NCPA - National Center for Policy Analysis

Will Democrats Take California's Growth For Granted?

April 8, 1997

As California pulls out of the economic doldrums, business leaders there are wary that Democratic majorities in the state's Assembly and Senate will succumb to the urge to pass more new laws, raise taxes and add more red tape. They say growth cannot be taken for granted and the state will have to follow enlightened economic policies.

But a raft of bills increasing the difficulty of doing business have already be introduced and business leaders fear more are on their way.

  • California is one of only three states to require that workers be paid at overtime rates if they work more than eight hours in any day, the standard being working more than forty hours a week in 47 other states.
  • This inflexible work regulation is estimated to cost workers $1 billion each year -- and unions and Democratic allies are fighting a proposal to adopt the 40 hour rule.
  • The state Senate will consider a bill to extend the so-called "living wage" -- which was adopted by the Los Angeles City Counsel recently -- to cover all workers who work for firms that do business with the state.

While they look to Republican Governor Pete Wilson to veto legislation which might jeopardize the economy, business leaders worry that the legislature may tack these initiatives onto bills the governor feels he must sign.

  • Business groups are fighting a number of bills which might generate frivolous lawsuits in areas such as sexual orientation and arbitration agreements.
  • They are also wary over the prospect that 10 percent and 11 percent personal income tax brackets -- now expired -- will be reinstated.

Source: Charles Oliver, "Dulling Golden State's Glitter?" Investor's Business Daily, April 8, 1997.


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