All posts by CA Labor

California

California’s Business Climate — Myths & Facts

I just came from the Capitol press conference on the sham of a report about the supposed cost of regulation in California. Not surprisingly conservatives and business groups are touting the study, as “evidence” that we need to de-regulate California and they took great glee in perpetuating a tired myth – California is a bad place to do business. The problems with the study are numerous, as noted in previous Calitics posts . The study takes much of its data from right-wing think tanks and Forbes magazine, not exactly subjective sources. It is purposefully vague in naming specific regulations that are supposedly so burdensome to business. It doesn’t take into account the myriad benefits of California consumer, labor, environmental and wage protections. And many of the arguments it does make are completely misleading.

The familiar refrain that California is a high-tax, high-wage-state that drives businesses away is simply not supported by the facts.

MYTH: California has the highest taxes in the nation

FACT : California is a high-income state with a wide range of revenue sources. Besides local and state taxes, California collects fees, assessments and other taxes. Taking into account all of those sources of revenue, California has a very moderate tax rate. The percentage of average income Californians pay in all taxes, which is a measure of tax burden, is reasonable compared to other states. Using that measure of tax burden, California ranks number 17 behind states like Alaska, Wyoming and North Dakota that have a higher tax burden per capita.

MYTH: California’s high-taxes and cost of doing business is driving businesses and jobs to states with fewer regulations

FACT: California loses very few jobs from businesses leaving the state. In fact, only 11,000 jobs leave the state annually out of a total of 18 million jobs. That’s only 0.06% of California’s total jobs that are lost by businesses moving out of state. The biggest job creation and loss engine are businesses opening, expanding, shrinking and closing within the state due to normal business cycles-very few businesses leave the state to our neighbors.

California has lost fewer jobs than our ostensibly “business-friendly” neighboring states. California does not rank in the Top 10 of states suffering job loss from 2008-09 and three of our five neighboring states lost more jobs than California. Our low-tax neighbors of Arizona, Nevada and Oregon had over 6.5% job loss, while California only had 4%. Even notoriously low-tax, little regulation states like Florida and the Carolinas have suffered more job losses than California.  

MYTH: Businesses will not come to California because of our high-taxes and high-wages

FACT: Businesses chose their locations for many different reasons including the tax burden, but also based on other criteria such as infrastructure, education and skill level of the workforce, access to intellectual and natural resources and many others. In that regard, California has an advantage because of our natural and human resources and the high concentration of research and technology centers. In addition, California workers are among the most productive with  an annual average output that is 13% higher than in other states.  

However, we are in danger of losing our competitive edge. Budget cuts result in crumbling roads, under-funded education systems that fail to educate the workforce, traffic-clogged highways that slow delivery and inadequate housing stock. California businesses can’t be globally competitive when they don’t have the infrastructure to perform. That is what will drive business from the state.

MYTH: California already taxes everything

FACT: Actually, California has many untapped sources of revenue that other states regularly tax. We could raise billions from the following immediate changes, with little impact on small businesses:

    $855 million: Oil Severance Tax of 9.9% on any oil pumping from California soil or water (California is the only oil-producing state without one.)

    $2 billion: Close the corporate loophole on Proposition 13 and raise the rates on assessments of corporate property.

    $1.1 billion: Impose a tax on services, similar to the sales tax. California only taxes 21 of a possible 168 services that many states tax. In contrast, Washington and New Mexico tax 158 different services.

    $470 million: Raise the corporate income tax by only 0.46% which barely keeps pace with the 557% net profit corporations saw from 2001-05 in California.

TOTAL: $5.725 Billion

If there’s one thing we’ve learned from our nation’s deep financial crisis it’s that when a group of Republicans come together and start scheming about de-regulation, everyone, including small business, should be concerned. Very concerned.

Budget

Statewide Protests at Chevron Stations Call for End to Corporate Tax Breaks

(Posted by Steve Smith, California Labor Federation)

The campaign to repeal the egregious corporate tax giveaways that were part of the last budget deal is gathering steam. Thanks to Brian and David for their coverage of this issue – it seems to being having some resonance with folks who are fed up with sweetheart deals for corporations at the expense of the rest of us.

To continue the momentum, the California Labor Federation is organizing statewide actions tomorrow at Chevron gas stations to raise awareness about how desperately flawed these tax breaks are. The actions come on the heels of last week’s letter to the governor and legislative leaders, signed by 75 organizations,  calling for the repeal of corporate tax breaks before an additional dime is cut from services.

Why Chevron? Because there couldn’t be a better example of how upside down our budget process has become.

(Edit by Brian, see the flip)

As Calitics has noted, the last budget deal included corporate tax breaks that will cost the state billions in revenue, including a tax giveaway just like the one that Chevron’s been lobbying to get for years. These giveaways amount to $2.5 billion a year, every year, permanently, to Chevron and a handful of the world’s largest corporations.

To get those huge tax breaks, Chevron has invested heavily. Chevron has six separate lobbying firms working for them in Sacramento. They racked up more than $6 million in lobbying bills in just five years. And that doesn’t include the $48 million they’ve on spent California campaign contributions since 2005.

It’s clear that all the corporate tax giveaways and high-powered lobbyists are paying off for Chevron. During just three months of 2008, Chevron raked in $7.9 billion in profits – more than doubling their profits from a year earlier.

Chevron’s abuse of corporate tax breaks is costing us all. Because Chevron’s not paying its fair share, we’re looking at fewer teachers in our classrooms, fewer firefighters and police protecting our families, and almost a million more kids without health insurance.

We hope you can join us tomorrow to shed some light on how these corporate tax breaks are impacting all Californians. You can find all locations and times for the actions at our Facebook group, No More Budget Cuts Until Corporate Tax Breaks Are Shut Down . And if you haven’t signed the online petition to repeal corporate tax giveaways, please take a second to do so.

Uncategorized

Workers to Fast for Employee Free Choice at Feinstein’s SF Office

(Posted by Steve Smith, California Labor Federation)

Sen. Dianne Feinstein is going to hear from both sides in the debate over the Employee Free Choice Act this week, but there couldn’t be a more stark contrast in the messenger.

Corporate executives from around the country are attending a lobbying junket to DC on Wednesday organized by the Chamber of Commerce in hopes of persuading Feinstein to join them in opposing labor law reform.

Meanwhile, in San Francisco, workers who have been fired or intimidated simply for trying to join a union will gather to begin a two-day fast Wednesday morning at Feinstein’s office to implore her to stand with them by supporting the Employee Free Choice Act.

As the negotiations and wrangling over the bill continue, Feinstein has emerged as a key player. While initially expressing skepticism about the bill (even though she was a co-sponsor of identical legislation in 2007), Feinstein is working with Sen. Harkin and others on seeking a solution that would garner the 60 votes needed for cloture. While political viability is important, the real consideration here must be on how the legislation would help the millions of workers who want a union to better their lives and the lives of their families.

To that end, we must have a bill that would do three things:

    Ensure workers have the freedom to join a union, without harassment and intimidation;
    Increase penalties on corporations that violate the law by firing or threatening workers;
    Provide a timely and fair process for a first contract.

Without meeting those principles, the bill won’t be worth the paper it’s printed on. The next few weeks are critical. With Al Franken expected to be seated soon (knock on wood), the negotiations over the Employee Free Choice Act are headed into overdrive. And that means corporate honchos are going to be leaning heavily on key Senators like Feinstein in a last-ditch effort to derail the bill. And while Washington is a lot bluer than it used to be, make no mistake, corporations still have a stranglehold on power in our nation’s capitol.

CEOs like Lee Scott of Wal-Mart have said they’ll do whatever it takes to prevent the Employee Free Choice Act from passing. They’re spending hundreds of millions of dollars on a dishonest campaign to defeat the bill. We can’t let them succeed because the fate of this bill is intrinsically tied to the fate of the middle class. While CEOs are fighting to protect their multi-million dollar perks and lavish contracts, workers are fighting for health care, a living wage and safety on the job.

What can you do? Now that we’re in the home stretch of what has been a generation-long struggle for fairness in the workplace, I urge all progressives to take a stand in support of the Employee Free Choice Act. In California, more than 50,000 hand-written letters have already been delivered to Feinstein. Tens of thousands of calls have been made to her offices. Hundreds of impacted workers have visited with her staff across the state. But we must do more to counter the corporate onslaught.

Call Sen. Feinstein and tell her you support the bill. Send a message of support on our Facebook page to the workers who are fasting this week for their rights or, better yet, if you’re in the Bay Area stop by Wednesday or Thursday to show your support.  Let friends and family know that Feinstein needs to hear from them too.

We’ll be out in front of Feinstein’s office Wednesday and Thursday – rain or shine. Hope to see (or hear from) you then.

Uncategorized

Let’s put politics aside and help the unemployed

(It is practically criminal that Schwarzenegger is being such a hypocrite about this.  Aside from changes to unemployment law, the state risks leaving $11 billion in Medi-Cal funding on the table if they don’t change the eligibility rules in the next couple days.  It’s crazy to leave money out there in the midst of a crisis.  We are such a badly run state. – promoted by David Dayen)

(Posted by Steve Smith, California Labor Federation)

Good economic options have been noticeably absent from Sacramento recently, but in the usual March legislative lull, a bill to draw down billions of dollars in free federal funding is starting to get some serious momentum. The bill, ABx3 23 (Coto/Arambula) would extend unemployment benefits by up to 20 weeks for the long-term unemployed and update the state’s outdated eligibility rules for unemployment insurance – all courtesy of the federal stimulus package.

To get the full effect of the federal money and start helping workers immediately, the bill will need to muster a 2/3rds vote in each house. On its merits, this bill should be a no-brainer. The bill essentially involves driving a U-Haul to Washington, filling it with cash, and distributing that money to some of the state’s most cash-strapped residents and communities. Unfortunately, like so many things in Sacramento, the debate on this bill hasn’t been about its merits.

During debate in the Assembly Insurance Committee last week, the bill was opposed by the Chamber of Commerce and other business groups. They argued that we shouldn’t rush into taking the federal funds – that legislators should push off $839 million in federal aid and wait until we have a comprehensive fix for unemployment insurance. That “comprehensive fix” though, will involve raising unemployment taxes – a fact the Chamber is fully aware of and a policy they’ve fought for a decade. Their plea for a go-slow, comprehensive fix was code for trying to kill the best shot California has at economic stimulus.

But the Chamber’s subtle attempt to squash workers’ hopes wasn’t even the most galling performance of the day. Demonstrating his trademark connection with working people, Assemblymember Roger Niello (R-Fair Oaks) actually suggested that the unemployed could just wait three months – with no source of income – before applying for assistance.

And where was the governor’s office during all this? While Schwarzenegger himself had trumpeted his support for federal stimulus funds – “I’m more than happy to take his money or any other governor in this country that doesn’t want to take this money” he told George Stephanopoulos on national television – his staff began backtracking from that support during the hearing. His Assistant Secretary of Labor hemmed and hawed her way through questioning, never officially taking a position, but doing her best to throw up roadblocks at every turn.

The bill will hit the Assembly floor next week. Passage will mean more than $5 billion in free federal funds for unemployed workers and the state’s economy. Using even the most conservative economic estimates, that will mean upwards of $9 billion in increased economic activity for our floundering state with unemployment rates over 10%.

It’s time for Republicans – of both the legislative and executive variety – to make it clear where they stand once and for all. Voting to accept free federal funds for the unemployed isn’t a potential career-ender. It isn’t an ideological issue. It’s a simple decision about whose interests they’re really serving in Sacramento.

Arnold Schwarzenegger

CA Labor Fed. Executive Secretary-Treasurer Art Pulaski statement on today’s speech

The Governor’s profound failure to lead in this time of crisis will be his legacy.

California’s working families are facing a crisis of epic proportions. We were hoping the Governor would use his State of the State to show us the light at the end of the tunnel — a sensible, fair proposal to balance the budget that would put people back to work and move our economy forward. We deserved much better than we heard today. Instead of embracing real solutions to lift California out of this economic morass, the Governor used his State of the State address to point fingers and peddle more empty promises.

The Governor’s repeated slash-and-burn tactics to balance the budget have left working families much worse off than we were five years ago.

Schwarzenegger’s response to the current budget crisis is so weak that he can’t even gain support from his own party, much less build consensus, bi-partisan support as true leaders do. That lack of leadership comes at severe cost to working families. Our state’s credit rating is tanking, thousands of jobs to rebuild our crumbling infrastructure are threatened and working people’s long-term economic security is in danger.

With working families facing sharply rising unemployment, mass layoffs and stagnating wages, it’s imperative that we stop the bleeding now. California should take a page out of President-elect Obama’s playbook and stimulate the economy by creating, not eliminating, jobs.  We also must take immediate steps to shore up our unemployment system and stem the tide of rising home foreclosures.

These are the real policies of change – plans that will put Californians back to work and get our economy going again.