A number of large business organizations have offered support for funding sources to be used for transportation infrastructure purposes on one hand, while on the other strongly opposed both general and specific tax measures such as a property tax increases on commercial property (SCA5) and making it easier to raise local taxes (ACA4).

Some in the business community probably hope that support for transportation revenue may be balanced with other tax measures and other bills meeting a dead end.

The focus on the minimum wage issue, so recently debated in cities and counties, will come back to the state capitol (Senate Bill 3) along with concerns for rising workers compensation costs. Capitol-centered business interests will argue a double whammy on the economy with minimum wage increases and rising workers comp costs. They will try to find a solution to workers comp increases while leaving the politics of minimum wage to local jurisdictions.

The saga of environmental regulations and the resulting costs imposed on businesses will continue to be played out, especially focused on fuel costs if petroleum reduction measure SB350, and an increased greenhouse gas regulation (SB32) become law.

The California Chamber of Commerce is monitoring its list of Job Killer bills as it does every year.

Business is not a monolith, however. Small business and big business may express different views and even within these broad business categories there are differences of opinion. That could complicate the drive to find common ground with the Legislature and governor.

Business often survives on the art of the deal – a negotiation that leads to a gain for both sides of the negotiation. Similarly, government is said to advance on the art of compromise. So will broad business interests achieve certain goals while satisfying the powers-that-be under the capitol dome?

You can bet the discussions are already taking place. As to the results — we shall see.

Assembly Bill 12: State Government: administrative regulations. Authored by Assemblyman Ken Cooley, D-Rancho Cordova, this bill would:

• Require agencies to review regulations for overlap, inconsistencies or outdatedness.

Assembly Bill 19: Governor’s Office of Business and Economic Development: small business. Authored by Assemblywoman Ling Ling Chang, R-Diamond Bar, this bill would:

• Require the Governor’s Office of Business and Economic Development (GO-Biz) to review all regulations impacting small businesses to see if they are outdated or could be improved.

Assembly Bill 351: Public contracts: small business participation. Authored by Assemblyman Reginald B. Jones-Sawyer Sr., D-Los Angeles, this bill would:

• Codify requirement that all state contracts have a minimum of 25 percent small business participation.

Assembly Bill 419: Governor’s Office of Business and Economic Development: regulations. Authored by Assemblywoman Young Kim, R-Fullerton, this bill would:

• Require the Governor’s Office of Business and Economic Development to post information on the GO-Biz website to assist small businesses in understanding how to find information on pending and current regulations that may affect them.

Toebben said trust your experiences — when wages go up speedily, businesses, especially small businesses, have to cut somewhere. If minimum wage is increased there would be fewer jobs (just as the Beacon Economics study sponsored by the Chamber stated, up to 140,000 fewer jobs over five years).

Hicks said it is common sense — if workers have more money they will spend the new money, which will increase the economy and create jobs (46,000 new jobs according to the Economic Roundtable who did its study for the Labor Federation).

The third study by UC Berkeley, done at the behest of the LA City Council, decided the lives of low-wage earners would improve which would overshadow job losses.

Since the dueling studies didn’t offer clarity to observers considering the question of raising the minimum wage, perhaps the debaters could break the gridlock. Reflecting the studies they sponsored, the debaters rolled out familiar arguments to buttress their positions.

Hicks argued that increasing the minimum wage for those barely getting by would decrease government subsidies in such things as child care and food stamps, saving the taxpayer dollars. Toebben said implementing a minimum wage increase of 50 percent in three years and 75 percent over 5 years, as proposed, would slow job growth in half and reduce revenue for city services for low-income families.

Hicks argued that business has claimed job loss as a result of minimum wage increase since the minimum wage came into being in the 1930s, and that has not happened. Toebben countered that business will have to compensate for the increased wages in some way. If not layoffs, then reductions in charitable contributions or advertising, for example, would come into play.

Toebben insisted that he was defending small business, which would be most affected by the increase. “This is all about Main Street, not about Wall Street,” he said.

Hicks conceded that exemptions might be made for some organizations like non-profits, some small businesses or young workers to ease the conversion to a higher minimum wage. The Chamber president said if no accommodation is made Los Angeles will have a reputation of a place not to start a business.

Common ground? Perhaps a small patch of turf, but not much more. Figuring out the exemptions and who gets what could be a regulatory nightmare, not to mention a field day for lobbyists.

The minimum wage increase proposals in Los Angeles include Mayor Eric Garcetti’s plan for an increase from $9.00 an hour to $13.25 by 2017. A city council proposal calls for an increase to $15.25 by 2019.

Other major West Coast cities — Seattle, San Francisco, Oakland — have already lifted their minimum wages recently. Could Los Angeles learn from those experiences?

Rusty Hicks said it was too early to measure the true impact, but he said there are now more restaurants in San Francisco since the minimum wage law was changed. To which Gary Toebben replied restaurants have closed in Oakland because of the minimum wage increase.

The studies didn’t give any clarity to those considering the minimum wage deliberations. The Town Hall debate probably didn’t change too many minds, either.

Californians working through the holidays could get heftier paychecks under legislation that would mandate double pay for Thanksgiving and Christmas shifts. The legislation is by Assemblywoman Lorena Gonzalez, D-San Diego.

Of course, that’s only if they actually work on those days. If costs rise too high, businesses could go back to the old tradition of closing on Thanksgiving and Christmas.

While she’s at it, why not bring back “blue laws” — closing all but non-essential businesses not only on holidays, but every Sunday? The actually still exist in some states, and have been upheld by the Supreme Court.

It’s unlikely blue laws would be enacted here. Which would mean Gonzalez’ laws would advantage some businesses, probably big companies like Wal-Mart, that can afford to pay the higher wage, while harming other businesses, such as small Mom-and-Pop operations, that can’t pay the higher wage.

And of course, the Internet remains open at all hours.

Finally, if California’s anti-business climate weren’t so severe, businesses could afford to pay their employees more not just on holidays, but every day.

Now that would be a great Christmas present.

Pete Peterson, the Republican candidate for Secretary of State, plans to use the entrepreneurial qualities of Californians to reignite the greatness of the Golden State.

By Katy Grimes

When a business closes it’s doors forever, the impacts are far-reaching.

The announcement of the upcoming closure of the Campbell’s Soup plant in Sacramento will have regional and statewide impact.

Econ. 101

I may have been a political science student, but my husband is a longtime Sacramento manufacturer. For many years I lived and worked Econ. 101 lessons alongside 250 employees.

My businessman husband was an economics major in college and frequently reminds me that economics education in college has seen a dramatic shift. There weren’t many Keynesian economists in universities back then. Unfortunately, today, Keynesian economics seems to be the only economic theory coming out of universities.

Keynesian economics is an economic theory stating that aggressive government interventions in the marketplace and monetary policy are the best way to ensure economic growth and stability.

Economist Walter Williams has explained for many years the reality of the free market economy in which businesses must make a profit in order to survive: “In the market, when a firm fails to please its customers and fails to earn a profit, it goes bankrupt, making those resources available to another that might do better. That’s unless government steps in to bail it out.”

Williams has long argued against Keynesian economics, “The ruthlessness of the market discipline, which forces firms to please customers and thereby earn profits, goes a long way toward explaining hostility toward free market capitalism.”

Campbell’s Soup

Campbell’s Soup has five large plants in the United States. But the Sacramento processing plant with 700 employees is the only large one closing. Campbell’s Soup also will close a tiny New Jersey spice plant with 27 employees and consolidate spice production at its Milwaukee plant.

What hasn’t been reported are the many suppliers and vendors associated with a large manufacturing plant like the Campbell’s Soup Sacramento location.

Corrugated and boxes

A Sacramento box manufacturing plant owner recently told me the story of Western Corrugated. In 1963, Sacramento company Western Corrugated was a major supplier to Campbell’s Soup in Sacramento. The box maker had to store so much for Campbell’s Soup that stacks of the box materials stood 25-30 feet high within the building. The Sacramento company shipped truckloads out every day to Campbell’s Soup.

During the very busy summer tomato season, when Campbell’s Soup ramped up efforts to can tomatoes, Western Corrugated’s 65 employees grew to 110.

Western Corrugated is gone. But whatever box maker supplies Campbell’s today will lose it’s largest client.

Campbell’s Soup also has an on-site can manufacturer. This business will also lose out, and be forced to lay off many employees.

Campbell’s Soup has its own cogeneration plant on site, which many speculate is one of the biggest reasons the soup company decided to close the Sacramento plant. Cogeneration is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat. All thermal power plants emit a certain amount of heat during electricity generation, subjecting Campbell’s Soup to California’s stringent cap and trade emission laws and carbon emission credit auctions because of AB 32, the Global Warming Solutions Act of 2006.

The carbon emission credits are nothing more than a tax on business, and the caps on emissions are fabricated by the California Air Resources Board.

The Campbell’s Soup Sacramento plant is so large and significant the railroad runs right to it.

Campbell’s Soup closure

With the closure of Campbell’s Soup, the Sacramento region and all of California will lose. The label manufacturers, can manufacturers, the energy produced for SMUD through the cogeneration plant, property taxes, employment taxes, corporate taxes, and the flow of revenue from employees living in the region — all will be lost.

The real impact of a business closure is the city the business supports. The payroll alone for Campbell’s Soup is between $35 and $40 million a year.

Campbell’s Soup announced that they will ship all of the Sacramento plant equipment out of state to their other U.S. plants.

California government

With the new Democrat supermajority in the Assembly and Senate, and with a Democratic governor, California could see even greater taxes in the near future, particularly on the wealthiest Californians and corporation.  Perhaps taxing not just income, but assets. There has been talk about a wealth tax for many years in California, with some politicians insisting that this helps to equal out the “wealth inequality” in the state.

A real stimulus to the economy is a business, and the fiscal effect it has when contracting with other businesses, as well its employees and their spending ability. California politicians ought to be careful not to kill off the only real stimulus left in the state.

An already precarious business climate in the state is about to get worse.

The San Francisco Human Rights Commission voted unanimously this week to join the Reentry Council of San Francisco and send a letter to the San Francisco Board of Supervisors and Mayor Ed Lee “urging them to develop and enact legislation to prohibit discrimination in San Francisco against people with prior arrest and/or convictions.”

Because it is difficult for convicted criminals to find jobs and housing, the Commission is pushing San Francisco officials to instead make criminals out of business owners for asking a perfectly appropriate question during a job interview: “Have you ever been convicted of a crime?”

“The Commission heard testimonies from citizens that have prior arrest and convictions records. They testified to the difficulty they face in securing housing and employment in San Francisco after completing their sentences,” the letter stated.

It’s not so unreasonable that the employer who provides the paycheck, medical benefits, pays employment taxes, workers compensation insurance, and social security for the prospective employee would want to know a little bit about the applicant.

I worked as a Human Resources Manager for more than 20 years and can attest to the vast restrictions on employers surrounding employment law procedures and policies. Running a criminal background check on prospective employees has become a standard employment procedure for more than 80 percent of U.S. employers, according to the Society for Human Resource Management.

People who have screwed up are supposed to pay a price. It’s a long climb back to legal society after committing a crime, and not supposed to be easy.

Lawyers have tied the hands of employers so severely, that many job applicants now volunteer information in order to set themselves apart from less desirable applicants.

At the urging of a labor attorney, I used to give job applicants a short written questionnaire attached to the job application which asked about a criminal record. This gave the  applicant a chance to explain any situation in which there was a criminal conviction. Most often, applicants with any criminal record usually had minor drug conviction, which was not a deal killer at our company.

What is left out of most news reports is how many private sector employers offer convicted criminals a second chance. My company was not the exception. While we would give the job applicant a chance to straighten out a past lapse in judgment, there was only one chance given, and only for non-sexual, non-violent crimes. Violent criminals had to reform elsewhere.

Preventing employers from learning about the criminal convictions of job applicants is in direct conflict with OSHA laws as well as other state and federal labor laws requiring all employers to provide a safe workplace.

Once again, the burden has been placed on employers with conflicting laws because of differing political agendas. What are employers supposed to do, and does anyone in government even care?

Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico, and the cities of Atlanta, Baltimore, Chicago and Philadelphia have already instituted policies making it illegal for employers to inquire about job applicants’ criminal convictions, chipping away at the importance of accountability, and respect for the law.

Most people outside of San Francisco already think that its politicians are stark raving mad. Attempts to ban circumcision, a ban on the Happy Meal and fast food toys, plastic bags, pet goldfish, styrofoam, cell phone radiation laws, and attempts to stop “impulse purchases” are proof. Even prostitutes in San Francisco “are not obliged to make change for bills larger than $50.”

And now employers will not be able to ask job applicants about prior criminal records.

The utopian, liberal insanity has spread throughout California like a fungus in a locker room shower, usually originating in San Francisco, Berkeley or Davis.

And while the batty utopian types are dreaming up new ways to level the playing field for California’s deadbeats, failures and social victims, the taxpayers are going broke or moving out of state.

I am beginning to think that the weather anywhere else in the world is better than California’s.

The Human Rights Commission will be conducting a hearing on Monday June 25 from 4:00 p.m. to 7:00 p.m. at San Francisco City Hall.

JULY 22, 2011

This YouTube shows how hard it is to get a job or start a business in America, including California.

Nov. 11, 2010