Rats, Rents, Garbage and Jobs

Wednesday, April 21, 2004

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IN MY OPINION (Column)

Rats, Rents, Garbage and Jobs

By RAY HAYNES

(The writer represents the 66th Assembly District which includes portions of western Riverside County and northern San Diego County.)

The Department of Finance, in its April 2004 Finance Bulletin, observed that California added 5,200 non-farm jobs, which “is surprisingly low considering the nation as a whole gained 308,000 jobs.” Apple Computer just closed down its Sacramento plant, and the California State Automobile Association just moved all of its telephone operations to Arizona. Just these two announcements this week cost the state 1000 of the 5200 jobs it added last quarter. This is just a typical week in California. Add a few jobs, lose a lot.

Last week, the California Legislature passed a worker’s compensation reform package, which hopefully will relieve some of the pressure on California businesses. This reform, however, is just the first step in California’s long road to economic recovery. California has a lot more problems that it needs to solve before businesses bring jobs back to our fair state.

According to one business owner (whose sentiments echo those of many I hear), “Worker’s comp... [is] just one of many items,” including energy, rents, labor and taxes. He went on to note “even garbage costs are less in Nevada.”

Result? He is moving his business to Reno.

Even the Los Angeles Times now agrees that “rising business costs are restraining hiring and discouraging new employers from setting up shop.”

Think about it, when even garbage costs less in Nevada, California has a problem. Everybody generates garbage of some type, and when we generate garbage, we have to pay to get rid of it. If a California business has to pay more to get rid of it, that business is automatically at a competitive disadvantage to a business from another state.

When all the other costs are combined—insurance, rent, electricity, tax burdens, unemployment insurance, and the daunting cost of compliance with California’s environmental mandates (like protecting the flies and rats in my neighborhood), it is no wonder that a rational business owner would find Arizona, Nevada, New Mexico, or Texas a more attractive place to live and operate his business. Los Angeles may be closer to the beach, but if a Los Angeles business can’t compete with a Las Vegas business making the same product, it goes broke regardless of whether it has a nice view. Bankrupt business owners don’t provide too many jobs, don’t perform any services, and if nothing else causes alarm for the Democrats up here in Sacramento, this should: They don’t pay taxes.

The amazing thing is that my Democrat friends don’t get it. Rich business owners pay lots of money in taxes, and they provide jobs to others who, in turn, pay lots of money in taxes. If a left-wing Democrat in the Capitol actually thought about economics at all, he or she would figure out that having lots of rich people providing lots of jobs would be the first step toward creating bigger government and more money for government programs.

But these left-wingers just seem to lack common sense. Too many of them share the sentiments of one of their leadership team, who when asked last year about businesses leaving the state, said “You can’t blow off California. If a few companies want to go and rip off some other state, that’s fine with me!” So they raise taxes, create more regulations, increase rent, energy and insurance costs, and then wonder why all the businesses leave the state and why the state doesn’t have enough tax revenue to pay for all of their pie-in-the-sky programs.

If the worker’s compensation reform works, and more reforms to our business climate follow, business owners in California might start creating jobs again in California. Those jobs will come, if they come, in spite of, and not because of, the Democrats in the Legislature. The state will then have more money and the Democrats, as usual, will want to spend the money on some hare-brained government program while I will want to cut your taxes. On balance, however, that is a much better fight than we’re facing this year in Sacramento as the Democrats continue driving this state and your business into bankruptcy.