Chamber of Commerce, Wrong Again

May 19, 2011 - 7:50pm

By Donald Cohen. Published in the Los Angeles Times. May 19, 2011.

Every year since 2003, the California Chamber of Commerce publishes its hit list of proposed legislation it labels “job killers.”  The list includes legislation to protect consumers, workers and the environment from irresponsible business practices, or raise revenues to fund public services, or support middle and working class families.   

The Chamber released their 2011 list on May 25.  Topping the list of 29 so-called “job killer bills” are restrictions on the use of Styrofoam that is filling landfills and polluting our rivers and oceans.  The list includes proposed legislation to index the minimum wage, decrease greenhouse gases, and raise desperately needed revenue for local governments.

The Chamber’s annual propaganda campaign has two things going for it.  One, no politician – Democrat or Republican – wants to be known as someone who kills jobs, so many of them will avoid supporting any bill so labeled.  Two, the Chamber and its corporate members provide big bucks to politicians’ campaign warchests, so even pols who think the Chamber’s arguments are hogwash give them a respectful hearing.  Republican Governor Arnold Schwarzenegger used the Chamber’s list as a to-do list for his veto pen.  Even his predecessor, Democrat Gray Davis, vetoed some of its top targets.

The argument is always the same:  If  ”job-killer proposal X” passes,  companies will go bankrupt, or shrink, or move out of state, or decide against investing in California.  Excessive taxes, regulations, and paperback, especially on  small businesses, will crush private sector investment.

If these arguments sound familiar, it’s because business lobbies have made these claims every time California increased the minimum wage, every time businesses had to disclose or limit toxics from in workplaces, consumer products and communities, every time California’s wealthiest or profitable corporations were asked to pay their fair share, and every time legislators and voters took action to limit greenhouse gas emissions. 

The Chamber and its business allies rigorously carry out the central principle of modern advertising –  repetition, repetition, repetition –  hoping that their job killer claims become each bill’s default sound-bite.

But if we look backwards, we find that the Chamber’s predictions are often wrong. Despite the Chamber’s political clout, some of the bills on its “job killer” list became law. So now it is possible to evaluate whether the Chamber was providing honest analyses or crying wolf and engaging in scare tactics.
In 1986, voters approved by a wide margin Proposition 65 ("The Safe Drinking Water and Toxic Enforcement Act ") requiring warning notices about potential exposure to toxic chemicals.   The Chamber and major business lobbies opposed the measure claiming it would have “an adverse effect on the economy.”    But when the California Environmental Protection Agency conducted a five-year review of the law in 1992, it found that "By federal standards, Proposition 65 has resulted in 100 years of progress in the areas of hazard identification, risk assessment, and exposure assessment."

The Chamber opposes amending the Paid Family Law to allow people to care for their grandparents and other close relatives. In 2002, California was the first state to create a paid family leave insurance program, the California Paid Family Leave (PFL) program, which helps families care for their children or elderly parents without losing their jobs.  The Chamber lobbied vigorously to kill the bill but was unable to stop it.  At the time Chamber President Allan Zaremberg described the leave law as a coming disaster for business. "We're opposed to a lot of bills, but this is one of the worst,” claimed Zaremberg.  A lobbyist for the National Federation of Independent Business predicted “If it becomes law, it will be the biggest financial burden for small businesses in decades.”

Now eight years later, an extensive survey of employers and employees by sociologist Ruth Milkman and economist Eileen Applebaum found that the law California law didn’t turn out to be the costly “job killer” that business lobbies warned about. In fact, the survey found the leave law actually helped employers with reduced turnover and increased employee loyalty while helping families meet the challenges of working and caring for their children. 

This year’s list includes the California Chamber’s repeated attack on a proposal to mandate paid sick days for the hundreds of thousands of workers that don’t get any paid days and have to choose between going to work when sick or forfeiting wages.  The bill was modeled on a law passed two years earlier in San Francisco – the first municipal sick days standard in the country.

Local business organizations vigorously opposed San Francisco’s law when it was first proposed.   They prophesized a job losses, shuttered businesses, and slashed benefits. But they were wrong. A recent survey of employers and workers revealed that San Francisco’s law has been proven a success.   It helped workers stay at home when they or their children were ill.  Two two-thirds of the city’s employers now support the mandate.

The California Chamber has opposed every proposed increase in the state’s minimum wage in recent memory, describing it as the ultimate “job killer.”  In 1996, voters adopted Proposition 210 to raise the state minimum wage in two steps from $4.75 to $5.75 in 1998.  California’s minimum wage had been stuck at $4.25 since 1988 until the October 1996 Federal Minimum increase to $4.75. per hour. The Chamber claimed that year’s proposed increase was a “job killer” that would disrupt small business and damage the state’s economy.   But contrary to the predictions of doom, 1.1 million jobs were created in California in the five years after Proposition 210 passed.

The Chamber opposes a proposal for a small tax on income over $500,000 to help close the budget gap. California has increased taxes on high income earners several times in the last twenty years.  According to the nonpartisan California Budget Project, after the California issued a temporary 10 and 11 percent tax rates on high-income residents in 1991, the number of income tax filers over $200,000 skyrocketed by 33.4 percent over the next four years.  And after voters in 2004 approved an additional 1 percent surcharge on taxable personal income above $1 million to pay for expanded mental health services the number of millionaire taxpayers in California shot up by 37.8 percent within two years. In other words, contrary to the warnings of opponents that millionaires would flee the state, the rich absorbed the tax hike; they didn’t flee the state. They want to live in California and are willing to pay slightly higher taxes for the privilege of doing so.

Many of the bills on the Chamber’s “job killer” list have saved lives, cleaned our air, made our workplaces safer, and helped California’s middle class families. Many actually created jobs by unleashing innovative new technologies and spurring economic growth.  

The Chamber continues to promote its “job killer” list, despite the fact that its dire warnings of economic doom are mostly hot air.   And despite the fact that Californians broadly support laws and protections that made our air cleaner, our workplaces safer, and our families more secure. Businesses do well when workers do well, when families do well and when we invest in our future. That’s what makes for a healthy economy.  

A shorter version of this appeared in the Los Angeles Times on May 19, 2011

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