ABQ City Council’s Fair Workweek Act is Extreme, will kill local business

The Fair Workweek Act will be heard before Albuquerque’s City Council on August 10. The legislation, sponsored by Councilors Benton and Peña was written by outside organizations but that is not what makes it a bad idea. The proposal has a number of extreme provisions that would have tremendous, negative impacts on local businesses, especially small ones.

As written, the proposal would require employers to:

• Set work schedules three weeks in advance or pay compensation (predictability pay);
• Provide paid sick leave;
• Allow for a secret ballot to be held among employees to decide on “alternate schedule” (such as four-10 hour shifts or three 12 hour shifts);
• An employer must offer additional hours of work to existing employees before hiring additional employees or subcontractors;
• Employees will be able to trade shifts regardless of job descriptions or skill sets.

Like arbitrary mandated minimum wages, but far more radical, this proposal is yet another intrusion into the relationship between workers and employers. All of the regulations seem well-intended, but they all are based on the premise that a bunch of city councilors know what is better for a worker than they do. After all, if I don’t like the requirements of a particular job, I can always go elsewhere….of course that is assuming that there are other jobs out there.

The proposal’s negative impacts would most likely be felt in construction, retail, and restaurants as well as customer-service-oriented industries, especially those that have to deal with weather issues.

Ultimately, because it is so new and so radical, we don’t know exactly how this proposal will impact our local economy. We do know that it will further drive up the cost of doing business and make Albuquerque a less attractive destination for business expansion. That will harm the very workers you say you want to help.

The Fair Workweek Act is the most ambitious and comprehensive that we’ve seen, but several cities/states demand paid sick leave. A full description of those laws can be found here.

Details on Seattle’s experience can be found below:

In September 2012, Seattle became the fourth U.S. city to require employers to provide paid leave to their employees as a condition of doing business in the city. Of the 301 service-industry businesses surveyed, 191 of them—or nearly two-thirds—had started providing paid sick leave to comply with the law. Another 67 businesses already provided the benefit. (Note that the law in Seattle exempts businesses with fewer than five employees.)

Survey results suggest that issues of sickness are overstated by activists/supporters. Among businesses that started providing leave, 83 percent—or more than 8 in 10 businesses—said that sickness in the workplace was “not serious at all” prior to the law taking effect. Just 10 percent described it as a serious problem.

Two thirds of those who started providing paid leave said that they did not anticipate the law would reduce turnover in their workplace. One-third of surveyed Seattle businesses also anticipated that the law would increase unscheduled absences in the workplace that may not be connected to an illness.

Among those service-industry businesses that started providing leave to comply with the law, roughly 56 percent said it would increase their cost of doing business in Seattle. More than one in four said it would cause a big increase in their business costs.

15.7 percent of employers raised prices in response to the new law. • 18.3 percent of employers reduced hours and staff in response to the new law. • 17.3 percent of employers either increased the cost to employees of their current benefits, or eliminated the benefits they used to offer.

New Mexico and Albuquerque economies face serious problems

In fact, in March of 2007 we had 399,400. That’s down to 382,300 as of May 2015, a decline of 4.28 percent. If we want to improve pay and benefits for workers, let’s have more jobs for them to choose from and more competition for those workers. What follows is a historical listing of Albuquerque’s April non-farm employment (thousands):

2008 398.6
2009 380.4
2010 373.9
2011 373.6
2012 369.6
2013 374.9
2014 375.4
2015 382.9

* May, the most recent data available: 382.3 (even lower)

* Albuquerque has lost 16,300 since the April 2008 peak

* No jobs recovery for more than seven years

New Mexico also ranks poorly on many indices of economic competitiveness/growth:
Federation of Tax Administrators; 9^th highest in tax burden as percent of personal income
American Economic Development Institute: 35th
Institute for Justice (Occupational Licensing): 39th
John Locke Foundation “First in Freedom”: 42nd
Fraser-NCPA “Economic Freedom of North America”: 52nd (of 60)
Kauffman Foundation/Thumbtack.com Small Business Friendliness: D+