California unemployment reached 27.7 percent, highest of any state and almost twice the national rate. Yet Governor Newsom and the Legislature won’t let people work.
After pledging to do “everything we can to keep small businesses afloat,” the Governor proposed a budget that drowns them in favors for special interests. As a result, the number of unemployed Californians exceeds the entire population of 28 different states, with 5.3 million filing claims.
Having ordered small business shut down for months, you’d think we’d now try to help them in every way possible. But the budget does the opposite: Regulations are ratcheted up, not relieved. Taxes are raised, not cut. Liability is expanded, not limited. AB 5 is reinforced, not repealed.
On the latter point, a study by Berkeley Research Group found the decision to restrict independent contracting will put 90 percent of drivers out of work, not to mention the 300 other professions harmed by the law. This isn’t the “creative destruction” of innovation, where new jobs arise. It’s just destruction.
Kerry Washington of Pacific Research calls Newsom’s AB 5 the “most malicious and harmful law ever passed in California.” The story of Monica illustrates why:
“I’m a 61-year-old cancer survivor. AB 5 destroyed my life, taking my interpreter job that was my salvation during chemotherapy and made me feel useful, helping people. For 8 years I’d wake up and work. Now some days I’m too depressed to get up, I just crawl and cry. Sometimes I wish I could die.”
It gets worse. The Governor has set EDD loose on small businesses, having the agency conduct burdensome audits during the shutdown. I asked EDD to cut it out, and they refused.
In addition, trial lawyers are preparing COVID-related lawsuits targeting businesses. Rather than provide legal protections for establishments that follow safety guidelines, the Governor unilaterally decreed that businesses are “presumed” liable when someone tests positive.
I surveyed 1,000 small businesses in my district and 97 percent are likely to “lose a significant amount of income” because of the pandemic. All but 7 percent will have to shut down permanently if they can’t re-open within 3 months.
What will it take for Governor Newsom to let people work?