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Job killing bills hobble California in global competition

By Loren Kaye – President, California Foundation for Commerce and Education

CalChamber released its list of Job Killing legislation yesterday – 23 bills that would further curb California’s competitiveness and chill our investment climate.

Expect on cue from labor unions and the tax-and-regulation lobby: tearing of hair and rending of garments. In their view, reforms to improve flexibility for workers and expedite permits for job-creating development is “a race to the bottom.”

I hate to inform them – we’ve already reached the bottom. We’re bringing up the rear in competitiveness (CEO Magazine), business tax climate (Tax Foundation), and trail the pack in regulatory climate (Forbes). By an overwhelming margin, executives and owners tell us that it’s harder to do business in California than in other states.

A survey of the 2012 crop of job killers reveals a dreary choice – the authors of these bills are either ignorant of the fundamental conditions necessary for job creation – or they simply choose to ignore them.

For example:

  • AB 2517 by Assembly Member Mike Eng would allow any employee in a wage dispute to file a lien on his employer’s real property – business or personal. Existence of these super-precedent liens will chill the real estate market, not to mention new hiring.
  • AB 1897 by Assembly Member Nora Campos would require local governments to amend their general plans to ensure residents have access to healthy food, including access to discount grocery stores, urban farming, community gardens, and developing incentives for solar refrigerators.
  • AB 1450 by Assembly Member Michael Allen would prohibit employers from legitimately inquiring into a prospective employee’s employment history, for fear of discovering that the prospect may have been … currently or in the past … unemployed. What’s more, the bill would effectively create for state contractors a hiring preference for unemployed persons.
  • AB 1963 and AB 2540, by Assembly Members Alyson Huber and Mike Gatto, respectively, would create new taxes on services, ranging from shoe shines and ski lifts to attorneys and advertisers. Oddly, neither of these tax proposals is purportedly aimed at raising new, additional revenue for the state, but as a way to redistribute the tax burden. In each case, the tax burden would generally shift from the well-to-do to the middle class. What’s more, in taxing services, consumers have enormous discretion in using fewer services or, in the case of businesses, doing them in-house. So the real losers will be the (often low-skilled) workers who will lose their jobs.

Many on the left believe the government’s role in job creation begins and ends with the creation of government jobs. After that, it’s a festival of tax and regulation to support one or another special interest’s leverage with employers or tax-supported program.

Nothing could be further from the truth. The path to the bottom is marked by closing off free trade, loading the litigation cannon aimed at employers, and erecting permit obstacles before new investments can create California jobs.

What’s the common thread linking these job killers? Increased costs. More regulation, more litigation, more time and more taxes. It’s these increased and unnecessary costs that lead businesses to grow more slowly in California and increasingly lead consumers to do business outside California.

California has a daunting task to pull regain its competitiveness. It can’t be a leader in the global economy if it interferes in the global marketplace. Making short work of the job killers is a small step in the right direction.

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