While the Golden State's enterprise zone program does shift jobs to 40 areas it deems economically depressed, employers are the big winners. In many cases, jobs are moving from one California locality to another, sending existing workers to the unemployment line. Meanwhile companies are piling up more profits due to the tens of thousands in tax breaks they get for each employee they hire at the new job site.
The Frying Pan News explains the state-sponsored sham. Established in 1984, the program gives companies tax credits of up to $37,440 per person hired in one of the zones. Yet there is evidence that many areas eligible for the programs shouldn't be, noting that well-heeled neighborhoods in Los Angeles and San Francisco qualify as enterprise zones.
While some workers might be willing to move to continue their employment, they don't get the choice. Under the rules of the program, employers cannot take current workers if they want to receive tax credits. That leaves a lot of people who once earned middle-class wages out of luck. Bay Area warehouse workers John Thomas and Hans Burkhardt, both Teamsters, are just two examples.
The union jobs that Burkhardt and Thomas and their fellow workers had at the BlueLinx and VWR locations paid, on average, about $20 an hour, plus benefits. They were replaced with non-union positions that paid about one-half of that, with non-existent or substantially reduced benefits.We detailed the plight of many of their fellow workers earlier this year. The loss of union wage jobs by members of Teamsters Local 853 resulted in the companies paying their new non-union employees about $10 an hour with no benefits in their new locations.
Doug Bloch, Teamsters political director for the Central Valley and Northern California, told Frying Pan News the VWR and BlueLinx situation encapsulates all that is wrong with the enterprise zone program.
Our union is all for programs that create jobs in economically distressed areas. This program doesn’t create jobs.Some elected officials are beginning to see the light. State Sen. Jerry Hill has unveiled legislation soon to be considered on the Senate floor that would revamp the program by saying it must create net new jobs that pay at least $16 an hour. And Gov. Jerry Brown earlier this month proposed that the zones be replaced by a sales tax credit for firms that buy manufacturing or biotech equipment.
Californians need to make sure the rest of the state's lawmakers get on board as well. Tell your elected members to support Sen. Hill's SB 434 and help create new jobs, not just move old ones.