1 PUBLIC FORUM MODERATED BY CONGRESSMAN XAVIER BECERRA 2 3 "AMERICA'S JOBS & ECONOMY: 4 WHERE ARE WE HEADED" 5 6 7 8 REPORTER'S TRANSCRIPT 9 10 11 12 13 Date of Forum: Tuesday, August 17, 2004 14 Time: 1:40 p.m. 15 Location: LOS ANGELES TRADE TECH COLLEGE 400 West Washington Boulevard 16 Grand Theater, Main Admin Building Los Angeles, California 17 The Moderator: Representative Xavier Becerra 18 (CA-31) 19 20 21 22 23 Reported By: 24 Catherine Ponicsan, RPR 25 CSR No. 8271 1 1 ON THE DAIS 2 3 FROM THE UNITED STATES CONGRESS: 4 SENATOR BARBARA BOXER (CA) 5 REPRESENTATIVE XAVIER BECERRA (CA-31) 6 REPRESENTATIVE GRACE NAPOLITANO (CA-38) 7 8 PANEL 1 - ECONOMIC ANALYSIS AND FORECAST: 9 CHRISTOPHER THORNBERG 10 JEAN ROSS 11 JACK KYSER 12 13 PANEL 2 - THE PEOPLE'S PERSPECTIVE: 14 LERON GUBLER 15 DAVID RATTRAY 16 MANNY DE LEON 17 JOHN PEREZ 18 NATASHA HUMPHRIES 19 20 21 22 23 24 25 2 1 I N D E X 2 Prepared Statements By: Page 3 SENATOR BARBARA BOXER 6 4 REPRESENTATIVE NAPOLILTANO 16 5 CHRISTOPHER THORNBERG 25 6 JEAN ROSS 30 7 JACK KYSER 35 8 LEON GUBLER 49 9 DAVID RATTRAY 52 10 MANUEL DE LEON 55 11 JOHN PEREZ 58 12 NATASHA HUMPHRIES 61 13 14 15 Questions from the Audience: 85 16 17 18 19 20 21 22 23 24 25 3 1 Los Angeles, California, Tuesday, August 17, 2004 2 9:40 a.m. 3 -oOo- 4 5 PRESIDENT CASTRO: Good afternoon. Welcome to 6 Los Angeles Trade Technical College. My name is Daniel 7 Castro, the president of the college. 8 And we are very, very honored to have the 9 distinguished guests that we have here, that will bring 10 you some very important information at a very crucial 11 time in the history of our country. 12 Without further ado, I would like to introduce 13 our Congressman from this district, Congressman Xavier 14 Becerra. 15 REPRESENTATIVE BECERRA: Good afternoon, and, 16 welcome, everyone, to this forum today on the economy 17 and jobs. We are pleased that you could take the time 18 to be with us. 19 I'd like to begin this forum today by 20 introducing someone who really needs no introduction 21 here in California, nor in the United States of 22 America. 23 When you talk about fighters, when you talk 24 about champions, when you talk about people who know the 25 interest of young people, those who are college-bound, 4 1 people who are trying to eke out a living, then you have 2 to talk about Senator Barbara Boxer, who has been a 3 Representative in Congress in the House of 4 Representatives, and since 1992 since her election to 5 the U.S. Senate has been one of California's premier 6 Senators representing all of us so well here in the 7 State of California. 8 You know her as a fighter for a cleaner and 9 healthier environment. 10 You know her for her support for local after 11 school programs. 12 You have seen her be the advocate for medical 13 research. 14 You have seen her countless times stand up and 15 defend a woman's right to choose. 16 We know she defends the rights of older 17 Americans. 18 And certainly you have got to know her because 19 of her work -- tremendous work on the issues of 9/11 and 20 homeland security and making sure that we are safe here 21 at home. 22 And perhaps you have even saw her -- I hope you 23 did see her -- be one of first to come forward and talk 24 about the suffering, the plight of Afghan women, who did 25 not have anyone representing them during these last few 5 1 years when times were very tough in Afghanistan. 2 And like she usually has, she came out and 3 stood, and those women in Afghanistan should know well 4 that while Senator Boxer represents us in the State of 5 California -- we intend to keep her here for another six 6 years -- we also know that women in Afghanistan owe her 7 a great deal of gratitude for what she has done to 8 elevate their plight throughout the world, and certainly 9 here in the Congress and the United States of America. 10 So we want to, first and foremost sya to 11 Senator Boxer: Thank for your so many years of great 12 service. 13 Thank you for making the time to come visit us 14 here in Los Angeles. 15 Thank you, I know, on behalf of President 16 Castro and all the faculty, staff, administrators and 17 students of Los Angeles Trade Tech College -- thank you 18 for coming to visit us and grace us with your presence 19 and again impart the wisdom that we have grown to know 20 over the many years of your service. 21 I present to you now our Senator, Barbara 22 Boxer. 23 SENATOR BOXER: Thank you. It's very nice to 24 be with you. 25 Xavier Becerra, you are a great Congressman. 6 1 And you also have here a wonderful 2 Congresswoman, Grace Napolitano, and I am just thrilled 3 to be here with them. 4 These are my friends, they are my advisors, and 5 as you know, they fight every day for their districts -- 6 and believe me, they are always on the phone to me, and 7 I know to Senator Feinstein as well, saying, "You need 8 to help us, you need to get this bill passed." 9 And therefore when Grace called and asked me to 10 do an event such as this in her district, I said: 11 Absolutely. 12 And when Xavier offered me this opportunity, I 13 did the same. 14 Also, what a distinguished panel. 15 President Castro, what a wonderful place you 16 have going here. I'm very pleased to be here. 17 Well, the topic of the today -- and I should 18 tell I just got off the plane because, of all things, we 19 were supposed to be on a break, but the Congress 20 committee on which I serve called us back for a hearing 21 on the 9/11 Commission Report and how it relates to 22 safety in terms of our transportation sector. 23 We have been focusing on air, but there is 24 rail, there are ports. 25 So I got on a plane, I went back there for one 7 1 day, and I was very frank in my assessment of what this 2 administration could be doing. 3 We have seven bills sitting at the Senate desk. 4 That means they have been passed through 5 committees overwhelmingly bipartisanly support on rail 6 security, on chemical plant security, on nuclear plant 7 security, on transit security, on aid to first 8 responders and on and on. 9 And guess what? 10 Those bills are not being brought forward. 11 And I wanted to make that point, as well as 12 make my point that they don't have enough air marshals, 13 and they are not protecting our airplanes, our aircraft 14 against shoulder fired missiles. 15 Needless to say, if I sound a little jet 16 lagged, I am a little jet lagged. 17 But I want to get to the topic at hand. And 18 Mary Bell who is my wonderful -- one of my field reps, 19 is here with me. And she is going to put up a chart 20 that shows the lost jobs. Is that what you did, Mary 21 Bell? I can't see it. Okay. 22 I don't know if you can read the numbers, but 23 we are talking about between 2001 and 2004, after coming 24 off of the tremendous period of job growth -- I think 25 it's 22 million in jobs under President Clinton -- we 8 1 saw a 2.7 million decline in manufacturing jobs, with 2 hundreds of thousands of those jobs right here in 3 California. 4 And in the private sector, 1.8 million lost 5 jobs altogether. 6 And when you look at those lost jobs, and you 7 realize that the jobs that are replacing them -- at 8 least some of them -- pay nine thousand a year less, 9 then you look at my next chart, rising costs, in this 10 same time period. 11 We see gas prices -- you know this -- up 12 23 percent. 13 We see college -- this is the national number; 14 it's sometimes worse here. 15 Gas prices up 23 percent. 16 College tuition is up 28 percent. 17 Family health care premiums up 36 percent. 18 That adds up to what we call a middle class 19 squeeze, not to mention what it does to our working 20 poor. 21 So we have a combination of lost jobs, the jobs 22 that are coming in pay less, and we are facing -- our 23 families are facing rising costs. 24 Now, why is this? 25 Well, I think there are two reasons. I know 9 1 there are two reasons. 2 We are looking at the fact that when the 3 president cut taxes: Who got the benefits? 4 This is just to prove to you the middle class 5 squeeze. The middle 20 percent of Americans got about a 6 thousand dollars back a year. 7 The I would say working poor got nothing. Got 8 nothing. 9 And the top one percent got $78,460 back a 10 year. A year. 11 So you are looking at, again, the people at the 12 top getting back all this money. The middle class 13 getting squeezed. The lower echelons getting virtually 14 nothing, and prices going up. 15 Well, who does it hurt? 16 It hurts most of our people, because most of 17 our people are in the middle class or lower. They are 18 not in the upper class. 19 Now, in the meantime, what's happened to the 20 bigger picture? 21 The budget deficit. We used to have a surplus, 22 and Xavier and Grace will say what a hard job it was to 23 make that surplus occur. We had people who lost their 24 seats in the Congress, but we wanted to have a 25 government that took in more than it spent every year. 10 1 We got to that point. Before Bush, we had 2 $236 billion surplus. 3 We now have a $445 deficit. 4 Why is this important? 5 In the long range, it's going to put upward 6 pressure on interest rates. 7 In the short range, what happens? 8 It ties our hands, and it doesn't allow us to 9 do anything that we have promised the people we would 10 do. 11 Such as giving them good a transit system, a 12 good highway system, a good education system, a decent 13 health care system, et cetera, et cetera. Create jobs 14 with the government. It has tied our hands. 15 So in my closing moments -- because I promised 16 Xavier I would go ten minutes. It's hard for a Senator, 17 but I'm going to do it -- and I was an economics major 18 in college, so you can get into that whole speechifying. 19 But I want to wrap it up this way: We could 20 complain about this -- and we should. 21 And by the way, on November 2nd, we can do 22 something about you it, but that's up to you. 23 But the bottom line is: What can we do now in 24 the Congress to help? 25 Well, I think what we need to do is take a look 11 1 at those tax cuts, and take a look at the tax cuts at 2 top and say: You know what? We have got to rescind 3 those tax cuts at the top. And take some of that and 4 give more tax relief to the middle class and businesses 5 who will create jobs. 6 That will get us moving. 7 And to invest some of these funds. 8 We also have to change our foreign policy. It 9 is literally killing our young people to go it alone in 10 Iraq. $200 billion have been spent over there, and if 11 you take that $200 billion and you combine it with the 12 loss of revenues from these tax cuts, we can't make it 13 as a country. We are falling apart. 14 So we need dramatic change. So once we do 15 this, we will be able to get back on track. Once there 16 is burden sharing in the world. 17 Now, transit systems and highway systems create 18 great jobs. There is a great bill that is sitting in 19 the Senate and the House -- and I'm on the conference 20 committee to try to get that bill out. 21 If we get the bill out -- the Senate version of 22 that bill -- California will create 89,000 new, good 23 paying jobs. 24 That's what we need to do now. 25 The president won't do it because he says we 12 1 are spending too much. 2 We are not spending too much. That is a bill 3 that is paid for by the gasoline tax. That's the 4 purpose of the gasoline tax -- to keep pace with the 5 infrastructure. 6 But that's one way to turn things around. 7 In addition to giving tax breaks to the middle 8 class. 9 College tuition should be tax deductible. 10 Health care premiums should be tax deductible. 11 And we should pass the Invest in USA Act, which 12 is in conference committee again. I wrote it with 13 Republican John Ensign. The bill says we will give a 14 one-year tax break to high tech companies who have 15 parked their monies, billions of dollars off shore, let 16 them bring it back at a lower tax rate if they put 17 people to work. And Allen Sinai said -- a very 18 respected economist -- says that bill alone will create 19 600,000 new jobs in our country, 60,000 here in 20 California. 21 So we also need to do something about the 22 people at the bottom of the economic ladder. It has 23 been eight long years since we have raised the minimum 24 wage. I am embarrassed to say that. 25 And I have been working with Senator Kennedy in 13 1 trying to push that minimum wage increase through. We 2 believe we have the votes, but they are stalling it in 3 the Senate. We would take it from 5.15 to $7 an hour in 4 three-year increments. 5 We also need to help those who have lost their 6 jobs extend their unemployment. 7 We need to fully fund No Child Left Behind -- I 8 wrote the after school piece of that -- we are leaving 9 millions of kids out in the cold. 10 That will help us move our economy forward and 11 do things -- invest in our kids, invest in our work 12 force, invest in our people. 13 We need to open up the health care plans that I 14 get -- Xavier and Grace -- we get a good health care 15 plan. 16 I'd like to open it up to anyone, so that you 17 could get affordable health care. 18 I think we need to invest in broadband. You 19 know what is. That's that fast, quick connection to the 20 internet. In this time of communications, if you don't 21 have that information when you need it, you are slowed 22 down our productivity. We can jump start that with some 23 investment by the government. 24 Finally, stem cell research. There is a ballot 25 measure. I hope you will look at that. It's very 14 1 important. It would mean that we could find the cures 2 to Parkinson's, to Alzheimer's, paralysis, juvenile 3 diabetes -- these illness is that plague our grandmas 4 and grandpas and our family. 5 If we do this, that will also greatly jump 6 start our economy here. 7 So I think we have got to get past the idea 8 that we just sit and complain, and have an action 9 agenda. 10 And that's what I love about your 11 Congresspeople you have here today -- and, of course, 12 Xavier doing this kind of panel. Because we are three 13 people who are elected to make things better for the 14 people. 15 That's what we want to do. 16 And that means that you need to analyze why 17 things go wrong, but you can't stop there. 18 You've got to have an agenda to get it moving 19 in the right direction. 20 So thank you, Xavier, Congressman Becerra. 21 Thank you all for being here. I have really 22 enjoyed this opportunity to share my thoughts with you. 23 Thank you, very much. 24 REPRESENTATIVE BECERRA: Ladies and gentleman, 25 I'd now like to continue with a colleague of mine who 15 1 was referenced by Senator Boxer as someone who has 2 worked on this and any number of issues, especially with 3 regard to small businesses, for quite sometime in the 4 House of Representatives, as well. 5 She is a representative for a portion of the 6 County of Los Angeles. She has been in the State 7 Legislature as well. She serves on the Interior -- 8 Resources Committee and Small Businesses Committee and 9 Interior in the House of Representatives. 10 And she is someone who has become renowned for 11 her efforts constantly not just to support and promote 12 small business creation in the United States of America, 13 but also to try to help those small businesses expand, 14 and have export opportunities throughout the world. 15 So it's with great pleasure that I introduce at 16 this point Congresswoman Grace Napolitano. 17 REPRESENTATIVE NAPOLITANO: Thank you. Good 18 afternoon, everybody. Thank you. 19 This is coming home to me, because I came to 20 Trade Tech years ago to take specialized training in 21 transportation. 22 It is a pleasure to come at the behest of my 23 colleague, and to hear Senator Boxer talk about the 24 importance of small business and the generation of jobs 25 that you will need when you go to work -- when you want 16 1 to have gainful employment or when you want to create 2 your own entrepreneurship, your own business, to be able 3 to make this state of ours further up the line, instead 4 of fifth world largest economy, I say the first. There 5 is always a question, because the United States is the 6 first, but 7 There is always a question that you are the 8 first. California has that potential. We are the fifth 9 world's largest economy. 10 And it's based on the entrepreneurship, on 11 small business. 12 And it's based on the fact that we have the 13 ability to attract business of any qualified individuals 14 and bring them to us from any other countries, because 15 they see what California has done, and what it continues 16 to do. 17 I have unfortunately represented this 18 district -- it is a working class district -- that has 19 lost a lot of its business to maquiladores due to NAFTA. 20 And so we have gone from coming a manufacturing 21 and aerospace industry to service industry, although we 22 still have six or seven major factors in California that 23 provide us with that standing of fifth world's largest 24 economies. 25 And I'm going -- before I do that, let me tell 17 1 you that I have drug someone with me -- he has been with 2 me all morning -- visiting employers and talking about 3 the expansion of business, and that's the SBA director 4 from Glendale, Alberto Verado. 5 Where are you, Alberto? 6 MR. VERADO: Right here, Congresswoman. 7 REPRESENTATIVE NAPOLITANO: And the reason I 8 brought -- well, we are attached to each other -- is 9 that he provides help to small business for expansion 10 and SBA programs. 11 And that to me is important -- is how we 12 visualize, how we work with the expansion of small 13 businesses so they can grow, so they can provide that 14 impetus to us having a better economy. 15 One of the businesses we went to this morning 16 is a Latino-owned business that four years ago started 17 with ten employees. Now employs 105. Is looking for 18 expansion. His partner wants to go to Tijuana. He 19 says, "No, I am staying here." 20 So we are working with him to keep that 21 business here, because we need those jobs. We want to 22 continue to provide those avenues to our people. 23 My area has an unemployment rate -- I represent 24 East L.A. to Pomona, so it's a big long, elongated 25 district -- that has an unemployment rate anywhere 18 1 between a low of 4.3 to a high of 10.6. 2 My Hispanic unemployment is 6.7. 3 To me, that's high. And it's unacceptable. 4 What we need to do is continue to work in 5 forums such as the one provided by my colleague -- and 6 we did our own, with Barbara coming in -- and talk about 7 how you can become part and parcel of a solution that is 8 going to get us to work with small business. 9 We need to train employees -- students who 10 become employees -- to jobs that are going to be 11 available. Not the other way around. So that when you 12 are finished with your education, you have a spot to go 13 to. 14 We need to begin the work of bringing 15 businesses in to understand that they need to tell the 16 educational institutions, "This is what we need, this is 17 the training we need." 18 And be able to help the education institution 19 financially and with the brain trust that they have, 20 because it's there. We are not reaching out to them. 21 One of the many areas that -- I sat on the 22 small business -- many small business committees. This 23 is my sixth year. And what I see this administration 24 doing is criminal. 25 Two years ago they wanted to cut the SBA budget 19 1 by 43 percent. That's the only agency that helps small 2 business. 3 This budget for next year, they want to cut it, 4 I believe, by 25 percent. 5 They have cut the programs. They deleted 6 others. They have frozen others. To me, that is the 7 engine of our economy. That is what's giving us the 8 ability to stay afloat until the economy improves. 9 And it will improve. And California will rank 10 among the highest in the nation. 11 In Washington, everybody looks at California 12 with a skewed eye. It's like: You have all you need. 13 You have the world's fifth largest economy. Why do you 14 need money back there? 15 Well, we provide it by the numbers, by the 16 economy that you generate when you buy. You go out and 17 buy cars. You buy food. You buy clothing. You are 18 generating an economy. 19 And because we have a large population that 20 buys a lot of -- it's -- that's the everlasting circle. 21 So what we would make sure that you understand 22 is that we are continually pushing to try to make sure 23 that they understand how important this is for 24 everybody. 25 It's a continuing of us helping small business. 20 1 Not major corporations. They can hire their own 2 attorneys. They can could do all of that themselves. 3 We need to help small businesses and give them 4 tax incentives instead of to the large corporations. 5 Of course, as you well know, monies for PELL 6 grants, the assistance the students need -- you need to 7 be vocal about it. You need to talk, E-mail. Don't 8 write to Washington. Anthrax has created a loophole, 9 and we lose a lot of mail. 10 But E-mail, fax, and let us know how you feel. 11 Let your electeds know. Because I'm sure most of you 12 don't come from my district, but from Xavier, all over 13 L.A. County. 14 You need to understand how important your voice 15 is. But unless you exercise that right, then we cannot 16 have as effective a voice in Washington as we would like 17 to have. 18 With that, I'm going to tell I'm very pleased 19 to be here, and I hope that some day one of you -- or 20 more than one of you -- are interested enough that you 21 want to make a difference and get elected to represent 22 the constituency you have a passion about. 23 Thank you very much. 24 REPRESENTATIVE BECERRA: Congresswoman 25 Napolitano, thank you, very much. 21 1 As we get ready to proceed with our first 2 panel, I'd like to make sure that I once again thank 3 Dr. Castro and all of the folks from L.A. Trade Tech for 4 letting us be here today. 5 I'd like to acknowledge Dr. Peter Lansberger, 6 who is the chancellor of the L.A. Community College 7 District, who has joined with us. I'd like to thank him 8 for having made it here. 9 I'd like to also thank Elizabeth Santiva, who 10 is the student trustee with the L.A. Community College 11 District, who is present as well. 12 Make sure I acknowledge my staff, especially 13 Gayle Greenberg, who has helped to put this event 14 forward. And I want to make sure we recognize that 15 Channel 36 is here today. And Steve Grace, thank you so 16 much for making sure this forum would be broadcast on 17 cable television, Channel 36, for those who are not able 18 to be in attendance today so they can also hear the news 19 about what's going on with the economy and jobs. 20 To our Spanish translator, Delia Torres, our 21 sign language interpreters, Bill Pugin and Mark Lloyd, 22 our stenographer, Katie Ponicsan -- thank you so very 23 much for being here to help make this forum something 24 that can be recorded and used by others, and also for 25 making it a success. 22 1 With that, let me now turn to our panelists. 2 We have a distinguished group of individuals 3 who are here to testify today. I would love to start 4 with questions, but first we want to hear from them. 5 And I'd like to begin with our panel of 6 economic experts who can tell us about their analyses 7 and forecasts for the economy and for jobs. 8 To my right, my far right, we have Mr -- 9 Dr. Christopher Thornberg, who is a senior economist 10 with UCLA Anderson Forecast. Dr. Thornberg authors the 11 Anderson Forecast for the Los Angeles and East Bay 12 regions. 13 He has also been involved in a number of 14 special studies measuring the impact of important events 15 on the economy, including the NAFTA treaty and the 16 California power crises and September 11 terror attack. 17 Dr. Thornberg previously held a faculty 18 position in the economics department of Clemson 19 University. 20 Seated to his left is Jean Ross, who joined the 21 California Budget Project as its first executive 22 director in 1995. 23 California Budget Project is a non-profit, non- 24 partisan organization established to promote a better 25 understanding of state fiscal and economic policy issues 23 1 and their impact on low and middle income Californians. 2 Ms. Ross is a frequent speaker on fiscal and 3 economic policy issues, and has been published in 4 numerous reports and -- sorry -- she has published 5 numerous reports and articles. She has authored 6 articles that have been published in the Los Angeles 7 Times, Sacramento Bee, State Tax Notes, San Diego Union 8 Tribune, Cornell University Press, and other 9 publications. 10 And then seated to Ms. Ross' left is Mr. Jack 11 Kyser, senior vice president and chief economist at the 12 Los Angeles Economic Development Corporation, called the 13 guru of the Los Angeles economy by the Los Angeles 14 Business Journal. 15 Mr. Kyser is responsible for interpreting and 16 forecasting economic trends in the Los Angeles five 17 county area that includes Los Angeles, Orange County, 18 Riverside County, San Bernardino County, Ventura County, 19 and for analyzing major industries of the area. 20 Utilizing this information, Mr. Kyser helped 21 develop job retention and creation strategies for Los 22 Angeles County. 23 Mr. Kyser's advice is frequently sought by 24 business, government and the media. 25 With that, let me ask our first panelist, 24 1 Christopher Thornberg, to please make his presentation. 2 DR. THORNBERG: I think. I'm a little taller 3 than the previous speakers. 4 Thank you very much, Congressman, for having me 5 here. I will -- we have been told we are on a strict 6 five-minute time line -- don't start yet. Okay? No, 7 no. Put the card down, don't do that to me yet. 8 I guess I can speak for Jean and Jack and 9 myself -- I guess it's difficult for a Senator to stay 10 within ten minutes. It's very, very difficult for an 11 economist to stay within five minutes. So I will hurry. 12 Basically, we are looking at the economy. I 13 can tell you right now the economy is both better and 14 worse than you might think, just reading sort the 15 day-to-day articles that you find in the newspaper. 16 To understand why the economy is both better 17 and worse, you first have to understand why we ended up 18 where we are today, and it goes back, really, to the 19 late '90s period. Of course, the late '90s period was 20 the time of the Internet rush. 21 We were all promised this new economy, and we 22 were all going to be hard wired into the Internet, and 23 we were never going to leave our houses, if I remember 24 correctly. 25 Of course, in the midst of all that hype, you 25 1 had businesses really spending unprecedented amounts of 2 money on information technology and the infrastructure 3 surrounding information technology. 4 Of course, the big problem was: The promises 5 of the Internet never materialized. And instead, the 6 only thing these firms saw was stagnant profits for 7 many, many years. 8 By the middle of 2000, firms said enough was 9 enough, and they started pulling back on their 10 investment, that's what drove us into that 2001 11 downturn. 12 What we have been going through since then has 13 been the recovery period from that 2001 tech downturn. 14 And it was a very unusual downturn, because it was our 15 first recession in the United States that was led by 16 businesses rather than being led by consumer spending. 17 We never had a downturn in consumer spending. 18 So with that, let me tell you why the economy 19 is better than what you might think. 20 First of all, let's look at the long term. We 21 keep hearing about how our job growth or our job 22 situation here inside the United States right now is 23 basically where it was back in March 2001. But that's 24 not the proper metric by which to measure employment 25 now. 26 1 You see, in that late '90s period, there was 2 over-investment by businesses on capital, but at the 3 same time there was also over-investment by businesses 4 on people. 5 In fact, in that late '90s period during that 6 incredible economic rush, businesses were really 7 petrified that they might not be on that starting line 8 when the new economy fianlly arrived. 9 And just as they just invested a tremendous 10 amount in new equipment, they also invested a lot in 11 workers. And of course, unemployment fell to 12 unnaturally low levels, and we saw tremendous increase 13 in wages relative to productivity. 14 Just as the investment rush couldn't last, nor 15 could the employment rush last. 16 And really, that March 2001 figure is sort of 17 reflecting an overheated employment market, just as much 18 as it reflected an overheated investment market. 19 Now, of course, if you go back to 1997, right 20 now jobs are back on trend. In fact, that 21 productivity-wage gap has worked its way out of the 22 economy, and jobs are starting to improve. 23 That's the longwinded version of why things are 24 better. 25 In the short run, they are also better. 27 1 As you know, economists are always looking at 2 numbers. One of the problems we have is when we're 3 looking at numbers, we have to pull out what sort of 4 normal seasonal pattern jobs versus what's an actual 5 economic trend. 6 You might have heard a lot about the soft patch 7 we are in. Well, in fact, the soft patch is already 8 over. Last year at this time, between June and July, 9 the State of California lost 200,000 jobs. 10 The EDD, once it seasonally adjusted that, said 11 the state overall had lost only 2000 jobs. That was a 12 normal, seasonal variation. 13 This time between June and July we lost 147,000 14 jobs, yet the EDD is telling us that seasonally 15 adjusted, we lost 17,000 jobs. 16 When you look at that, something doesn't work 17 too right. In fact, the EDD and Bureau of Labor 18 Statistics is having some problems with their seasonal 19 adjustments, as far as we can tell at UCLA Anderson 20 Forecasts. 21 The soft patch was actually in May and June, 22 and we are passed that. July was, in fact, a very good 23 month for job growth. It was May and June that were 24 weak. 25 So it looks like not only are we sort of out of 28 1 this employment slump with you, but jobs are growing, 2 and we are not even out of the soft patch. 3 July was a very good month for jobs, once you 4 corrected these kind of inaccuracies at the national and 5 at the local level. 6 That's why things are good. 7 Now, why are things worse than we would 8 imagine? 9 Well, that goes back again to the Internet rush 10 in the late '90s period. That was a period of time not 11 only with businesses spending too much, but consumers 12 stopped saving. 13 In fact, over last decade, the United States 14 has seen a very alarming drop in both public and private 15 savings. 16 People are not saving. And of course, as we 17 know, the federal government is in deep, deep red right 18 now. 19 This is a problem because, you know, we are 20 running this enormous trade deficit. We have the baby 21 boomers coming down us. This is time when our nation 22 need to be saving more, not less. 23 Consumers, of course, have a lot of debt level 24 going on right now, and again, this is creating a 25 certain amount of stress in the economy. 29 1 We need to go through a period of soft consumer 2 spending where we allow basically our balance sheets to 3 get back to a more normal, long run sustainable level. 4 We at Forecast are worried that because the 5 government is not a pursuing a policy of encouraging 6 more savings now, both because of the tax cuts -- on 7 both sides of that particular fence -- we are worried, 8 of course, as this imbalance continues to expand, that 9 we may, in fact, very soon be running into a consumer 10 led recession. 11 In short, running into yet another consumer 12 downturn. This could happen in the next year or two. 13 Again, because of the lack of policy. 14 So that's sort of our view of what's better and 15 what's worse inside the economy, and we'll see how 16 things work you in the next year or so. 17 REPRESENTATIVE BECERRA: Well done. 18 Jean Ross. 19 MS. ROSS: Thank you. It's an honor to be 20 here, and I can see it's a tough challenge to stay 21 within our five minute allotment. Dr. Thornberg has set 22 the bar high. 23 I think I would agree that the picture of 24 the -- I'm going to speak to the California economy -- 25 is decidedly mixed. 30 1 My business is really public policy rather than 2 the economic forecasting that my colleagues do. So I'm 3 always keen to note the difference. 4 And I think that many of you probably heard him 5 speak about what's good for the economy and how we need 6 to see some softening. And I would say that's probably 7 not ideal from the perspective of the low and middle 8 income Californians whose interests my organization 9 studies and examines. 10 I think if you look -- and I'm going to speak 11 to also what's good news and bad news, a good framework 12 for looking at the economy. 13 If you look over the past year, California's 14 job growth has actually exceeded that of the nation. 15 That's certainly good news. 16 Also -- and I think this is critical from the 17 standpoint of how individual families and workers 18 experience the economy -- I think part of the good news 19 is that California's hourly wage growth has actually 20 exceeded that of the nation between 2002 and 2003. 21 And particularly good news within that is some 22 of the strongest wage growth is actually at the bottom 23 end of the labor market, the lowest paid workers. 24 And a lot of that has to do with some of the 25 increase in the state's minimum wage at the end of the 31 1 1990s, early part of this decade as well. 2 And unemployment is down. All very good news 3 for California and for California's families. 4 However, I think there are still a number of 5 very troubling long term trends, both looking backwards 6 and looking forwards. 7 Between 1989 and 2003, California's wage growth 8 actually substantially lagged that of the nation with 9 wages, after adjusting for inflation, for the workers in 10 the middle of the distribution rising 3.2, as compared 11 to just over ten percent for the nation as a whole. 12 And only for the very highest workers did 13 California's wage growth approach that of the country. 14 A lot of that had to do with the dot-com boom and some 15 of the tremendous wages in the high end of wages. 16 We have seen that temper off the last several 17 years. 18 California's economy -- again, I think this is 19 another one of the troubling signs -- like that of the 20 nation -- and this speaks to some of the comments made 21 by Senator Boxer -- isn't providing the kinds of jobs in 22 the long term that provide sufficient incomes that 23 support a family. 24 If you go back to 2001, nearly a fifth -- one 25 out of five California workers earned less than the 32 1 average wage for the federal poverty line for a family 2 of four. 3 The percentage is even higher here in the Los 4 Angeles area. 5 If you a look at industries that are expanding 6 as a share the economy, and compare those to industries 7 that are contracting as a share of the economy, you will 8 find that the pay level for expanding industries is 9 actually substantially lower than that for the 10 industries that are declining. 11 And moreover, the expanding parts of our 12 economy are less likely to provide health and pension 13 coverage to their workers. That adds additional 14 financial stress to workers and their families. 15 And if you look at the quality and what kinds 16 of jobs our California economy is now beginning to 17 create, I think one of most troubling indicators to me 18 is that just under a third -- 32 percent of the jobs 19 created in California in the past year -- are in 20 temporary services, employment services, temp agency 21 jobs. 22 An additional 25 percent of the jobs are in 23 retail, trade, leisure and hospitality, which again are 24 at the low wage end of the wage distribution. 25 Finally, if you look at the official state 33 1 forecast to the jobs that are to be created through the 2 end of decade, you will find that a quarter of the job 3 growth projected in California is in jobs that pay less 4 than $10 an hour, which translates into a full-time 5 annual income of just under $21,000. 6 Why has that happened? 7 A lot of it has to do with public policies. 8 I think that's why we are here meeting with 9 these officials today. 10 Deterioration in the purchasing power of the 11 minimum wage is down by a third since the 1960s here in 12 California. 13 Down even more nationally, because California 14 is taking steps to increase our minimum wage above that 15 of the country as a whole. 16 Tax policies has shifted the burden of paying 17 for public investment from our highest income households 18 onto middle income families -- a dramatic shift over a 19 very short period of time because of the tax policies 20 enacted during this administration. 21 And finally, we are seeing some of the cost 22 squeeze on families. That makes the very slow increases 23 in wages particularly severe due to rising housing 24 prices, tremendously so in California, with fuel prices 25 and others. 34 1 I look forward to a spirited debate. Thank 2 you. 3 REPRESENTATIVE BECERRA: Thank you, Jean Ross. 4 Mr. Jack Kyser. 5 MR. KYSER: Good afternoon, ladies and 6 gentlemen. 7 I'll start out with some bad news. We just got 8 word today that four different firms in Los Angeles 9 County are going to be shut down. 10 One out of Azusa, 200 jobs moving to Mexico. 11 A firm in Glendora, 85 jobs moving to Las 12 Vegas. 13 A firm in Industry, 300 jobs, closing the 14 plant. No reason given. 15 Then a firm close by, 220 jobs closing due to 16 the cost of workers' comp insurance. 17 So there are some interesting things going on. 18 As Chris pointed out, we are still dealing with 19 the fallout of multiple events, any one of them would 20 significantinaudible] for the economy to cope with. 21 And also, we have threats the terrorism. 22 There was a new survey released today by a 23 group of business that showed that terrorism was one of 24 their biggest concerns, and of course, this soaks up 25 resources. 35 1 The economy is growing. It's growing in Los 2 Angeles County. 3 But what our representatives in the field that 4 talk to businesses tell us is that they are hesitant to 5 hire people. It's expensive. They are willing to 6 invest in plant equipment. 7 So I think when we are looking at the future 8 growth rate of jobs nationally and in California and 9 Southern California, both in terms of quantity and 10 quality, we are going to have to start thinking in some 11 new, innovative ways. 12 Because we are in a global economy, whether we 13 like it or not. It's the real world. 14 We have China out there, a very, very fierce 15 competitor for manufacturing. 16 But interestingly enough, we are finding the 17 Chinese are interested in investing in Southern 18 California. So that's something we need to try to 19 encourage. 20 We have India taking in a lot of service jobs. 21 Again, another interesting note -- that a lot of people 22 who have service jobs in India are not happy with what 23 they are seeing there. So maybe we will start to see 24 some of these come back. 25 For California and for Los Angeles, we have to 36 1 acknowledge the size of the business base. It's small 2 to medium size businesses -- they don't have the 3 resources of the Fortune 500 type of firm, and they are 4 definitely feeling the pressure of import competition. 5 One thing we have to look at is education, K 6 through 12. 7 We also have to look at the community colleges. 8 I'm a big fan of community colleges, and very big fan of 9 L.A. Trade Tech. 10 And then as Senator Boxer pointed out, we have 11 to look at transportation. She was concerned about 12 safety and security, but we have to look at just the 13 whole transportation infrastructure, above the grids and 14 people. This is something we need to do in a holistic 15 fashion. 16 Another thing is: I think government has to 17 look at rules and regulations they are pass. In many 18 cases the individual piece of litigation is well 19 intended, but it has unintended consequences. 20 In California we are seeing what we call the 21 piling on of legislation. It makes it difficult to 22 compete with these global competitors out there. 23 The other thing is that we have to understand 24 that business is not the enemy. We just recently were 25 dealing with a situation where a firm needed a permit. 37 1 The government agency wasn't willing to really work fast 2 and get it out there. 3 So we have to be very, very innovative. We 4 have to look at a lot of different things. 5 We have a great economic base. 6 We have creative minds. 7 We have global connections. 8 But what are firms telling us? 9 Job training. Very, very important. 10 Work ethic. Very, very important. 11 Ability to reason. Very, very important. 12 And then also people getting an education -- 13 pick up some management skills, because you may find 14 yourself in a management position. 15 So we're optimist, but I think we need to break 16 down a lot of old thought processes and a lot of 17 different rules and regulations. 18 If we can do that -- and I think we can -- we 19 can create a quantity and quality of jobs that we'd like 20 to see nationwide, as well as here in Los Angeles 21 County. 22 Thank you. 23 REPRESENTATIVE BECERRA: Before we move to the 24 second panel, I'd like to ask a couple of questions of 25 our first panelists, and I'd like to open this question 38 1 up to any of the three panelists. 2 There is this phenomenon going around that I 3 have read about that says we have an economy that's 4 going in two different directions. 5 In one case you have the Wal-Marts, the Targets 6 of the world, where retail sales for them in the last 7 couple months -- June report I think said Wal-Mart sales 8 grew at about two percent. 9 On the other side, we have the Neiman Marcuses 10 of the world where evidently retail sales went up over 11 12, 13 percent. 12 I'm wondering if you could explain to the 13 audience and to us, how you can-- assess the difference 14 between a Neiman Marcus, which is very high end 15 retailer, and Wal-Mart, which is a retailer to the vast 16 majority of Americans, and what that means to the 17 economy. 18 MR. KYSER: I will start. Lower income 19 households have been hurt by rising energy costs. I 20 think that's very, very important. And in some cases 21 their employers that may have been hurt by rising energy 22 costs. 23 People forget if you are operating a truck 24 [inaudible] and then maybe working some shorter hours. 25 But definitely there are some price pressures, 39 1 and rents and home prices have been going up rather 2 dramatically. 3 When you get up to the Neiman Marcus level, 4 they don't care. They shop till they drop. And they 5 have a lot of disposable income. Also probably they are 6 looking for something new and inviting. 7 If you go to Wal-Mart, a lot of people are 8 afraid of -- you have to remember Wal-Mart is not for 9 everybody. It's sort of home for [inaudible]. 10 REPRESENTATIVE BECERRA: One of the tax cuts 11 that Senator Boxer mentioned, that the top one percent 12 of tax earners earn a massive amount of -- in the tens 13 of thousands dollars this year. 14 I have an estimate that says those who were in 15 the top one percent of income earners will receive a tax 16 cut that averages around $52,000, while the majority of 17 Americans receive somewhere perhaps approaching $850. 18 Would that have an influence on our purchasing 19 ability and the ability to go purchase at Neiman Marcus? 20 MS. ROSS: I think it certainly would. 21 I think when you layer in all the different 22 things that you see in the economy -- housing prices 23 would be particularly squeezed for the bottom and the 24 middle. 25 When you look at the impact of the tax cuts and 40 1 the distribution of those -- that's one of the problems 2 with the economy, is the largest tax cuts went to those 3 households which are least likely to turn around and 4 spend that money in the local community. 5 And I think you see an added impact: Not only 6 did you not provide -- an extra shift of the greater 7 share of the burden on the people in the middle and 8 lower end, but you are not turning around and seeing the 9 people who got the money spending as much. 10 Thirdly, if you look at the impact of the 11 rising deficit on interest rates, I think that's a 12 particularly troubling and long time issue. 13 Because again, the biggest impact on the 14 interest rate by the federal deficit will be on mortgage 15 rates will be to low and moderate income households in 16 California. 17 DR. THORNBERG: And if we can look at certain 18 tax cuts and talk about what's high income earners are 19 making more because of the tax cut, being at that end 20 versus the other -- of course, we also have to keep in 21 mind that the high income earners are also paying the 22 vast majority of the taxes into the system. 23 You have to be careful to see both sides. They 24 are benefitting the most, but they are still carrying 25 the larger burden and are still paying the most for 41 1 federal programs. 2 Be that as it may, I would like to rail against 3 tax cuts, period. 4 As I mentioned, we are in a period right now in 5 which we have dramatically low savings rates, both at 6 public and private level. 7 This is something that's coming go to come back 8 and haunt us in the next couple years. 9 If you look at tax cut at federal levels, you 10 will see that translated almost perfectly into increased 11 consumption. 12 Again, just increasing this savings gap that we 13 have inside the United States, and of course, starving 14 our local and federal government of a lot of those 15 resources that we need to move our economy forward. 16 We talk about workers who are trapped, say, in 17 those Wal-Marts. The best cure to help workers who are 18 trapped in a Wal-Mart is not to fight Wal-Mart or erect 19 trade barriers. It's education and training, and that 20 means improving our high school, improving our community 21 colleges, improving our universities. 22 And again, the tax cut has really stripped both 23 the local and state and national government from the 24 ability to do that. 25 So rather than worry about us versus them, I 42 1 rail against the idea, period. 2 MR. KYSER: Here's another aspect. You have 3 had local governments under great financial stress, and 4 they have raised permits fees, all types, and it's 5 probably had an impact on both small business and the 6 lower income consumer. 7 REPRESENTATIVE BECERRA: You mentioned 8 deficits. The question has gone around: Do deficits 9 matter? 10 The federal deficit for the fiscal year 2004 is 11 projected to be about $445 billion by the office of 12 management and budget -- that's the president's own 13 office. 14 That's a hundred billion dollars higher than 15 the president projected at the beginning of the fiscal 16 year, and it's $70 billion greater than the budget 17 deficit of the previous year, which was a historic high. 18 So we have now reached another high in our red 19 ink spending. 20 And my understanding is that these projections 21 for a federal budget deficit are going to go on for 22 quite some time totaling in the trillions that would be 23 added to the national debt every year there's a deficit. 24 You add up those deficits, and that gives you 25 the amount of debt that the nation has. 43 1 Do deficits matter? 2 DR. THORNBERG: Yes. You know, one of the 3 things, of course, is that you -- we keep talking about 4 the fact that we had this tax cut. 5 We never had a tax cut in the United States. 6 The tax cut is when you cut taxes and cut spending. 7 When you cut taxes and don't cut spending, 8 that's called a tax deferral. 9 What we are now inside the United States is a 10 massive tax deferral. 11 Who we are deferring to is the next generation: 12 Me, basically. And really, there is a tremendous 13 intergenerational transfer going on here, and it's just 14 unwise. 15 And like I mentioned in my talk with baby 16 boomers who are five and ten years from retirement -- 17 it's going to put an incredible stress on the social 18 support system, Social Security, MediCare, MedicAid, 19 MediCal. 20 And this is the time we need to be planning for 21 that, and we are going in the exact opposite direction. 22 We are creating a massive deficit in a period 23 we should have massive surplusin order to plan for the 24 future. 25 Yes, deficits matter. 44 1 REPRESENTATIVE BECERRA: So one final, easy 2 question: What's the solution? 3 MS. ROSS: I think certainly rolling back 4 particularly the high end tax cuts is step number one. 5 And looking at trying to bring the budget into 6 long term balance. 7 Certainly, beginning to invest more rather than 8 cutting back funding for work force development, more 9 federal investment, fiscal relief for the states. 10 While the federal budget deficit has been 11 mounting, we have seen the same thing is happening here 12 in California. 13 Again, it's a question of priorities. We are 14 seeing more and more pushing down to the state and local 15 levels. 16 Roll back the tax cuts, send monies to states 17 which across the country are experiencing difficulties, 18 some real investments in education. 19 I think particularly given the demographic 20 changes in California, all of us would agree that there 21 is tremendous challenges the next decades in the terms 22 of providing a kind of quality educational opportunities 23 from preschool through higher education. 24 And certainly immediately, increasing the 25 minimum wage. Again, I think it was California 45 1 angle,which we will be more competitive if the rest of 2 the country has a minimum wage. 3 So that's important in terms of our economy, as 4 well as our wage workers. I'll stop there. 5 MR. KYSER: I think the federal government cold 6 go through and do some streamling. I think there is 7 still a lot of waste and mismanagement in the federal 8 government. 9 My mother passed away in early 2002. I just 10 got a letter from the IRS asking why she hadn't paid her 11 taxes in 2003 taxes. 12 DR. THORNBERG: I would also -- if we are 13 thinking about policies, we really ought to be as a 14 nation thinking about revising our overall tax 15 structure. 16 Right now we have a tax structure that doesn't 17 encourage private saving. We need to change things. Go 18 more for consumer taxes, less savings taxes. 19 And encourage people to work more, save more, 20 and plan for tomorrow. 21 Which is not where our system is now. I'm 22 talking about overhauling taxes both the federal and 23 state level. 24 REPRESENTATIVE BECERRA: Jack, I have one final 25 quick question for you, more to Los Angeles and the 46 1 people who are here today and maybe watching. 2 My understanding is that at the federal level, 3 the president's budget proposes that we eliminate 4 funding for school dropout prevention programs. 5 The president's proposal for education funding 6 K through 12 called No Child Left Behind has been 7 underfunded at about $8 billion by the president in his 8 budget. 9 We are cutting back on the funding that would 10 provide MedicAid, which is MediCal in California. 11 Obviously, Los Angeles being the largest area in the 12 state would be impacted most. 13 We have lots of folks who are modest folks or 14 indegent. 15 How do you reconcile what is being proposed at 16 the federal level with what is needed at the local 17 level? 18 MR. KYSER: I don't think there is a real 19 recognition of what is needed. The problem is -- 20 remember, first of all, California is a donor state. We 21 send more to the federal government than we get in 22 various programs. It's more for the various programs. 23 And then you have to say Southern California, 24 especially Los Angeles, is somewhat unique in its needs. 25 And there is no recognition that. But 47 1 definitely need to keep the children in the school and 2 even graduating from high school -- it is going to be a 3 very, very dismal future for them. 4 Of course, the county health care system is 5 under stress. It's almost we -- believe it or not, you 6 are busy trying to generate tax revenue. Unfortunately, 7 inaudible]. 8 REPRESENTATIVE BECERRA: Thank you. Let us 9 move on now to our next panel, and I'd like to begin -- 10 I'm going to just make a quick introduction of these 11 people, because I want to be sure we reserve our time 12 for presentations and for questions. 13 We will begin -- I will begin by introducing to 14 my far left the president and CEO of the Hollywood 15 Chamber of Commerce, Mr. Leron Gubler. 16 We have also from the Los Angeles Area Chamber 17 of Commerce the vice president of work force 18 development, David Rattray. 19 We have from the Teamsters Local 396 the 20 business representative and political coordinator, Manny 21 de Leon. 22 And we have from the United Commercial Workers, 23 we have Mr. John Perez here as well. 24 Finally, we have the former senior software 25 quality assurance engineer at a company by the name of 48 1 Palm, Incorporated, Ms. Natasha Humphries, who will also 2 be testifying. 3 Why don't we first begin with Leron Gubler. 4 MR. GUBLER: Good afternoon. Because of the 5 time constraints, I'm going to limit my remarks to the 6 employment sector in the Hollywood entertainment. 7 Also, in my outline to the Congressman included 8 information including our other two major employment 9 sectors of health care and tourism. 10 Entertainment is a largest employee in 11 Hollywood. Since 1999 we have lost 29,000 job. 12 According to job Jack Kyser, we are going to 13 looks another 1500 this year, and 2500 next year. 14 I'm going to talk a little bit where these jobs 15 are going and are there opportunities to turn things 16 around. The information we have collected is from our 17 business members of the Chamber who work in the 18 entertainment field. 19 First of all, let's talk about some of the 20 items that are causing this loss of jobs. 21 One of the major factors is the movement to 22 smaller film crews. Reality television, for example, is 23 an area that does not require large crews compared to 24 sitcoms or dramas. 25 We have also in recent years seen a 49 1 proliferation of new cable networks. Many of these 2 cable networks do require programming, and they operate 3 on budgets that are substantially lower than regular 4 networks, and therefore these productions have to be 5 done on a shoe string. 6 Feature films -- we have also noticed the 7 production of feature films is up this year 12 percent, 8 but down 43 percent from 2001. 9 In addition to off-shore filming as our 10 competition, new filming incentives have been passed by 11 other states such at Hawaii, New Mexico and Louisiana, 12 all designed to take jobs away from Hollywood. 13 A recent poll in the Hollywood Reporter shows 14 as of that particular date, 24 feature films were 15 filming in Los Angeles County, six elsewhere in 16 California, 38 in other states, and 24 in foreign 17 countries. So our problems are by no means just 18 foreig,n, alone. 19 Another factor contributing to the decline of 20 the employment in the entertainment industry is the 21 recent wave of mergers and acquisitions, we are seeing 22 elimination of permanent positions and increased hiring 23 of freelancers. 24 So let's talk about now: What are some 25 opportunities? 50 1 In the major studios, we have seen a flattening 2 of their employment, with the exception of perhaps one 3 area. That's the home entertainment divisions, which 4 are involved in the production of DVDs. We all know how 5 those have exploded in recent year. 6 The video game industry poses another 7 opportunity for Hollywood. A few years ago many of the 8 studios jumped into this sector, and then immediately 9 jumped out when they couldn't figure out a way to make 10 money. 11 But it appears the direction now of the video 12 industry is towards sophistication, a realistic look, 13 characters and plots, all areas in which Hollywood 14 excels. 15 All the people I have spoken to do not 16 anticipate like the dot-com boom. They do see this as a 17 growth area for Southern California. 18 Finally, I'd like to point out another 19 opportunity area with digital cinema. Up to this point, 20 work in this field has been primarily research and 21 development with the digital cinema initiative based 22 here in Hollywood trying to determine some industry 23 standards. 24 Now we have reached a point where digital 25 cinema is close to a rollout. Currently, there are 51 1 36,000 movies screens in the United States, with another 2 100,000 worldwide. 3 There are less than 100 screens at this point 4 that are digital. So you can see the potential that 5 exists. 6 I'm told that deployment is anticipated to 7 begin within the next six months in a serious way, and 8 will grow some great opportunities, and will possibly 9 create thousands of jobs worldwide. 10 So those are areas where there are some 11 opportunities, where we are looking to have a upside and 12 turn the entertainment employment around. 13 And with that, my time is up. 14 REPRESENTATIVE BECERRA: Thank you, Mr. Gubler. 15 Now we will have Mr. Rattray. 16 MR. RATTRAY: Good afternoon. First of all, 17 our Chamber members in the L.A. Area Chamber tell us 18 what's always been true, but it's even more true today, 19 and that is what matters most for building in their 20 business is the human capital, or as Nordstroms calls 21 it, people power. 22 That's especially true now in our 23 knowledge-based and global economy. 24 Attracting and retaining attractive employees 25 and attracting their families or retaining their 52 1 families is directly correlated to the real and 2 perceived effectiveness of our educational system. 3 People want to live -- and especially we find 4 the middle class want to live where they believe they 5 can send their kids to school in a great school system. 6 And the more disturbing thing that we all know 7 here in Los Angeles is that we not only do we have an 8 achievement gap, but it's growing. 9 Our biggest concern then is really addressing 10 the education and work force development system, 11 especially our public education system, here in Los 12 Angeles. 13 The tragedy that too often we don't talk about 14 is that in many of our L.A. high schools, more than 50 15 percent of our Latino and African-American students do 16 not graduate. 17 If you just stop and think about that -- 50 18 percent do not graduate from high school. 19 That's a crime that we need to be confronting 20 and talk about, because we are all accountable for that. 21 And that really is what sets the framework for 22 what I think -- and we think -- is the future of our 23 economy and the wellbeing of our citizens, themselves. 24 Further, we know that the old factory model 25 high school that has 5,000 kids and sorts and segregates 53 1 kids based on perceived ability in ninth and tenth grade 2 is a crime as well. 3 It's a model that doesn't work -- it probably 4 never did work, and it certainly doesn't work now. 5 We are pleased the superintendent and school 6 board got bonds passed to build and open new schools -- 7 the new orthopedic high school right next to the campus 8 here is an example of that -- and that the 9 superintendent wants to open and reinvent high schools 10 into small learning communities to make them intimate, 11 and to connect every student with a caring adult. 12 In addition, our community college system is 13 massively underfunded and undersupported. 14 And we believe at the Chamber of Commerce that 15 we need to have a whole new emergence of the importance 16 of community college system of Los Angeles, and 17 California. 18 L.A. also needs to start speaking out much 19 louder. 20 And I think we need to support you, 21 Congressmen, and all of our delegation into get the 22 Dream Act passed. 23 For those of who don't know, the Dream Act 24 would help our undocumented students get access to get 25 federal financial aid. 54 1 Again, it's just a crime we bring kids to this 2 country, we put them in public education, and say, "Do 3 well." And as they do well and they reach ninth, 4 tenth, eleventh and twelfth grade, we suddenly really 5 turn the doors closed to these kids. 6 So I urge all of us to get behind the 7 Congressman and our delegation from Los Angeles, and get 8 the Dream Act passed. 9 REPRESENTATIVE BECERRA: Thank you, David. 10 We now have Mr. Manuel de Leon from Teamsters 11 Local 396. 12 MR. DE LEON: Good afternoon. I'd like to 13 express my sincere appreciation of being given this 14 opportunity to participate in this forum as a panelist. 15 My name is Manuel de Leon. I'm an a business 16 representative for Teamsters Local 396. 17 Many studies have bene conducted by various 18 entities on the subject of today's forum. Some of these 19 reports stemming from these studies paint a dismal 20 picture in the current state of the our economy and the 21 possibility of a portentous future. 22 In testimony given by Angie Wei, legislative 23 director for the California Labor Federation, AFL-CIO 24 before a joint Senate committee, she states that nearly 25 three million jobs in the United States have been lost 55 1 during the Bush administration. 2 Job losses continue, and unemployment is 3 lasting longer than it has for decades. 4 Yet corporate stocks, profits and worker 5 productivity are climbing. 6 We are suffering a jobless economic recovery. 7 I had prepared a written statement here, but 8 having listened to some of these experts here, I wanted 9 to share a little bit with you about my personal 10 experience. 11 I, too, am a community college graduate, and I 12 empathize with you. And I wholeheartedly support in 13 your endeavors and the tasks that are undertaken to 14 improve the quality the education here in California. 15 Going back to the reports produced -- by the 16 report mentioned studies that they are subject to a lot 17 of criticism. Those who disagree quickly move to 18 discredit the substance of these record. 19 Today I would like to share with you a brief 20 report of some of my life experiences. 21 After fulfilling my four-year enlistment, I was 22 honorably discharged from the United States Marine 23 Corps. 24 I then began the quest of the middle class 25 dream as a young man of 22 in 1979. 56 1 The day after my discharge, I was hired as a 2 technician at the rate of $8 an hour. Indexed for 3 inflation, those 1979 dollars are now worth $21 in 4 today's economy. 5 I was able to accomplish that with just a high 6 school education and the training I had received from 7 the United States Marine Corps. 8 During the subsequent years I was able to 9 provide for my family that grew to four daughters and 10 one son, purchase a home, and raise my family without 11 the need for my wife to leave my children to go to work. 12 I did this on a union wage in a manufacturing 13 environment that is now rapidly disappearing. 14 One of my daughters graduated from Cal State 15 San Bernardino with a bachelor's degree in psychology 16 this past June. I have always inculcated education to 17 them. 18 It has been two months since her graduation, 19 and the current job market does not hold much promise or 20 many opportunities, not only for her, but also for the 21 thousands of other college graduates and the rest of the 22 under-employed looking for work. 23 Today I see a ray of hope in this forum for my 24 children, most of whom who are grown, and the others who 25 are growing, right down to the newest addition who is 57 1 two months old, my grandchildren, and for the rest of 2 the community. 3 I applaud and commend the efforts of 4 Congressman Becerra in reaching out and searching for 5 answers. 6 Once again, I thank you for this opportunity. 7 REPRESENTATIVE BECERRA: Thank you, Manuel. 8 Let me now turn to Mr. John Perez from UFCW 9 United and Commercial Workers, Local 324, director of 10 legal affairs. 11 MR. PEREZ: Thank you, Congressman. 12 In thinking about what we were going to discuss 13 today, there were was really two ways to approach this, 14 discussing where we are economically as being a question 15 of a crossroads, or being a question of a crisis. 16 And since others on the panel have expressed a 17 little more optimism than I think I'm prepared to do, I 18 think I'll talk about the situation we are in from the 19 point of view of a crisis. 20 Today the Bureau of Labor Statistics released a 21 report talking about the consumer price index for the 22 last year. 23 And what it showed is that there is an absolute 24 a middle class squeeze affecting people throughout the 25 country. 58 1 Skyrocketing costs in health care, energy -- 2 and as you know too well -- in the area of education. 3 Tuition and fees have risen by three percent this last 4 year, and wages have only gone up 1.9 percent. 5 At the same time, our current administration's 6 policy is to shift the tax burden from those who can 7 afford it most to those who can afford it least. 8 And just in the last week our president 9 announced a plan to discuss moving towards a national 10 sales tax model, further burdening average working 11 people. 12 In reality, we have lost 1.8 million jobs in 13 the last several years. 14 When you talk about the jobs that have been 15 created -- and Jean Ross mentioned some of the 16 differences in the quality of the jobs that have been 17 created versus those that were here before -- 25 percent 18 of those are jobs in the industries I represent, the 19 retail industry and the hospitality industry. 20 Lower paying jobs than those that were lost -- 21 and now jobs that -- while they started off lower 22 paying, are in further decline. 23 In the grocery industry, we had a 141 day 24 strike to protect quality health insurance, and to 25 protect future wages. Unfortunately, we weren't able to 59 1 gain all we were looking to, and we had to make 2 concessions. 3 But these weren't concession because companies 4 were struggling to make do, day-to-day. 5 These are companies whose profits had increased 6 between 180 and 240 percent over the last several years. 7 What they said is: They needed relief because 8 they were competing with the bogeyman of our industry, 9 Wal-Mart, the largest corporation in the world, a 10 corporation who, while it succeeds economically, costs 11 the State of California $86 million on an annual basis 12 to provide emergency financial and health benefits to 13 its employees. A company that really can afford to 14 provide those services themselves, but have figured out 15 a way to game the system and creating a tax burden for 16 the rest of us. 17 In an effort to be brief, I will say this: 18 There are two areas of structural relief that we need to 19 look for. 20 On a national level we need to look to do away 21 with incentives of off-shoring jobs, the jobs that we 22 have been off-shoring too much across this country. 23 Here in California, we need a structural 24 approach to de-fiscalize land use. 25 We need to give local governments a system by 60 1 which they can create income for themselves without 2 having to go to the lowest wage job creators, and really 3 create a system by which they can incentive high wage, 4 high paying jobs. Thank you. 5 REPRESENTATIVE BECERRA: Thank you, John. 6 Let me ask Natasha Humphries to come forward, a 7 former quality assurance engineer for Palm, Inc. And 8 she is a member of TechsUnite.org, an alliance of 9 technical workers to protesting off-shoring and other 10 workers' rights issues. 11 MS. HUMPHRIES: Thank you, Congressman Becerra. 12 And good afternoon. I'm not sure if I'm going to 13 maintain this three minute time limit. But they'll have 14 to rustle me off the mike. Quite a story. 15 During my undergraduate studies at Stanford 16 University, I developed an interest in computer 17 software, landing my first job at Apple Computer. 18 Over the years I have continued to acquire new 19 skills through classes, seminars and self study in order 20 to adapt to the fast-paced technological changes in 21 Silicon Valley. 22 As a senior software quality assurance 23 engineer, I have over six years experience testing U.S. 24 and international software applications, most recently 25 in the handheld device industry and the wireless 61 1 communication stage. 2 After more than three years of service, I was 3 laid off from Palm, Inc. due to a workforce reduction of 4 realignment. 5 Palm, as you know -- as probably most of you 6 know -- is the global leading provider for handheld 7 computing devices, with total revenues of $871.9 million 8 in the fiscal year 2003. 9 Since the dot-com bust a few years ago, Palm, 10 as well as many other companies in Silicon Valley, were 11 struggling to reduce their R and D and other costs in 12 order to meet Wall Street's as well as shareholders' 13 fiscal expectations. 14 Palm's software testing organization 15 definitively began an aggressive campaign to outsource 16 all testing assignments to India and China. 17 After securing pay rates for as low as $2 to $5 18 an hour, executive management made a decision to 19 outsource all testing overseas, achieving a considerable 20 savings of 50 to 70 percent on salaries alone. 21 My software project was one of the first ones 22 at Palm to use an off-shore team in India. 23 And after several weeks of mounting project 24 difficulties, including but not limited to language and 25 geographical barriers, cultural differences, downed 62 1 E-mail servers and weak network and telephone 2 infrastructure, immature software development knowledge, 3 lack of familiarity with Palm software and hardware 4 products, management quickly identified a solution, 5 which was to send in-house Q and A engineers to 6 Bangalore, India in order to train software Q and A 7 engineers. I was one of those designees. 8 After returning from my trip in India -- I 9 spent two weeks in Bangalore, traingin software Q and A 10 engineers to basically do my job function. 11 After my return in January of '03, I repeatedly 12 met with my Q.A. manager and director to ascertain the 13 new direction of the company and any new skill that were 14 required to remain competitive as the off-shore team 15 began performing more of my job functions and to quickly 16 advance up their learning curve. 17 And at each individual or organizational 18 meeting was unable to learn any specific new 19 requirements of my position, and was discouraged to even 20 enhance my professional skillset either through poor 21 direction, or denied approval of tuition reimbursed for 22 course work. 23 The Q.A. director also indicated that his 24 organizational structure was in flux, and that his 25 strategy to increase the group's technical expertise in 63 1 alignment with new business objectives would be revealed 2 soon. Moreover, he assured the group that no one was to 3 lose their job to off-shoring. 4 On August 20, 2003, I was terminated, along 5 with 40 percent of my group. 6 Although it technically represented 14 people 7 during that layoff, statistically it seems like an 8 insignificant number, but we represented the talented 9 tenth remaining after scores of layoffs over a 10 three-year period. 11 Most of the terminated Q.A. individuals in this 12 layoff held senior positions, and commanded much higher 13 salaries than our counterparts in India at $5.00 a hour. 14 And although most of the software Q.A. 15 engineers in India are master's degree holders, they 16 were only paid $2 to $5, as Palm is only required to pay 17 home country wages commensurate to living standards in 18 India. 19 So it's -- as you can see, I have a personal 20 anecdotal experience as far as off-shoring, and in 21 conclusion, it has created a devastating economic 22 effect, not just in Silicon Valley, but nationwide. 23 Although the public and media have faulted H1B 24 and L1 guest worker visa programs for the massive job 25 losses, companies are finding a new back doors, which is 64 1 off-shoring large volumes directly and displace 2 technical workers like myself. 3 REPRESENTATIVE BECERRA: Thank you, Natasha. 4 Let me ask a question of our second panel, and 5 open it up to anyone to answer. 6 We have been hearing more and more reports 7 about off-shoring of jobs, and Natasha, you have justs 8 testified about how your job was off-shored. 9 Give me a sense of how real you see it in the 10 film and TV industry, how we see the off-shoring of, in 11 a sense, our movie production when it goes to Canada or 12 Australia or other countries as well? 13 How palpable, how real is it for the average 14 person who works day-to-day, whatever the field may 15 be -- whether service, engineering or manufacturing? 16 Anyone can answer. 17 MR. GUBLER: Maybe I can give one example I 18 didn't in my comments. And actually, I thought it was a 19 little alarming. 20 Up to this point, what we have seen in the off- 21 shore film industry was primarily on the filming end of 22 things, not post production. 23 Generally speaking, they film outside the 24 country. They come back to L.A. and in the 25 post-production houses and finish the editing. 65 1 The reason it's done here is because we have 2 excellent workers, skilled workers, and usually the 3 directors like to have access to watch editing as it's 4 done. 5 Because of the advances in technology, that has 6 now charged. 7 In fact, I was told yesterday by a company that 8 Canada is now putting out the pitch not only to film in 9 Canada, but to finish the work in Canada. 10 And not only Canada, but now Eastern Europe is 11 also appealing for jobs. One company has told me they 12 lost six contracts in the last year to Prague in the 13 Czech Republic. 14 What does convert to in means of jobs? 15 In the last year their work force is down 16 40 percent. They now have 110 employees. They have 17 laid off about 50 employees in the last year. 18 This is alarming, because particularly in 19 Hollywood, as you know, most of our employment is in the 20 post production field. I think that's an alarming 21 development. 22 So what does that mean to an individual? 23 That's 50 people who made a good living in 24 Hollywood, and are now out and probably freelancing. 25 REPRESENTATIVE BECERRA: Ron, do you have an 66 1 idea how much those types of jobs pay on the average? 2 MR. GUBLER: I do not. I can get it that for 3 you. 4 REPRESENTATIVE BECERRA: Anyone on the question 5 of out sourcing because of costs? 6 MR. PEREZ: I guess I view the current wave of 7 off-shoring similarly to previous waves of moving other 8 manufacturing jobs out of the country, and historically 9 to Mexico and the maquiladores. 10 Congressman, you dealt with this issue a lot in 11 the '90s. 12 The reality is: What we are seeing is wave 13 after wave of high quality jobs moving someplace else. 14 When it happened in the auto industry, when it 15 happened in other manufacturing, people said it was 16 because it could be done cheaper somewhere else and 17 would create higher skill level jobs here. 18 So now that we are seeing it happening in the 19 highest skill level jobs available in the tech industry 20 and other industries, really, I think it forces us to 21 revisit some of the questions that you and some of your 22 colleagues raised in the last decade about what kind of 23 tax structures are in place that incentivize some of 24 these off-shorings, and whether or not there isn't 25 something you and your colleagues can do in tax reform 67 1 to create the incentive to keep those jobs here and to 2 create the opportunities for folks that have these high 3 level jobs after they are done with their eduction. 4 REPRESENTATIVE BECERRA: David, did you want to 5 add anything? 6 MR. RATTRAY: I want to add to the comments 7 made earlier looking at tax incentives for investing in 8 the United States and other structural components are 9 crucial. 10 But I think, as Jack said earlier, the global 11 economy is here to stay. We can't escape the fact that 12 the global economy is here to stay. And we are just 13 going to change at faster rates tomorrow than we did 14 yesterday. 15 So our biggest defense, to me, is offence. 16 That is having the best education training system in the 17 history of this universe. 18 The only way to empower our people is to truly 19 empower them with knowledge and skill and talent, 20 notwithstanding the experience of what was just shared 21 with us. 22 In the long term, that's the greatest offensive 23 weapon that we have in the country -- we have always 24 had. 25 I think that's added on top of the structural 68 1 things mentioned. You need to do that. 2 But you can't put up the walls that we kind of 3 thought about with trade tariffs years ago on products 4 against people movement move. 5 You can only do it with great talent and a 6 response to the economy. 7 MS. HUMPHRIES: I wanted to add to that. 8 I think off-shoring is a very complicated 9 problem, but education is not the silver bullet. 10 My said education did not inform my company's 11 decision to separate me from the company. 12 I think off-shoring is just increased 13 profiteering, and we need to find a line between a true 14 survival need and profit, just pure profit and corporate 15 greed. 16 REPRESENTATIVE BECERRA: On that point, I think 17 most of us recognize Palm as a very universal 18 product,the Palm Pilot and other devices that -- 19 electronic devices manufactured by Palm. 20 Palm still has sites, factories, offices in the 21 U.S.? 22 MS. HUMPHRIES: Yes. Global headquarters are 23 in Milpitas in Northern California. 24 REPRESENTATIVE BECERRA: Did they explain to 25 you all as they were dismissing you the reasons for your 69 1 being let go? 2 MS. HUMPHRIES: Oh, yeah. It was couched in 3 terms of a skillset swap. They claimedthat these 4 individuals in India had a superior skillset. 5 Which totally begged the question: Why was I 6 training them? 7 So once the knowledge transfer took place, I 8 didn't feel that was the -- a very truthful statement. 9 But that was the official statement. 10 And I think a lot of companies are hard 11 pressed. I mean, I'm a business person. I understand 12 the cost of legitimate financial concern. 13 But I think there is a humanistic aspect that's 14 missing in all of this off-shore strategy planning. 15 That day and a half notice I got before I was 16 laid off? Was not enough time to refinance my mortgage. 17 So it has a personally devastating impact on me 18 and my family, and my own financial planning. 19 REPRESENTATIVE BECERRA: Do you happen to know 20 what Palm is paying those employees in India who 21 replaced you and others at the Northern California site? 22 MS. HUMPHRIES: Oh, absolutely. Q.A. engineers 23 at my level can earn anywhere from 75 to $125,000 a 24 year. So that's roughly $30 to $65 a hour. 25 Versus individuals in India -- I know what the 70 1 budgets were, because I managed a project team and a 2 small part of the budget, so they were being paid $2 to 3 $5 an hour. That is a competitive wage in India. 4 I will tell that you these individuals are very 5 ambitious. They are driven to succeed. They are very 6 talented, and the U.S. does not have a monopoly on 7 engineering computer science talent. That must be 8 acknowledged. 9 It is difficult for me -- I have mixed 10 reactions to the off-shoring. I think it could have 11 been planned a little more carefully where maybe 12 employees could have repointed themselves within Palm, 13 or at least polished up the resume so you can market 14 yourself to another company. 15 REPRESENTATIVE BECERRA: The acoustics are not 16 the best. Let me make sure I understood you correctly. 17 I believe I heard you say that the salary that 18 you could expect here in the U.S. from Palm for your 19 position was somewhere between $35 to $65 a hour. 20 And that the individuals who replaced you and 21 your co-workers in India were being paid $2 to $5 an 22 hour. 23 MS. HUMPHRIES: That's correct. And I 24 understand -- I have recently been in contact with my 25 counterpart in Bangalore, India -- she has since 71 1 received a promotion and has moved onto another project, 2 and is working for somebody in Singapore and may be 3 coming to the U.S. 4 But yes, that is a competitive wage. $10,000 a 5 year is the middle class. It will get you a car and a 6 servant in India. 7 REPRESENTATIVE BECERRA: Anyone have any 8 comment, including our first panel, talking about how we 9 succeed in retaining jobs when India offers skilled 10 workers at less than one tenth of the cost of what we 11 pay or skilled workers here? 12 DR. THORNBERG: Well, there are a number of 13 issues here that can be addressed -- not to take away 14 from your personal problems -- 15 REPRESENTATIVE BECERRA: One second, because 16 going to what Jack -- or David said earlier, even if we 17 get them that great education, we still can't hold them 18 because someone else -- India, China -- will pay them 19 far, far less or require a pay that's far, far less, and 20 that means someone very skilled here still would not be 21 able to compete at all. 22 DR. THORNBERG: First of all, we have to keep 23 in mind the sort of -- the coming out of the tech 24 sectors in India, Singapore, so on and so forth really 25 occurred in the late '80s, early '90s, and they grew 72 1 rapidly all the way through the '90s, and we never heard 2 any complaints about it. 3 That was because in the process of 4 commoditization of a lot of these skills and 5 off-shoring, at the same time the tech sector was 6 expanding elsewhere. 7 So people who lost their jobs here were quickly 8 moved on to other places and continued at that time with 9 a job. 10 You can't blame outsourcing for the hiccups 11 the technology sector is going through right now. 12 The reality is: The technology sector grew too 13 fast in the late '90s. 14 In the last few years, the technology sector 15 has been declining to a more proper or longer level. 16 And so -- again, not to take away from personal 17 difficulties -- and it sounds like Palm didn't handle it 18 very well -- but outsourcing has been with us for years 19 and years and years. 20 Also, again, not to take away -- there are 21 definitely a lot of people who have been displaced. We 22 always have to be worried about them and help them get 23 back on their feet. 24 But the reality is: Jobs are coming back, and 25 incomes are growing in the U.S. at the average level. 73 1 The biggest issue we face here in California and the 2 U.S. is not the average wage. It's the high end. 3 Because at the high end particularly 4 [inaudible]. 5 The real issue, as far as I can see, is the 6 widening income distribution, the gap between those who 7 are educated and those who are uneducated. 8 For the most part, people who are educated, 9 have solid degrees, are doing very, very well right now. 10 Incomes have been growing on a year-to-year basis. 11 Didn't really slow down in 2001 downturn. 12 Did you want to add something to that, Jack? 13 MR. KYSER: There is another phenomenon we have 14 overlooked, and that's called in-sourcing, where you 15 have foreign companies coming in to the United States. 16 For example, we have an auto industry in Los 17 Angeles County. Mazda and Nissan and Toyota of the 18 world. They don't do any manufacturing here, but a lot 19 of their decisions are made here [inaudible]. 20 They do have plants in the U.S. Southeast. 21 Unfortunately, the UAW has never been able to crack 22 those. 23 And right now we have a lot of Chinese firms 24 coming into Southern California, and this is something 25 that we are looking at to see if we can entice Chinese 74 1 firms to come in and consider Los Angeles the first stop 2 in Southern California for creating some interesting 3 jobs. 4 But Chris used a wonderful term, 5 commoditization. Any time you have a job that processes 6 something or is doing a something [inaudible] we are in 7 dangerous territy, what we do a again going back to this 8 education to always stimulate [inaudbile] and also be a 9 couple steps ahead. Within six months we'll come up 10 with something. And because they still don't play by 11 all the rules. 12 REPRESENTATIVE BECERRA: Anyone else? 13 MR. GUBLER: Going back to the example of the 14 post production house, I don't know the hourly wage, but 15 I think I did give an example of wages of the price 16 differential in these projects that are going to 17 Czechoslovakia. 18 Generally, post-production is about ten percent 19 of the cost of the movie. 20 In particular, some of the examples -- gave me 21 a job they would normally bid for $500,000. 22 In Prague, companies were bidding $50,000. 23 So one tenth of the cost. There is no way they 24 can compete with that. 25 I said, "What about the quality?" 75 1 He said, "Well, unfortunately, I have to tell 2 you their quality is very good." 3 Technology is moving, particularly in Europe 4 and other places, and catching up with us. 5 So staying that one or two steps ahead is not 6 as easy as it once was. 7 There is a challenge: How do we save those 8 jobs there? 9 REPRESENTATIVE BECERRA: Mr. de Leon? 10 MR. DE LEON: Mr. Kyser probably recalls the 11 downturn of the aerospace industry, specifically General 12 Dynamics and more in California where thousands of good 13 paying jobs were initially moved to Arizona and after 14 that was purchased by Hughes Aircraft. 15 A lot of that work was done at Pomona, 16 California, then turned to Mexico, with the 17 maquiladores. 18 Now we have a situation where those jobs are 19 now being done with products, of all places, Russia. 20 Some of the things. That's -- 21 How do you explain that? 22 At what cost, you know, do we go out to save 23 money -- at any cost? 24 The second part is: We have talked about 25 outsourcing, how is it unconscionable that we have the 76 1 food stamp program being administered off-shore by 2 workers either in India or Mexico with our own state 3 dollars. 4 Those are jobs that can be done here locally to 5 help out the people. 6 DR. THORNBERG: Two things. First of all, the 7 decline of the aerospace industry in the early '90s was 8 not due to outsourcing. 9 It was due to a dramatic cutback on spending on 10 both civilian and military aircraft by the federal 11 government, and also by civilian airlines. 12 There was a big runup in purchases of planes 13 that created a big gap. 14 So most of that was decline in demand. It 15 wasn't an off-shore phenomenon. 16 Also, when you talk about manufacturing, keep 17 in mind that right now in the United States in real 18 terms we produce twice as many or twice as much -- I'm 19 not sure of the terminology -- manufactured goods than 20 we did 30 years ago. 21 We have doubled our manufacturing output in the 22 last 30 years. 23 The issue is: We are doing it with many fewer 24 workers, and there are few high tech workers with either 25 two-year degrees or four-year degrees earning a lot of 77 1 capital equipment. 2 Unfortunately, a lot of these good jobs went 3 away, but they are not being replaced by Mexicans or 4 Indians. They are being replaced by machines and 5 computers. 6 It's productivity and technology training 7 that's replacing a lot of those jobs, which again goes 8 back to what Jack said: That the solution to this is 9 education and training for this next generation coming 10 up. 11 Because, again, it's a new world, different 12 kind of world, and you got to have those skills if you 13 are going to succeed. 14 REPRESENTATIVE BECERRA: Let me ask if I can, 15 because I'm not quite sure I'm connecting all this. 16 Ms. Humphries has given us a clear example of 17 someone who has gotten herself well educated, skilled, 18 gone through the education that we'd like to have many 19 of our young people go through, and yet she is still 20 finding herself at the short end of stick. 21 And so at the same time we have right now a 22 budget that's put forward by the Bush administration 23 which cuts funding for a lot of those educational 24 programs that you are talking about pushing forward to 25 try to make it possible for those who haven't gone to 78 1 college to get there. 2 So it sounds like on both ends of this stick, 3 people are on the short end. 4 One: You get well trained, as Ms. Humphries 5 did, and you still lose your job. 6 Two, those who are trying for the first time to 7 get an education, this administration is cutting money 8 for education programs. Tell me where I'm wrong. 9 MS. ROSS: What is so different about this 10 recession than the early 1990s is the fact that it has 11 had a very disproportionate impact at the high end, 12 unlike the early '90s, which was sort of low to mid end. 13 If you look at what the unemployed population 14 in California looks like, if you go back to 2000 which 15 my colleague tells me again which is probably as good as 16 it will ever get -- 14 percent, 15 percent of the 17 unemployed population was individuals with bachelor's 18 degree or educations higher than that. 19 Last year it was 30 percent. 20 Again, if you look at who is getting jobs and 21 who and is not getting jobs, this has been a recession 22 that has really hit exactly the people -- the kind of 23 people that we are talking about here. 24 And I think the question in terms of education 25 and training in part to get to: When you lose your job 79 1 do you have the skills that can help you go out and get 2 another job, as well as the issue of job creation. 3 I think there are some very very significant 4 challenges here. 5 I think we have talked a lot about investing in 6 education. 7 I think it's also a question of investing in 8 infrastructure. 9 I was in rural China last fall, where every 10 small village I went to had high speed Internet anywhere 11 you went. 12 I can't get that in my neighborhood in 13 Sacramento. 14 I think we have seen a tremendous investment, 15 public investment in India and in China in terms of 16 making their infrastructure world class. 17 And we are not seeing that kind of investment 18 here in the U.S. 19 REPRESENTATIVE BECERRA: I want to announce to 20 the audience we are going to have a little bit of time 21 for public comment or questions, so I would ask those 22 who are interested to please approach the microphone. 23 We will only have time for a few questions, so I will 24 ask you -- whoa, oh my gosh. 25 We are going to stay until 3:30, and then we 80 1 are going to have to close. We might not have a chance 2 to get everyone who is lining, but it's great to see you 3 are interested in participating. 4 Before we go to those in the audience, just to 5 confirm something here -- I probably want to pose it to 6 the panelists from our first panel. 7 I did a newsletter recently where I collected 8 some data -- please correct me in I'm wrong -- because 9 as you talk about this recovery, job recovery and so 10 forth, I keep wondering whose it is. 11 My information tells me that work productivity 12 -- I think this was mentioned earlier -- and by work 13 productivity, we mean the amount of time and labor a 14 worker needs to produce a good or service -- that worker 15 productivity improved by about 5.4 percent over the last 16 year. 17 Yet workers' real wages -- in other words, your 18 pay minus inflation -- has actually declined during the 19 past year by about 1.3 percent, and is declining faster 20 over the last five or six months. 21 So your productivity as a worker has gone up, 22 you are producing more with an hour's worth of labor, 23 but at the end of the day, after inflation is factored 24 in, you are making less money than you were a year ago. 25 At the same time, corporate profits since March 81 1 of 2001 have skyrocketed some 55 and a half percent. 2 And the information I saw recently was that the 3 average salary of a CEO, a corporate executive officer, 4 in America's largest corporations, now exceeds $8 5 million annually. 6 That's about 300 times greater than the average 7 worker's salary. 8 Whose recover is this? 9 DR. THORNBERG: Congressman, I'm sorry, but our 10 numbers don't agree with your number on that. 11 We have seen incomes rising in the last couple 12 years in the United States. 13 Unemployment right now -- excepting the 14 overheated labor market in the late '90s -- 15 REPRESENTATIVE BECERRA: Real wages? Or wages? 16 DR. THORNBERG: Real wages have increased. 17 And unemployment in the United States right now 18 is -- except for the overheated economy of the late 19 1990s, unemployment right now is lower than it's been at 20 any time since 1970. 21 UNIDENTIFIED MEMBER OF THE AUDIENCE: That's a 22 lie. 23 MR. KYSER: That's begs the question -- 24 DR. THORNBERG: Sorry. These aren't lies. 25 These are statistics. If I'm wrong, then the census 82 1 bureau is feeding me wrong information, so -- 2 REPRESENTATIVE BECERRA: Chris, let's make sure 3 I understand. 4 They are lower than 1970, but they are higher 5 than they were up until the year 2000 -- 6 DR. THORNBERG: Unemployment is lower right now 7 than it was during any time during the '80s. 8 REPRESENTATIVE BECERRA: How about in the '90s? 9 DR. THORNBERG: Except for the late '90s when 10 unemployment went down to four percent, and that was 11 reflective, again, of that overheated economy. 12 A lot of jobs -- you talk about we have 13 productivity growth but not a lot of wage growth, but 14 the last three years, which I agree with. But that's 15 because in late '90s period we had a lot of wage growth 16 without productivity growth. 17 REPRESENTATIVE BECERRA: My understanding is 18 that 5.5 percent unemployment rate, what we have is 19 about 8.4 of so million people unemployed. 20 On top of that my understanding is that there 21 are some four and a half million people who are under- 22 employed -- they are working less than a full-time job 23 even though they may be seeking full-time work. 24 And if you add the four and a half or so 25 million other Americans who have stopped looking because 83 1 they became so discouraged, you are looking at something 2 over 17 million Americans who are either unemployed or 3 underemployed. 4 DR. THORNBERG: The percen of the work force 5 who are working age work force right now is higher than 6 it's been at any point before 1995. 7 So, actual number people of with jobs in the 8 United States right now is higher as a percent of the 9 working age population from 16 to 65 than it's been at 10 any point before 1995. 11 So again, I keep hearing about lack of jobs, 12 but the reality is: There are a lot of jobs out there 13 in the U.S. economy. 14 UNIDENTIFIED SPEAKER FROM THE AUDIENCE: Where 15 are they? 16 REPRESENTATIVE BECERRA: That's -- I do want to 17 go to the audience. 18 Did you want to -- Jean did you want to say 19 anything before we go on? 20 And I want to actually get to the audience, so 21 we will close with you and then go the audience, to try 22 to take a few questions. 23 MS. ROSS: Again, I think we have seen -- and I 24 think the most recent information will be out next week 25 in terms of income which I thinnk in California, have 84 1 been fairly flat, if not falling behind, depending which 2 years you hit. 3 Again, I think it comes from if you look at the 4 economy as sort of something that has an independent 5 life or how it impacts individual workers and families, 6 I don't think in an economy with four to five percent 7 unemployment is necessarily overheated. 8 I think that's the good thing for workers and 9 their families. 10 I think certainly now we are at a level of 11 unemployment that is higher than much of the past decade 12 and higher than the late 1980s, which I think was a more 13 reasonable period. 14 REPRESENTATIVE BECERRA: Let me go to 15 questions, and I know the panelists want to chime in -- 16 we are going to go run out of the time real quickly. 17 If you can be very brief with your questions 18 and your comments, we will see if we can get a quick 19 response from the panelists if it's appropriate. 20 Otherwise, we will move on. 21 Your name, please? 22 MR. KHAN: My name is Nezra Khan, and I'm a 23 constituent of yours. I'm also a Pakistani. 24 I'm a community college student, and I found 25 this all very informative. I think Proposition 72 is a 85 1 step in the right direction concerning health coverage 2 for the entire state of California, and I want to thank 3 you very much. 4 REPRESENTATIVE BECERRA: Thank you very much. 5 Let's go over here to my right. Yes, sir, give 6 us your name. 7 MR. CARLTON: My name is Robert Carlton, and I 8 am an American, served in World War II, shot down in a 9 B-17, spent a year as a prisoner of war in Germany. Got 10 an purple heart, which was legitimately awarded, if you 11 get the meaning. 12 REPRESENTATIVE BECERRA: Mr. Carlton, I need 13 you to be brief. 14 MR. CARLTON: Okay. I appreciate it. All I can 15 say is: It's sort of like a society that is an 16 alcoholic. 17 If you are elected by a government of alcohol 18 producers, they will tell you: Let's switch from 19 whiskey to gin. When you are done, you willb be an 20 alcoholic. 21 We today live in a society that unfortunately 22 has been misinformed as to what the problem is. 23 If you read your letter, the first three of the 24 first our paragraphs, the problem is money and the way 25 we utilize it, obviously. 86 1 In other words, we have been told that 2 capitalism is the answer. 3 That's like the alcohol producers saying "Let's 4 switch from whiskey to gin." 5 REPRESENTATIVE BECERRA: Mr. Carlson, I want 6 you to voice the question. 7 MR. CARLSON: The answer is socialism. 8 If you want a GNP, if you back to Jesus 9 Christ's example, he had the perfect GNP at the loaves 10 and fishes situation. 11 And what was the result? 12 It was distributed. They all were fed and 13 happy. 14 REPRESENTATIVE BECERRA: Thank you. Gentleman 15 on my left? 16 MR. WATKINS: I just want to say, first of all, 17 it's really frustrating to travel so far and wait so 18 long to get a chance to say just so little. 19 My name is Tim Watkins. 20 I represent the Watts Labor Community Action 21 Committee in Watts. My motto is: The little community 22 with the biggest name in the world -- that's Watts. 23 Unfortunately, we can't have this kind of 24 gathering in our community because federal standards 25 that are providing for redistricting have compromised us 87 1 thoroughly. 2 We have no less than three congressional 3 representatives in a one-mile square area. 4 As you know as a member of Congress, it's very 5 seldom they all get together on anything very often. 6 We need to have a solution for that. It does 7 not need to be left in the bailiwick of the three 8 representatives that are currently there. 9 It needs to be brought into the scope of 10 Congress because federal redistricting principles have 11 been violated. 12 REPRESENTATIVE BECERRA: Thank you for your 13 comment, Jim. Ma'am, will you give us your name? 14 MS, KALTON: My name is Cynthia Kalton. I'm 15 commissioner of student services here at Trade Tech, and 16 I'm just astounded. 17 What gives me the incentive to stay on the 18 president's list, go to higher education, vie for these 19 Fortune 500 jobs, to one day train my replacement in a 20 third world country? 21 Please tell me what gives me the incentive? 22 Why don't I just roll over and get a job over 23 there and just wait for it to come to me? 24 REPRESENTATIVE BECERRA: I don't know if the 25 panel wants to answer. 88 1 MS. ROSS: We talk about individual stories, 2 and we talk statistics about the economy. 3 Because you're fitting every piece of data that 4 I think certainly all of us know about -- would tell you 5 that your best chance of making a good living, getting a 6 job that will provide health coverage, pension coverage, 7 and security for the family is education. 8 Again, I think everything we know is because if 9 you lose your job, the more education, the quicker you 10 are able to get back on your feet and hopefully find 11 another one. 12 REPRESENTATIVE BECERRA: I'll just add that 13 policymakers make decisions on how they spend trillions 14 of dollars that you give us through your taxes. 15 Come November, you can make a decision about 16 who are the policymakers who get to deal out those 17 dollars. So don't forget to vote. 18 Yes, sir? 19 SPEAKER ID INAUDIBLE: My name is [inaudible] 20 I'm a student at Los Angeles Trade Tech Center. 21 I was wondering what have you been doing to 22 toughen our foreign policies? 23 And second of all, why would anyone go anywhere 24 in a third world country to train somebody else knowing 25 you were training your replacement? 89 1 REPRESENTATIVE BECERRA: I'm hoping that people 2 who are coming to ask a question or comment would try to 3 stay to the subject matter, because we have several 4 people who are here. 5 I will briefly say the whole situation abroad 6 is a very difficult and sticky situation, not one that I 7 supported from the get-go. 8 But at this stage what I'm hoping we do is find 9 we can find leadership that will try to get us 10 extricated from Iraq as quickly as possible but without 11 making the situation any worse. 12 Let me move to the next speaker. Please if I 13 can ask you to try to address the questions -- or excuse 14 me -- the subject matter of the forum. 15 MR. BROWN: Real quick, my name is Larry brown, 16 and I would just like to make a comment on the jobs 17 going overseas. 18 Out-source -- Senator Kerry was at Cal State 19 Dominguez last week, and he proposed a tax credit for 20 businesses that keep jobs in the United States. 21 Also, real quick, the guy that is saying jobs 22 are coming back -- we didn't see the jobs. 23 Where are the jobs? 24 If the jobs are coming back, why is 25 unemployment so high and people can't get a job? 90 1 Also, real quick, Trade Tech has a tremendous 2 labor studies program. I encourage all members to look 3 at Trade Tech's labor studies program, which I am an 4 alumni. 5 Also, sir, on that advisory committee: Where 6 are the jobs? 7 MR. KYSER: Aerospace is starting to hire 8 again, but they require very specific skills. 9 You are seeing jobs in construction. 10 Unfortunately, it seems to be jobs in 11 retailing. 12 But there are a lot of things around. You just 13 have to be alert. 14 What I tell people is to look at the help 15 wanted ads in the Wall Street Journal. That gives us an 16 indicator of who is thinking about hiring out there. 17 You have to be aggressive in this market. 18 REPRESENTATIVE BECERRA: We will take four more 19 questions, two from each side. 20 I apologize for having to limit it to that, but 21 we are very close to concluding, and I want to make sure 22 we close on time. 23 So sir, give us your name, and brief comment or 24 question. 25 MR. MAVIS: Yeah. My name is John Mavis, and I 91 1 want you to know -- I am a native of Los Angeles since 2 day one. I graduated off that stage 52 years ago, where 3 you are at right now. 4 My problem is transportation for all disabled 5 people. 6 The MTA is saying they don't have money, and 7 they are trying to cut out access services in Los 8 Angeles County. 9 They have cut it from same day service to next 10 day service. 11 Now we are going to have to make up our mind up 12 today if we want to go to McDonald's tomorrow to get a 13 hamburger. 14 And it's ridiculous to knot know when you are 15 able to go and do anything. It's supposed to be a 16 freedom. They freed the slaves. Now the ADA went 17 through this to try to free us, but we are not really 18 free. We can't go where we want to go. 19 Secondly, I want to ask the committee if you 20 would please recognize nine months from now that this 21 school here originally was Polytechnic High School, and 22 I would like to see some kind of certificate or diploma 23 given to a bunch of us students who are still alive and 24 kicking and have an alumni group. 25 If you would please recognize that, I would 92 1 appreciate it. Thank you very much for having me and 2 letting me speak. Thank you. 3 REPRESENTATIVE BECERRA: Mr. Mavis, if you -- 4 there are people, representatives of Trade Tech here. 5 You may want to approach them. 6 MR. MAVIS: I'm talking about Polytechnic High 7 School. 8 REPRESENTATIVE BECERRA: Thank you very much. 9 MS. STRAUB: I'm Mrs. Valjean Hotchkiss Evans 10 Straub, and I used to work in the Wilshire District for 11 Texaco and Shell Oil companies. 12 And I have received three AA degrees from the 13 community colleges, ins business administration and real 14 estate management. 15 But what -- the question I want to ask to the 16 panel and Mr. Becerra is: How do you think our -- how 17 do you think we he can get our jobs working better in 18 Los Angeles? 19 I have been filling out applications left and 20 right now for -- oh, gosh -- over 20 or 30 years. 21 And the issue is that I -- they just refuse to 22 hire me. Somebody is trying to punish me about my jobs. 23 I had no alcohol problems, no drug problems, 24 and I worked with my husband -- he got his degrees from 25 USC while we were married. He got his bachelor's degree 93 1 from USC. Bachelor's degree, and even passed the L.A. 2 bar exam. You see, he tried to do me wrong when we went 3 to divorce -- 4 REPRESENTATIVE BECERRA: Let me see if we can 5 focus on a question -- 6 MS. STRAUB: The question I'm addressing this 7 question to the panel, is: How do you think we can get 8 our jobs working again? 9 I know education helps people get better 10 professional jobs, but -- I don't want to be punished 11 about my jobs. 12 REPRESENTATIVE BECERRA: Let me pose the 13 question to the panelists, and perhaps Mr. Kyser would 14 like to responded because he is someone who knows well 15 about Los Angeles, I think you talked a little bit about 16 this, Jack, and I don't know if you add anything more in 17 terms of what L.A. needs to do. 18 MR. KYSER: We are trying to find the answer. 19 We are working right now -- 20 UNIDENTIFIED SPEAKER: Louder! 21 MR. KYSER -- trying to develop a strategy for 22 growth in L.A. County, and we are looking at good 23 quality jobs. 24 But it's going to take some very significant 25 changes in the way that we all operate and do business 94 1 and think about things. 2 REPRESENTATIVE BECERRA: I really have to move 3 on -- 4 MS. STRAUB: I just don't want to be punished 5 for my jobs -- 6 REPRESENTATIVE BECERRA: -- I have to move over 7 here. And we have just two more questions for the 8 panel. 9 MS. STRAUB: I have been -- 10 REPRESENTATIVE BECERRA: Folks, I hate to tell 11 you, but we really have run out of time, so two more 12 questions, one from each side of the auditorium. 13 Sir? 14 MR. REYES: Yes. My name is Eddie Reyes. I'm 15 a proud member of the south central Los Angeles 16 community. 17 I have a question maybe perhaps for Ms. Ross. 18 Maybe two questions. 19 One of them deals with of small businesses 20 and -- in our community, there is lot of small 21 businesses. 22 And we -- the ownership of our community 23 is necessay in order to improve all aspects of life. 24 So what incentives are offered at the federal 25 level and state level and local level to improve small 95 1 businesses and help them grow? 2 The second part is this: What does the 3 economic development taking place downtown mean for our 4 community? 5 We are south of the 10 freeway designated as a 6 redevelopment zone. 7 How does the big operations that are going to 8 be constructed there in downtown affect our smaller 9 community, our small businesses? 10 MS. ROSS: I think it's maybe a better question 11 for Mr. Kyser and also for Congresswoman Napolitano and 12 her staff that may be here in terms of what specific 13 programs are available. 14 I think there it's always a question when you 15 have a downtown investment, what does this mean for 16 areas surrounding downtown. I think a lot of that is 17 local public policies. 18 MR. KYSER: If you go to our office, 444 South 19 Flower, and ask for a business resource guide that we 20 published with all the incentive programs for the 21 business community, everything from government programs 22 to educational programs. 23 REPRESENTATIVE BECERRA: We have one final 24 question before the gentleman -- we will move forward 25 with this question. 96 1 I'd like to add on that one point that we could 2 do a lot more for small businesses if we get the SBA's 3 budget fully funded. 4 Right now, the administration is planning to 5 cut a substantial amounts of funding for the SBA which 6 would include money to provide business loans at a 7 reduced interest rate to entrepreneurs who are trying to 8 begin their businesses. 9 So there are things we could do that wouldn't 10 cost a lot of money that would open the doors to small 11 business owners here in Los Angeles. 12 Sir, you get to ask the final question. 13 MR. KELLEY: Yeah, my name is Patrick Kelly. 14 I'm with Teamsters Local 952. 15 The greater Los Angeles area is on the verge of 16 losing tens of thousands of more jobs due to the opening 17 of the border with Mexico. 18 This is a fact, and it's going to happen, and I 19 would urge everybody to write their Congressman. 20 I want to thank Congressman Becerra for his 21 activities on behalf of working people. 22 But once the border is open, there are going to 23 be tens of thousands of distribution jobs that will go 24 across the border. 25 There are going to be Mexico domiciled truck 97 1 drivers bringing those goods up here, and returning to 2 Mexico. 3 This is the result of NAFTA and the lack of an 4 industrial policy. 5 And I would like to ask the panel, particularly 6 Mr. Kyser, if he would join with labor in pushing for -- 7 not necessarily Prop 72, because that may not be the way 8 he wants to go -- but I think this country needs to 9 develop an industrial policy that retains jobs here. 10 And I don't think we have that. 11 I think there are steps that could be done that 12 we could do that on a national basis. 13 I'd like to get his comment, because we are 14 continuing to lose jobs, not just to Mexico, but to 15 China and other places -- California, we are losing jobs 16 to other states. 17 And I think that Prop 72 is probably a small 18 step towards doing some things in California, but that 19 doesn't fix the issue beyond the State of California. 20 I'm interested if you would be interested in 21 working, joining with labor to develop an industrial 22 policy so we don't have a situation we now only have one 23 auto plant in California, Mexico has 15. We had 14. 24 And we can go step by step throughout the 25 industrial sector and we can see that our country is 98 1 being de-industrialized to a large extent. 2 We from labor would like to work with the 3 employers and figure out a way to come to a consensus to 4 go forward. 5 If we don't come to consensus, I don't see us 6 getting any kind of a fix on these larger jobs. 7 But anyway, Congressman, I want to thank you 8 for your sponsoring this, and I want to thank L.A. Trade 9 Tech and all the students for coming here today. 10 REPRESENTATIVE BECERRA: Mr. Kyser, would you 11 like to respond? 12 MR. KYSER: As I need we need policies on all 13 types of things. 14 We need an overall education policy. 15 We need a transportation policy. 16 We need an economic development policy. 17 I don't see that coming out of D.C. 18 Remember Inaudible], and California is a -- 19 [inaudible]. 20 I think the Congressman is trying to change 21 that. 22 REPRESENTATIVE BECERRA: It's a tough one. 23 It's us against the world on that one. 24 Let me ask Mr. John Hernandez, the student 25 body president here, to please step forward a help us 99 1 close this forum. 2 MR. HERNANDEZ: Thank you. First off, I want 3 to say: Thank you, Senator Barbara Boxer -- even though 4 she is not here -- thank you Barbara Boxer. 5 Thank you, Congresspersons Xavier Becerra, 6 Sherman, and Napolitano. 7 Thank you all the delegates as well for 8 choosing Trade Tech to speak about America's economy and 9 jobs. 10 The information that the Senator and the 11 Congresspeople and the delegates as well provided is 12 important to this community, and THE college as well. 13 At this moment, I would like to thank the 14 students at Trade Tech for attending this public forum, 15 and I would thank you -- I would also like to thank all 16 the residents for making the effort to attend this 17 historic public forum as well. 18 Lastly, I would like to thank all the Trade 19 Tech professors and the staff for their support and 20 participation in education and information and informing 21 the students. Thank you. 22 REPRESENTATIVE BECERRA: Thank you, very much. 23 Let me also add to all those who prepared this 24 forum, to thank President Castro, L.A. Trade Tech, the 25 staff, the faculty, the student all who made the 100 1 possible for us to host this event here. 2 I want thank all of our panelists for their 3 instructive comments and their guidance and advice on a 4 very important issue about jobs and the economy. 5 To all of those who asked questions or made 6 comments from the audience, I want to thank you for 7 that. 8 To those who were not able to ask questions, I 9 thank you for your indulgence and patience. 10 And I want to make sure to thank all those who 11 helped put this together and their staff -- 12 Congresswoman Grace Napolitano and her staff, Senator 13 Barbara Boxer and her staff, and to all who made it 14 possible at Channel 36, and the other media, I want to 15 that say: Thank you very much for helping us to hold a 16 forum to disucss jobs and the economy and where we go 17 from here. 18 With that, we have concluded the forum, and I 19 thank everyone for having participated. 20 (Whereupon at 3:35 p.m., the. 21 Forum adjourned.) 22 23 24 25 101 1 CERTIFICATE OF REPORTER 2 3 I, Catherine Ponicsan, C.S.R. 4 No. 8271, do hereby certify: 5 That the foregoing proceedings were taken 6 down by me in shorthand, to the best of my ability, 7 within the confines of difficult acoustics and audience 8 response overlapping speakers, at the time and place 9 therein named and was hereafter reduced to typewriting 10 under my supervision; 11 This transcript, with the above caveat, is 12 a true record of the proceedings and contains a report 13 of the proceedings which took place at the time and 14 place set forth in the caption hereto, as shown by my 15 original stenographic notes. 16 I further certify that I have no interest 17 in the event of the action. 18 WITNESS my hand this 26th day of August, 19 2004. 20 _______________________________ 21 C.S.R. No. 8271 22 23 (Certified Transcript Requires Original Signature of Reporter) 24 25 102