By Ted Gaines
State Board of Equalization
Is California’s economy recovering from COVID or not? Recent jobs numbers don’t help answer that question. In May, California added nearly 105,000 jobs, the fourth straight month adding more than 100,000. That is certainly strong job growth by historic state standards. But California has gained back only about 52 percent of the jobs lost since the start of the pandemic, far below the national average of 66 percent.
What is clear, though, is that jobs themselves, more than the stock market or trade deficits or interest rates, are the primary measure of a healthy economy to most people. A surging NASDAQ stock exchange means little to those who can’t afford to put food on the table. As that 52 percent number indicates, California needs more jobs urgently and we should celebrate and support the entrepreneurs who will make that happen.
The Golden State has around 3.5 million businesses, many of them small, single-person operations. Our labor force comprises more than 15 million people, though. Almost everyone in the state depends on someone else for a job. In the private sector, that someone is an entrepreneur.
California has been blessed with some of the most creative and successful entrepreneurs in the nation, most notably in Silicon Valley, which is the unquestioned global leader in technology and has long been the source of high-paying jobs. Their stories are legendary, and we owe much of our prosperity to these world-changers.
But the magic of entrepreneurship doesn’t depend on innovation. You don’t need to build a better mousetrap, or a better search engine, to succeed in business. It doesn’t take a new idea; it takes courage, determination, and hard work. You can find donut shops and dry cleaners in strip mall after strip mall. There are nail salons and real estate offices everywhere. They are not providing anything new, but are providing something valuable. And by doing that, they survive, then grow, then hire, providing employment for others, too. I respect their efforts and congratulate their success.
Recently, super-entrepreneur Elon Musk announced he was leaving for Texas, and one California legislator publicly told him, in so many words, “good riddance.” That’s a heartless statement considering the hundreds of thousands of people looking for work in our state and Mr. Musk’s proven ability to create enterprises that provide tens of thousands of jobs. It shows a complete misunderstanding of the economy. It shows an unwarranted hostility towards businesses and the people who build them.
If we want to speed up our ascent from the depths of COVID-induced economic devastation, we should take this moment in time to recognize the vital importance the brave men and women who take the risks needed to start a new venture. Simply put, entrepreneurs are heroes and government should treat them as such.
California must look right now to remove barriers to their success. That means lower taxes, lower fees, fewer stifling regulations that bury them in paperwork and take them away from their mission, and in too many cases, out of California.
COVID presented special challenges that call for special responses. The state that CEO Magazine rates the worst place to do business for more than a decade straight needs to look in the mirror and realize it can help its unemployed most by helping its employers. Governor Newsom, himself a private business owner, should call a special session this fall on jobs and economic development, specifically with our entrepreneurs and small business owners in mind.
Let’s put these heroes in a position to flourish – someone looking for a job right now is depending on their success.
Senator Ted Gaines (Ret.) was elected to represent the Board of Equalization’s First District and its nearly 10 million constituents in 30 counties of northern, eastern, and southern California. For more information, visit boe.ca.gov/Gaines.