Wagener: California workers and pension plans are victims of anti-tech policies

In California, there are more than 66,000 businesses active in the digital economy. They employ more than 1.6 million Californians and account for more than 10% of the state’s GDP. Californians are disproportionately paying the costs of politically motivated legal attacks on America’s leading tech companies.

Successful litigation could cost targeted firms more than 10% of their global revenues annually, according to a recent analysis incorporating public pension data, stock market trends and company disclosures that the Computer & Communications Industry Association (CCIA) conducted from Bureau of Economic Analysis and Census data.

For California’s government employee pension plans, this translates to a minimum loss of $14.7 billion, robbing pension plans by more than $3,800 per plan member. These figures are conservative estimates — they account only for direct holdings within the top 10 investments of pension plans, excluding indirect holdings through index funds. The true financial impact could be far worse.

California has the most to lose financially when U.S. tech companies are targeted by the government. California-based companies such as Google and Apple are typically among the top holdings of pension funds. Now these pension funds and even the S&P 500 stock index are at risk because of countless lawsuits and enforcement actions. Californians not directly working for a tech company likely don’t realize how this anti-tech movement disproportionately harms them.

California’s public servants, in particular, should be aware that their federal and European counterparts have put California state and local government employee pension plans squarely in their crosshairs.

Employees of the politically targeted companies are far from the only victims. As targeted companies face increased operating costs from litigation, their market value shrinks, adversely affecting shareholders. Among the largest of these shareholders are state and local government employee pension plans, which represent the retirement security of more than 3.8 million Californians.

Dubious U.S. antitrust litigation and potential fines from a protectionist new European regulation could have a staggering impact on pension plans for California workers.

The costs also extend beyond pension plans. According to the analysis from CCIA, more than one-fifth of the S&P 500 index is composed of the leading tech companies singled out by European and U.S. authorities. With most index funds and mutual funds benchmarked to this stock index, ordinary Californians with 401(k)s and IRAs are exposed to the costs of anti-tech litigation. A Californian with $200,000 saved for retirement in diversified mutual funds can expect to lose more than $16,000 from U.S. antitrust lawsuits and Europe’s new regulations.

California has millions of state and local government employee pension plan members, employees in the digital economy and residents saving for retirement in 401(k)s and mutual funds. They may want to ask why the federal government is picking their pockets, and allowing European bureaucrats to do the same, just to look “anti-tech.”

Trevor Wagener is the director of the research center and chief economist for the Computer & Communications Industry Association, an international not-for-profit trade group.