Small Businesses Carry a Large Burden as Restrictions Get Tighter
Over the next two decades, 66,000 small businesses will be regulated by the South Coast Air Quality Management District in its push to clean the region’s skies.
“That is a substantial portion of the economic-industrial base of this area,” said John C. Wise, deputy regional administrator of the U.S. Environmental Protection Agency. “Many of these firms have never had to deal with air pollution controls before.”
At the moment, companies that use paints and solvents--particularly furniture manufacturers--are the most active critics of the plan’s rules, some of which already affect their operations.
Furniture building is mostly small business in Southern California.
In Los Angeles County, from 60% to 80% of the furniture companies employ fewer than 20 workers. Yet they are a significant part of the economic mix, supporting more than 37,000 employees, roughly 1% of the county work force, according to Los Angeles industrial economist Goetz Wolff.
Lately, furniture makers have come under rules restricting hydrocarbon emissions, which waft up from traditional oil-based paints and solvents. The clean air plan requires a switch to non-polluting, water-based coatings as well as a new routine of environmental record-keeping, with regular reports to the AQMD.
Many furniture companies are suspicious of the quality of the new materials. They also strongly object to the increased accounting load and say they are taking on an unfair portion of the air cleanup, particularly compared to drivers and their hydrocarbon-spouting cars.
“I wouldn’t be surprised if 50% to 60% of the wood-products industry is gone in the next few years,” Gary L. Stafford of Terra Furniture warned a county jobs task force recently. Stafford also is a director of the industry’s trade group, the Western Furnishings Manufacturers Assn.
Last fall, Pasadena Research Institute, an industry consultant, issued one of the grimmest prophecies to date in a study for the Community Air Quality Task Force, a local government and business group. It predicted that air pollution controls will cost 239,000 Southern California jobs among furniture makers, house painters, wood and metal finishers and other solvent users. The AQMD predicts job losses of only a fraction of that size. Moreover, district spokesmen point out, any so-called job losses should be considered only a slight slowing of growth against the tide of 2 million jobs that the Southern California Assn. of Governments expects to see created in the region over the next 20 years.
So far, more than 40 such firms have left Southern California, according to Pasadena Research. Although many of the departing companies complain of the cost of meeting air pollution standards, they also cite California’s high labor costs and demanding workers’ compensation laws.
Meanwhile, AQMD regulations have resulted in increasing use of low-polluting water-based paints. It is now illegal to sell many high-polluting oil-based paints in the South Coast Basin. In some cases, paint manufacturers who a year ago said these rules required an impossible leap in technology now market new paints that meet the standards.
At the same time, although an exact accounting is not available, the once-threatened mass exodus among the estimated 800 Southern California furniture manufacturers has yet to materialize.
“The effect of the AQMD plan has been really negligible when you get down to it,” said Peter B. Olney, project coordinator of Local 1010 of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers. Olney believes that business failures and moves out of state have often been unfairly blamed on pollution control rules.
“Not that there isn’t need for help with businesses having problems with technological upgrades,” Olney said, “but there have been some exaggerated and inflated figures bandied about. . . . The closures that we have confronted have had to do with market conditions or parent companies contending with debt service or restructuring, not the air quality plan.”
Air quality policy specialist Richard Ayres said people “aren’t stupid; they change.”
“Over and over again, when a new regulatory requirement is imposed, industry looks at current technology, or the most expensive way to go about it,” said Ayres, who also was a co-founder of the Natural Resources Defense Council. “Of course, when (the new rule) is in place, then they have a different incentive. Then it is to find the least expensive way to comply, and very often they find that.”
