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The Business of Change: One Private-Equity Pioneer Is So Fed Up With the Industry, He’s Ready to Quit

Co-published by Fast Company
Leo Hindery has long been outspoken about super-rich fund managers who exploit a loophole that allows them to pay the capital-gains tax rate—about half the ordinary tax rate—on a huge chunk of their personal income.

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For Leo Hindery, the declining standards in private equity are part of a larger picture in which the leaders of corporate America are focused on short-term profits at the expense of the greater good to society.


Co-published by Fast Company

Greed is winning,” Leo Hindery tells me on the latest episode of my podcast, The Bottom Line. “I don’t like its trends. ” Hindery, a private-equity pioneer, is fed up with the mores of his $2.5 trillion industry.

“I’m not sure I’m going to stay in the business,” he says.

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Hindery, who runs New York-based InterMedia Partners, stresses that he looks forward to continuing to make “thoughtful investments” on behalf of others. But he is mulling a new vehicle outside the realm of private equity.

“I don’t like the fee structure,” he explains. “I think it’s usurious. I think it’s caused really unfortunate—almost unethical—behaviors by some of the managers. I’m not happy with it. So we’re going to change our own perspectives.”

Hindery’s displeasure comes in large measure from seeing private equity change over time. When the field began to take off in the mid-1980s, he says, there was more of an inclination to acquire businesses and hold onto them for five to seven years, building them up along the way.

But now, he says, there is so much capital chasing so few good deals, it has put pressure on private-equity managers—often young generalists with zero experience in the types of businesses that they’re buying—to become overleveraged and then try to turn a relatively quick profit.

“They’ve backed away from the longer hold, and they’ve gone for the more expedient action of cutting . . . costs, especially employee costs,” Hindery says.

His peers infuriate him in other ways, as well. Hindery has long been outspoken about super-rich fund managers who exploit a loophole that allows them to pay the capital-gains tax rate—about half the ordinary tax rate—on a huge chunk of their personal income. “It’s just unconscionable,” Hindery says. “It’s beyond intellectually absurd.”

“There’s nothing that suggests that what we do as managers of these monies is a capital gain,” he adds. “To call it a capital gain is to call an orange an apple.”

For Hindery, the declining standards in private equity are one piece of a larger picture in which the leaders of corporate America have become increasingly focused on short-term profits at the expense of the greater good to society.

When Hindery went to work for natural resources giant Utah International in the early 1970s, fresh out of business school at Stanford, he says he plunged into a world in which major CEOs “were patriots.”

“They believed in the value of their employees as assets,” he says. “They believed in their responsibility to their communities and to their nation.” Today, however, “I can’t make that generalization much anymore.”

Hindery acknowledges that social impact investing is a force to be reckoned with, as more and more public-pension funds, university endowments and charitable foundations steer their investment dollars into those companies that are good stewards of the environment and their workers.

But money managers and top corporate executives—the bulk of whose own compensation is typically linked to their company’s share price—are still often motivated by other concerns. At least for now, says Hindery, “greed is winning.”

You can listen to my entire interview with Hindery here, along with Larry Buhl reporting on efforts by a group of wealthy individuals called the Patriotic Millionaires to battle income inequality, and Rachel Schneider exploring why we need to develop new indicators that measure people’s overall financial health, not just their creditworthiness.


The Bottom Line is a production of Capital & Main. 

Labor & Economy

Study: Government Needs to Boost Child and Home Health Care Funding

Daycare and home care-giving “are a public good and need to be treated as a public good,” says Ken Jacobs, chair of UC Berkeley’s Center for Labor Research and Education.

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Recent campaigns to raise the minimum wage have put into sharp relief what university researchers are calling a “care conundrum.” The workers who care for us at the beginning and end of our lives are paid far too little, but raising their wages can increase the already high cost of care for families who can ill afford it.

That’s because the child care and home health care markets are “too heavily private,” according to a study released today by research centers at the University of California, Berkeley and the University of Wisconsin, Madison.

The answer to the conundrum, the study says, is not to leave child care providers and home health aides—the vast majority of whom are women and people of color– in poverty. The typical “care” worker in the U.S. earns only $10.29 per hour and hasn’t seen much of a raise in 10 years. Rather, the public sector must do more to support the two industries, says Ken Jacobs, chair of the UC Berkeley Center for Labor Research and Education. “Those care services are a public good and need to be treated as a public good,” he said.

“Child care organizations all supported the minimum wage increases. They understand that low wages are unsustainable. In long-term [elder] care, we have a growing shortage of people to do those jobs because the wages are so low,” Jacobs said.

Jacobs said he teamed up with researchers from UC Berkeley’s Center for the Study of Child Care Employment and UW’s COWS think tank to gain a better understanding of two industries that were impacted by increases in the minimum wage that are underway in more than 30 states and local jurisdictions across the country.

Since November 2012, when fast-food workers went on strike and launched the “Fight for 15” campaign to raise the wages of low-wage workers, more than 17 million employees across the country have benefited from minimum-wage increases, according to the National Employment Law Project.

Restaurant and retail employers have been able to pass on modest price increases to consumers, according to research cited by the study. But home care and early child care industries are more constrained because families have difficulty shouldering any increases to the already high cost of care in what is a labor-intensive business.

Jacobs says the solution will ultimately lie with increased funding at the federal and state level, but the study also highlights local efforts to address the funding gaps in child care and home health care, including Measure A, a proposition on the June 5 ballot in Alameda County, and the expansion of pre-kindergarten in New York City.

Increased funding has the potential to improve the livelihood of early child care providers and those on the front lines of elder care. It also can lead to better outcomes for children and the elderly on the receiving end of services, says Jacobs. “We know that in child care and in long-term [elder] care, continuity matters,” he said.


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Labor & Economy

Battling Income Inequality With Second Avenue Partners’ Nick Hanauer

The Seattle maverick, who has pushed for a slate of progressive policies while warning his “fellow zillionaires” that the pitchforks are coming, explains on “The Bottom Line” podcast that his dad helped to shape his values.

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When venture capitalist, entrepreneur, and political provocateur Nick Hanauer was coming of age in Seattle, he wanted a sports car. His father, however, wouldn’t let him get one.

It wasn’t because the family, which owned and ran bedding producer Pacific Coast Feather Co., didn’t have the money for a luxury like that. Nor was it because Hanauer’s dad deemed it too dangerous or frivolous.

He forbade the purchase because he was worried about the optics. “He felt strongly that it sent the entirely wrong signal to our employees who worked, in his opinion, harder than I did and couldn’t afford such a thing,” Hanauer told me on the latest edition of my podcast, The Bottom Line.

“That was just kind of the perspective that my dad had,” Hanauer adds, “and I suppose I got some of it.”

Actually, Hanauer got substantially more than some.

An early investor in Amazon and a co-founder of Second Avenue Partners, Hanauer for years has been citing the dangers of income inequality in America, famously warning his “fellow zillionaires” that “if we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”He also hasn’t been shy about offering a host of policy prescriptions to lift up the working class. Among them: raising the minimum wage to as much as $25 an hour at the nation’s biggest corporations; making vastly more people eligible for overtime pay; creating a system of portable, pro-rated, and universal benefits for independent workers; and curtailing stock buybacks.

If he had his way, he’d also significantly boost corporate taxes—a total reversal of Trumpian economics.

Hanauer says that he learned the merits of this idea from watching his father manage Pacific Coast Feather. At the time, in the 1970s, the top corporate rate was 48%. (The Trump tax law just lowered it to 21% from 35%.)

“When I grew up in the family business and tax rates were very, very high, my dad employed this fantastic tax-avoidance scheme,” Hanauer says. “We called it investing in the business.

“What my dad did to avoid paying corporate tax, which he hated, was to spend every dollar of cash flow on more employees, more factories, and more equipment,” he recalls. “We kept our profits insanely low because we did not want to pay more corporate tax. Today. . . the penalty of high profits is very, very low.”

While Hanauer has harsh words for what he calls the “trickle-downers,” his condemnation is not limited to one side of the political aisle. “The evisceration of the middle class,” he says, “took place during Democrat and Republican administrations.”

He also sees the public sector as just one part of the problem; the private sector, in Hanauer’s eyes, has largely abdicated its responsibility, as well. “In the old days, big companies used to set the tone at the top,” he says. “Today, they drag everyone down to the bottom. And that shouldn’t be tolerated.”

One of the corporations that Hanauer criticizes is Amazon, which he helped to get off the ground (and where, it was recently disclosed, the median employee made $28,446 last year while CEO Jeff Bezos’s net worth has climbed to more than $130 billion).

“They’re super exploitive—just unacceptable,” Hanauer says. “What I can guarantee you is that Jeff Bezos is not going to change those things in the absence of somebody putting essentially a gun to his head and forcing him to do it.”

If Hanauer’s father helped to forge a firebrand, there’s at least one aspect of the son’s life that he would have trouble fathoming. “I . . . have this giant pile of money that would have been inconceivable to my dad,” Hanauer says. “And I live a ridiculously lavish life as a consequence of that.”

You can listen to my entire interview with Hanauer here, along with Larry Buhl reporting on the steady erosion of overtime pay in America, and Karan Chopra explaining how great social benefits can result when “agents of innovation” combine with “agents of scale.”

 

The Bottom Line is a production of Capital & Main

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Environment

BlueLA E-Vehicles Hit the Streets

With rates roughly equal to rideshare services like Lyft and Uber, BlueLA appears unlikely to make a significant dent in Angelenos’ travel habits anytime soon.

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Rex Weiner

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The writer test-drives an e-vehicle.

Last month a controversial French company and the Los Angeles Department of Transportation rolled out the blue-carpet at a full-launch party for BlueLA, an eco-friendly car-sharing service. BlueLA enjoys enthusiastic municipal backing for its mission of helping to ease L.A.’s desperate transportation woes with a fleet of electric cars and charging stations, initially targeting, LADOT says, some of the city’s lowest-income neighborhoods. (A soft-launch of the L.A. program was unveiled last June.)

Although questions remain about the viability of BlueLA’s business model, on April 20 — while a DJ spun tunes under sunny skies on the L.A. Community College campus in East Hollywood, community organizers and environmental groups dispensed brochures, food trucks served lunch and reporters test-drove the nifty blue e-vehicles — local pols hailed the co-venture between LADOT and Blue Solutions, the parent company of BlueLA.

“BlueLA is making a difference,” said Sandy Berg, vice chair of the California Air Resources Board, which is granting $1.7 million of cap-and-trade regulation funds to the $10 million project. A statement from Mayor Eric Garcetti declared that the company would provide “underserved communities with an environmentally-friendly way to get around town—at an affordable price.”

BlueLA’s first seven stations are located at Los Angeles City College, Koreatown, MacArthur Park and downtown Los Angeles. The next round of stations will include Los Angeles Trade Technical College, Echo Park and Westlake. The program’s first phase aims to have 100 vehicles available in 40 locations, with subsequent expansions tripling the program’s reach by the end of 2021. A phone app allows users to locate and reserve available cars.

The pricing structure offers users a “Community” level subscription: one dollar per month and 15 cents per minute, provided the user is “low-income qualified,” with a total annual gross income of less than $31,550 for an individual. Proof requires pay stubs, tax returns or enrollment in Medicaid/Medi-Cal, SNAP or other public-assistance programs. At this level the second and third hours of any rental period are free, adding up to a cost of $9 for the first three hours, after which the 15-cent-per-minute rate applies.

A statement from Marie Bolloré, CEO of Blue Solutions, a division of the Paris-based Bolloré Group, which manufactures the Blue Cars and the e-vehicle’s battery, reiterated the goals of sustainability and “creating inclusive communities,” and saluted CARB and LADOT for “unwavering support” for their co-venture.

Yet it’s not all been a win-win for her company. The 30-year-old heiress to the Bolloré business, which dates back to 1822, and “director of the Electric Side of The Empire,” according to the French press, might not have known that less than a week later her father, Vincent Bolloré, would be arrested by French judicial police. The 66-year-old head of one of France’s richest conglomerates—counting Universal Music Group and a large tranche of French TV and film media companies among its diversified holdings, which yielded 18.3 billion euros in 2017 revenues—is the target of a bribery investigation involving the presidents of Togo and Guinea in West Africa, where the Bolloré Groups’ myriad interests in transport, palm oil plantations and shipping make it one of the continent’s biggest investors.

“That is about things that happened 10 years ago,” Blue Solutions managing director Christophe Arnaud told Capital & Main by phone about the senior Bolloré’s arrest. “It won’t affect our operations in L.A.”

Indeed, l’affaire Bolloré has not yet affected AutoLib’, the company’s 3,000-car rideshare service in Paris, or BlueIndy, the company’s three-year-old American test project in Indianapolis. But, even if the parent company’s distant troubles don’t impact the rollout of BlueLA on the streets of Los Angeles, other factors present daunting challenges to the car-share venture’s success here.

BlueLA is not expected to turn a profit for 12 to 13 years, says Arnaud, describing it as a “long-term investment.” The business plan envisions revenue, beyond customer subscriptions, coming from three main sources: the offering of its charging stations to other e-vehicles; advertising on the sides of Blue Cars; and selling the car batteries’ stored juice back into the grid. Arnaud admitted, however, that for the scheme to pay off, BlueLA’s infrastructure will have to scale up quickly.

With rates roughly equal to rideshare services like Lyft and Uber, and competition from rapidly expanding bike-share services around the city, as well as other share-ventures such as Santa Monica-based Bird electric scooters, BlueLA appears unlikely to make a significant dent in Angelenos’ travel habits anytime soon.

As for the idea of servicing the EV community, BlueLA’s charging stations do not currently accommodate other e-vehicles, nor are the Blue Cars compatible with any of the city’s existing charging stations, despite the fact that Los Angeles is one of the country’s top 10 EV cities, according to a recent study by Indiana University, with more than 1,200 plug-ins within 10 miles around the city.

The car’s solid-state lithium battery has its pluses—such as “no cobalt,” Arnaud emphasized, referring to the rare-earth element that is often mined under conflict conditions for other batteries—but faces overwhelming competition from Tesla and other battery manufacturers. Also, outside of sunny California, the Blue Solutions battery must be kept plugged in and warmed above a certain temperature.

Still, a quick spin around L.A.’s Mid City neighborhood in a BlueCar was easy, with radio and AC functioning on a recent hot day, built-in GPS guiding my way and pretty good acceleration, although I wouldn’t take it on the Santa Monica Freeway. Want to practice your French? Tap the Help button; it connects to customer service in France. But don’t forget the nine-hour time difference. “It is two in the morning!” said the voice with a touch of Parisian impatience, as I rounded the corner of Melrose and Vermont avenues.


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Labor & Economy

Manuel Pastor on California’s Golden Resistance

A new book argues that the dismantling of policy initiatives that made up the Golden State’s successful postwar social compact were, in part, driven by racial fears as state demographics shifted. 

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Bobbi Murray

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When reading Manuel Pastor’s State of Resistance, it’s hard not to wonder if the present White House dumpster fire is being fed by the same ideological tinder that fueled California’s political right wing from the 1970s throughout the 1990s. Pastor, a sociology professor at the University of Southern California, offers an unsentimental view of that period: “By the 1990s racism had really gotten the better of us. Race made us take our eye off the ball of development.” His book, subtitled, What California’s Dizzying Descent and Remarkable Resurgence Mean for America’s Future, recalls that two-decade span as a disaster for California’s development as a forward-looking state, but also, perhaps, as a necessary prelude to its current status as the progressive movement’s shield against the Trump administration.

A community activist, contemplating the destruction visited upon Los Angeles after its 1992 civil unrest, is quoted as wearily declaring, “There’s an immediate need to think long-term.” In Pastor’s view it is long-term thinking that has carried California forward as the model of a state of resistance—as a leader in wage justice, in climate change policy, in support of immigrant and other civil rights.

Pastor’s book also examines what has led to the Golden State’s periodic explosions. He takes readers at a brisk pace through 20th-century California history: years when migrants from across America came to it in hopes of bettering their lives; through various political backlashes and then onward to the social movements that learned to build and wield power and helped turn the state in a progressive direction.

In his book and during a recent interview, he is clear about the ways in which the playing field in the state was never quite level for people of color but, until the 1990s, had at least been seen by a broad spectrum of people as a place of opportunity.

That minimal social compact, he says, was undone “by a series of well-organized and often grassroots right-wing movements usually taking advantage of the racialized anxieties of voters frightened of a changing state.” Pastor argues that the dismantling of policy initiatives that made up the Golden State’s successful social compact—support for public education, transportation, housing desegregation and economic development–were in part driven by racial fears as state demographics shifted.

One pivotal moment came in 1978, with the passage of Proposition 13, a ballot initiative ostensibly proposed to put a brake on California’s spiraling home property taxes, but which the author claims defined a racial and generational divide. The new law had the practical effect of protecting older, whiter homeowners from rising property taxes and locked in commercial taxes at artificially low levels for decades — while ultimately stripping funding from state services that support the young, especially education and public infrastructure.

But, as California turned younger and browner, conservatives were only getting started, as they pushed through a wave of ballot initiatives to recalibrate the social compact and target people of color:

  • Proposition 187 in 1994 sought to block undocumented immigrants from access to education and non-emergency health care and elections; it succeeded at the ballot box but those two features were overturned in court;
  • Proposition 184, a 1994 three-strikes law, imposed a life sentence for any crime if the offender had two prior convictions categorized as serious or violent, and disproportionately affected black youth;
  • Proposition 209, an anti-affirmative action measure passed in 1996, inhibited access to higher education for people of color.

Pastor outlines vibrant grassroots efforts that emerged in Los Angeles in response to the civil unrest and the public policy that fueled it —the South Los Angeles organization SCOPE, committed to power-building in poor and black and Latino communities; the Community Coalition, founded by now-Congresswoman Karen Bass; the economic justice-inspired Los Angeles Alliance for a New Economy and others that connected with similar organizations throughout the state.

“Relationships got built so that when people were pursuing slightly different strategies they didn’t end up with a permanent hostility,” Pastor says. “They just recognized that they were pursuing different strategies at different times.”

By the 2016 elections the organized right wing had seized powerful pieces of the national narrative, according to Pastor. “The Tea Party was astroturfed in by the Koch brothers–but actually did have a grassroots component and spoke to a high level of pain and anger that was out there.”

Social change means being attentive to narrative—how people talk with one another, Pastor says. “How do you change the debate so that it’s not, ‘We need to raise the minimum wage,’ it’s the Fight for Fifteen? That it’s not about ‘comprehensive immigration reform,’ it’s about Dreamers? That it’s not about ‘civil rights for gays,’ it’s about marriage equality?”

Crucial to making California a state of resistance was a turn from the conventional get-out-the-vote approach that pops up every election season and does little to connect with the electorate.

“What happened in California was this emergence of integrated voter engagement—what we call community organizing-based politics,” Pastor says. By this he means cultivating new and occasional voters, rather than those who never miss an election and tend to vote conservatively. The book details the work of California Calls, a statewide network of community organizations located in towns from the Central Valley to San Diego County, whose members work door-to-door between elections to stay in touch with the political pulse of voters and mobilize them at election time, boosting the turnout from low-income areas.

Throughout the country there are similar efforts that Pastor calls “movements that capture the imagination,” including the New Florida Majority, focused on mobilizing and including marginalized communities, and Black PAC, which provided a vote margin to turn an Alabama election for a U.S. Senate seat against hardline conservative Roy Moore.

“Political change is not just about elections,” Pastor cautions. “We have to invest in progressive infrastructure.”

In each election season, he says, “there’s a lot of money being spent on pollsters [and] strategists who don’t produce messaging that resonates, get-out-the-vote that’s not integrated voter engagement.”

The most effective way to not get a Trump elected, Pastor argues, is to invest in the grassroots.


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Labor & Economy

Caregivers Union Says Orange County Colluded With Freedom Foundation

The potential effects of an anti-union ruling in Janus v. AFSCME could already be on display in Orange County, where a right-to-work group scored a win involving orientations for new in-home health care aides.

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Robin Urevich

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A union home care worker addresses the Orange County Board of Supervisors.

This spring the Supreme Court is likely to deal the U.S. labor movement a crushing blow if, as expected, it rules in Janus v. AFSCME that public employees who choose not to join unions no longer have to pay service fees for union representation.

For the political right, the case is a dream come true because weakened unions would mean a weaker Democratic Party, which relies on organized labor for campaign money and boots on the ground to get out the vote.

If plaintiff Mark Janus prevails, deep-pocketed conservative groups—funded by the likes of the Koch brothers— have announced they’ll wage war for the hearts and minds of public employees in an attempt to separate them from their unions.

The fight is already on in Orange County, where the right-to-work group Freedom Foundation, based in Washington state, scored a win last January in a battle over orientations for new in-home health care aides.

Because of this, new workers are being explicitly told they can leave the room during optional union presentations at job orientations. Because home-care workers don’t have a central work place, union officials say these presentations are one of the union’s only opportunities to sign them up as members.

The United Domestic Workers, which represents home-care workers in Orange County,  argues this new practice discourages membership among public sector employees — in violation of a California law that took effect this year.  (Disclosure: The union is a financial supporter of this website.)  What’s more, union officials contend the county illegally sidestepped its obligation to meet and confer with them over the new orientation policy, claiming that the union contract specifies that a labor-management committee is to plan such orientations.

In-home health care workers, who provide support for low-income elderly and disabled people, are canaries in the Janus coal mine, since the Supreme Court ruled four years ago, in Harris v. Quinn, that these caregivers couldn’t be compelled to pay union fees if they chose to opt out of membership. Ever since, the Freedom Foundation – in Oregon and Washington, and since last year, in California, has knocked on doors, launched a cable TV ad campaign and a website aimed at convincing home-care workers to quit their union. (Freedom Foundation would not answer questions for this story.)

California law allows unions that represent home-care workers to give 30-minute presentations at new-employee orientations. But last fall, the Freedom Foundation’s Orange County director, Sam Han, objected to the union’s sole access to new employees and began lobbying the supervisors, all of whom are fellow Republicans, to give him five minutes to also address the new recruits. He further argued that the workers should be explicitly told they could leave the room during the union presentation.

In January, the Orange County Board of Supervisors discussed the matter in closed session. County counsel Leon Page said the closed-door consideration was justified because a decision by the supervisors to allow Han into new worker orientations would likely lead to a lawsuit from the UDW.

Page said the supervisors took no official action, but that he alone decided to change the script that guides employee orientations to clearly state that the union presentation was optional and to maintain the county’s neutrality in union matters.

“We are Switzerland,” Page said, contending that the county’s previous approach—of only informing new workers the presentation was optional if they asked—was biased in favor of the union.

Two days later Han declared victory on the Freedom Foundation website. Union officials were incensed that he got word about Page’s action a full week before they did.

The UDW has filed an unfair labor practice charge against the county with the state Public Employee Relations Board. Union attorney Tony Segall said that to his knowledge it’s the first such charge to be filed under the new state law that bars employers from discouraging public employee union membership. He noted the dispute will take on added significance if the court decides against organized labor in the Janus case.

“We’re going to be fighting this battle everywhere,” Segall said.


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Labor & Economy

Reality Check: CalChamber’s “Job Killer” Bills Actually Create Jobs

CalChamber won’t say how many jobs on its Job Killer list would be eliminated by proposed environmental and workplace protection bills — or even how such legislation would eliminate them.

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Judith Lewis Mernit

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Photo: Joanne Kim

Shortly after Lorena Gonzalez Fletcher assumed office in the California Assembly in 2013, her work started getting a special kind of attention. Every year for more than 20 years, the pro-business lobbyists at the California Chamber of Commerce have put out a list of bills CalChamber considers “job killers” — proposed laws that, it contends, would so burden business owners that they’d presumably start firing workers, or at least cease to hire new ones. Among the bills to make the list during Gonzalez Fletcher’s first legislative session was one of her own: A measure ordering employers to grant one hour sick leave for every 30 hours worked.


Even Democrats who supported sick-leave legislation feared the Chamber’s wrath.


The Chamber’s influence has historically been persuasive in Sacramento; by its own reckoning, it has managed to kill 92 percent of the bills named on its annual list. In the two years before Gonzalez Fletcher (D-San Diego) took office, only five of 70 so-called “job-killer” bills were passed into law. Even Democrats who supported sick-leave legislation so feared the Chamber’s wrath that they urged the new Assemblywoman to modify her bill to be more business-friendly.

“People said to me, ‘You have to work with the Chamber and get them to remove that title.’ I said ‘Why?’ I come from organized labor and represent a working class district. They’re going to oppose whatever I do.”

The Assembly and Senate did make some changes to the bill to make it less onerous for business owners. But its basic premise remained intact, all the way to Gov. Jerry Brown’s desk. In August 2014, California extended the nation’s largest expansion of paid sick leave benefits to workers. “We caught up to the rest of the world,” Gonzalez Fletcher says.

In the years since, Gonzalez Fletcher has become known for sponsoring bills that end up in the Chamber’s cross-hairs. In 2016, she carried a bill to grant overtime to farm workers, correcting part of a 77-year-old law that cut farm workers out of federal labor standards. Brown signed it into law that September. The year before, she successfully pushed through a law to require grocery stores to retain workers for 90 days after they changed ownership.

“That was my favorite one they called a job killer,” Gonzalez Fletcher says. “It was literally a bill to save workers’ jobs.”

California has often been a target of scorn for its stringent regulations, mostly from pro-growth conservatives who see any law that restrains business, be it worker protections or environmental controls, as inimical to economic success. And to be fair, new laws and market forces sometimes do affect jobs. The state’s singular climate laws, which set accelerating greenhouse-gas emission standards for electrical utilities and industries, have undoubtedly forced coal-fired power plants in Utah, Arizona and Nevada to shut down over time, eliminating jobs as operations wind down. One bill on the California Chamber’s list, to permanently close SoCalGas’ troubled Aliso Canyon storage facility, which blew a catastrophic leak in 2015, would necessarily uproot a certain number of workers were it to pass.

But just as some jobs go away in one market sector, other ones arise in another. “When you’re transitioning, there is a loss in traditional jobs, and then there’s growth in non-traditional jobs,” says Mary Leslie, president of the Los Angeles Business Council, which works toward corporate sustainability. “Then those jobs become the jobs of the future.” After the legislature passed the Global Warming Solutions Act of 2006, for instance, building owners in the state made investments in energy efficiency — one of the easiest ways for a company to reduce resource use and emissions.

“That created a whole industry around energy efficiency,” Leslie says. And far from killing jobs, that industry helped businesses save money on their utility bills, potentially creating revenue for new hires. “Now that they’ve made the switch, they won’t go back.”

California also has more jobs in the solar industry than does any other state, thanks to a cluster of state climate laws and incentives — 86,414 jobs, according to the Solar Foundation’s 2017 National Solar Jobs Census. That’s down from 100,050 in 2016, but California still holds more than a third of the nation’s solar jobs. “Distributed [rooftop] solar has helped fill the gap that was left after the recession in Los Angeles,” Leslie says. “We saw people start new companies, become successful business people.”

In fact, all of California’s climate laws continue to show up on various job-killers lists. A bill in this legislative session that would ban the registration of gas and diesel vehicles by 2040 has also been tarred by the Chamber, even though the state’s promotion of clean vehicles has given rise to not just jobs but whole new businesses. And even while some of those businesses, including Tesla and Lucid Motors, have located at least some manufacturing facilities outside of highly regulated California, they have indisputably created jobs.

Since the climate laws have been in effect, California’s economy outpaced the nation’s by seven percent between 2008 and 2016. That economic growth would seem to contradict the California Chamber’s 2012 claim that California “can’t be a leader in the global economy if it interferes in the global marketplace.”

“It’s time for them to come up with a new rap,” Leslie says. “They’re starting to sound like dinosaurs.”

Other bills on the Chamber’s current list have less to do with jobs and economic growth than they do with economic justice and fairness. One, by Assemblywoman Eloise Reyes (D-San Bernardino), would give residents of disadvantaged communities advance notice of industrial development projects slated for their neighborhoods, with the intent of ending discrimination in the siting of polluting facilities. (Reyes has modified the bill enough for the Chamber to strike it from the list, but it still opposes the measure.) Another, by the Assembly’s Al Muratsuchi (D-Torrance), would protect hotel workers against violence and harassment. Still another would forbid employers from punishing workers who use cannabis for medical purposes.

This year, Gonzalez Fletcher is pushing a bill that would end forced arbitration agreements between employers and their workers. “When you disempower individuals, it allows companies to be bad actors,” she says.

How precisely these bills would kill jobs, and exactly how many would die, the California Chamber doesn’t specify. (No one from the organization responded to interview requests.) “They never come into the legislature with estimates of projected job losses” based on any research, Gonzalez Fletcher says. “They haven’t shown how any of the policies they’ve opposed have resulted in a single job loss.” Meanwhile, the Chamber stands behind policies that are known job killers, such as increased automation in the workplace.

Gonzalez Fletcher suggests that perhaps it’s time to change the list’s title. “If you want to call it the ‘Profit Reduction for the One Percent’ list, that’s fine,” she says. “Just be honest with your label.”


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Municipal Broadband: Urban Savior or Gentrification’s Wrecking Ball?

Co-published by Fast Company
While municipal-broadband initiatives and digital-friendly promotional campaigns project a narrative of progressive growth, the repercussions for disenfranchised communities often go overlooked.

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Julianne Tveten

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Illustration: Define Urban

“The coattails on tech jobs aren’t like they used to be in the industrial economy, where large industries would come in and 800 jobs would be created in a factory.”


 

Co-published by Fast Company

In March, Los Angeles City Councilmember Paul Krekorian introduced a motion to study the feasibility of municipal broadband, citing the increasing indispensability of Internet access in daily life. Los Angeles would not be the first city to do so; eyeing the precedents set in Chattanooga, Tennessee, which implemented a high-speed municipal broadband program in 2010, local governments elsewhere in California, Colorado, Kentucky and other states have initiated their own efforts, buttressed by popular support.

The case for city-operated broadband is compelling. It offers comparatively fast service: Chattanooga’s broadband runs up to 10 gigabits per second, whereas traditional providers such as Comcast and Verizon claim to offer a maximum of two or nearly one gigabits, respectively (and deceptively). It’s celebrated as a means by which to preserve net neutrality, which prevents Internet service providers from altering the speeds and availability of individual websites. It also has the potential to liberate communities from ISPs’ notorious monopolistic control of regional billing inflation, and denial of service to rural and low-income communities — a phenomenon popularly termed the “digital divide.”


Chattanooga’s tech-centric downtown has the fastest rate of gentrification in the nation.


Furthermore, municipalities often tout broadband alternatives as a means of “economic development,” an expression typically denoting the process of attracting businesses and, by theoretical extension, creating jobs. Fast, reliable Internet connections, the logic goes, are appealing to companies — particularly tech startups that rely on consistent broadband access in their daily operations and seek environs cheaper than West Coast metropolises. Chattanooga has exemplified this selling point. As of 2015, the city had reportedly generated $865 million over a four-year period by “cutting power outages, improving data connections, lowering power bills and attracting businesses to the self-described ‘Gig City’”; Mayor Andy Berke, meanwhile, has cited its fiber-optic infrastructure as a fundamental part of his city’s nascent tech economy.

Yet, while cities’ broadband initiatives and digital-friendly promotional campaigns project a narrative of progressive growth, the repercussions for disenfranchised communities often go overlooked.

Chattanooga has remodeled its downtown Innovation District, a locus of coffee shops and office space for the largely white, middle-class constituency of the tech-centric “knowledge economy.” Mimicking Silicon Valley’s tech centers, this area has aggravated displacement of low-income communities. As of 2012, downtown Chattanooga’s ZIP code was found to have the fastest rate of gentrification in the nation; between 2000 and 2010, more than 500 white residents moved in, displacing nearly 1,000 African-American residents. The situation has since worsened.


Coding is “not going to catapult you
into the next income bracket.”


Ken Chilton, an associate professor of public administration at Tennessee State University, told Capital & Main that Chattanooga has “done a lot in terms of funding a place that would be attractive to what Richard Florida used to call the ‘creative class’: that kind of young, tech, hipster persona. That was intentional.” He added, “The broadband [initiative] kind of magnified that, once they figured out how to monetize it.” Chilton estimates that, since then, 4,000 to 5,000 white residents have moved into neighborhoods in or near the downtown area, such as Jefferson Heights and Southside, while roughly 5,000 to 6,000 African-American residents have left.

The numbers may be even greater. “We’ve had [approximately] 7,000 people come into the area in the past four years,” added Michael Gilliland, board chair of the community-organizing nonprofit Chattanooga Organized for Action. “A lot of this is a combination of tech professionals, higher-income earners, as well as empty-nesters.”

Media outlets — and the city itself — portray Chattanooga as a progressive, burgeoning hub of innovation, a once-scrappy postindustrial municipality transformed by its novel broadband program and corresponding downtown revitalization. However, “You’re only seeing a small sliver of what Chattanooga actually is,” Gilliland said. “That sort of shiny facade is really hiding a lot of  inequality in the city.”

Chattanooga isn’t alone. Among cities entertaining nontraditional broadband projects and fostering local tech industries, Columbus, Ohio has gained significant attention. In addition to contracting with a private broadband consultancy firm in 2015 in an effort to become the next “gigabit city,” Columbus won the U.S. Department of Transportation’s 2016 “Smart Cities Challenge,” vowing to outfit more vehicles and city resources with Internet connectivity, putatively, to benefit low-income neighborhoods. Meanwhile, corporate tech publications rank it among America’s top tech-job locations, while former Silicon Valley venture capitalist and Hillbilly Elegy author J.D. Vance recently relocated there, pledging to invest in startups in Columbus and the broader Midwest.

As in Chattanooga, the image Columbus projects — a new beacon of enterprise with relatively low costs for developers and business owners — neglects a considerable portion of the existing population. “The city has an idea of what they consider to be a ‘Smart’ citizen,” said Columbus tenants-rights organizer Bernard Hayman. “When they construct these plans, it’s based around one kind of demographic — white, male, early 20s, early 30s, with a certain kind of background, certain kind of income, and a certain kind of aspiration.”

This environment is increasingly evident. As is the case in most major cities, Columbus suffers from a housing-affordability crisis: As property values have risen 50 percent in neighborhoods like Franklin Park over the last handful of years, luxury housing is rendering low-income public housing scarce. More uniquely, Columbus is home to a longstanding infant-mortality crisis disproportionately affecting poor, African-American communities; in the neighborhood of South Linden, the rate is four times the national average.

Aware of many of the problems afflicting its poorest residents, Columbus’ local government claims it will leverage its Smart City capabilities to address them. Columbus City Council president pro tem Michael Stinziano cited the Smart Columbus Operating System and multimodal trip-planning and common-payment system as examples “geared towards connecting neighborhoods and residents.” Stinziano also alluded to the city’s prenatal trip assistance program, wherein expectant mothers in underserved communities may have access to subsidized “Uber-like” ride-sharing services for transportation to medical facilities. (The initiative has garnered skepticism from urban-planning and reproductive-justice experts.)

Among some residents’ concerns of cities’ unfurling strategic tech initiatives is another issue: government and police surveillance. As part of its broadband program, Columbus boasts improved mobile connectivity among police stations, as well as the transmission of video from cameras that monitor specific neighborhoods — developments for a city that, in recent years, has been home to the highest rates of fatal police violence against African-Americans among major U.S. cities. (Stinziano told Capital & Main the camera installation was driven by citizen feedback.)

“If we’re giving police even more powers of surveillance and control than they already have, where’s the accountability for that?” asked Hayman. “How are we going to make this function in a way that’s not going to . . . make people feel even more surveilled?”

Columbus and Chattanooga officials concede that economic and racial disparity pervades their cities. In an email, Chattanooga’s Berke noted that “We are fully aware…that we have a responsibility to make sure this best-in-class, municipally-owned Internet infrastructure benefits all Chattanoogans, including low-income households and older citizens.” Berke mentioned Tech Goes Home Chattanooga, a program that offers digital training and assists low-income residents with obtaining access to low-cost home Internet.

Still, community activists are skeptical that digital training and access alone, even if they’re purported to broaden job opportunities and address transportation and health-care issues, will suffice to improve the quality of life of its most vulnerable residents. Tennessee, for example, has a historically high concentration of low-wage workers, many of whom work in tourism and hospitality, as well as service industries offering little to no job security, benefits or upward mobility.

“The coattails on tech jobs aren’t like they used to be in the industrial economy, where large industries would come in and 800 jobs would be created in a factory,” said Chilton. “The old factory job that might have been 40 hours a week, with some benefits, has been replaced by an accommodation job that might be 24 to 26 hours a week and no benefits.”

Furthermore, while Chattanooga and other cities courting the middle-class tech labor force offer programs to train workers and “recruit candidates in underrepresented communities,” Hayman cautions that the financial promise of work available to them may not be as high as suggested. “A lot of cities, and Columbus among them, look to coding as the next [way] that everyone can be an affluent tech worker, and if you gain these skills…then you have an entry into that industry,” he said. “The flip side of this is that coding is not necessarily the most affluent tech job. It’s becoming a rote, blue-collar kind of job, to where you’re not going to make a lot of money. It’s not going to catapult you into the next income bracket.”

Access to alternative broadband is a boon to cities, but Gilliland and Hayman agree that technological progress alone isn’t a societal panacea. Rather, meeting all residents’ material needs, they contend, requires a multi-pronged effort that entails investments in housing, education and other resources necessary to all members of the community. “The public aspect has to extend beyond…just the gig,” Gilliland said. “There has to be an increased investment across the board if this is going to become an equitable model. You have to be very purposeful about the attempt to lift all boats.”


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What the NLRB’s About-Face on McDonald’s Means for Franchise Workers

While the National Labor Relations Board is currently divided 2-2, the confirmation of another Trump appointee will restore the Republican majority — which is bad news for fast-food-chain workers.

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Charles Davis

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Illustration by Define Urban

With Donald Trump’s election, the momentum at the NLRB is now with employers.


Workers at McDonald’s joined the union-backed Fight for $15 campaign because many found that they could not get by on minimum wage without the help of family and public assistance. But joining that campaign spurred retaliation, with dozens of employees alleging that they lost money or their job for organizing to get better pay.

Enter the U.S. National Labor Relations Board.

In a victory for workers, the board decided the McDonald’s Corporation was jointly responsible for punitive actions against employees across the country because the company dictates, among other things, how those employees cook and clean. That 2015 decision, in a case called Browning-Ferris, established a broad definition of “joint employer.” It made franchisors potentially liable for the actions of individual franchises, citing the “indirect” control they exercised over employees and their workplaces. And it meant fast-food chains, among others, would have to collectively bargain with employees who joined a union.

Donald Trump was elected president the next year. By December 2017, the NLRB was back on the side of business with respect to who is and who is not a joint employer, the board overturning with a 3-2 vote the “indirect control” standard of Browning-Ferris.

Then a Republican member of the board retired, evenly dividing the NLRB along partisan lines. The board’s inspector general then issued a report in February 2018 saying the December decision never should have been made — that, in particular, a Trump appointee should have recused himself due to a conflict of interest. The decision was thrown out, with congressional Democrats, such as Massachusetts Senator Elizabeth Warren, calling for hearings.

By that point, however, the NLRB had already ordered its lawyers to retreat in the most visible battle over the “indirect” joint-employer standard.

When an administrative trial began back in 2016, the NLRB had said McDonald’s was jointly responsible for alleged labor violations at its franchises, including reduced hours, surveillance and wrongful termination of employees who had been organizing for better pay.

“If McDonald’s is involved in determining working conditions at its franchised operations, it is responsible for what happens to workers subject to those conditions,” NLRB lawyer Jamie Rucker said at the time.

But the NLRB sought and won a 60-day suspension of that trial earlier this year. Lawyers representing the Fight for $15 movement and its allies say the NLRB is now rushing through a proposed settlement that would see McDonald’s get off without a finding of joint liability — which won’t make it any easier for low-wage workers to collectively bargain.

“What I see is an attack on workers’ ability to form a union,” said attorney Marni von Wilpert of the progressive Economic Policy Institute (EPI). “If you were able to find a joint-employment relationship with the corporate [franchisor], then all of a sudden they all have one big employer, and all the employees can go to corporate McDonald’s. That’s really what it’s all about, whether workers can organize.”

Under the proposed settlement, McDonald’s admits no wrongdoing, but its franchisees agree to cover back pay for workers fired as a result of their organizing.

The NLRB “is proposing a sham settlement,” said Mary Joyce Carlson, a lawyer representing Fight for $15. “McDonald’s directed a wave of retaliation that stretched from coast to coast and included illegally harassing, surveilling and firing workers in the Fight for $15. The hardworking cooks and cashiers who were organizing to get off of food stamps and out of poverty deserve a ruling in their case, not a settlement hammered out at the last minute in collusion with the Trump administration.”

With Trump’s election, the momentum at the NLRB is now with employers. Any setbacks would appear to be temporary: while divided 2-2 for now, the confirmation of another Trump appointee will restore the Republican majority. Once that happens, the NLRB can be expected to seek another opportunity to overturn the Browning-Ferris joint employer standard.

While Browning-Ferris did not explicitly pertain to the franchise model, it clearly spooked those who depend on it — and inspired those who think franchisors like McDonald’s should be liable for the mistreatment of employees at locations bearing its name.

Fight for $15 has prioritized organizing at fast-food businesses, but forming unions is extremely difficult when a dozen small restaurants with the same name may have a dozen different owners. There are over 14,000 McDonald’s restaurants in the United States, with only one in 10 owned by the corporation. The ability to collectively bargain with McDonald’s, the corporate franchisor, would make a union’s task easier — and help address the sort of labor violations that regulators routinely find at fast-food franchises. An EPI report says unionized workers are half as likely to be victims of wage theft, for example.

At an April 5 hearing, Fight for $15 attorney Kathy Krieger urged NLRB Administrative Law Judge Lauren Esposito to reject the settlement. Krieger argued that McDonald’s had conspired with its franchises to thwart worker organizing, the corporation recommending, she said, that franchisees “restrict crew members from taking their meals or their rest breaks outside the crew room” as a means “to prevent concerted activity.”

McDonald’s attorney Willis Goldsmith said the company would never accept a settlement identifying it as a joint employer. “The franchisees, they’re independent business people,” he said. “They did whatever they did, and if they are willing to concede that, they’re going to have to pay people. It’s not our job.”

While it appears the NLRB under Trump will ultimately reimpose the stricter, pre-Browning-Ferris standard that a joint employer must have direct rather than indirect control of workers, industry groups aren’t taking any chances.

Jenna Weisbord, a communications manager at the International Franchise Association to which McDonald’s belongs, said her group is looking to Congress to pass the “Save Local Business Act,” which would legislatively reimpose the pre-Browning-Ferris standard. “We understand the Senate will take on this task later this year,” she said of the bill, which passed the House last year.

A television ad campaign sponsored last year by the franchise association and the U.S. Chamber of Commerce argues the measure would restore “balance to labor law” in the face of a “runaway government agency.” That agency, in the era of Trump, is increasingly tilting in the favor of business.


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New Study: Early Exit from Short-term Homelessness Prevents Worse Scenarios

Escape Routes: Meta-Analysis of Homelessness in L.A., produced by the Los Angeles Economic Rountable think tank, finds that homelessness results from a cascade of system-wide failures, requiring a broad range of responses. Early intervention is key to all solutions.

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Golden State Green Rush

Golden State Green Rush: A Trimmigrant’s Tale

Trimmers make from $100 to $300 for a day that can run 15 hours. The bad gigs are the grows where weapons are numerous and the bosses are stressed out and high.

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Donnell Alexander

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Photo: Pandora Young

What’s to become of trimmers, the untold thousands of minimally skilled laborers who haunt the new cannabis horizon, is one of this industry’s most compelling issues.


 

Matilda reclines on a Northeast Los Angeles couch she’s paid $25 to sleep on for one night. The young woman, who earlier in the day had returned to the U.S. from Mexico, talks about her job as a cannabis trimmer. Matilda—not her real name—gives a heads-up on her epilepsy, and through the night she’ll make a number of unusual, loud sounds in her sleep.

Matilda has worked most in Mendocino on trimming jobs good and bad. At most black-market marijuana grow operations, she’s found there are guns. She grew used to the constant, noisy whirr of the high-powered generator that powered the lights growing the plants. The bad gigs are the grows where weapons are numerous and the bosses are stressed out and high.

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She left one trimming gig where the volume of open gunplay made her uncomfortable, and moved to another one in the Emerald Triangle–– Northern California‘s Mendocino, Humboldt and Trinity counties –– that featured consistent pay. The farm’s generator operated at lower decibels and the guns were out of sight. Sweet gig. Except for the bathroom, which sat a good 30 yards from the house. Every midnight tinkle run was an adventure.

“You shouldn’t have to worry about bears on the way to the bathroom,” Matilda said.

Briefly, about five years ago, I trimmed for room and board in Oakland and Marin County. My top boss was a retired Russian circus clown who tooled about the Bay Area with a briefcase full of many thousands of dollars and, of course, a heater. While riding with — let’s call him Yuri — it became clear the industry could not function without trimmers, who are generally unseen and often as high as the strain they’re cutting will let them get. What’s to become of these untold thousands of minimally skilled laborers who haunt this new cannabis horizon is one of the industry’s most compelling issues.

The adult-use and medical marijuana markets may collectively think pot magically goes from a plant in the soil to that jarred nugget in your local dispensary display case. But that eye-catching product was prepared by a worker who’s been at the mercy of their employers. Unlike growers, whose value derives from the training and practice necessary to grow pot on a large scale, trimmers are often regarded as disposable. Almost any stoner—or even nonstoner—can do their job. The profile of this work will only become more visible as adult-use marijuana goes mainstream.

A sizable subset of trimmers like Matilda are called “trimmigrants” due to the nomadic nature of their seasonal outdoor labor. Word of workers like Matilda coming together to improve their working conditions has begun getting out, however uncertainly. Matilda herself was unaware of any such movement; however, trimmers are indeed getting organized in a movement that’s as undeniable as it is necessary.


Trimmers are taken less seriously than growers and testers because their labor is viewed as an easily scalable craft that can be completed while thoroughly baked.


California labor law requires that any cannabis licensees with 20 or more employees be prohibited from operating in the state without a labor peace agreement between the business and a union representing cannabis workers. With the peace agreements in place, labor organizers can then recruit workers to join their union without interference from the employer. If the workers join, union negotiators will seek basic workplace protections: freedom from sexual or other harassment, regular pay schedules, incremental wages, just-cause termination and consistent, scheduled breaks.

Down the road, labor contracts hope to include health insurance and other benefits for the folks who trim California’s cannabis, as has happened with the unionized licensees since 2010. Union negotiators want to make sure protections now in place become industry-wide standards, and that all jobs (including trimming) allow a living wage and mobility.

United Food and Commercial Workers (UFCW) Local 770 consultant Robert Chlala said that by organizing trimmers, “My hope —and what we are seeing in our work already—is that we can avoid trimmers being treated as contingent workers or falsely labeled as independent contractors, that they can get the same protections as other workers.” (Disclosure: UFCW is a financial supporter of this website.)

Along with the Teamsters, the UFCW has greeted California’s adult-use cannabis-legalization era with a spate of organizing among trimmers. “From what I have also seen, it’s rarely just one-off,” Chlala said. “Trimmigrants do this work, but many also work in other aspects of the industry, from cultivators to retailers.”


Trimmers have little recourse to being asked to work topless or perform fellatio to receive earnings.


Trimmers are taken less seriously than growers and testers, and even bud tenders and deliverers, because their labor is viewed as an easily scalable craft that can be completed while thoroughly baked.

Before pot ends up in the hands of a distributor and, in the legal marketplace, a lab tester, it is cultivated. After cannabis “colas”–– the flowering site of a female cannabis plant––are grown, dried, and cured, it’s the trimmers’ responsibility to manicure the plant. Leaves, which contain less tetrahydrocannabinol or THC, are cut away, leaving only the cola’s bud. Bad trimming can be aesthetically unpleasant and a waste of time and product. Great trimmers are a business asset.

Their pay can range from $100 to $300 a day. Some in the off-the-books grows, as mentioned earlier, trim as barter. Work days can run as long as 15 hours. The work is inherently repetitive and often done while high and listening to music and, increasingly, podcasts.

Work conditions can be as varied as the strains of cannabis cultivated in the state. The Center for Investigative Reporting’s Reveal reported in 2016 that sexual assaults on female trimmers are frequent and woefully undercounted. Because of the vagabond nature of these workers—many are college students on break and travelers from Europe—there’s little recourse to being asked to work topless or perform fellatio to receive earnings.

However, there’s no single way to summarize the trimmer experience, according to Hezekiah Allen, executive director of the California Growers Association. “A licensed grow and a trespass grow on wilderness land are two different experiences, and the needs are very different,” said Allen. “California’s a very, very diverse marketplace, with a lot of different practices, from best to worst. And it’s very important to avoid generalizations.”


The arrival of industrial-sized pot farms raises concerns that worker treatment will more resemble that found in big agriculture than the kind seen in traditional mom-and-pop pot growing.


Criminal grows are most likely where openly stored guns are found, Allen told me. Small farms that employ family and friends are more the norm, and firearms are not out in the open. These farms, particularly in the Emerald Triangle, are grappling with the California industry’s volatile changes—new regulations and massive companies—and the demands of finding a path to legal status. Allen compares the concerns of these workers to Detroit just before President Obama’s auto company bailout. Simply maintaining jobs is the primary on-site issue.

Big marijuana businesses such as the Oakland-headquartered behemoth Harborside Farms and the average pot cultivator are incorporating these changes differently. Harborside Farms came factory style to ag iconic Salinas, bringing a 360,000-square-foot grow with it. The typical grow is smaller than 5,000 square feet. Flower greenhouses have been largely replaced by cannabis farms. Land costs have skyrocketed as other cannabis operations have streamed into Monterey County. The Harborside Farms effect has raised concerns that worker treatment will more resemble that found in big agriculture than the kind seen in the county’s previous mom-and-pop pot growing.

“That workforce is a lot more interchangeable with the traditional ag workforce,” Allen said, noting that he’s unfamiliar with the specifics of Harborside’s business practices. “You run into a lot of traditional issues. You run into the same safety and wage issues that you do with criminal grows, oddly enough.

“Big industrial ag is pretty well known for human rights abuses, the same sort of human rights abuses that cannabis workers are used to seeing on those criminal grows.”

At the opposite end from the skeletally policed Emerald Triangle, in a small Los Angeles warehouse, two trimmers luxuriate in just how satisfying the craft can be. While classic rock plays from an old-school radio, Francisco, 44, lovingly prepares a nugget to go out into the world. The cola has just come from the curing room. He and his partner that day were waiting for their boss at the door, eager to work.

“Every time I trim one I’m like… ahh,” he says, clipping at a bud while explaining. “You just make it look the way you like it. Trim it until the little red hairs are showing, until you can see all of the really good crystals. I really enjoy looking at it.”

The two sampled the cannabis and explained to their bosses how the product was working. Two thumbs up. It’s a much more satisfying job than Francisco’s previous work as a landscaper. The closest thing there is to a labor of love that he would do for free.

Yet, the trimmer’s work needs protection and recognition, noted Chlala, who’s also President of Latinos for Cannabis. Southern California, with its vertically integrated cannabis companies—where grows are owned by the same people who sell and move green product—is likely to lead the way in trimmer organizing around the state. Santa Barbara has seen an influx of big pot businesses and is likely to be a big target for unions.

The organized shops could not come soon enough for a workforce too often on the lookout for bears and regarded as an industry stereotype.

“While trimmers are often treated like they do one discrete task,” Chlala said, “their work is key to the production chain for cannabis—no different from any agricultural process like harvesting tomatoes or processing cut flowers or almonds.”


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