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Monday, May 16, 2022

Alas, Our Shriveling Factory Sector

I have little first-hand knowledge of manufacturing. I worked in a factory two summers when I was in college. That is 100 percent of my blue-collar experience.

But those collective six months were an eye-opener. For one, I recall the job was hot and harder than I expected. At times it was so monotonously repetitive that I couldn’t stop my young and unbridled mind from wandering, and I nearly spot-welded my finger to sheet metal on several occasions. Other times, the job was so mentally confounding that I had to ask help to solve some conundrum or the other. I must admit that I didn’t expect to, but I quickly developed respect, admiration even, for the rough-hewn guys who worked in that sheet metal factory. (And yes, they were all men, back then.)Another impression: I was struck by all the visits from outsiders. Trucks arrived on schedule to deliver raw materials, and others came to cart away our finished products. Repairmen showed up to maintain our industrial machinery, and various suppliers visited regularly to stuff our workplace with the specialized tidbits we needed to carry on. And it was my first experience buying from a food truck, which magically showed up three times every day at our exact break times. I remember a wise cracking co-worker saying something like, “Fifty guys work in this factory, but 150 others depend on it.” He was exaggerating, of course. But not by much.After those two summers, I walked away from my blue-collar fling, never to pick up a tool again. Except for some DIY adventures at home that were as hilarious as they were hazardous.

But as I followed my career path deeper into what we used to call the Information Economy, I took with me an appreciation for the factory and the people who work there. After all, the manufacturing sector diversifies our economy and makes use of L.A.’s port complexes. It creates a big number of jobs beyond the factory floor. And it provides a good living for men and women who may have only a high school education.

In fact, that last point may be among the manufacturing sector’s greatest virtues. As we move further into a technologically oriented economy that demands highly educated employees, the manufacturing sector provides a refuge for those workers who may not have advanced degrees. It gives them a path to the middle class and rescues some from possible economic despair.

I bring all this up because it hurts to see manufacturing – once so dominant in the Valley area – seeping away.Where’s it going? An article in the Wall Street Journal last week confirmed what we’ve long suspected. It’s going to the states to our east. The headline: “The Southwest is America’s new Factory Hub. ‘Cranes Everywhere.’”The article said manufacturers increasingly are drawn to Arizona, Texas and other Southwestern states, partly at the expense of California. “More than 2,700 manufacturing workers have come to Nevada from California in 2017 through 2019,” the article said.As a current example, the article cited Haas Automation, an Oxnard maker of precision tools used on assembly lines. Haas is building a plant south of Las Vegas to complement its Oxnard plant. It is to have 500 workers when it opens in early 2023 and “expects to add more than 1,500 additional jobs in Nevada and hopes at least a few hundred of its 1,500 workers in California will move to fill them,” the article said.This is not to bag on Haas. Haas is just doing what other California manufacturers have done and probably will continue to do: shift production to lower-cost states. You probably know all about that, and – I write this with sadness – you could make a case that it’s their fiduciary responsibility to do so.And you probably know all the reasons. California’s steep taxes, burdensome regulations and high costs. That article said three-bedroom apartments in Oxnard rent for about $2,800 a month while comparable ones in Nevada go for about $1,000 less.

The San Fernando Valley lost nearly 28 percent – I repeat, 28 percent – of its durable goods manufacturing jobs since the eve of the Great Recession. That’s according to the Business Journal’s Valley Economic Forecast presented last year by the economists at the Center for Economic Research and Forecasting at California Lutheran University.

Also, the non-durable goods manufacturing segment in the Valley lost more than 25 percent of its jobs in that same span. Those were the two biggest losers. No other major sector suffered as much. The Valley’s economy, overall, did great.Again, you probably know all this or at least suspect it, and you know the reasons why manufacturing is swooning. It’s lamentable that elected officials keep taking actions that make the situation worse, not better. I’ve made that argument plenty of times, so I won’t go on.I’m making the simple point that we’re watching our manufacturing sector seep away. It’s sad, and it comes at a cost. Workers without advanced degrees will have fewer paths to the middle class. Our local economy won’t be as diversified. And college-age people, as I once was, will have fewer chances to get the eye-opening experience of working a blue-collar job at least once in their lives and learn to respect those who work there.Charles Crumpley is editor and publisher of the Business Journal. He can be reached at  ccrumpley@sfvbj.com.

Charles Crumpley
Charles Crumpley
Charles Crumpley has been the editor and publisher of the San Fernando Valley Business Journal since March 2016. In June 2021, it was named the best business journal of its size in the country – the fourth time in the last 5 years it won that honor. Crumpley was named best columnist – also for the fourth time in the last 5 years. He serves on two business-supporting boards and has won awards for his civic involvement. Crumpley, a former newspaper reporter, won several national awards and fellowships for his work, and he was a Fulbright scholar to Japan.

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