The True Problem

Stuart Waldman
President, Valley Industry & Commerce Association

The beginning of every year prompts a flood of new ideas from California’s state legislators, and obviously, I’m grateful to them. They’re keeping me and my staff employed, as businesses turn in desperation to advocacy groups around the state who can try and explain to legislators why their proposal would harm our economy and kill jobs. Clearly, you’d rather put that money towards growing your business, not paying me to talk to elected officials. But happily for me, it’s probably not going to change anytime soon.

Most legislators have never run a business, and it shows. They don’t think about the implications of making hundreds of changes to the laws that apply to small, family-run business. They fail to consider how the heck those businesses are going to 1) learn about the new laws, 2) set up training for their employees and pay for the training, and 3) ensure compliance. They certainly don’t consider whether the cost of those steps is worth any benefit that the state may gain.

Let’s break that down for a package of proposed bills recently introduced. In the fight against childhood obesity, lawmakers have chosen their target. Drumroll please…It’s fruit juice. Also iced tea, sweetened milk beverages such as mochas, sports drinks and sodas. Any drink which has sugar added to it is fair game. Don’t worry about donuts though – they’re fine, along with any other junk food. Just, you know, apple juice.

So they want to ban convenience stores from selling drinks in sizes larger than 16 ounces, label your vanilla latte with a health warning like cigarettes, prohibit discounts on soda and ban these drinks from being near a checkout counter. They also want to tax them, because it’s California.

Let’s say you own a small convenience store. You’ve owned it for a few years and you have 12 part-time employees. First, you have to know about the new laws. Ignorance of the law is not a protection, and neither is hiring a professional to make sure you’re up to date. If you don’t believe me, ask the local business owner who had a nationally-recognized payroll company leave a piece of information required by California law off paychecks. They got hit with a Private Attorney General Act lawsuit. So your mom-and-pop store had better hire a lawyer. The cost of a lawyer is probably equal to a part-time job or two. Great for the lawyers, I guess. Not so great for the CSUN student who needed her part-time job while she completes her degree.

How about training? Your little convenience store doesn’t have a break room, and you can’t shut for a couple of hours while you train your staff about what stock they can legally display by the checkout counter or when they can give someone a straw. You have to spend a few hours training your staff a couple at a time. And then more time when your staff graduate from school and move on to other jobs, and you hire new staff.

Now time to demonstrate compliance. Your store isn’t huge, and most of it is pretty close to the checkout counter. What counts as “adjacent?” The drink display fridge is plugged into the same outlet as your cash register and card machine, and you can’t just move it without considering safety and egress issues, so there are a few more professionals you’re going to have to hire.

During Jerry Brown’s 16 years serving as governor, he signed 17,851 bills. That’s a lot of freakin’ bills, and that’s pretty normal for California. So multiply our handful of pretty minor proposed laws, then apply them to the hundreds of small business owners in the San Fernando Valley. Suddenly, the tiny change you’ve just mandated has hurt a lot of families.

Our message to legislators is pretty simple. You try learning about, training your employees on, and complying with more than 1,000 new laws each year. Sure, most of them may not apply to you. But the 20 that do are going to hit you hard. They’re going to cost you. And the way you pay for those costs is to reduce your staff and reduce your investment in your business. That hurts the Valley, way more than a large Slurpee on a hot day ever did.

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