July 14, 2021

President’s Notes: Lessons Learned?

Business owners and their employees are constantly seeking to learn from successes and mistakes in order to improve their products, processes and service. Adaptation to get better is a never-ending commitment. Those who fail to make that commitment are likely to fall by the wayside as competitors charge ahead.

Government, on the other hand…well, let’s just say, “If only.”

Conservatives often say that government should be run like a business. While I think there are some business practices government agency leaders can and should adhere to, the reality is government agencies really can’t be run like businesses, because they just aren’t. They are public agencies funded by taxpayers, staffed almost entirely by employees with civil service protections and union collective bargaining agreements arranged between union leaders and, in states like California, public officials who were elected with the strong support of the same union leaders.

On top of those realpolitik realities, the mission of most government agencies is to perform functions that cannot be cast into a profit-and-loss mold. Still, we deserve government that is more interested in doing better by the taxpayers than in doing whatever unions and other powerful interests demand.

Granted: Government agencies are not motivated to analyze, learn, adapt and improve in the same way businesses are. The “profit motive” that drives businesses to perpetually challenge assumptions and adapt is really a survival motive. For government agencies, there is no risk of “going out of business.” Indeed, it is the rarest of things when a government agency actually ceases to exist.

The motivation to get better in government, therefore, must be an altruistic one. The people we elect to lead our government and all its agencies must lead, and be accountable for, the tough work of driving change in laws that are missing their intended mark and ensuring that bureaucracies constantly adapt to practical and economic realities.

Let’s start with Cal/OSHA and its troubling approach to COVID-related workplace safety rules, known by the bureaucratic acronym ETS (Emergency Temporary Standard). The emergency rules were a mishmash of union-promoted requirements that caused enormous confusion and cost for businesses with little factual basis. Indeed, career Cal/OSHA staff and business groups maintained that the proposed rules were not needed at all, noting that existing workplace safety rules were more than adequate to the task. But the unions insisted otherwise, and the political appointees who hold seats on the Cal/OSHA governing board overruled their staff.

Western Growers led a business coalition that challenged the rules in court, which is testament to just how onerous and illogical the rules were; organizations like ours are not eager to make the large financial commitments needed to launch lawsuits, but in this case the deaf ears of the Cal/OSHA board and the Newsom Administration left us no option.

The question now, given Governor Newsom’s order to lift most of the ETS requirements, which essentially preempted the slow and confused Cal/OSHA, should be obvious: What will Cal/OSHA and the Newsom Administration do to conduct a brutally honest self-assessment of the way this agency performed during the COVID shutdowns? And what changes will be made to the agency’s regulatory philosophy, processes and engagements with regulated businesses in light of its many missteps?

The same questions should be asked of the Coachella City Council, which ignored the laws of economics in ordering farmers to pay workers an additional $4 per hour, couched as “Hero Pay.” Here again, WG was compelled to file a lawsuit challenging the city’s orders, but it should have been obvious to city council members that the order would harm farmers operating on non-negotiable contracts in a globally competitive market. And that would ultimately translate to harm to the farm employees the city council was purportedly trying to help. Will the members of the city council now go back and conduct an honest assessment of their actions and the unintended economic consequences of their orders?

Legislative policy makers should be equally motivated to assess, learn, adapt and improve. In California, they could start with the state’s overtime statute governing farm employees. The real world experience under this law is mounting and it all points one direction: Farm workers are losing wage-earning opportunities as employers—fighting global competition and extremely tight margins (thanks in no small part to California’s enormous regulatory burdens)—alter operations to minimize the bottom line impact of this law. The tough question legislators should be asking themselves is whether their desired outcome is being realized by virtue of the mandate they imposed, or whether instead the laws of economics are once again prevailing. If it’s the latter (spoiler alert: it is!), the right thing to do, for farmers and farm workers alike, would be to repeal or otherwise dramatically change the overtime law to restore farm worker wage-earning capacity.

If we all press on our elected legislators and Governor to hold themselves accountable on these issues in a cool and clinical way, perhaps change is possible. The alternative is too ugly to contemplate.