When the obituary for the State of California is finally written, it will be unions and their bought-and-paid-for Democrats who will get the credit for killing the once-golden state’s economy.
In December, Stanford University’s Professor of the Practice of Public Policy and Director of Graduate Practicum, as well as former Democratic assemblyman Joe Nation wrote about California’s public pension system:
In a scenario under which investments earn 6.2 percent per year, which is the long-term historical average for investors allocating capital in the same manner as pension funds, the shortfall is $290.6 billion, or about $24,000 per California household. Like a mortgage accruing interest that’s not being paid, that shortfall grows every day the problem is not addressed.
Rather than Democrats facing the reality that they are sinking their own state, California Democrat Assemblyman, community organizer and teachers’ union staffer Kevin De León has introduced a bill to force private-sector employers with five or more employees to enroll employees into a government-managed, private-sector pension plan.
According to the Sacramento Bee [emphasis added]:
Senate Bill 1234, written by Sen. Kevin de León, D-Los Angeles, would require businesses with five or more employees to enroll them in a new “Personal Pension” defined benefit program or to offer an alternative employer-sponsored plan.
The new system’s investments would be professionally managed by CalPERS or another contracted organization. Employees would contribute about 3 percent of their wages through a payroll deduction, although they could opt out of the plan. Employers could make voluntary contributions into the fund.
There is no polite way to put this so I won’t. Sen. Kevin de León is clearly a certifiable nutcase.
Stoctkon and Vallejo California are both bankrupt over insane promises made to public union employees. So is Detroit Michigan, Central Falls Rhode Island, Providence Rhode Island, and Harrisburg Pennsylvania.
Numerous other cities will eventually be forced to seek bankruptcy. Los Angeles and Oakland are at the top of the list.
Numerous airlines and GM went bankrupt over defined benefit pension plans.
De León’s bill would bankrupt countless small businesses trapped in its wake.
Things That Would Happen If Passed
- Immediate large-scale firings by small businesses. No small business owner in his right mind would have over four employees.
- Any business that could, would leave the state.
- Many businesses that do stay would be destined to go bankrupt.
- California would end up like Detroit or Greece
Given that California’s employers continue jumping off California’s sinking ship, union-bought Democrat Kevin De León’s adding another burden on the state’s job creators will only hasten the capital flight from that state.
“Socialism has no place in the hearts of those who would secure the fight for freedom and preserve democracy.” Samuel Gompers, American Federation of Labor, 1918