There are 250,000 fewer Los Angeles County residents with jobs today than there were one year ago. The state’s unemployment rate rose to 12.2 percent in August and L.A. County rose to 12.3 percent, according to the numbers released Friday. All but 5,400 of those jobs were private sector employees.
Mayor Antonio Villaraigosa stated in his State of the City address on April 14 and his inaugural on July 1 that creating jobs should be the city’s highest priority. He stated that the focus of the city’s efforts must be on promoting economic recovery. The L.A. Area Chamber applauded Mayor Villaraigosa for his renewed commitment to economic development and since then has been working with city officials to help improve the business climate and stimulate business and job growth. The unemployment numbers released Friday indicate that a dramatic effort needs to be initiated.
One of the biggest problems in Los Angeles is that we make decisions without asking: “How much does that law cost? How will it impact jobs, business and tax revenues?” Every law that elected officials pass either helps or hurts business — and we think these questions should be at the heart of every policy deba,1te.
In reality, most laws that are passed at L.A. City Hall do not include an assessment of the economic impact the law would have in our community. Over the years, laws add up, many negatively for business, and one day soon we will reach a tipping point for business — and jobs — in our city.
That’s why the Chamber urges our city officials to adopt an Economic Impact Statement (EIS) requirement for new legislation. This would give elected officials a tool to understand whether the legislation they are considering will create jobs and new tax revenue or hinder the creation of new jobs and new tax revenue.
Right now, most city legislation must undergo environmental and fiscal impact reviews. These assessments are important but they do not help elected officials or the public understand the long-term impact the legislation will have on business, jobs and tax revenue to the city.
San Francisco is a model for using an EIS. In 2004, voters approved a ballot initiative that established an Office of Economic Analysis. Staffed by a handful of trained economists, the office reports on legislation introduced by the Board of Supervisors. It doesn’t take politics out of the process, but it certainly adds a missing link to a comprehensive policy discussion.
Over the next few weeks, the Chamber will continue meeting with city officials urging their support for moving forward on this initiative and others to accelerate our economic recovery. We need jobs and the city needs tax revenues from growing businesses. It’s time to say yes to an EIS.