Surveying the challenges of a minimum wage hike

Posted 5/6/16

Despite the ongoing recovery, businesses continue to face challenges in Southern California. The Los Angeles Business Federation’s annual poll of its members is just out and the top five concerns of employers are: 1. Taxes and fees; 2. transportation; 3. government regulation/compliance; 4. education; and 5. public infrastructure (roads, rail, bridges, waterways, etc.).

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Surveying the challenges of a minimum wage hike

Posted

Despite the ongoing recovery, businesses continue to face challenges in Southern California. The Los Angeles Business Federation’s annual poll of its members is just out and the top five concerns of employers are: 1. Taxes and fees; 2. transportation; 3. government regulation/compliance; 4. education; and 5. public infrastructure (roads, rail, bridges, waterways, etc.).

BizFed founding CEO Tracy Hernandez told us poll results also apply to Orange, San Bernardino and Riverside counties because they face the same challenges and operate under the same state tax and regulatory policies. Despite many problems, Southern California still is growing because “we’re in a global economy,” she said. “We can design and sell products to anywhere in the country or the world. We also have benefited from the country’s energy abundance of recent years and from record worker output.”

This list matches data from other areas: On taxes, California nabs the highest state income and sales taxes. Its roads are rated the worst in the country, with $64 billion now slated to be wasted on the high-speed rail boondoggle. Regulations proliferate like kudzu in the spring. The K-12 education system ranks near the bottom on the National Assessment of Education Progress. And the recent drought uncovered the state’s long-neglected system of dams and reservoirs, something only partly corrected in 2014 with the passage of Proposition 1, $7 billion for water infrastructure.

A really good finding is that two-thirds of those surveyed are optimistic for business growth in 2016. Yet that’s balanced with a lower number, 41 percent, expecting jobs growth for the year, the same as last year.

The disparity is “tied to investing more in technology and durable goods” because of the minimum wage increase, Ms. Hernandez explained. “People will grow their businesses through automation rather than investing in human capital to increase efficiency in operation. I don’t want it that way, but that’s the way it is.”The BizFed survey is further proof that, far from helping middle-class Californians, the state’s high taxes and regulations are transforming the economy from one based to a great extent on labor, to one based on brains and capital investment.

— The Orange County Register