California manufacturers are among the best friends the state’s economy can have. The sector pays an annual average of $74,000 in wages and traditionally is one of the best providers of health insurance for employees.
You would think, then, that everyone on Team California would be pulling for this vital sector to remain healthy and growing. After all, over the last two years, our state has lagged behind the rest of the country in manufacturing job growth and new investments.
You’d think that, but sadly, you’d be wrong. Right now, the California Legislature is considering a bill that threatens our ability to foster growth in manufacturing and other critical sectors. That bill, AB 880 by Assemblymember Jimmy Gomez, will severely harm businesses, employees and the state’s effort to implement the federal Affordable Care Act (ACA).
AB 880 places a fine on businesses with 500 or more employees when any worker – including part-time or seasonal — putting in eight hours a week or more decides to enroll in Medi-Cal instead of the employee-sponsored insurance plan. This fine could be between $6000-$15,000 per employee.
This proposal does not help increase healthcare coverage, rather it will penalize employers – including employers who provide healthcare coverage to its workers.
When the ACA is fully implemented, all Californians will be guaranteed access to health coverage and this bill is not necessary to achieve that goal. In fact, AB 880 doesn’t provide one worker with health insurance. It doesn’t lead to one more office visit or hospital stay being covered. What it does is create a burdensome new law and regulations that will dampen job creation and add to the government bureaucracy.
Businesses, like everyone else in California, are in the midst of trying to figure out how the ACA will work and how to meet the requirements of the new law. AB 880 steps in at this uncertain time and introduces a chilling uncertainty — additional and costly penalties and taxes, and more complicated government rules. The result is confusion and another disincentive to adding manufacturing jobs in a state that needs them.
Supporters of the bill deceptively claim that it will only impact a few very large companies that won’t leave the state. Somehow, fines can be imposed and sanctions levied, but nobody gets hurt. Please. The reality is that AB 880 will discourage California employers from every major industry sector from growing in the state and hiring part-time workers or workers who are trying to enter or re-enter the workforce. That hurts everybody.
Our state has been stagnant in manufacturing job growth during last two years while the nation grew these jobs by more than four percent. That means that California is not getting its share of the emerging recovery.
The state does not need AB 880 to make the ACA work. Our manufacturers and other high-wage job creators, whom we depend on for economic growth, can’t afford it.