Monday, September 28, 2009

California Government Admits Regulations Kill Huge Numbers of Jobs

California unemployment stands at 12.2%. The bottom is not in sight, as the economy shrank even more in the last six months. The rate was 10.5% only six months ago. California has the fourth highest rate in the nation, only Michigan, Nevada and Rhode Island, at 15.2%, 13.2% and 12.8%, respectively, are faring worse. California construction jobs down 18.5%, manufacturing down 8.6% The only sector that is growing is the education and health care sector (the government supported sector). Even government employment is down 0.7%.

The total California labor force stands at 18.3 million people, down from an all time high of 18.5 million, as people have started to leave the state for who knows where. And now this shocker:

Regulations on small businesses in California have cost the state 3.8 million jobs, according to a report quietly released by Gov. Arnold Schwarzenegger's office this week.
The report, authored by Sanjay B. Varshney, the dean of the business school at California State University Sacramento and Dennis H. Tootelian, a marketing professor at Sacramento State, totaled the "direct, indirect and induced" costs of regulation to calculate the [burden of] $134,122 per small business in 2007 and caused about one job loss per small business.

"This study provides the most comprehensive and complete analysis of the total regulatory burden in California," the authors wrote in their findings.

They relied on data compiled by Forbes and used a complicated formula to calculate the primary and secondary costs of regulations. They concede that "much more work will need to be done to determine the exact nature of potential remedies to the regulatory burden."

So regulations cost the average small business $134 thousand dollars? How about some examples of that? Recall this from June:
Bureaucrat scuffs dream of homeless shoe shiner

He sleeps under a bridge, washes in a public bathroom and was panhandling for booze money 11 months ago, but now Larry Moore is the best-dressed shoeshine man in the city. When he gets up from his cardboard mattress, he puts on a coat and tie. It's a reminder of how he has turned things around.
In fact, until last week it looked like Moore was going to have saved enough money to rent a room and get off the street for the first time in six years. But then, in a breathtakingly clueless move, an official for the Department of Public Works told Moore that he has to fork over the money he saved for his first month's rent to purchase a $491 sidewalk vendor permit.

"I had $573 ready to go," Moore said, who needs $600 for the rent. "This tore that up. But I've been homeless for six years. Another six weeks isn't going to kill me."

Even the bootstrapping homeless sidewalk vendor has to pay off the Government Mafia. It is far easier for him to be homeless in San Francisco, and when he tries to help himself, some bureaucrat has to push him down. Indeed, the homeless flock to San Francisco. Just one reason why California has nearly a third of the welfare recipients in the country.

So, the bottom line is that the California legislature manufactures job-killing regulations, then has to create the biggest welfare program in the country to care for the out-of-work and ne'er do wells. These people have too much time, too much influence and too little sense.

There is hope -- a movement in California to change the full-time legislature to a part-time legislature. Of course, nothing energizes government workers like the thought they might lose their plushy do-nothing jobs.

Prediction: Part Time Legislature in a Landslide next November!


OBloodyHell said...

> They concede that "much more work will need to be done to determine the exact nature of potential remedies to the regulatory burden."


How much work is it to say:



For regulatory bodies, tell them one rule, with one subject, per day, less than one letter-size page of typed instructions using 14-pt type.

Gee. The work is now done....

Makes me think of Staples: That was easy.

You know a lot of crap is going to get added back in but that constrains the speed and makes it so people will really have to prioritize the rules they think are relevant... which makes it possible to force consideration of which rules really matter and which is just a job for a bureaucrat.

Bob Cosmos said...

OBH I like your approach.

I'm so glad you picked up on this point -- "much more work..." is the phrase that the consultant puts in his report to continue his funding.

As long as government is run by clueless morons we will need professionals to tell us how effed up it is.

Jeff In California said...

bob,that is ever so true,,california's never ending regs are forcing me to retire my emissions compliant equipment in a few power unit(a 2002 model) must be scrapped because it doesn't meet their cut off date,while the 05 must be retrofitted with a device that will cost more than the truck will be worth upon compliance other state is imposing this regulation upon this industry...yet the trucks coming across the border from mexico are exempt from this regulation.when this regulation takes effect,I will be taking 4 jobs out of the state myself if I do not want to spend about 150k replacing my equipment.

Jeff in California said...

Unfortunately,this is where(Tree-Hugger)Democratic policies fail small business,,the large carriers update their fleets every 4 to 5 years,since they get wholesale prices on their equipment.If we would be allowed to rebuild our engines and upgrade our emissions software on the ECM's,the difference in pollutants would be minimal, once these devices are installed, the fuel milage drops considerably, resulting in more fuel consumption and emissions per loaded mile. the trucking industry is in an uproar over this, and the mainstream media and the general public are completely unaware of what this means down the road,,higher prices for consumer goods.

Brad S said...

This issue of over-regulation is all well and good. However, the fact that Nevada has an unemployment rate a full percentage point HIGHER than CA suggests a certain unhealthy dependence on CA on the part of NV.

suek said...

Hey...if they eliminated all those bureaucrats who do all the regulation enforcing, think what the employment rate would be!


I have horses. I buy hay by the truckload. The man who owns the hay squeeze (diesel truck front with bars that compress so it can pick up 3.5 tons at a time) says that his squeeze will be non-compliant in 2012. He says he'll be out of business at that point. A new squeeze runs between 80-100K.

I have no idea whether some kind of engine upgrades can be done, but I suspect that if they could, he would.