Wilson as Hero for the Small Business Owners

Last week, the San Fernando Valley was the battleground for Gov. Pete Wilson’s unusual war against the Democratic-controlled Legislature over workers’ compensation reform.

I knew it was war when I heard Wilson speak to about 200 owners of comparatively small businesses at the Precision Dynamics Corp. plant in San Fernando. I’ve observed four previous governors--Pat Brown, Ronald Reagan, Jerry Brown and George Deukmejian. But I’ve never seen one so uncompromisingly militant as Republican Wilson, tossing off threats to Democratic lawmakers from L.A. County who are getting ready to oppose him during the special legislative session that begins Thursday.

When the Legislature votes on his plan, he said, that “one vote is either going to allow legislators to stand with the men and women who run and work in the small businesses of their districts or stand instead with the special interests whose agenda is more delay and defense of the status quo. . . . It is fair to say that the jobs of legislators should ride upon reform.”

Wilson needs a hard attitude for the task he’s taken on. In the past, every attempt to reform the runaway, often crooked workers’ comp system has failed.

Each year, workers’ comp costs escalate. The employer-financed program was devised early in the century to pay for employees’ recovery from on-the-job injuries. Wilson has proposed legislation designed to reduce medical costs and limit benefits for cumulative stress and for injuries not traceable directly to work. But a powerful lobby of donation-giving labor unions, lawyers, doctors, psychologists and other health professionals who make a living from workers’ comp are ready to block these proposals.

Wilson’s tactic against the Democratic leadership is unique. He’s trying to mobilize the small-business owners who haven’t been much of a force in state politics.

We talked about it in an interview as he was riding to Burbank Airport, where he was to catch a flight for San Diego, another stop on his workers’ comp campaign.

Although his face remains perpetually pale, he looked better than the pasty-faced, drawn, tense Wilson of the recent budget fight. He still speaks in a nasal monotone, but snaps his words out in brusque, clipped sentences that give him an air of command.

“Let me tell you, I think it is the only way we can overcome the special-interest contributions,” he said, explaining his attempt to organize small businesses.

Small business would be a new entry in the vast marketplace of special interests known as the state Capitol.

The Legislature is already dominated by a few readily identifiable economic interests.

High among them are traditional big California businesses such as manufacturing, aerospace, oil, entertainment and booze. Add to that the powerful trade and professional associations--trial lawyers, physicians, cosmetologists, and so on. Finally, we’ve got the big unions--the teachers, the cops, other public employees, the building trades and the rest.

The person who owns a catering company, or a small manufacturing or contracting business never made the Sacramento power list. But in recent years, small businesses--particularly manufacturing firms with 100 to 300 employees--have become the state’s major employers, particularly in the Southland.

“You’ve got people running small operations they built themselves and that is what is creating jobs in the state,” Wilson said.

Workers’ comp takes a huge slice of a small businesses’ profit. If insurance costs double, for example, to $200,000 a year for a 100-employee business, profits may vanish.

In Los Angeles County, Wilson is targeting Democratic Assemblymen Bob Epple of Cerritos and Terry Friedman of Los Angeles, who face tough races, and Richard Katz of Sepulveda, who is expected to be reelected but is preparing to run for Los Angeles mayor. “If I were he, I’d be interested in projecting an image of a pro-business Democrat,” Wilson said.

On Thursday, the Valley’s heavy grass-roots effort begins when VICA--the Valley Industry and Commerce Assn., representing 330 companies with about 100,000 employees--sends a business lobbying delegation to Sacramento for the legislative session. That will be followed by full-page newspaper ads by the association urging the defeat of lawmakers opposing VICA-backed workers’ comp changes.

Republican strategist Stu Spencer, a key Wilson adviser, said he thinks the governor’s strategy makes sense. “I think he’s definitely got something going here,” Spencer said. “To small business, Pete has become their spokesman and their hero and they are rallying around him.”