California, which would like to think of itself as the recycling capital of the universe, has lost its largest bottle and can recycling chain, rePlanet. The company shut down all 284 sites across the state on Aug. 5 and terminated its workforce of as many as 750 employees. It’s been a slow motion collapse. In 2016, it closed nearly 200 locations, the Press-Telegram reports, and had to let almost 300 employees walk.
There are multiple reasons behind the decision, all of them caused by poor public policy.
RePlanet’s statement blames the shutdown on “the rise in operating costs resulting from minimum wage increases and required health and workers compensation insurance.” Consequently, the company “has concluded that operation of these recycling centers and supporting operations is no longer sustainable.”
Those are hurdles that all California companies have to overcome to remain in business in the state. Some simply can’t.
California has the second-highest minimum wage in the country at $12 an hour — on its way to $15. Only the District of Columbia, $14 an hour, has a higher wage floor. Analysts predicted the minimum-wage hike would forces businesses to leave or simply shut down because they couldn’t afford the added costs, but lawmakers passed the increase anyway and then-Gov. Jerry Brown signed it.
As for workers compensation insurance premium rates, California is second again, according to a report issued last fall. New York has the highest rate, $3.08 per $100 of payroll. The Golden State is right behind at $2.87, far higher than the national average of $1.70.
Another estimate says California’s average workers’ compensation costs are $3.24 per $100 of payroll, highest in the nation.
As rePlanet has learned in a most miserable way, the financial burden of employment in California is high. The costs are so high that some companies can start a business and remain profitable only when they operate with contract workers rather than hired employees.
Other causes behind rePlanet’s shutdown, says the company, include “the continued reduction in state fees, the depressed pricing of recycled aluminum and PET plastic.” This brings up a couple of other thoughts, one being: If not for public subsidies, as well as various recycling mandates, would the plastic and glass recycling business return profits over the long term, even in reuse-reduce-recycle-happy California? As rePlanet itself noted, it needed more help from the state with its finances. Had Sacramento not used public funds from the Beverage Container Recycling Program, which requires “consumers to pay a deposit … for each eligible container,” to incentivize recycling, would rePlanet have lasted as long as it did?
The other thought is about America’s obsession with recycling: What have we wrought? We need to acknowledge that sending our scrap to China, at one time taking tens of millions of tons a year — and about 70% of plastics being collected in the U.S. for recycling — might have been worse than throwing it in landfills. The country eventually became saturated with our dirty refuse, a great deal of it spilling into the waterways from where it flowed into the ocean.
“Even before China’s ban” on the import of some plastics and other types of solid waste called National Sword, “only 9% of discarded plastic was being recycled, while 12% was burned. The rest was buried in landfills or simply dumped and left to wash into rivers and oceans,” says Wired.
As we’ve noted before, roughly 90 percent of ocean plastic enters the ocean through 10 rivers, eight of which are in Asia, two in Africa.
Unloading plastic into landfills might have been the better option, and still likely is, even as plastic production continues to grow worldwide. There is no shortage of space — the next 1,000 years of all the trash generated across the world could fit into a 15-square-mile landfill — and modern landfills are safe, their contents contained by lining. They are environmentally friendly enough to be turned into parks and other public spaces once they have reached their capacity.
The greenest of Californians wouldn’t be happy with this alternative, but with China offline, what else are we going to do with our plastic containers? Outlaw them? Don’t bet against the possibility, because that campaign has actually already started.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.
