California’s liberals just can’t help themselves. Their state is already in such decline that it is losing big-name companies, losing population, and losing seats in Congress. But they won’t stop doing what it takes to drive away every business and profitable venture they possibly can.
In 2020, the Democrats who control California’s legislature very nearly drove Uber and Lyft out of their state, formerly the cradle of technological innovation. They would have succeeded in this effort at self-harm but for a judge’s last-minute intervention. Now, they are attempting to set employee hours with a central planning scheme that would be hilarious were it not being proposed in earnest.
California Democrats now want to impose a four-day workweek on all large employers. No, this is not the innovative “4/10” plan that some workers and businesses have voluntarily adopted. Rather, this is a hard 32-hour cap on the regular workweek. This bill, were it to become law, would require businesses with more than 500 employers to pay overtime beyond 32 hours despite banning (or attempting to ban) affected businesses from paying their employees less than they currently make for working 40 hours.
In other words, California’s legislators think they can force companies to pay employees 25% more per hour of work without any negative repercussions for California’s economy and business climate. What could possibly go wrong?
The bill’s sponsors justify their actions by citing the much-exaggerated trend of people resigning from their jobs during the COVID era. To Assemblywoman Cristina Garcia, this calls for state intervention. “There has been no correlation between working more hours and better productivity,” she recently said. This highly implausible assertion really says it all about how out of touch she must be. This may well be true of her own work — negative productivity only gets worse with more time. But does she really think delivery drivers can just go 25% faster and cover the same routes or that orderlies can just start preparing hospital rooms and medical equipment 25% faster? Does she think this mandate for 20% less work per week won’t affect companies that need to man the phones during business hours?
“It doesn’t make sense that we are still holding on to a work schedule that served the Industrial Revolution,” Garcia has said. But this could not be less relevant. Work schedules are created by markets, not by governments. This has never been truer than it is right now in this modern era of gigs and side hustles. If employers really find it challenging to fill positions or to staff their businesses during needed hours, the market effectively fills the gaps with pay increases, extra flexibility, and other incentives. Long before COVID, wages were rising, and more people were seeking more flexible work arrangements through the very gig economy that California Democrats have tried so hard to destroy.
As Milton Friedman famously noted, there is no such thing as a free lunch. Californians will not just start making more money because their state legislature says so. What is far more likely to happen is that even more businesses will join the exodus from California at an even faster pace. Those forced to stay will either offer their new hires lower starting wages, shift to part-time hiring, or (if possible) automate.
Politicians like Garcia are so desperate to preserve the overregulated and ossified traditional employment arrangement — their labor union masters demand it — that they can’t even see what is happening around them. Garcia is right that old-fashioned work arrangements cannot last forever, but the changes are occurring in spite of her and her political allies, not because of them.
