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Commonly Asked Questions I watched the gubernatorial debates the other night and the lieutenant governor said that we have a record number of business starts this year while others were saying that California is anti-business, what is the truth? I don't have the specific data the candidates were using, but I have a pretty good idea what is behind that data. California has had a lot of high paying jobs move to other places and displaced workers are not finding new jobs in their own field of work. This often results in people starting their own business to free-lance their skills to several employers or to pursue a dream of being their own boss. What then happens is that a certain percentage of laid-off employees apply for a business license so they can contract out their services and this shows up on the records as the startup of a new business. What is the cause for the rise in the worker's compensation insurance rate? Is it really as bad as the business people claim? I am not a human resources expert, but those who are tell me the problem is caused by two things. The first is that the state raised the benefits for workers at the same time they changed the insurance carrier. Increasing the benefits will result in higher premiums for insurance. As a result of the changes in coverage and the new carrier's premium rates, it has just about tripled the costs to many businesses. This is a problem because most companies locked down their budgets just prior to the release of the new premium rates. Having the rates increase by three hundred percent after their budgets were compete caused many to have to significantly change their operating and staffing plans. I consult for a company that had their insurance premiums remove all profits and force them to operate at a loss until business conditions improve enough that they can raise their own prices. It should be kept in mind that every legislatively mandated increase in business costs must be passed to the consumer over time. This can be devastating as the Internet is changing a lot of buying patterns.
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