06/24/2008
CONTACT: Michelle Orrock, 916-448-9904
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Alzada Knickerbocker, NFIB/California member and owner of the Avid Reader bookstore, shares how mandated paid sick leave would affect her business. |
SACRAMENTO, Calif. -- A study released today by the National Federation of Independent Business Research Foundation shows the loss of approximately 370,000 jobs within five years in California should Assembly Bill 2716 become law. The Senate Labor Committee is expected to vote on AB 2716 Wednesday, June 25. The bill mandates that all employers provide paid sick leave regardless of their ability to pay.
In addition to significant job losses, the bill, authored by Assembly Member Fiona Ma, imposes a direct cost, just like a tax, on California employers and will disproportionately affect small businesses. According to the study released today:
- California employers will be taxed with a $4.6 billion mandate.
- The new regulations will cost California companies an estimated $59.3 billion in sales in the first five years of enactment.
- About 36.2 percent, or slightly more than one third of the sales loss, will occur in small firms with fewer than 100 employees.
- Major job losses will occur in retail trade, construction and professional services.
John Kabateck, executive director of NFIB/California, urged the Legislature to take a look at the complete study. "This study should alarm everyone about the consequences of costly mandates to small businesses in California," said Kabateck. "With our current economic challenges, California can't afford to lose 370,000 jobs. Our members will be forced to make difficult choices, including cutting back hours or laying off employees. The Legislature needs to understand the damage mandates inflict to the engine of the California economy. When small businesses get hit with cost increases, they cannot automatically increase prices to make up the difference. This legislation has the opposite effect on the very people it intends to help -- working Californians."
NFIB's Research Foundation, based in Washington, D.C., studied the economic and small business effects of AB 2716. The study analyzes the results of an input-output system that produces short- and long-term forecasts for detailed industry sectors when external shocks are applied. It estimates future changes in jobs, output (sales), income and productivity for California by business size and industry. Estimates are made by comparing forecasts without change to forecasts with change -- in this case, the proposed legislation.
