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CBIA Opposes Legislating Corporate Responsibility
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Business New Haven
1/26/1998
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BNH recently interviewed Kenneth O. Decko, president and CEO of the Connecticut Business & Industry Association (CBIA). Decko offered a rebuttal to comments made in this space last month by State Sen. Edith G. Prague (D-19), a leading proponent of corporate responsibility legislation. The legislation would hold certain companies that receive state grants, loans, tax breaks and similar aid to specified standards of “responsibility” to employees regarding health-care benefits, minimum wage, vacations and sick time, for instance.
Why shouldn't the state
intervene to make sure companies treat employees responsibly and fairly?
It's not needed. When you have any company that has grants or loans from the state, they already have agreements with strings attached. If they don't live up to those agreements, they are penalized.
Do those agreements include provisions on such things as wages, vacations and benefits?
No. But most companies provide all of those benefits. There certainly might be some that don't. But the highest percentage of people covered by employer health benefits in the country is in Connecticut. It's even higher than in Hawaii, which has mandatory health coverage. So we have a pretty good record, and I think you'll find the quality of the benefits is very good. In this day and age, when one of the biggest problems facing Connecticut employers is a lack of skilled labor, any employer pushing around employees is going to lose them because they can go anywhere else and get a job. Ultimately, a healthy business climate is the best way to increase wages, benefits, societal contributions and increased involvement in education.
Proponents say only a few larger companies would be affected.
I'm not sure I believe that. [Legislators'] intent last year was to have something very broad. The concepts would apply to almost every business in the state. As we began to raise questions about it, they'd say they didn't mean that and draft narrower legislation, and it kept going back and forth. But I don't think only a few businesses would be affected.
What kind of economic impact would you foresee from this?
It would cut off the recovery - no question about it
Why?
One of the reasons the recession was deeper in Connecticut is that the state had a business climate that everyone perceived as extremely hostile. We finally have begun to turn that around, and that's why the economy is doing better. This, however, is the type of legislation that business people in other states would look at and think the legislators in Connecticut are crazy.
Is that more just perception than reality?
It is the reality. We're already dealing in a state with very high costs environmentally. When you add this type of legislation to the fact that we are not as competitive as we need to be, the impact is extremely negative. Perception is very important - how businesses view states and whether those states seem to want them there or not.
What are the chances this legislation will go through this year?
When it's all said and done, I don't think it'll happen because I think the majority of legislators know that legislation like this is very foolhardy and hurts the people it is trying to help.
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