Bay Area Council Blog: Economy Archive

3.24.10

Governor Signs Green Tech Jobs Bill

By Jim Wunderman

Today Governor Schwarzenegger signed SB 71 (Padilla, D-Pacoima) into law, creating a sales tax exemption for the purchase of green tech manufacturing equipment in California.

In order to compete in the world economy, and to stay true to our goal to be the most innovative place in the world, we must continue to pass legislation like this, which in addition to creating jobs, spurs investment in green tech.

This bill was part of the Governor’s larger job creation package – we congratulate the Governor and the Legislature for their hard work and success on this bill.

group of confident professional employees in a serious meeting from above

Bay Area’s Job Market Showing Signs of Life

By Jim Wunderman

The Bay Area Council today announced that for the first time in 20 months, more Bay Area companies are planning to increase the size of their workforce than are planning layoffs, signaling a potential job market rebound, according to results of its quarterly Business Confidence Survey.

The responses of the 498 CEO’s and top executives in the nine Bay Area counties surveyed between January 27 and February 18, 2010, show that overall, 20 percent plan to increase their workforce within the next six months while 17 percent expect layoffs, and 59 percent predict no change. These results are in stark contrast to a year ago, when the Survey revealed that only 10 percent of companies were planning to hire, while 42 percent expected layoffs. The last time the Survey recorded a positive job market trend was in June, 2008.

Learn more:

Press Release
Results
Charts

1.2.10

Must act decisively and fast to save California

Opinion Editorial by Jim Wunderman
Published in the Contra Costa Times, Oakland Tribune, San Mateo County Times & Tri-Valley Herald

As 2009 closes, the opinion of most Californians is “good riddance.” The year ends with record unemployment figures of 12.5 percent, 25 percent higher than the national average. Other large states with diverse economies like New York and Texas have unemployment rates below average. The year also closes with another record budget deficit looming and more cuts to education and other vital services on the way.

Economists predict a slow recovery for the nation’s economy in 2010, but what about California? Will we lead the nation out of this recession as we have done so many times in the past?

I believe we can. California still has the best and brightest workforce in the world, we still lead the world in innovation, venture capital investment and new technologies. If any place can turn this economy around, it is California.

Unfortunately, it is also true to say that if anywhere in the world, despite its embarrassment of riches, can make things worse, it is California.

A recent national survey of CEOs ranked California the worst state in the nation to do business. The nonpartisan Tax Foundation ranks California 48th in the Business Tax Climate index. A 2009 report commissioned by the governor, titled “Cost of State Regulations on California Small Businesses” totals the cost of regulation to the state at almost half a trillion dollars. This cost amounts to 3.8 million lost jobs, one-tenth the state’s population.

Businesses in California are overtaxed, overregulated and underappreciated, which is why so many are moving to other states. If we are to emerge from our current fiscal mess, a mess that is costing us our position as an economic leader in the country and the world, we must make policy changes to encourage new investment and job creation in California.

Before we step forward, let’s start by looking back and undoing shortsighted policy decisions that have badly damaged California’s economy. This is my wish list for California’s businesses in 2010.

In 1999, California scrapped the 40-hour federal standard for payment of overtime, and instead forces employers to pay overtime to employees once they have exceeded eight hours in any given day, even if they work less than 40 hours a week. This law, combined with California’s incredibly rigid lunch-hour rule, makes California noncompetitive. Employers and employees need more flexibility and less mandates from Sacramento. We need to repeal AB 60, the eight hour day law, and AB 1711, the mandatory lunch law.

It is impossible to total the California Environmental Quality Act’s (CEQA) cost to business, because it is so pervasive. One thing is certain: It is a massive anchor on California’s economy. The U.S. already has stringent environmental protections in the National Environmental Protection Act; California has set the bar much higher in CEQA and forces our businesses through lengthy and costly delays. We need to reform CEQA to speed up the review process and give more certainty to business while maintaining our environmental protections.

California has the highest sales tax in the nation and is one of just four states in the nation that does not allow a sales tax exemption for the purchase of machinery used in manufacturing and telecommunications. This puts California at a huge competitive disadvantage and cost us thousands of jobs since the exemption sunsetted in 2004. We need to address our overall taxation structure and reinstate the 6 percent Manufacturer Investment Credit that helped pull California out of the last recession.

We can protect our environment, workers and businesses and prosper again, but we must act decisively and act fast.

12.3.09

Business Confidence Creeps into Positive Territory

By Jim Wunderman

This week the Bay Area Council released its quarterly Business Confidence Survey showing that business confidence has crept into positive territory for the first time since the summer of 2007. The business confidence index – the number that distills the survey findings – registered at 53 out of 100. A reading over 50 signals a positive economic direction and below 50 is negative. The results indicate that we may have finally hit bottom and are looking up. Unfortunately, the new found optimism doesn’t seem to be translating into new jobs. Layoffs still outweigh hires in almost every corner of the Bay Area, the Survey shows. Overall, 23 percent of respondents expect to see their workforce decrease over the next six months, while 18 percent expect an increase and 56 percent expect no change.

Business Confidence Press Release
Jobs Chart | Confidence Index | Data

11.20.09

Institute Report Shows Strong Ties with India

By Sean Randolph

This week the Bay Area Council Economic Institute released a new report, “Global Reach: Emerging Ties Between the Bay Area and India,” which assesses the unique ties linking the world’s innovation capital with the fastest growing major economy after China.

Once perceived primarily as a site for call centers and for low-cost off shoring, India has rapidly scaled the economic ladder to provide increasingly sophisticated services that are embedding its companies and workers into the fabric of the global economy. It is also developing dynamic markets that are attracting growing investment by Bay Area venture capital, technology and consumer-oriented companies.

The report is being released at two events – one today in Silicon Valley and one in San Francisco on Monday. You can download the Executive Summary here – or visit this webpage to download the full report. The Bay Area Council plans to build stronger ties with our counterparts in India and will keep you informed of our progress.

11.6.09

Persistence, Persuasion Pay Off with NOL

By George Broder

This week Congress passed – and this morning President Obama signed – a $24 billion bill to help the unemployed and support the housing market – with a Net Operating Loss (NOL) provision included as part of the deal – a major part of the Council’s 2009 legislative agenda.

The bill extends unemployment benefits that were due to expire for an additional 14-20 weeks. It also renews an $8,000 tax credit for first-time home buyers, while also expanding it to cover many other home purchases – another priority BAC members advocated for while in D.C. last month. The NOL provision allows businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years – extending it from two years.

NOL may not roll of the tongue, or come up often in conversation, but its more than just an accounting term – it’s about jobs and economic survival. An enlightened NOL tax policy allows businesses to weather tough times, maintain their payrolls and avoid layoffs.

A delegation of Bay Area Council members met with Congressman Richard Neal (D – Massachusetts), leader of the NOL fight in Congress, on our May trip to Washington D.C. – and again last month – to offer their support and expertise on the issue. In addition, it was a key issue while meeting with other members of Congress to support the extension. The Bay Area Council’s Urban Development Working Group has also been engaged on the issue and coordinated broader outreach to Congress by the Bay Area business community. The Bay Area Council is happy to have played a role in such a huge win for business.

3.26.09

BAC Economic Institute Prepares Economic Recovery Workplan

By Sean Randolph

The California Business Housing and Transportation Agency, through Secretary Dale Bonner, has asked the Bay Area Council Economic Institute to prepare a Bay Area Economic Recovery Work Plan. The purpose of the plan is to guide the allocation of federal stimulus funds (and other funds and programs available to the state) to support economic development in California. We have been asked to do this in partnership with the region’s leading business and economic development organizations—with the goal of presenting the Bay Area’s top line priorities. Those priorities will be strategically focused and aligned with both near-term needs and long-term goals. We have been given a fast time frame in which to do this: an initial product is due by April 1 and a final product by June 1.

Click here for the latest information on the Economic Recovery Workplan.

Click here for our press release: At State Request, Bay Area Council Economic Institute Coordinating Quick, Massive Regional Response to $30-50 Billion In Stimulus Opportunities

Donate now to help create a better Bay Area through support of our Economic Recovery Work Plan efforts.

12.2.08

Economic Institute Seeks Data and Support for Globalization Index

Signs of the Bay Area’s globalized economy appear every day, indeed our global connections have propped our economy up, when so many others across the U.S. are suffering.  Residents get it.  In a Council poll last year, a super majority of 88 percent of Bay Area residents felt that “all in all” greater business, personal and cultural connections between the Bay Area and other countries are a good thing, and 74 percent want elected officials to expand global business ties.  If ever there was an issue that needs local, regional and state support, it’s expanding trade and Bay Area global links.  Unfortunately, we have an economic analysis problem.  Global flows of goods, services, money, people and communications are primarily measured nation to nation, not on a regional basis.

The Council’s Economic Institute will issue a groundbreaking report in the next few months detailing the Bay Area’s global role.  This report can help shift critical public policy on a local, state and even federal level, but it needs financial support to cross the finish line.

If you are interested in hearing more or sponsoring this important report, contact me at 415-946-8722.

4.2.08

Biannual Bay Area Economic Profile

Today, we released the biannual Bay Area Economic Profile, which analyzes the Bay Area’s changing economy and benchmarks its performance against other major metropolitan centers.  This year’s report, Sustaining the Bay Area’s Competitiveness in a Globalizing World, shifts from a national to a global scan – comparing the Bay Area with international as well as U.S. cities such as Boston, London, New York, Tel Aviv, Stockholm, Shanghai, Singapore and others.  We offer profound thanks to McKinsey & Company who contributed thousands of free hours of labor to make the report possible.