News & Updates - Will standing up to Trump hurt California’s economy?

Will standing up to Trump hurt California’s economy?

By Rob Lapsley, The Sacramento Bee, December 8, 2016
California’s top elected leaders are making it clear they will push back hard against any efforts by President-elect Donald Trump to undermine their progressive policy agenda.

These not-so-veiled threats, in combination with the supermajorities legislative Democrats hold, are giving the business community grave concern that job growth could be collateral damage in a partisan agenda against the Trump administration.

Last year the Legislature passed several significant pieces of legislation, many of which will require major investments from the business community. In addition to being the highest-taxed and -regulated state in the nation, a $15-per-hour statewide minimum wage and paid family leave are certainly going to have an impact on small businesses across the state. Senate Bill 32, the toughest-in-the-nation climate-change law, will further affect our economy and business community in unknown ways, even as we continue to navigate the uncharted waters of California’s landmark greenhouse gas emission law, Assembly Bill 32.

For instance, we know that implementing AB 32 is significantly increasing energy and transportation costs. California drivers pay about 11 cents more per gallon of gasoline than the national average, a total of more than $3 billion each year. This is on top of other regulatory mandates that help make California’s gas prices some of the highest in the nation.

Perhaps more troubling are indicators of the emergence of a two-tiered economy, which is directly related to actions taken by the Legislature in recent years. Since 2007, 42 percent of California’s employment growth has been in the Bay Area, with health care the fastest-growing sector. At the same time, inland areas are struggling and we are adding low-wage jobs in food service and retail while traditionally middle-class jobs lag far behind with no real growth in sight.

Just last week, a new electric vehicle manufacturer, Lucid Motors, headquartered in Menlo Park, decided to build its new 2,000-worker plant in Arizona rather than Sacramento.

We have lost more than 500,000 middle-class, blue-collar jobs since 2000, 300,000 of them just since 2007, according to the nonpartisan Center for Jobs and the Economy, a project of the California Business Roundtable.

As the new Legislature starts work this week, we encourage lawmakers and other statewide leaders not to use the Capitol as a political tool that could discourage corporations and small businesses from creating jobs. The business community will be looking for reassurance that California is not just financially stable, but also politically stable.

If so, that message will be heard on Wall Street, in boardrooms and in small-business offices, improving the climate for growing good middle-class jobs. We will be asking for the same approach from the new administration in Washington, D.C., and from California congressional leaders such as House Majority Leader Kevin McCarthy and House Minority Leader Nancy Pelosi.

California’s economy is too important to become collateral damage in a political war.

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