Can Business Recovery Be Legislated?

Katy Grimes: It’s so exciting that fast food giant Carl’s Jr. plans on opening 300 new fast food restaurants! Wow. That’s such good news for the economy.

Unfortunately for California, the restaurants will be opening in Texas. Carl’s Jr. CEO Andy Pudzner explained the economics of CKE Restaurants (Carl’s Jr.’s parent company) recently at an Economic Recovery Group monthly meeting, while delivering the bad news.

Carl’s Jr. has 700 restaurants in California, one-half of which are owned by CKE Restaurants, and the other one-half are franchises. The company has more than 72,000 employees total, 18,500 of which are in California.

And while Puzder made very clear that Carl’s Jr. would be “maintaining” status of their California restaurants, the company plans on opening 300 new restaurants in Texas.

Describing CKE Restaurants as a ” job creation machine,” Puzder said that the company had more than $4 billion last year in revenues, and paid $60 million in California taxes,” I wrote in “A Texas-sized Move For Carl’s Jr.?

At a Sacramento Carl’s Jr. restaurant on Thursday, Assemblyman Dan Logue, R-Linda, the Economic Recovery Group creator, held a press conference with the other Assembly members who went on a recent trip to Texas with him, introducing a package of 30 bills designed to greatly improve the nasty business climate in California.

Bills dealing with regulatory relief,  lawsuit abuse, taxing, and job creation were presented in the setting where low-paid hourly workers served fast food, and in a restaurant where no employees are getting rich off the sales. Carl’s Jr. managers aren’t even allowed to work the hours needed to address production needs, because of California regulations and labor laws.

Designed to help bring back jobs and make the state a more attractive place for job creation and retention, Logue explained, “The message we got from California business owners who relocated to Texas was clear – the Legislature has made it too expensive and too burdensome to create and retain jobs in the Golden State. As we learned in Texas, there is no one silver bullet to fixing the job climate, but together, all these measures will do their part in making our state more business friendly and allow the private companies to create jobs. ”

From targeted tax credits and economic incentives designed to create jobs, as well as measures making it more convenient for businesses to set up operations in California, regulatory relief and junk lawsuit reforms, these bills have been created to help get the state back on track to being like today’s Texas when it comes to jobs – and like the California many knew decades ago.

“The Legislature will make very little progress in helping California recover without a renewed focus on jobs,” said Assembly Republican Leader Connie Conway, of Tulare.

Asked if he is positive about the possibility of the passage of the bills, Logue said, “We are carrying the ball, but are not making touchdowns right now.” But Logue explained that Democrats Lt. Gov. Gavin Newsom and Assemblywoman Cathleen Galgiani were along on the trip and were moved by the amazing changes implemented by Republican Texas Gov. Rick Perry upon being elected to office. Perry even moved the Economic Development Department right into his office. Logue said he believes that Republicans are making headway and influencing legislation in the areas of economic recovery – and many Democratic legislators are in agreement with the desperate need California faces.

But the question remains – can Republicans pass these much-needed bills? They are clearly applying pressure and gaining the support of the public. But as the minority party in the state, there’s only so much that can be done when Democrats are already showing solidarity and voting down really good economic recovery bills in committee hearings.

Read more about the 30 job recovery bill HERE

APRIL 28, 2011



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