Thomas Sowell
California versus business
http://www.NewsAndOpinion.com | If you wonder what has gotten California in such an economic mess, here is a recent sample: The state legislature has passed a law requiring landlords to give tenants 60 days' notice, instead of 30 days, before evicting them.
In other words, if you are renting to a tenant who refuses to pay the rent, plays his music loud all night
and makes himself a pain to all and sundry, he can give you the finger for two months before you can get rid of
him — all courtesy of California politicians.
If you think federal safety regulations go beyond all reason, they are nothing compared to California
safety regulations. Among states with their own workplace safety regulations,
in addition to the federal ones,
California prosecutes more employers than all the other states put together.
High taxes on California businesses and high workmen's compensation costs are all part of the same
anti-business mindset. Employees of these businesses do not get off scot free either. Other laws restricting the
building of housing have given San Francisco the highest rents of any city in the country. Housing prices in the
surrounding areas like Marin County and San Mateo County are sky high as well.
This means that people who work in such places in modestly paid jobs — including nurses, teachers and
policemen — are usually forced to live far away and commute, spending three or four hours a day fighting
congested highway traffic.
An insurance executive in Marin County said: "It probably costs us about $35 million a year in additional
costs being based in Marin. Not a big percentage of our (5,600) employees live in Marin. They can't afford to."
The anti-business climate in San Francisco was a recurrent theme in interviews with local business
leaders published in the December 28th issue of the San Francisco Chronicle.
One executive said: "When you look at the Board of Supervisors and how they talk about business, you'd think we were the enemy." Another said: "The city's lost 60,000 jobs and yet many members of the Board (of Supervisors) are doing everything they can to prevent job growth." He added: "The Board of Supervisors has to cut it out and start acting like adults."
No they don't! On the left coast, they can get elected and re-elected on anti-business rhetoric and
anti-business policies. The same is true of the state legislators.
When the state budget is deep in the red, the state legislature's answer is to raise tax rates. Not only do
they not want to cut spending, it would never occur to them that moderate taxes paid by more businesses could
bring in more revenue.
On the contrary, the exodus of businesses gives them just one more reason to raise tax rates some
more on the remaining businesses, in order to make up the difference.
Massive bureaucratic red tape is also part of the anti-business package. The head of Sun
Microsystems said: "There's a million rules that make the cost of operating here just off the charts."
The net result is that some businesses are moving to other states, taking their jobs and their taxes with
them. Other businesses that are looking for a place to locate or expand know that in California they will be
treated like chickens to be plucked.
Only part of this is due to political pandering and demagoguery to win votes. There are many ideological
activists in California, some of whom have inherited enough money that they will never have to work a day in
their lives.
They — along with college students — have the time to spend promoting whatever political crusades are
in vogue among the fashionable elites, whether that is "open space" restrictions on housing, "living wage" laws
or "anti-war" resolutions.
Usually activists have neither practical experience nor economic literacy, so they go around blithely
creating huge costs for those who have to work for a living and those who employ them. Not only businesses
but Californians as a whole end up paying a staggering price so that a relative handful of people who are a
drain on society can feel superior to those who contribute to it.
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JWR contributor Thomas Sowell, a fellow at the Hoover Institution, is author of several books, including his latest, "Applied Economics: Thinking Beyond Stage One." (Click HERE to purchase. Sales help fund JWR.)
