Employers Say State Climate Remains Poor

By DAVID W. MYERS

Dec. 8, 1993 12 AM PT

TIMES STAFF WRITER

More than 90% of employers in California say the state still has a poor business climate, despite the recent overhaul of its much-maligned workers’ compensation system and recent signs that the economy is finally pulling out of recession, according to a survey to be released today.

However, despite numerous complaints, 29% of the 1,377 executives at companies with more than 25 employees told the California Business Roundtable that they plan to add workers in 1994, compared to the 21% who expanded their payrolls this year.

And in another sign that the region’s business environment is modestly improving, 29% of the employers said they will eventually open new offices or plants in California, compared to 24% who said they will move some or all of their operations to other parts of the country.

“We’re seeing a few signs of improvement in the business climate here, but employers are still facing a whole litany of problems,” said Robert Wycoff, past president of Arco and chairman of the business group.

The Roundtable organization, representing 90 of California’s biggest employers, works to improve the state’s business atmosphere.

Not surprisingly, employers said the overall cost of doing business in California--followed by relatively high state taxes, regulations and military cutbacks--is primarily to blame for the state’s current economic woes.

But in a separate telephone survey of 600 registered California voters chosen at random by the Roundtable, the typical resident named the cost of services afforded undocumented workers as the biggest drag on the state’s economy.

“The general public can’t really measure what impact a (military) base closing might have, but they can turn on the TV and see politicians . . . complaining about the cost of immigration,” said Mark Baldassare, an independent pollster and sociologist at UC Irvine.

Although Gov. Pete Wilson and a bipartisan group of legislators passed a sweeping overhaul of the state’s troubled workers’ compensation system earlier this year, only 15% of the business executives surveyed said those improvements will save them much money. More than 80% said further curbs are needed on related medical and legal costs, as well as on claims for mental stress.

Overall, the surveys show a remarkable amount of similarity between the answers given by corporate executives and the responses from the voting public.

Both groups called for changes in the state’s legal system, and both said law enforcement and education should be the Legislature’s top budget priorities.

The two groups differed most on the subject of protecting the environment: 74% of business leaders called for further easing of state environmental regulations, while 55% of the voters polled said no more changes are needed.

Roots of Economic Downturn

Big employers say the high cost of doing business in California is the primary reason the state’s economy is dragging, but voters say the main reason is illegal immigration.

In your opinion, how much does each of these contribute to the state’s current economic problems:

Cost of business

Business leaders: 70% Voters: 32%

Taxes and regulations

Business leaders: 53% Voters: 22%

Military cutbacks

Business leaders: 52% Voters: 30%

Cost of immigration

Business leaders: 43% Voters: 43%

Decline of public systems

Business leaders: 28% Voters: 24%

National economy