Hillary’s Wrong: California’s Paid Family Leave Mandate Hurting Small Business, State

Regulation: Hillary Clinton claimed that California’s paid family leave mandate hasn’t hurt business and job growth, and ought to be expanded nationwide. But a recent study shows that she’s living in a statist dream world.

Clinton made the ill-informed remark at Tuesday’s Democratic presidential debate during an exchange with CNN’s Dana Bash:

BASH: Secretary Clinton, you now support mandated paid family leave. Carly Fiorina argues if the government requires paid leave, it will force small businesses to “hire fewer people and create fewer jobs.” What do you say, not only to Fiorina, but also a small-business owner out there who says, you know, I like this idea, but I just can’t afford it?

CLINTON: Well, I’m surprised she says that because California has had a paid leave program for a number of years. And it has not had the ill effects that the Republicans are always saying it will have. This is typical Republican scare tactics. We can design a system (like that at the federal level).

Clinton might want to do more homework.

She can start by reading a report by the San Francisco-based Pacific Research Institute, which found that — thanks in large part to its paid family leave mandate — California has the nation’s worst regulatory climate for small business and among its slowest payroll growth.

And such costly workplace mandates are why so many California businesses keep moving to Texas and other business-friendly states, taking thousands of jobs with them.

The Golden State was the first to mandate paid family leave, launching a program in 2004 that lets workers take up to six paid weeks a year to care for a newborn child or other family members. California’s family leave regulation is now the most generous — and burdensome — in the nation.

“California’s regulatory policy makes it more difficult and more costly for current and potential entrepreneurs,” said study author Wayne Winegarden, a senior fellow at PRI and a partner in the consulting firm Capitol Economic Advisors. “These higher costs reduce the amount of business growth.”

And payroll employment growth. The 123-page report shows California’s payrolls continue to trail other states. State job growth significantly lagged even the subpar national average between 2002 and 2011.

Clinton might also want to talk to CEOs recently joining the corporate exodus from California.

By relocating its corporate headquarters and distribution facilities — and 350 workers — to the Dallas area, coffee maker Farmer Bros. expects to save $15 million a year. Farmer follows Toyota, which moved its U.S. sales and marketing headquarters to Texas, as well as Raytheon Space and Airborne Systems, eBay, Occidental Petroleum and RifleGear. Nissan recently bailed to Tennessee — which like Texas doesn’t require employers to pay for family leave.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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