Fact-Checking Dubious Claims About Enterprise Zones

Several dubious claims about Enterprise Zones (EZs) should be put to rest with some facts. Proponents of the EZ Program argue that zones save the state money by providing jobs to individuals who would otherwise turn to public supports, such as CalWORKs. The facts simply don’t support this claim. Data show that fewer than three out of 100 workers for whom businesses claim EZ hiring credits are even eligible for public programs. Instead, the majority of hiring credits – nearly two-thirds – are claimed for workers who happen to live in relatively low- to moderate-income neighborhoods, regardless of whether those individuals themselves have low incomes.

EZ proponents also argue that California should maintain the EZ Program because the cost to the state associated with providing EZ hiring credits is far less than the cost of providing Unemployment Insurance (UI) benefits. This erroneously presumes that workers for whom EZ hiring credits are claimed would be jobless were it not for those credits. However, as a new report by the Public Policy Institute of California explains, “research makes clear that a substantial share – often as high as 90 percent of total hiring credit payments – pays for hiring that would have occurred anyway.” In other words, many, if not most, of the workers for whom businesses claim EZ credits would likely have been hired by the very same businesses even in the absence of the EZ Program.

Urban myths about EZs abound. These facts should set some of them straight.

— Alissa Anderson