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A key moment in the modern myth-making around small business came in 1978. That’s when MIT economist David Birch published claims – which he repeated in testimony before Congress – that small firms had accounted for 80 per cent of all new employment opportunities between 1968 and 1976. Critics quickly pointed out that Birch’s findings were quite wrong, largely because he defined firm size according to how many employees worked in a given location (like a branch office, factory, or store), not how many the firm employed altogether. In fact, most job creation, in the 1970s and today, comes from a small number of very fast-growing firms, while most small firms either fail (killing jobs) or remain small. Birch later admitted that the 80 per cent figure was a ‘silly number’, but the claims took firm root in popular mythology and political rhetoric by the 1980s. ‘Small businesses create eight out of every 10 new jobs,’ said Richard Lesher, president of the largest pro-business lobbying organisation, the US Chamber of Commerce.

California’s Unemployment Insurance Fund is projected to have a positive balance by the end of 2018, marking the first time since 2008 that the employer-funded account will end in the black, the California Employment Development Department (EDD) reported October 31. California in 2009 began borrowing from the federal government to pay unemployment benefits, and in 2012 the debt triggered a reduction in California employers’ Federal Unemployment Tax Act (FUTA) credit. The FUTA credit reduction has carried over every year since then, costing employers approximately $9.5 billion in additional tax from 2012 through 2018 (as projected by the EDD). 

We know this destructive gas tax will disproportionately hurt working families and struggling small businesses, but unfortunately the list of new burdens does not stop there. Governor Brown signed a slew of additional bills which will make California even more hostile to small business.

California no longer should give specific tax incentives to businesses and instead should provide broad-based tax relief, the state’s nonpartisan Legislative Analyst’s Office said in a new report.

The analyst’s office examined California Competes, a program that began four years ago to give tax credits to businesses looking to move to the state or remain here, and found it puts existing companies that don’t receive the awards at a disadvantage without clear benefits to the overall economy.

“Picking winners and losers inevitably leads to problems. In the case of California Competes, we are struck by how awarding benefits to a select group of businesses harms their competitors in California,” the report said. “We also think the resources consumed by the program are not as focused as they should be on winning economic development competitions with other states to attract major employers that sell to customers around the country and the world.”

Electric-car maker Tesla has reached an agreement to set up its own manufacturing facility in Shanghai, according to people briefed on the plan, a move that could help it gain traction in China’s fast-growing market for electric vehicles.

The deal with Shanghai’s government will allow the Silicon Valley auto maker to build a wholly owned factory in the city’s free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China’s 25% import tariff.

California lawmakers have proposed more taxes and fees in the first half of the 2017-18 legislative session than in all of 2015 or 2016. If each proposal became law, the tax burden in California would increase by more than $373 billion per year. To put this in context, all revenue in the 2017-18 State Budget is expected to bring in $178.4 billion.

One of the few great inescapable facts in the field of economics is the reality of the business cycle. No matter how high-flying an economy might appear, another recession is coming sooner or later. It can be difficult, if not impossible, to regularly predict when one might occur, or how severe it may be, but recessions and their place in the business cycle are an accepted fact of economic life. Therefore, preparing for recessions is an equally inescapable concept.

It has been more than eight years since the end of the last recession, the third longest period of expansion in U.S. history, and many are rightfully beginning to look ahead to the next economic downturn. However, one of the most effective ways to look forward is to look back and make sure that we have adequately learned the lessons of the Great Recession. Nowhere is this type of postmortem more appropriate than for state and local governments.

When California’s Gov. Jerry Brown signed a 10-year extension of the state’s cap-and-trade program this summer, it was heralded as a rebuke of President Trump, who had just announced he would withdraw the U.S. from the Paris Climate Accord. While the nation was failing on climate change, the story went, states could succeed. The trouble is that California could leak—like a sieve.

In the decade since Mr. Brown’s predecessor, Gov. Arnold Schwarzenegger, first signed the Global Warming Solutions Act, the cap-and-trade program has done little to abate carbon emissions, let alone planetary warming. Under the law, companies in California that emit carbon in their production processes must secure scarce permits for the right to do so. The theory is that this creates an incentive to invest in green power and energy efficiency.

Yet the law’s designers still have not confronted the central conundrum of trying to impose a state or regional climate policy: As firms compete for a limited supply of carbon permits, they are put at a disadvantage to out-of-state rivals. Production flees the state, taking jobs and tax revenues with it. Emissions “leak” outside California’s cap to other jurisdictions.

The United States slipped one spot to eighth in the most recent iteration of the World Bank’s Ease of Doing Business rankings. The Index ranks countries based on how supportive their economies and regulatory frameworks are to starting and operating a local firm. For the United States, the report uses a population-weighted score for Los Angeles and New York City. A decade ago the United States ranked third, behind only perennial top-two finishers Singapore and New Zealand, but in this year’s Index it also ranked behind Denmark, Hong Kong, South Korea, Norway, and the United Kingdom

If the next recession hit the U.S. this year, more than a quarter of states would be financially unprepared to weather even a moderate downturn, according to a new report.

Fifteen states would struggle in the case of a recession-related tax revenue slump and spike in demand for services, such as Medicaid. They are more than 5 percentage points below the share of funds left in their budgets they would need to tap, according to a new Moody’s Analytics analysis. Another 19 states narrowly fall short.

California extended income but not sales tax hikes, though local sales tax increases dropped California in the Index’s sales tax component.

Labor influence over climate policies occasionally made Democrats uncomfortable last week. One late addition to state budget legislation, Assembly Bill 134, directs regulators to develop a process for determining whether automakers are “fair and responsible” in their treatment of workers.

If lawmakers approve the process next year and companies fall short of that standard, their electric cars could become ineligible for California rebates that are crucial to making zero-emission vehicles more cost competitive. Tesla, the state’s only automaker, has resisted efforts to unionize the workforce at its Fremont factory.

The provision was supported by the California Labor Federation, a coalition that includes the United Auto Workers, as a way to ensure public money doesn’t flow to companies that mistreat employees. But these kinds of rules could end up “undermining our own goals” of fighting climate change with more electric cars, said Sen. Scott Wiener (D-San Francisco).

Organized labor doesn’t rack up a lot of wins these days, and Silicon Valley isn’t most people’s idea of a union hotbed. Nonetheless, in the past three years unions have organized 5,000 people who work on Valley campuses. Among others, they’ve unionized shuttle drivers at Apple, Tesla, Twitter, LinkedIn, EBay, Salesforce.com, Yahoo!, Cisco, and Facebook; security guards at Adobe, IBM, Cisco, and Facebook; and cafeteria workers at Cisco, Intel, and, earlier this summer, Facebook.

The workers aren’t technically employed by any of those companies. Like many businesses, Valley giants hire contractors that typically offer much less in the way of pay and benefits than the tech companies’ direct employees get. Among other things, such arrangements help companies distance themselves from the way their cafeteria workers and security guards are treated, because somebody else is cutting the checks. Silicon Valley Rising, a coalition of unions and civil rights, community, and clergy groups heading the organizing campaign, says its successes have come largely from puncturing that veneer of plausible deniability.

Toastmasters Chief Executive Daniel Rex, who called the move “deeply emotional,” said the costs of operating in Orange County were a major consideration in the move. The company employs about 180 people. Toastmasters reportedly already has several potential sites in Denver and will likely buy property. “When you look at the availability of workers, when you look at the cost of commerce and real estate, this is something that makes sense,” Rex told the Times. Toastmasters, which aims to help members improve their speaking and leadership skills, was founded in Santa Ana in 1924 and has had its headquarters in Rancho Santa Margarita, California, since 1990

And then there’s the Public Records Act, California’s landmark law giving the public, mostly via news media, access to official documents, with some exceptions. Unfortunately, the list of PRA exceptions seems to be growing as legislators, who are not inclined toward openness in the first place, protect their fellow officials and/or do the bidding of powerful interests. The current session has had 79 bills involving the PRA. While most of the proposals amount to innocuous boilerplate, the Legislature is moving those that create more exceptions and blocking those that would expand access.