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A Roadmap to Green Manufacturing in Los Angeles

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A Roadmap to Green Manufacturing in Los Angeles A Roadmap to Green Manufacturing in Los Angeles: Policies, Planning, and Partnership for Quality Jobs A Comprehensive Capstone Project UCLA Luskin School of Public Affairs, Urban & Regional Planning Instructor: Goetz Wolff Spring 2012 Prepared for: USC’s Program for Environmental & Regional Equity (PERE) Los Angeles Alliance for a New Economy (LAANE) Green For All Table of Contents Executive Summary .................................................................................................................. 2 High‐Road Industrial Policy: A Framework & Lessons Learned .................................................. 4 Manufacturing Trends ........................................................................................................... 36 Green Manufacturing ............................................................................................................ 62 Manufacturing and Land Use in Los Angeles .......................................................................... 70 Organizing and Intermediaries .............................................................................................. 104 Employment Training System in Los Angeles ......................................................................... 124 Unions in Green Manufacturing: Trends and Opportunities ................................................... 134 Geographic Preferences in Public Procurement .................................................................... 152 Rail Standardization ............................................................................................................. 216 1 Executive Summary Los Angeles County is the largest manufacturing region in the United States. It leads all counties in the U.S. in terms of manufacturing jobs, payroll, and establishments, and is second only to oil‐rich Harris County, Texas, in terms of value of sales and shipments. As such, manufacturing is a critical component of the Southern California regional economy, accounting for over 10 percent of the region’s GDP. Unlike other sectors, local manufacturing provides direct linkages to several other industries; without manufacturing, many jobs in trade, transportation, and services would not exist. For working Angelenos, manufacturing is a source of economic mobility. Manufacturing offers career ladder jobs for workers across all skill and educational levels, providing important opportunities to underserved communities. Nationally and in Los Angeles County, manufacturing employees make higher average wages than workers in other occupations. Clearly, manufacturing matters. Moreover, the nexus between California’s cutting edge climate change policy, land use planning and transportation investments provide an important opportunity to grow green manufacturing in Los Angeles. In 2008, Los Angeles County voters passed Measure R, a half‐cent sales tax increase that will generate $40 billion over the next 30 years for rail expansion and highway improvements. These infrastructure investments are important to meet the future demands of a rapidly growing population, and can help bolster an already robust urban manufacturing sector in Los Angeles. But, like most U.S. cities, Los Angeles’ manufacturing sector is losing high‐quality jobs due to disinvestment and outsourcing. Since 1991, Los Angeles County lost over half of its manufacturing jobs, according to the Bureau of Labor Statistics Quarterly Census of Employment and Wages. Despite the shrinking manufacturing sector, local manufacturers of value‐added products such as high‐ precision aerospace parts have suffered but survived. Additionally, most manufacturers in Los Angeles are small‐ and medium‐sized businesses in niche sectors. In fact, since the Great Recession, the number of smallest firms (with 5 or fewer employees) increased, while the number of larger establishments decreased. This demonstrates a resiliency in the local manufacturing sector and an opportunity to nurture innovation. It also presents significant policy and organizing opportunities. Now is the time to pursue a strategic manufacturing partnership. The future of manufacturing requires substantial coordination between manufacturers and partnering advocacy and policy organizations. Therefore, a high‐road manufacturing policy should launch a citywide dialogue about the region’s economic needs and the role of local manufacturing in meeting the demands of a dynamic global market. However, to move forward with a comprehensive manufacturing strategy, several challenges must be addressed. First, Los Angeles has a disorganized manufacturing constituency. Therefore, despite trends in globalization and dynamic labor markets, there is little political momentum to help manufacturers remain in the region. Second, manufacturers need industrial land, but industrially zoned land in Los Angeles is scarce. 2 The region has the nation’s lowest industrial vacancy rates, yet despite the high demand, industrial land continues to disappear. The fiscalization of land use – accelerated by California’s Proposition 13 – and the subsequent conversion of prime industrial land to other uses with greater revenue potential have led to a serious attrition of potential sites for manufacturing operations. The following report addresses the manufacturing landscape of Los Angeles, summarizes the challenges manufacturers experience, outlines policy recommendations for a high‐road manufacturing policy, and suggests future research steps to build momentum for a comprehensive manufacturing initiative in Los Angeles. The outline of the report is as follows: Chapter 1 provides a framework for Los Angeles’ high‐road industrial policy package, and summarizes key case studies from several cities that have implemented local high road manufacturing initiatives that preserve and grow green manufacturing. In this chapter, we offer lessons learned about manufacturing advocacy efforts that can help guide present and future industrial policy initiatives in Los Angeles. More broadly, Chapter 2 examines several manufacturing trends in Los Angeles and the U.S., and makes recommendations for future research and data needs that can guide a comprehensive manufacturing strategy. Chapter 3 looks into the literature around green manufacturing and gives specific policy recommendations for improving manufacturing to benefit the environment, economy, and workers in Los Angeles. Chapter 4 explores the current state of industrial land retention in Los Angeles. Through case studies on various several cities, this chapter outlines recommendations to retain and bolster the Los Angeles manufacturing sector through specific land use policies. Chapter 5 outlines the role of intermediaries and organizations in assisting the growth of manufacturing in the region. Additionally, to ensure continual industry growth, this section ends with policy recommendations for how to strengthen the linkages between intermediaries and manufacturers. Similarly, Chapter 6 explores the roles of Los Angeles and California employment training services in educating, retraining, and placing manufacturing workers in career pipelines. Also, this section addresses how governments continue to disinvest in educational systems, increasing the need for employment training services. Finally, this section identifies key stakeholders (i.e. labor, business, and community colleges) and explains how they can collaborate to fill the manufacturing employment training gap in the region. Chapter 7 assesses the situation of unions in Los Angeles and the role that unions can play in bolstering green manufacturing. Overall, this section makes a case for unions to collaborate with key stakeholders and pursue a high‐road manufacturing strategy. Chapter 8 examines how government procurement policies can be used as part of an economic development strategy. Additionally, this chapter analyzes the application of Buy America laws as a high‐road strategy to revitalize domestic manufacturing. Lastly, Chapter 9 builds on the previous chapter and gives an overview of rail standardization and the implications for transit‐related manufacturing in Los Angeles. 3 High‐Road Industrial Policy A Framework & Lessons Learned By John‐Edward Guevarra & Madeline Wander Abstract American manufacturing still matters: it leads the nation’s product innovation Learned and accounts for over three‐fourths of the nation’s exports, which concentrate in cities. Unlike much of the service sector, manufacturing Lessons creates good jobs with upward economic mobility and career pathway out of & poverty. In this chapter, we argue that the U.S. and its cities—including Los Angeles, which contains the largest manufacturing base in the country—need strategic policies to both grow manufacturing sectors and improve conditions Framework for workers, communities, and the environment. In other words, we need a A high‐road industrial policy. Policy: We recognize that instituting such a policy requires a strategic organizing and advocacy effort involving collaboration between public, nonprofit and private sectors, as well as political leverage. Therefore, in this chapter, we present Industrial case studies of three American cities—Chicago, New York, and Milwaukee. From these case studies, we offer the following lessons learned that can help Road ‐ guide present and future efforts to institute a high‐road policy that preserves High and grows green manufacturing here in Los Angeles: develop unlikely partnerships between labor, business, and communities
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