Few people would accuse me of being sentimental, but if there’s ever a time for it, it’s the first week of January.
The holidays are over and the cracks in our economy, disguised during the December rush, are showing again. A few weeks ago, we got word that Corky’s, open for over 60 years and a San Fernando Valley icon, closed. Last month, two other Valley restaurant owners told me privately that 2020 will be their last.
I’m not concerned simply for nostalgia’s sake. If the times are a-changin’, then fine. I can change with them, find new Saturday morning routines for my family, enjoy emerging small businesses, look forward to the future.
But I am concerned that these small businesses are closing down after decades of successful operation, and no one in a leadership position seems to be asking why.
I’ve asked why. I’ve sat down with small business owners all over the Valley and asked them what the challenge is. It turns out there’s not one single problem. There are hundreds of small challenges which add up to an insurmountable hurdle.
And these business owners are tired of figuring out how to get over the latest hurdle, the majority of which have been placed in front of them by elected leaders.
• Rising minimum wages, which exacerbate rising workers compensation premiums.
• Paid sick leave requirements, which are drafted in a way that employers can’t ask for documentation or fire an employee for calling in sick for every Saturday evening shift in a month.
• Shakedown Private Attorney General Act lawsuits, which force small businesses into settlements for hundreds of thousands of dollars for a simple error on someone’s paystub – not the compensation, just the documentation.
• Rising rents, which will be exacerbated if the November attempt to roll back Proposition 13 tax protections is approved by voters.
New rules regarding independent contractors came into effect Jan. 1. To be clear, the California Supreme Court unilaterally created new rules for independent contractors in a 2018 ruling, and the Legislature’s job was to fix it so that entire industries weren’t shut down in California. And they sorta kinda fixed it – for select industries, such as the insurance, financial services and medical professions.
But the author of the bill, Assemblymember Lorena Gonzalez, left an awful lot of Californians who were effectively running small businesses out in the cold. On receiving the news that major companies were cutting their contracts with California freelancers in response to the new laws, Assemblymember Gonzalez tweeted that “(she is) truly sorry for anyone…who has lost their job, but I would encourage you to apply for Unemployment Insurance.”
That can’t be the answer that elected leaders provide when Californians lose their jobs.
I understand that elected leaders are trying to protect workers. But the overwhelming majority of business owners treat their workers respectfully – that’s just good business sense. The laws that are being passed are “protecting” workers right out of a job, when businesses close, move out of state, or reduce their workforce in order to afford these rising costs. And the truly crappy employers, the ones that workers need protecting from, ignore the laws anyway.
You know what would help workers? If California legislators focused their formidable energy on creating an economy so strong that no worker would have to put up with a job that didn’t work for them. Low pay? Schedule you hate? No benefits? Go find another job that’s better.
If our elected leaders sat down with business owners, they would hear this frustration. And if they still think that this is the right path, that this is the way the future lies, then fine. But they better have a plan for what’s going to replace the jobs, businesses, and industries that we’ve lost.
We’re in the first week of the 2020s, and I want to be optimistic. I look forward to sitting down with our legislators and our business leaders and figuring out how our Valley economy is going to look in 2030. Happy New Year.
Stuart Waldman is president of the Valley Industry and Commerce Association, a business advocacy organization based in Van Nuys that represents employers in the San Fernando Valley at the local, state and federal levels of government.