For the 21st consecutive year, CalChamber is releasing our Job Killer list that identifies pending legislation that will significantly harm California’s business climate if enacted by: (1) discouraging employers from locating to California; (2) discouraging employers from growing their workforce in California; (3) eliminating jobs in California; or (4) significantly increasing costs on employers, which limits their ability to expand employee wages, benefits, and jobs. Although we see this type of legislation introduced year after year in California, it is especially surprising and harmful this year given that we are still currently in a pandemic, and many sectors of our economy are still suffering.
Much of California has been completely shut down or at a reduced capacity for the past year. Unemployment is still high, with approximately one million individuals out of work compared to the year before the pandemic hit. According to EDD, almost every sector of the economy saw a reduction in their workforce in 2020. Small businesses have shut down, or are barely holding on. It is estimated that about 44% of small businesses are at risk of shutting down permanently as a result of the COVID-19 pandemic. Small business revenue is down more than 30% in California, with some sectors being down more than 70%. According to Visit California, hospitality and tourism lost $59 billion in 2020 and California is not likely to reach pre-pandemic travel related spending until 2025. And while the increased vaccine distribution is promising and providing optimism that we may be close to the end of this pandemic, no one knows for sure. The Governor and federal government continue to remind people to be vigilant against the virus to curb any rise in infections.
Despite the uncertainty, loss, and devastation to California’s economy, the Legislature has introduced bills to: (1) increase taxes on targeted groups of Californians, even though California currently has a $15 billion surplus with another $151 billion coming from the federal relief package to state and local governments, schools and other sectors; (2) expand labor and employment mandates including additional protected leaves, new threats of litigation and costs, and forced unionization, all of which will burden struggling employers; and (3) even though it is well acknowledged that California has a significant housing shortage, there are bills to limit or eliminate housing production in the State. There is also a bill that will eliminate oil and gas production in this State to address climate change, even though it will put thousands out of work and make California more reliant on importing oil and gas from other states or countries with less restrictive environmental laws than California. And finally, a proposal has been introduced to completely overhaul the entire healthcare system in California, while we are still in a pandemic, and have the Government take over and manage it.
Allan Zaremberg, President and CEO of CalChamber stated “Many of these bills—particularly the labor and employment ones—seem to be solutions in search of a problem,”
Zaremberg also questioned why the Legislature is not working on ways to reduce costs on businesses struggling due to the pandemic. “Are policy makers unaware that unemployment filings increased last month? California employers cannot be the safety net for struggling workers. The billions of dollars coming to the state from the American Rescue Plan should be used to provide the safety net for struggling workers and help get businesses back up and running,” Zaremberg concluded.
The Legislature should pause on advancing these types of burdens on California employers at a time when there is so much uncertainty and so much existing loss that employers are trying to regain.