By Assemblyman Dan Logue
It has been said that the first step to solving any problem is to admit that a problem actually exists. Ignoring or denying the problem only makes it worse in the long run.
In California, we clearly have a jobs problem as we have the nation’s second-highest unemployment rate at 11.9 percent. At the same time, we also carry one of the heaviest tax burdens in the nation, including the highest sales and gas taxes and the top business income tax rate in the West. Respected publications such as Forbes and Chief Executive have also ranked the not-so Golden State as one of the worst places to do business.
Now comes a new report from the Virginia-based Mercatus Center at George Mason University that confirms the obvious: California is one of the least friendly states for freedom in the nation. We rank 48th out of 50 states for having policies and laws that restrict the ability of people to pursue their dreams. I believe it is this lack of freedom that makes it harder for us to attract the investment and jobs we need to turn our state’s economy around.
The report’s authors noted that “California not only taxes and regulates its economy more than most other states; it also aggressively interferes in the personal lives of its citizens.” The Mercatus Center suggested we cut state spending and relax labor laws to boost employment. In contrast, states that rank much higher in economic freedom such as South Dakota and Texas (ranked 1 and 15 respectively) have lower unemployment (4.9 and 8 percent respectively). Not coincidentally, these states also have lower tax and regulatory burdens on its job creators than California.
These facts and rankings would seem to imply to any fair-minded person that there is a correlation between private-sector jobs and government policies. However, the ruling party who controls the Legislature and holds every statewide office thinks otherwise.
Most members of the ruling party refuse to admit that we have a jobs problem that has shown no signs of improvement. Even as I led a bipartisan delegation of lawmakers to Texas last April to learn why it was creating jobs while California was losing them, liberal politicians said our state did not have a jobs problem. One official even said our state was a “winner” in job creation. Try saying that to the 2.2 million Californians looking for work.
These liberal politicians ignored the fact that Texas added more than 165,000 jobs from January 2008 to December 2010, while California lost 1.2 million jobs in the same time frame. They said our nice weather and fledgling “green economy” will continue to attract investment. Oblivious to reality, they were instead pushing bills that would raise taxes even further and add more regulations on businesses, such as telling hotels which bed sheets to use.
Sacramento needs to wake up and recognize that restricting the freedom of entrepreneurs will not create jobs in our state. As manufacturing jobs continue to flee to other states and countries, we cannot afford to lose further ground. With virtually all economic indicators projecting a “jobless” non-recovery for the state in the future, the Legislature needs to be proactive about putting job creation first. That means reining in out-of-control spending we cannot afford and streamlining laws that discourage investment.
In other words, California’s Legislature needs to adopt a business-friendly approach that recognizes that more taxes and regulations mean less freedom – and fewer jobs – for Californians. If we unshackle the restraints that make job creators think twice about coming here, I am confident we can have a much more vibrant economy that will reduce unemployment.
Assemblyman Dan Logue, R-Linda, represents the 3rd Assembly District in the California Legislature.