‘Job killers’ that aren’t
Since 2003, the California Chamber of Commerce has published an annual hit list of bills it labels job killers. The list has included state legislation to protect consumers, workers and the environment, and to raise revenue to fund public services or support middle- and working-class families.
No politician — Democrat or Republican — wants to be known as someone who kills jobs, so many of them will avoid supporting any bill so labeled. Republican Gov. Arnold Schwarzenegger used the list as a to-do list for his veto pen. His Democratic predecessor, Gray Davis, vetoed some of its top targets.
The chamber’s argument is always the same: If “job-killer proposal X” passes, companies will go bankrupt, shrink or move out of California. Excessive taxes, regulations and paperwork, especially on small businesses, will crush private sector investment.
If all this sounds familiar, it’s because business lobbies have made these claims every time California has increased the minimum wage; every time businesses have had to disclose or limit toxic material in workplaces, consumer products and communities; every time California’s wealthiest or most profitable corporations have been asked to pay their fair share of taxes; and every time legislators and voters have taken action to limit greenhouse gas emissions.
The chamber and its business allies rigorously carry out the central principle of modern advertising — repetition, repetition, repetition — hoping that their job-killer claims become each bill’s default sound bite.
But if we look backward, we find that the job-killer predictions are often wrong. Despite the chamber’s political clout, some of the bills on its lists became law. So it is possible to evaluate whether the organization was providing honest analyses or crying wolf and engaging in scare tactics. Here are some examples.
In 1986, voters approved by a wide margin Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act), requiring warning notices about potential exposure to toxic chemicals. The chamber and major business lobbies claimed it would have “an adverse effect on the economy.” But when the California Environmental Protection Agency conducted a five-year review of the law in 1992, it found: “By federal standards, Proposition 65 has resulted in 100 years of progress in the areas of hazard identification, risk assessment and exposure assessment.”
In 2002, California was the first state to create a paid family leave insurance program, which helps family members care for children or elderly parents without losing their jobs. The chamber lobbied vigorously to kill the bill but was unable to stop it. At the time, chamber President Allan Zaremberg described the law as a coming disaster for business, saying, “We’re opposed to a lot of bills, but this is one of the worst.” A lobbyist for the National Federation of Independent Business predicted, “It will be the biggest financial burden for small businesses in decades.”
Now, eight years later, an extensive survey of employers and employees by economists Ruth Milkman and Eileen Applebaum found that the law isn’t the costly job killer that business warned about. In fact, the survey found the leave law helped reduce turnover and increased employee loyalty while helping families meet the challenges of working and caring for their children.
In 2009, the chamber successfully opposed a proposed state law that would have mandated paid sick days for the hundreds of thousands of workers who don’t get any and therefore have to choose between going to work sick or forfeiting wages. The bill was modeled on a law passed two years earlier in San Francisco — the first municipal sick days standard in the country.
Local business organizations vigorously opposed San Francisco’s law when it was proposed, predicting job losses, shuttered businesses and slashed benefits. But they were wrong. A recent survey by the Institute of Women’s Policy Research of employers and workers found that San Francisco’s law has been a success. It has allowed workers to stay at home when they or their children are ill, and two-thirds of the city’s employers now support the mandate.
Even before it started the official job-killers list in 2003, the chamber has opposed every proposed increase in the state’s minimum wage in recent memory, including one in 1996. That year voters passed Proposition 210 to raise the state minimum wage in two steps from $4.75 to $5.75 an hour by 1998 — the first state minimum wage increase in 10 years. But contrary to the predictions of doom, 1.1 million jobs were created in the five years after Proposition 210 passed, according to the Bureau of Labor Statistics.
Tax increases, particularly on high-income Californians or corporations, are also typically attacked as job killers. According to the nonpartisan California Budget Project, after California issued temporary 10% and 11% tax rates on high-income residents between 1991 and 1995, the number of income tax filers making $200,000 or more jumped 33.4% over those four years.And after voters in 2004 approved a 1-percentage-point tax rate hike on taxable personal income above $1 million to pay for expanded mental health services, the number of millionaire taxpayers in California shot up 37.8% within two years.
Contrary to the warnings that millionaires would flee the state, the rich absorbed the tax hike. They want to live in California and are willing to pay slightly higher taxes for the privilege of doing so.
The chamber continues to promote its job killer list, despite the fact that its dire warnings of economic doom have been consistently wrong. And it does so despite the fact that Californians broadly support laws and protections that have made our air cleaner, our workplaces safer and our families more secure. Businesses do well when workers do well. That’s what makes for a healthy economy.
Donald Cohen is the director of the Cry Wolf Project, a nonprofit research network that identifies and exposes misleading rhetoric about the economy, regulation and government.
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