This past September, with the slam of a gavel, the Legislature closed its business for the year. Conversation between Assemblymembers and questions from staff immediately turned to plans for our temporary recess away from Sacramento. It is one of the most indispensable periods of the year as we are able to live in the real world and hear from the real people we represent back in our home district.
Town halls and community discussions are always on my agenda. However, this year, I also decided to open another small business, a seasonal “pop-up” store, to gain firsthand understanding of the retail business. While I have owned several companies, retail is different. As an owner, I supervised a manager and several employees. This experience has been invaluable to me and that is why I believe that EVERY Legislator should run his or her own business to see what it is like in this regulatory environment.
While every legislator brings a unique skillset and background to Sacramento, most have never issued a paycheck. It shows in the types of laws enacted by the Legislature. Our political decisions add up and have real-world ramifications. Too often, small business concerns fall on deaf ears in the Legislature where ideology and political agendas can outweigh the pragmatism needed to solve our state’s problems. Running a small business would give each Legislator a thoughtful education before making future laws. California’s small business job creators represent 99% of all employers and account for half the state’s workforce. It’s time for us in Sacramento to know what small business owners and their employees go through.
When a new regulation is passed, a new tax or fee is approved, or a new mandate is handed down, it has a ripple effect on our economy. For example, one of the more controversial and costly pieces of legislation signed into law this year will gradually raise the minimum wage in California to $10 an hour by 2016. To many Californians, a dollar or two – increase may not seem like a big deal, but if you understood what employers go through to make payroll or comply with regulations, your perspective would change. An increase in the minimum wage not only changes hourly pay, but also drives up workers’ compensation costs, overtime, and the prices of products, meaning less money to hire more employees. At a time when our state still struggles with one of the nation’s highest unemployment rates, the Legislature should not be taking action to discourage job creation, especially the entry-level positions that may start at minimum wage, but pave the way for future career growth.
This added cost is not the only one facing our small business owners. They are already paying higher taxes from the passage of Proposition 30 last November. They also face navigating the implementation of the Affordable Care Act, which, given its rocky rollout, will likely add a new level of unpredictability to our state’s already unfriendly business climate.
Given the enormity of the challenges facing California employers, I am grateful for my business background and the added experience of operating a retail shop to enlighten my decisions and priorities in Sacramento. The only way California’s economy makes a comeback is by allowing employers the freedom to create jobs in a regulatory environment that is predictable and open to business. I tip my hat to each of California’s hard-working small business owners. They have no guarantee of success, they have no guarantee of income, yet have placed roots in our communities and invested in our state. Each deserves our praises. Here’s hoping the Legislature listens to them when we meet again come January.