While the legislature is in session, the National Federation of Independent Business/California will be profiling anti-small business bills and initiatives and the adverse effect they would have on California’s job creators. This is the third column of the 2013 series.
Today, NFIB released a study revealing that if Assembly Bill 10 by Assemblyman Alejo becomes law, more than 68,000 jobs in California would be lost. And even more sobering, more than 63 percent of those jobs would be from small businesses.
So what does that level of job loss look like? Consider this – the City of Salinas (in the bill author’s own district) has a population of approximately 152,000 people. The passage of AB 10 would mean that as many as half of the residents in that city would be unemployed. As an aside – the unemployment rate in Salinas is already more than 18 percent currently.
Not only would the job loss be devastating, it would disproportionately affect small business owners who desperately want to create jobs and support their communities. In order to support this kind of minimum wage increase, small employers would be forced to make some very difficult decisions – either lay off employees and provide the same amount of products and services for less, or raise their prices, risking a dip in sales when consumers can’t afford to patronize their local small business.
One thing that is impossible to quantify is the job opportunities that are lost by increasing the minimum wage. Young workers with little experience now have a disadvantage when competing with older workers with more experience. The higher the minimum wage goes, the more likely entry-level workers are disqualified from getting their first job and “on the job training”. What kind of workforce will we have in ten years if Californians are unable to get jobs in their local pizzerias, dry cleaners and retail shops?
So what is the legislature to do? First, do no harm. Don’t pass new costs onto small businesses and consumers, especially in the wake of a $50 billion-plus sales and income tax hike voters approved last November.
Instead, each of us should demand that our leaders stay focused on job creation (not job loss) and strengthening (not weakening) the economy. A recent PPIC poll found that 45 percent of those surveyed thought that the most important issue facing the state was jobs and the economy. Is Sacramento getting that message? Let’s start creating policies that reduce regulations, reform the tax system and make the lives of our job creators – and their employees – a little easier. They deserve nothing less.