California Leaving Is Becoming a Reality

By August 29, 2007Health Care

The California Manufacturers and Technology Association is fighting the good fight for manufacturers on many, many fronts. And Governor Schwarzenegger and the Legislature insist on making it more difficult for them — and all manufacturers in the Golden State.

At the CMTA blog, Gino DiCaro notes that the Los Angeles Times has reported the maker of Wonder Bread — Interstate Bakeries Corp. — is closing its southern California operations, eliminating 1,300 jobs in the region. The cause? Ever-increasing health care costs and regulations, plus work rules that are simply too byzantine to follow.

Nevertheless, the governor and policymakers are intent in adding even more burdens, such as universal health coverage. Since it’s free, no one will object.

What, it’s not free? And it doesn’t fix the existing health care system?

As the Legislature proceeds with the healthcare debate, they must understand that the current system is too costly and burdensome on everyone, regardless of who’s paying. Manufacturers in California pay operational costs that are 22 percent higher than the rest of the country and still they provide more health coverage than any other industry in the State. Further, small and medium sized businesses can’t do the same thing. They can’t take on expensive coverage and they can’t pay a new health tax on top of their already uncompetitive overall costs.

A reformed health system in California should first address cost drivers — such as over utilization and lack of prevention — or it will devastate the insurance market, force more businesses owners and managers, such as the Wonder Bread executives, to re-think their position in California and put at risk both jobs and the premium benefits that many employees now depend upon.

A serious warning, one that legislators should heed.

Also, the bakery industry — pretty energy-intensive, isn’t it? Natural gas?

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