Dr. Marilyn Singleton of Redondo Beach, California, says she plans to stick around her home state despite seeing so many others leave amid what she considers a tough climate for business, including fellow medical doctors.
“It would be terrible for California—or as they call it here, Taxifornia—went national,” Singleton told The Daily Signal. “You have the same group of people paying for everything.”
California is losing a congressional seat, according to new data from the U.S. Census Bureau. Although still the largest state in the union, it has been losing employers to other states such as Texas and Florida.
“They are never going to drive me out,” Singleton said in a phone interview. “California has things that other states do not have. The geography is unparalleled. You can drive an hour and a half and go from the sunny beaches to skiing in the mountains.”
Despite the state’s economic and population problems, President Joe Biden used his address to a joint session of Congress to propose policies similar to those enacted in California. Among them: a law to ban “gig” or freelance workers, a hike in the federal minimum wage, measures to curb climate change, and promises of “free” pre-K and college.
In the neighboring state of Arizona, Carlos Ruiz, founder of HT Metals in Tucson, has seen how his state has benefited from businesses that have fled California.
“With the licensing and regulation laws, I don’t think I could have started my business in California,” Ruiz told The Daily Signal. “Arizona has always been a great place to start a business. If you eliminate competition among the states for business and make everyone like California, it’s going to stifle business creation. It creates a barrier to entry and stifles growth.”
Neither the White House nor the office of California Gov. Gavin Newsom responded to requests for comment.
Here are seven key areas where Biden’s agenda largely would mirror policies enacted in California.
1. American Families Plan
Newsom, a Democrat, took notice of Biden’s “American Families Plan.”
“Right here in California, our stimulus programs have provided tax relief for small businesses and money in pockets for struggling families, and we’ve expanded child care and made community college free,” Newsom said Wednesday in a public statement. “These strategic investments, which are complemented by President Biden’s American Families Plan, will bolster California’s equitable economic recovery and bring us roaring back.”
California, which already had covered the cost of one year of community college, expanded that to two years in 2019.
During his remarks to a joint session of Congress, Biden touted similar proposals.
“My American Families Plan guarantees four additional years of public education for every person in America, starting as early as we can,” Biden said.
“The research shows when a young child goes to school—not day care—they are far more likely to graduate from high school and go to college or something after high school. When you add two years of free community college on top of that, you begin to change the dynamic.”
2. PRO Act
During his remarks to Congress, Biden asked the lawmakers “to pass the Protect the Right to Organize Act—the PRO Act—and send it to my desk so we can support the right to unionize.”
The legislation dubbed the PRO Act essentially would take a California law known as AB 5 national. However, the California measure wasn’t very popular after the Legislature passed it and the governor signed it into law.
Previously, drivers for ride-hailing services such as Uber and Lyft; freelance writers, musicians, and others, and various independent contractors could work for companies without being considered full-time or part-time employees.
The new law required workers in California to be considered employees, narrowing opportunities for workers that wanted to set their own hours.
In November, voters opted to significantly weaken the law, though not discard it entirely, by passing a ballot question called Prop 22 after the law was seen as harming opportunities for freelancers and independent contractors.
The ballot initiative carved out Uber and Lyft drivers, but the law still affects most other part-time or freelance workers in California.
“If a policy is too liberal for California voters, you would think it’s definitely not something for the rest of the country,” Alfredo Ortiz, president of the Job Creators Network, a small business advocacy group, told The Daily Signal.
“That law has had a horrible impact on freelancers and independent contractors,” Ortiz said. “Even people in the movie industry that used to get contract jobs are losing opportunities. If you are a sole proprietor, you are a small business.”
The PRO Act touted by Biden would prohibit contract or freelance work. Organized labor strongly backs the legislation as a means of increasing union membership.
The Freelancers Union estimates that 1 in 3 workers in the United States participates in independent work such as contracting, freelancing, and consulting. About 10% of workers perform independent work as their primary job.
Fewer than 1 in 10 independent contractors would prefer a traditional work arrangement, according to the Bureau of Labor Statistics.
Specifically, the federal legislation would broaden the definition of “employee” under the National Labor Relations Act. Under the new definition, an individual who performs any service—with some exceptions—would be an employee rather than an independent contractor.
The proposal also raises concerns about invading workers’ privacy, doing away with the right to secret ballots in union elections, and invalidating 27 state right-to-work laws against compulsory union membership.
“California has been a policy disaster, yet President Biden seems to view it as a success,” Ortiz said.
3. $15 Minimum Wage
An increase in the federal minimum wage would have real consequences for employers, said Ruiz, who currently has five full-time employees.
“Amazon can pay high wages, but not every business is scaled to Amazon,” Ruiz said in a phone interview.
In 2016, California became the first state to adopt a $15 minimum wage statewide. The full wage doesn’t take effect until next year.
“While you’re thinking about sending things to my desk, let’s raise the minimum wage to $15,” Biden told Congress. “No one … working 40 hours a week should live below the poverty line.”
The current federal minimum wage is $7.25 an hour, meaning an employer cannot pay an employee less than that. More than half the states, 29, impose a higher minimum wage than the federal one, according to the National Conference of State Legislatures.
A 2019 study by the University of California, Riverside predicted problems for full-service restaurants and the industry’s employees.
“The model suggests that there would be 30,000 fewer jobs in the industry from 2017 to 2022 as a result of the higher minimum wage,” the study says. “Over the period 2013-2022, therefore, the number of new jobs in the full-service industry will grow by 120,000, but would have grown by 160,000.”
The Congressional Budget Office estimated in 2019 that raising the minimum wage to $15 per hour nationally would result in up to 3.7 million Americans losing their jobs:
According to CBO’s median estimate, under the $15 option, 1.3 million workers who would otherwise be employed would be jobless in an average week in 2025. (That would equal a 0.8 percent reduction in the number of employed workers). CBO estimates that there is about a two-thirds chance that the change in employment would lie between about zero and a reduction of 3.7 million workers.
4. Climate Change
During his remarks to Congress, Biden also talked about green jobs as a domestic policy while also working with other countries to curb emissions as part of his foreign policy.
“For too long, we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Biden said. “For me, when I think climate change, I think jobs.”
Last year, Newsom signed an executive order to ban the sale of new gas-powered cars in California by 2035. Several municipalities there also enacted bans on natural gas-powered products such as grills and even home-heating systems. That would mean, in theory, zero carbon dioxide emissions from cars and trucks.
During his virtual climate summit April 22 and 23, Biden said the United States has a “moral imperative” to cut greenhouse gas emissions by 50% from 2005 levels by 2030 and by 100% as of 2050.
5. Health Care and ‘Public Option’
During his campaign for president, Biden talked about a government-run health insurance entity that would compete with private markets. The president didn’t raise the point during his remarks to Congress, however.
Newsom has boasted that California has such a so-called public option, though the assertion is questionable.
Biden used a government option to rebut other Democratic primary candidates who called for a “Medicare for All” plan.
Biden did talk about expanding Obamacare, officially known as the Affordable Care Act, in his remarks to Congress.
“The Affordable Care Act has been a lifeline for millions of Americans, protecting people with preexisting conditions, protecting women’s health,” Biden said. “And the pandemic has demonstrated how badly, how badly it’s needed. Let’s lower deductibles for working families … in the Affordable Care Act.”
During the Democratic primary debate, Newsom said his state already has a public option in its version of the Obamacare insurance exchange.
“We have a public option, just so folks know,” Newsom said in January 2020 while announcing the state budget proposal. “It’s called Covered California.”
California Healthline, a publication that covers the state’s health care industry, challenged this assessment. It contended that Covered California is a collection of competing private companies on the exchange.
Peter Lee, executive director of California Covered, wrote an article defending the “public option” characterization by the governor.
“Among those plans are statewide [insurance] carriers that are both nonprofit and for-profit; we have public plans such as L.A. Care and Valley Health Plan which are locally accountable to their communities; and regional carriers such as SHARP Health Plan, Western Health Advantage, and Chinese Community Health Plan, which serve a growing number of people in their areas,” Lee wrote on LinkedIn.
Singleton said this is not exactly the case, but the doctor pointed to L.A. Care, which is run by Los Angeles County and competes with other plans on the state’s insurance exchange.
The state’s Medicaid program—known as Medi-Cal—has about 12 million enrollees, according to the California Department of Health Care Services.
“We don’t really have a state public option, but there are so many on HMOs and 21 covered plans,” Singleton, the Redondo Beach physician, said. “Los Angeles County has L.A. Care, which is close to a public option. It’s operated by the county and competes with private plans. It’s very easy for Newsom to say we’ve got a public option, since so many people are on Medi-Cal.”
The large presence of Medi-Cal and HMOs is not good for either doctors or patient choice, Singleton said:
There are many, many, many folks in the California Medicaid system. Medicaid payments are very low. There is a lot of bureaucracy. … The largest enrollment is in HMOs, about 60% in California. It’s about 30% in the rest of the nation. It’s restrictive for patients.
6. Big Labor’s Power
Union power is also a major problem in California because of unions’ sway over government policies, Singleton said.
“Probably the biggest problem is, unions run the state,” the physician said. “Now [Vice President] Kamala Harris is running a task force to promote more unions.”
Biden announced this week he was naming Harris, a former U.S. senator and attorney general for California, as head of the White House Task Force on Worker Organizing and Empowerment. The goal of the task force, he said, is to reverse the decline in union membership across the United States.
“The middle class built the country, and unions built the middle class,” Biden said in his speech to Congress.
7. Personnel and Policy
Harris may be the most prominent Californian in the Biden administration but is far from the only one.
The state’s last attorney general, Xavier Becerra, is now Biden’s secretary of health and human services.
Becerra was known for being an advocate of the Medicare for All plan. He also tried to force pro-life organizations to post advertisements for abortion services and prosecuted activists who investigated the practices of Planned Parenthood, the nation’s largest abortion provider.
Homeland Security Secretary Alejandro Mayorkas is a former U.S. attorney in the Central District of California, named to that post by President Bill Clinton, a Democrat, in 1998.
Sen. Dianne Feinstein, D-Calif., suggested the Mayorkas nomination to Clinton. He began working in the U.S. Attorney’s Office for the Central District as an assistant U.S. attorney in 1989.
Treasury Secretary Janet Yellen was a professor at the Haas School of Business at University of California, Berkeley from 1985 to 2006. Yellen did a previous stint as an assistant professor there from 1980 to 1982.
Before serving as chairwoman of the U.S. Federal Reserve from 2014 to 2018, Yellen was CEO of Federal Reserve Bank of San Francisco from 2004 to 2010.
Biden named Julie Su as deputy secretary of labor. Su served as secretary of California’s Labor and Workforce Development Agency since 2019 when Newsom appointed her.
During her tenure in California, Su oversaw the Employment Development Department that paid out at least $11 billion and as much as $31 billion in unemployment benefits to fraudsters—including organized crime rings from Russia, Nigeria, and China—during the COVID-19 pandemic.
The traditionally left-leaning editorial board of the Los Angeles Times noted in an editorial that Su’s nomination to serve as Biden’s deputy labor secretary “comes with heavy baggage that is sure to weigh her down during the confirmation hearings.”
During her confirmation hearing, the California newspaper added, “Senators must demand that she answer for her role in the EDD fiasco before she can be trusted to play a key role in the nation’s economic recovery.”
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