The California Chamber of Commerce recently released its annual list of job-killer bills currently in the state Legislature. The bills’ supporters claim these 25 measures will provide Californians physical and economic security when really they will eliminate jobs, increase taxes and enlarge the public debt.
The bills include initiatives to require businesses to fund health care for employees (SB 48), guarantee jobs for employees returning from workers’ compensation (SB 942) and reimburse employee wages after lockouts (AB 504). These bills, and others, will impede California’s economic growth.
SB 836, for instance, would mandate that employers not discriminate based on “familial status,” prohibiting employers from firing or refusing to hire and promote individuals who miss work for family reasons. The bill’s broad language even would protect employees who miss work to comfort a depressed parent-in-law; feed, bathe, and shuttle their children to swimming lessons; or drive a domestic partner to Las Vegas.
Employees remaining at work will be forced to pick up the slack. Businesses compelled to hire or retain frequently absent employees will have to shuffle their schedules to accommodate the unpredictability of each employee’s family.
Countless employers already provide workers ample flexibility for the family without government coercion. Working Mother magazine named Patagonia Inc., headquartered in Ventura, to their top 10 most family friendly companies. Patagonia offers alternative work arrangements, generous maternity leave, onsite child-care and up to four months’ unpaid leave for personal reasons.
Employers hoping to attract and keep productive workers will design programs to meet their employees’ particular needs. This bill will only expose companies to more costly litigation.
A UC Hastings study reported that the number of discrimination cases linked to family obligations swelled nearly 400 percent in the past decade, with a top award of $25 million. California businesses are heavily burdened with frivolous lawsuits.
The Pacific Research Institute’s U.S. Tort Liability Index, an assessment of each state’s civil-justice system, ranked California in the bottom third of the states. A new government-protected category of workers will further erode the state’s liability ranking and economic competitiveness.
Compliance with any government order takes time, money and labor better used to improve business products and benefit employees. Restrictive regulations particularly harm small businesses.
A 2005 study for the Small Business Administration estimates that federal regulations cost U.S. businesses and consumers $1.1 trillion in 2004. Firms with 20 or fewer employees bore the brunt at $7,647 per staffer.
Businesses facing higher costs due to regulation try to offset these losses elsewhere. They pass on regulatory costs to consumers in the form of higher prices. They slash employee wages, benefits and jobs.
In some cases, overburdened companies shut down or re-locate to states friendlier to business. The number of California businesses dropped by 2.8 percent in 2005 compared to a 12.5 percent increase in neighboring Nevada. The damaging effects of a few intrusive regulations might go unnoticed, but heaps of them will smother economic growth.
Fewer jobs and less business activity will shrink the state’s tax revenue. Paying down California’s current $76 billion bond debt and additional $66 billion in authorized bonds will be overwhelming if growth lags. Lawmakers will have to reduce spending or raise taxes. Higher taxes will strain the economy further leading to a persistent cycle of fewer jobs, more regulation and higher taxes.
The desire to provide job security and assist families is noble, but in the long run more government intervention will harm workers. Government interference only hurts businesses striving to address employee needs and foreshadows tax increases to pay the debt. State legislators should work to loosen, not tighten, the regulatory stranglehold on California businesses.
Legislators should kill these job-killer bills and instead offer tax incentives to firms that provide flexible work options. This would promote economic growth needed to service the debt and encourage employee-friendly workplaces.