GOOD JOBS FLEEING L.A. NEW REPORT CITES MANUFACTURING LOSSES.

Byline: Lisa Mascaro Staff Writer

Good-paying manufacturing jobs that can be the ``E-ticket'' to the middle class have sharply declined in California - and particularly in Los Angeles - in recent years, according to a study released Thursday.

While eastern counties Riverside and San Bernardino have seen modest gains in such jobs, their growth has done little to offset the 157,000 manufacturing jobs lost in Los Angeles and 266,000 statewide over the past five years in part because of the crippling business policies coming from state and local government, the report said.

The hit is particularly hard among minority communities that stand to lose jobs that offer average pay of $57,000 a year.

``The shop floor in California, Southern California, is Latino,'' said Steven B. Frates, a senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College, which co-authored the report.

``Those are good-paying jobs. Those are the people getting roto-tilled by this migration of jobs,'' Frates said. ``The question is, Do you have a deep and substantial middle class? Manufacturing is the E-ticket escalator and we are killing it.''

The report was prepared for the Keystone Partnership, a coalition of economic development executives across the region - including those from the Economic Alliance of the San Fernando Valley - seeking a comprehensive look at the issue.

Bruce Ackerman, the Economic Alliance's CEO, said the findings will provide a platform for his group and others to take to state and local leaders for policy changes.

``We need to get some relief on this legislation. We're going to be (encouraging) Sacramento to start looking at this,'' he said. ``We're not trying to hammer people. We just want them to have the information.''

Statewide, the number of manufacturing jobs has hit a record low, dropping from approximately 14 percent to almost 11 percent since 1998, according to the report.

While the number of manufacturing firms statewide has remained constant, many larger companies are downsizing or closing up shop, leading to an overall decline in jobs, the report said.

The Inland Empire has seen a bump of 12,200 manufacturing jobs in San Bernardino County and 7,300 in Riverside County, but the authors say that does little compared with the flood of jobs leaving Los Angeles County and elsewhere in the state.

``In Riverside and San Bernardino we are capturing some of them, but not as much as we're losing,'' said Larry J. Kosmont, whose Kosmont Partners co-authored the report.

The loss has cost the state $100 billion in sales from 1999 to 2002.

Even more, the job loss poses a direct hit on minority workers - more than half the machine operators, assemblers and inspectors are Latinos. Those jobs can pay twice the average individual annual income of $24,600 for Latinos, the report said.

The study targets three policy areas contributing to the number of jobs being lost:

--The rising costs of workers' compensation.

--Hostile business policies such as legislation mandating health care or domestic partner benefits.

--Local governments' reliance on retail to generate sales tax revenues rather than getting a larger share of property taxes that would encourage manufacturing.

``We're doing things that are hurting ourselves,'' said Frates. ``They go for sales tax and big bucks.''

``Not surprisingly, a lot of business people are voting with their feet,'' he said.

In the San Fernando Valley, they point to the old Lockheed plant in Burbank or the General Motors plant in Van Nuys - both now housing retail operations.

The report says manufacturing jobs can generate as much as four times the economic activity of retail jobs - from the extra cash in workers' pockets to the ancillary businesses that set up shop next door.

``You don't want to be a showroom economy,'' Frates said. ``If we don't have manufacturing, we have a bifurcated state'' of haves and have-nots, he said.

Kosmont said the report turns a spotlight on government policies that can preserve the remaining manufacturing jobs and prevent the further slide.

``They just don't know. No one's connected the dots,'' said Kosmont. ``It's our last stand. If you don't maintain 10 (percent to) 11 percent, then you have (capitulation) to every other state.''

Lisa Mascaro, [phone]

lisa.mascaro(at)dailynews.com