You’ve probably heard that the road to hell is paved with good intentions. The same can be said of the road that has led California to become one of the worst places in the country to do business. One bill working its way through the Legislature was drafted, I am sure, with the best of intentions, but its consequences for California businesses and the jobs with which a great number of our residents rely upon could be severe.
Assembly Bill 67, drafted by San Diego Democrat and former labor leader Lorena Gonzalez, would require retail and grocery stores with more than 500 employees to pay employees double on Thanksgiving Day. This bill would effectively mandate a holiday on private employers and hurt the hardworking Californians it aims to protect.
This bill would almost certainly result in retailers and grocery stores closing on Thanksgiving. Some employees ask to work during a holiday because they know they can get extra money by working extra hours. If a store closes on Thanksgiving because the owner cannot afford to pay employees what the government mandates, employees will have to miss out on a day of pay. Many employees look forward to the holiday season as a way to pick up extra hours and make some more money. Others rely on these jobs just to make ends meet.
Supporters of AB67 claim that forcing double pay is only going to be a small percentage of employers’ total labor costs. But that does not change the fact that this is the latest in a long list of burdens that California puts on job-creators. Studies have shown that California businesses on average have 19 percent higher operating costs per job than businesses in the rest of the country. The main reason for this is increased labor costs, which include wages, taxes, unemployment insurance and litigation costs.
Employers are required to pay hefty taxes on the wages their employees earn. They have to pay 6.2 percent of wages for Social Security, 1.5 to 6.2 percent of wages for California Unemployment, and 2.35 percent of wages above $200,000 for Medicare for every employee. This makes it incredibly expensive to hire employees in California. These taxes are all strong incentives to not grow and offer jobs to more people.
Requiring businesses that employ at least 500 people to increase their payroll costs even further ultimately hurts employees. When businesses get to the point where they can’t afford to hire more employees, or keep existing employees, they will be forced to look for other solutions. Large cities in California are already seeing an increase in automated service. Human workers are essentially being replaced with machines and robots. Other businesses will be forced to shut down completely. This is the result of job-killing mandates like AB67.
Policy should be based on the facts, not on feel-good ideas. Rather than continue to pass well-intended bills that end up advancing California’s demise, the Legislature should focus on encouraging employers to grow so that more Californians can have financial success.
Matthew Harper, R-Costa Mesa, represents the 74th Assembly District.