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Video: Safe Parking for Santa Barbara’s Homeless

Co-published by The Nation

A video by Jennifer Dworkin explores an innovative program for Santa Barbara’s homeless.

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Co-published by The Nation

At dusk, Thomas Goodwin, a worn but upbeat man in his mid-50s, drives his car into a parking lot in central Santa Barbara. There, he settles his young daughter to sleep in the back of a second vehicle—a van lined with her clothes—while he dozes in its front seat. The family has been sleeping and living out of the van for almost a year.

The Goodwins are not alone. In Santa Barbara, over 500 people sleep every night in their vehicles, unable to afford a home with a front door, roof, and bed. They, in turn, are among tens of thousands of unsheltered Californians—men, women, and children from up and down the state who have fallen through the wide cracks in the economy only to land smack on the hard surface of the street.

What are people like Goodwin to do? Like many cities, Santa Barbara does not always make life easy for its homeless residents: City law makes it illegal for people to sleep in their car, and the fines levied against those who do can lead to the loss of the only home they have. Evading the police and finding a safe place to sleep becomes an overwhelming task.

Twelve years ago, the Safe Parking program, run by the nonprofit New Beginnings Counseling Center, began offering a provisional solution. Its program places those sleeping in their vehicles into 20 private parking lots scattered around the city and provides bathroom facilities and some security. The parking lots are available only overnight and the cars must move by early morning. The group estimates they take 125 vehicles off the street every night and help more than 750 people a year.

The stories that Safe Parking’s clients tell me often involve a catastrophic financial loss precipitated by unemployment, domestic violence, injury or illness and the resulting medical bills. Most are working, although they have often lost secure, decently paid jobs and now struggle to make ends meet with multiple part-time jobs. A growing number of those forced to live out of their cars are families. All have been priced out of a brutal housing market.

Rents in opulent Santa Barbara have skyrocketed in recent years—20 percent in the last year alone—with one-bedrooms priced at $2,500 or up. The simple calculus of supply-and-demand is partly to blame. With a vacancy rate below 0.5 percent, a crisis figure, the housing market is at the mercy of landlords. Nor are there enough subsidized units to make up the shortfall for low-income renters—or plans to build sufficient numbers of new ones to meet the need, advocates say. “Santa Barbara’s housing market is broken and has been,” explains Chuck Flacks, executive director of the Central Coast Collaborative on Homelessness.

Santa Barbara isn’t the only city to be touched by the homeless epidemic, of course. The crisis is playing out in many California cities, most visibly in San Francisco and Los Angeles. According to the Los Angeles Homeless Services Authority, homelessness has increased in the last year, with nearly 47,000 people sleeping in the county’s streets and shelters each night; at least 6,000 more live in their vehicles.

Safe Parking and programs like it provide a welcome, if makeshift, port in the storm of homelessness. What families like Goodwin really need are homes: Solid structures with walls, floors, roofs, and beds, which they can leave at whatever time they want and return to at whatever time they want. For this to happen, however, both the city of Santa Barbara and the state and federal governments will have to dedicate significantly more effort to building subsidized homes that the poor and working-poor can afford.

Until then, Goodwin will put his daughter to sleep each night in a parking lot.


This video and feature were supported with funding from Capital & Main and the Economic Hardship Reporting Project.

Labor & Economy

10,000 Laid-off Workers Later, Sam’s Club “Transforms” Its Business

Co-published by Fast Company
Mass layoffs are never pleasant news. In America they are particularly disruptive, thanks to a meager safety net.

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Photo by Walmart

A decades-old plant-closing law provides an important protection to laid-off Sam’s Club workers, according to labor advocates.


Co-published by Fast Company

Last October a representative of the Walmart Foundation headlined a workshop entitled “The Just Transition” at a conference focused on corporate responsibility in Huntington Beach, California.

Julie Gehrki, the foundation’s vice president of programs, was optimistic about the future of a retail workforce that faces automation and has been beset by store closures. She touted Walmart’s recent investment in training academies and efforts to incorporate virtual reality into training workers to be battle-ready for Black Friday.

About three months after the conference, Walmart’s Sam’s Club chain announced it would close 63 stores, including three in hurricane-ravaged Puerto Rico.

The retail chain’s laying off of about 10,000 workers was prompted by a new plan to target a wealthier demographic—families with annual incomes of between $75,000 and $125,000, Sam’s Club CEO John Furner told the Wall Street Journal in late January.

“The strategy isn’t to close clubs,” he said. “The strategy is to transform the business.” About a dozen locations are expected to be converted into “eCommerce fulfillment centers” to better serve the growing number of customers shopping online.

Lining up early at a closing Sam’s Club in San Fernando. (Photo: Jessica Goodheart)

Was this the “Just Transition” envisioned by Canadian labor activist Brian Kohler, who coined the phrase in 1998? Mass layoffs are never pleasant news, and American-style mass layoffs can be particularly disruptive, given a safety net that’s meager, relative to some other industrialized countries, and employers’ minimal legal responsibilities to affected workers.

The layoff news arrived  the same day Sam’s Club announced a plan to raise hourly wages for new employees from $10 to $11 and to expand other benefits.

The Sam’s Club layoffs were no exception to that disruption, according to workers who seemed shaken by the sudden news. But because the membership-only warehouse chain employs so many workers, it triggered a decades-old plant-closing law that provides an important protection to some U.S. workers, labor advocates say. In addition, Sam’s Club says it will provide severance to long-term and full-time employees who qualify.

The layoff news arrived January 11, the same day the company announced a plan to raise hourly wages for new employees from $10 to $11, expand maternity and parental leave benefits, and offer one-time bonuses to eligible workers.

That was small comfort to employees across the country who learned about the closure by phone, email, in store meetings, by FedEx and sometimes, according to news reports, via a locked door.

At the Sam’s Club in the city of San Fernando, a working-class Los Angeles suburb, an overnight associate who only gave his name as Rudy sat outside at metal tables.

The store would be closing for good in three days, and a line of about 60 waiting customers—some wrapped in blankets—had started to form along the warehouse store’s wall and back toward a Home Depot at 6 a.m.

On break, Rudy munched on crackers and sipped soda with a co-worker. “They didn’t give us enough time,” he said. “It was all of a sudden.” Rudy is 50, a perilous age to be out of work. A 10-year Sam’s Club veteran and father of two teens, he is the sole breadwinner for his family.

Later in the morning, two blue-vested Walmart representatives headed into the Sam’s Club to participate in a job fair. The two women said the jobs on offer were all part-time.

Photo: Jessica Goodheart

“We’re sad, but you have to continue,” said Juan Casada, a supervisor and another 10-year veteran, pausing for a moment on his way through the parking lot. Casada complained, too, about the short notice and the job fair’s minimal offerings.

“Part-time jobs are everywhere,” he said. “You don’t just find a [full-time] job overnight.”

A few yards away, Sam’s Club shopper Ricky Crouch, who had two infants at home, waited patiently in line along with the other deal-seeking customers. He’d come in search of baby wipes at rock-bottom prices. Crouch lamented the store’s impending closure but consoled himself that he still had Costco two miles away from the San Fernando Sam’s Club, and Walmart, a seven-mile jaunt, as shopping options.

“It sucks,” he said. “I feel bad for all the workers.”

Sam’s Club’s employees will get paychecks until mid-March, thanks to the 1988 Worker Adjustment Retraining and Notification Act, a key protection for U.S. workers subjected to mass layoffs. A January 11 letter from Sam’s Club to San Fernando’s mayor cites the WARN Act in its subject line and provides information about all the occupations of the 178 displaced employees. The federal law requires large employers to provide 60-days of notice to workers and local government in advance of mass layoffs.

According to the letter, hourly employees would not be officially terminated until March 16, and managers were given yet another month of official employment.

“It’s a good law,” says Nicholas de Blouw, a California employment attorney, who points out that the WARN Act also provides protections for less densely populated areas of the country that may be heavily reliant on large employers, their services or sales taxes. (The Naperville, Illinois store, for example, provided $1 million in annual sales tax to the city, according to the Chicago Tribune.)

The act “is meant to protect employees and their families and really sometimes the community as a whole,” de Blouw said.

And after the 60 days?

“Associates with one to three years of continuous service will receive three weeks of pay and one week of pay for every additional year of service,” Laura Ladd Poff, a Sam’s Club representative, wrote in an email.

The company is also providing severance to laid-off part-time workers “who have been with the company for five continuous years and have not secured another position within the company.”

The company has held job fairs with local economic-assistance agencies. “We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations,” Sam’s Club’s Furner said in a statement.

Jobs at Sam’s Club tend to be better paid than those at Walmart, which are increasingly part time, according to Dan Schlademan, a spokesman for OUR (Organization United for Respect), which advocates for current and former Walmart employees. OUR has been holding workshops on the WARN Act for laid-off Sam’s Club workers.

Photo: Jessica Goodheart

Cheren Payne, an administrator with Los Angeles County’s Workforce Development, Aging & Community Services, said that part-time jobs can serve as “stop-gap employment” for laid-off workers until they find permanent work through local job centers.

At the October Huntington Beach workshop on “The Just Transition,” moderator Susan Winterberg floated another approach to mass layoffs, in which companies consult with unions and local government in advance, and create a layoff plan with workers’ representatives.

Winterberg, who works for BSR (formerly Businesses for Social Responsibility), distributed a two-page handout to the 40 or so attendees, illustrating contrasting approaches to layoffs. During four decades of Rust Belt decline, for example, workers “frequently learn[ed] about their layoff on the same day.” However, the tech firm Nokia used a different approach to laying off 18,000 people as it lost market share to Apple and Samsung.

Nokia, which is headquartered in Finland, was required to consult with unions and local governments to create a transition plan that resulted in a €50 million ($61.3 million) assistance package, three to 18 months of notice, career fairs, grants for volunteering or sabbaticals, and a start-up fund for new businesses.

But such an approach to labor relations is not necessarily forged at a corporate conference workshop. In Europe, “in many cases, the worker owns the job, and firms negotiate with their workers’ committee when layoffs are necessary,” according to Franco-American business professor Michael Segalla, who teaches at HEC Paris School of Management (Ecole des Hautes Etudes Commerciales de Paris). In France, where workers are much more militant, the terms of large-scale layoffs “almost always need the approval of regional or national governmental entities,” he adds.

U.S. workers, meanwhile, have the WARN Act, which may not be helpful for those employed in smaller stores. Also, American workers can access assistance from local workforce development agencies. Typically, at least 50 employees must be laid off to trigger the WARN Act.

That’s not to say employers shutting down a smaller location cannot provide severance, assistance or notice or all three, but it’s at their discretion, and information about the layoffs may be harder to come by.

A giant like Walmart, which employs 1.5 million workers in the U.S., is perpetually opening and closing stores. Just a year ago, Walmart announced plans to close 269 stores globally and eliminate some 10,000 jobs in the United States, including all of those in its small-format Express stores, even as it planned to open scores more supercenters and neighborhood markets. As with the recent Sam’s Club layoff, workers not hired by nearby locations would get 60 days pay and severance if eligible, according to Business Insider.

Photo: Jessica Goodheart

De Blouw, the employment attorney, says that workers should always talk to a lawyer before they sign a severance agreement, which typically requires them to waive their right to sue the company. To determine whether a company is complying with the WARN Act also requires a “case by case” analysis, and employees may have other reasons not sign away those rights.

“You always, always, always want to contact an attorney to get some legal advice as to whether or not you should sign” a severance agreement, de Blouw said.

Several workers at the San Fernando store said they had signed a confidentiality agreement that prevented them from talking to a reporter.

Alex Vega, 28, is a former Sam’s Club employee in Naperville, Illinois. He was displaced in the recent layoff but says he does not remember seeing a non-disclosure agreement. Vega described chaotic days following news of the closure when information was “scarce” at his store and “managers were almost nowhere in sight.”

“I’m pretty inexperienced,” he said. “I might have skimmed over that.”


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Labor & Economy

Tim O’Reilly Eyes the Future of the Tech Industry By Peering Into the Past

On the latest episode of The Bottom Line podcast, the O’Reilly Media CEO draws on lessons of history to help understand high-tech’s current perils and promise.

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Lots of folks have expressed amazement at the speed with which Facebook, Google, and Apple have gone from being at the center of “the coolest industry” around to being likened to Big Tobacco, “peddling a destructive addiction,” as New York Times columnist David Brooks has characterized the shift.

Count Tim O’Reilly among those who’ve been decidedly less surprised.

“It’s something that happens in the life of every technology,” O’Reilly, the founder and CEO of O’Reilly Media, told me on the latest episode of my podcast, The Bottom Line. “Television was going to change the world for the better. And then we had this backlash where we said, ‘Oh no, it’s making everybody into couch potatoes and making everybody stupid.’ The automobile was going to change the world for the better—and it did. And then we realized, oh my gosh, there are all these terrible downsides. . . .

“It’s kind of how we progress as a species,” adds O’Reilly, the author of, most recently, WTF?: What’s the Future and Why It’s Up to Us. “We start out starry-eyed and optimistic with all the possibility of a new technology,” only to realize that there are shortcomings that need to be addressed—and often are addressed, even as some people invariably resist in order “to preserve the profits that they’re making.”

If it sounds like O’Reilly has a keen sense of the past, that’s because he is a close student of it. But it’s also because he himself has helped to make history, at least in Silicon Valley.

O’Reilly Media started in the 1980s as a publisher of books about computer programming, and later the Internet. Today, its learning platform, Safari, is considered the largest online library for technical and business topics. The company is also well known for its industry conferences. In 1998, O’Reilly organized the meeting where the term “open source software” was born. In 2004, he became instrumental in popularizing the term “Web 2.0” to indicate the shift, in the wake of the dot-com bust, to sites that emphasized user-generated content and were easy for even non-experts to tap.

O’Reilly is also a partner in an early-stage venture firm.

As he draws on the lessons of yesterday to help figure out—and shape—tomorrow, one area that O’Reilly is focused on is the growing concentration of power among a handful of online behemoths. Many critics are concerned that the dominance of Google, Facebook, and Amazon is hurting consumers and workers alike. O’Reilly, though, believes that their behavior is also bound to have another casualty: the tech giants themselves.

“I watched this early in my career with Microsoft,” O’Reilly says, recalling how the company came to wield so much control in personal computing that it would dictate to venture capitalists “what they could invest in” and to entrepreneurs “what was safe to do.”

“That ended up leaving Microsoft holding all of the cards—they thought,” O’Reilly explains. “But in reality, all the innovators said, ‘Well, we can’t make any money in this world anymore. Let’s go over somewhere where there’s just interesting opportunity, namely the Internet. . . . Suddenly, Microsoft wakes up and went, ‘Oh, all of the innovators went somewhere else; they’re not developing for our platform anymore. . . .’

“What’s so interesting,” O’Reilly notes, “is the current conversations in the Valley are very similar. ‘What’s safe to invest in? How close are we to the center of Google’s bull’s-eye or Microsoft’s or Facebook’s or Amazon’s? Is this an acquisition opportunity—or will they just put us out of business?’”

O’Reilly stresses that while a lot wary eyes are being cast toward tech—and for good reason—the impulse to squeeze others transcends the sector.

“It’s really the problem in our entire society and our economy,” O’Reilly asserts. “Long-term greedy is good. Long-term greedy says we’re going to make everybody wealthier, and I’m going to get a piece of that. I’m going to make my customers more successful. I’m going to make my partners more successful.

“But you look at so many companies and you realize that it becomes increasingly zero-sum. And zero-sum is short-term greedy.”

You can listen to my entire interview with O’Reilly here, along with Bridget Huber reporting on how we seem to be facing less the rise of robot overlords and more the rise of robot coworkers, and Kanyi Maqubela exploring whether censorship in China is as much about business as it is about politics.

The Bottom Line is a production of Capital & Main

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Culture & Media

Union Staffers: Time’s Up, L.A. Times

The L.A. Times newsroom remains in a state of siege. Tronc has established an alternative editorial team for its shadowy “Los Angeles Times Network,” and has declined to explain to Times staffers what its intentions are for this new enterprise.

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Ed Leibowitz

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Photo: Andreas Praefcke

Workers at the Washington Post won their first union contract in 1937, the year the Hindenburg crashed and burned. New York Times staffers got theirs around the time the Japanese attacked Pearl Harbor. In the first years of the 20th century, the owners of the Los Angeles Times not only crushed union opposition at the paper, but turned their hometown into the most rabidly anti-union big city in America. For over 100 years, the Los Angeles Times‘ newsroom remained a bulwark against organized labor, maintained by below-the-masthead editors and reporters, as well as by management.

So why did L.A. Times staffers choose to unionize last month by a vote of 248-44?

During her 41 years as a journalist and three decades at the Times, Bettina Boxall had never worked in a unionized newsroom. Until last year, the veteran Pulitzer Prize-winning reporter on environmental and water issues would have kept working at an open shop if given a choice. “My father was a military officer, and no members of my family were ever in a union,” she tells me, “and watching them from afar — unions haven’t had a great reputation.”

When Boxall began at the Times, it was certainly a patriarchy, but a patriarchy rolling in profits and exceedingly generous when it came to employee compensation and job security.

In recent years, corporate mismanagement and merciless cost-cutting began to soften Boxall’s stance. Now the bosses had nothing to offer and seemed to be taking everything away. Accrued vacation time? Gone. The 401(k) plan? Raided by a profane real-estate mogul who drove the company into bankruptcy. Layoffs and buyouts pared down the newsroom from 1,200 to around 400 – sending thousands of years of journalistic experience out the door.

These depredations brought long-standing inequities into starker relief, and sharpened focus on new ones. “Women are paid less than men,” Boxall says. “I know that for a fact. And the long-standing Metpro program [for young minority journalists] has turned into a source of cheap young labor.”

The climate of oppression and fear at the paper came not only from Chicago-based Tronc, the newspaper conglomerate that now owns the Times, but from the top of the masthead. More than a year ago, in Los Angeles magazine, I chronicled the excesses of former editor and publisher Davan Maharaj — the paranoia, the interference with investigative pieces and behavior that had helped turn the newsroom into a hostile work environment for women.

Until he was placed on unpaid leave because of allegations about past sexual improprieties, Ross Levinsohn, the Times’ CEO and Maharaj’s successor in the publisher’s chair, pursued an agenda of click-baiting at all costs. To implement it, he hired Lewis D’Vorkin, who during his career at Forbes and other publications had earned the sobriquet “Prince of Darkness.” D’Vorkin held the post three months until Tronc removed him, following scathing coverage of his misrule. “We’d almost become like an abused family,” Boxall says of the Times newsroom. “We wouldn’t react in an overt strong way. We were passive in the face of anything they did to us.”

At her first organizing rally late last summer, Boxall took the podium and declared to her beaten-down colleagues that she had never signed a unionization card, but she was going to sign one that night. She would become one of the chief organizers of the effort, teaming with younger colleagues like 30-year-old data journalist Anthony Pesce, who had made the first call to the NewsGuild-Communication Workers of America  in 2016, and had championed the unionization drive from its inception.

Boxall believes that the massive job cuts of the past two decades actually made victory easier – the union advocates only had to convince a majority of 400 staffers, not of 1,200. The chronic instability of newsroom and business leadership – with publishers and editors coming in to make big changes and then packing up their offices seemingly as soon as they arrived — may have made the paper more dysfunctional, but it also ensured that there would be no company standard bearer in the building with the kind of longstanding authority and solid workforce relationships that can be effective at countering a unionization drive.

For their part, the Tronc executives back in Chicago proved no more competent at repulsing a union effort than they had been at choosing leaders to run the Times. It certainly didn’t help that Lewis D’Vorkin put his name on some of the anti-union pleas emailed to a staff that largely loathed him.

The newsroom remains in a state of siege. Tronc has established an alternative editorial team for its shadowy “Los Angeles Times Network,” and has declined to explain to Times staffers what its intentions are for this new enterprise. Many believe it  may be used to undermine or bypass the newly unionized workforce. Some say that the Times’ journalistic integrity and their own livelihoods will remain under threat as long as Tronc controls the paper.

Nevertheless, the establishment of the L.A. Times Guild seems to have somewhat dissipated the air of futility, anger and disgust that clouded so many of my earlier conversations with staffers. Boxall likens the feeling to what countless victims of sexual harassment must have experienced during the past year – finding strength in numbers as they confront their abusers after so much silence and disregard.

“We care about the institution of the L.A. Times,” Boxall says, “and we’re concerned about the revolving door and an ownership only interested in profits, not civic duty. Well, time’s up. It’s kind of the equivalent of the #MeToo movement. We’ve had enough of this.”


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Labor & Economy

Setting the Record Straight on Trump’s Black Unemployment Boast

Co-published by The American Prospect
Erin Aubry Kaplan speaks with economist Steven Pitts about the president’s claim that he has reduced African-American unemployment to an historic low.

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Erin Aubry Kaplan

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A job fair, San Diego. (David Maung/Bloomberg via Getty Images)

Co-published by The American Prospect


Editor’s Note: One of Tuesday’s State of the Union applause lines came when President Trump said, “Something I’m very proud of: African-American unemployment stands at the lowest rate ever recorded.” He had made the same claim days before, after rapper and business mogul Jay-Z expressed some cautionary comments about black prosperity on CNN’s The Van Jones Show. The remarks prompted Trump to scold Jay-Z with a tweet claiming that his year-old administration was responsible for black unemployment being at an historic low.

On the eve of the State of the Union address, Erin Aubry Kaplan spoke with economist Steven Pitts about the president’s claim. Pitts is the associate chair of the University of California, Berkeley’s Center for Labor Research and Education; his field of focus is issues of job quality and African-American workers.


“We need to do two things: Maintain current levels of employment and fend off growing attacks on public sector unions.”


 

Capital & Main  Can the Trump administration take any credit for the new low figures in black unemployment?

Steven Pitts  No. The downward trajectory of the black unemployment rate has many factors, but basically it’s a function of the economic expansion of the last six or seven years—that’s what we’re seeing. It’s not because of a policy enacted by Trump or even by Obama — that would be giving a single person too much credit. If there had been a sharp break in the trajectory—if it fell to one percent, say, in a short period of time– we could maybe say it was something someone did.

Did anything in Obama’s eight years in office aid black employment specifically, or indirectly?

Steven Pitts  When Obama took office, all hell was breaking loose. A combination of his stimulus package–even though it was too little–actions taken by the Federal Reserve and other factors helped to start expanding the economy after it bottomed out. We’ve had a steady upward trend since. The black unemployment rate has been falling since roughly June of 2011.

Lower unemployment for black folks is certainly good news, but there’s a troubling story underneath the numbers. Do you see the story changing substantially anytime soon?

Steven Pitts  You’re talking about job quality — what kinds of jobs people have and what kind of quality of life they help provide. So the unemployment rate is the lowest it’s been since 1972. But basically since the mid ’70s we’ve had flat wage growth, and growth has been very, very slow for all folks. Of the top-10 fastest growing occupations, seven or eight fall below the median wage in the state. We see an expansion of jobs in the service sector — janitors, those sorts of things. Black people are also historically employed in the public sector, which is why the fate of the public sector is so important. We need to do two things: Maintain current levels of employment and fend off growing attacks on public sector unions. One thing that made jobs good for black people was unionization.

“We’re never going to have a black Walmart,
it’s never going to happen.
We aren’t in a separate society.”

We tend to see the black labor problem as another black/white disparity, another example of inequality. A lot of times our basic metric of black well-being is how big is [its] disparity with whites. But that’s processing data wrong. If you ask a black person who’s struggling how they’re doing, they’ll say okay, but they’re not thinking about inequality or how they compare to white folks. Basic well-being is asking the questions, How are people living? Do they have good wages, good jobs? It’s not complicated, but we don’t tend to look at it this way. Not that inequality shouldn’t be noted — it should. But that’s not all we should look at.

What about the black middle class? We hear a lot about poverty and unemployment, but how are the technically better- off people faring?

Steven Pitts  The middle class is facing a lot of problems. Blacks were disproportionately hit by the subprime home loan crisis, so if you’re trying to buy a house in California, it’s tough. They come out of college with huge debts, maybe have to take out a second mortgage. Their status is a function of three things: the trajectory of the economy, the government policies to impact that trajectory and the state of community organizing—people power. Overall, things don’t look good right now.

In his conversation with Van Jones, Jay-Z talked about the limits of black capitalism—he said that money doesn’t make you “happy,” meaning that a few black millionaires like himself can’t solve deep problems of racial inequality, which includes employment. Do you agree?

Steven Pitts  Black capitalism is not part of the solution. Even if every black millionaire is willing, they can’t help every black person in the world. The scale is insufficient to the problem. When we talk about black entrepreneurs we tend to ignore other dimensions around the economy. We’re never going to have a black Walmart, it’s never going to happen. To the extent that small firms get beat down by Walmart, black firms get beat down too. We aren’t in a separate society. By the way, you have only one Walmart, not a lot of “white” Walmarts running around. We could talk about more black suppliers to Walmart, but that’s determined by Walmart, and then you’d have to talk about their labor practices.

Rather than celebrate the low unemployment rate, should the president and other national leaders officially declare black employment a national crisis?

Steven Pitts  It is a national crisis. A president should represent all the people and respond to the crises of those people. But that’s should. Reality is different.


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Environment

Four Ways California Can Beat Trump’s Solar Tariff

How much damage a 30 percent tariff will inflict depends on who’s talking. The Solar Energy Industries Association says the impact will be devastating. Others speak less pessimistically.

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Judith Lewis Mernit

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The new tariff will complicate the development of large, industrial “utility-scale” solar plants, a meaningful source of jobs
in a labor-poor industry.


On January 22 President Trump announced that the U.S. would impose a 30 percent tariff on solar technology imported from China and most other countries. The tariff won’t boost domestic solar manufacturing, but it will inflict damage on America’s 374,000-job solar industry, which for the last eight years has thrived on inexpensive imports.

How much damage depends on who’s talking. The Solar Energy Industries Association, or SEIA, says the impact will be devastating. Others say it will only drive the cost of solar installations back to where they were in 2015 ($1.77 to $3.09 per watt, opposed to $1.03 to $2.80 per watt in 2017), when solar installation was doing fine. The Obama administration imposed tariffs on Chinese solar imports specifically in 2012, and on China and Taiwan in 2014. Solar deployment in the U.S. nevertheless doubled between 2014 and 2016.

California state law, which also requires utilities to procure half of their energy from renewable sources by 2030, will also soften the effect of the price hike. Rooftop solar will feel little impact because each system is small enough to absorb a nominal price hike. What the tariff will do, however, is complicate the development of large, industrial “utility-scale” solar plants, a meaningful source of jobs in a labor-poor industry.

“California’s renewable energy mandate has created significant numbers of good, family-sustaining jobs with health care and retirement security,” says Carol Zabin of the University of California, Berkeley’s Center for Labor Research and Education. “It has also provided apprenticeship training and jobs to people of color from some of the poorest regions of our state.”

There are ways to cushion the tariff’s blow, however, ways that are within the powers of local and state governments, or at least can be helped along by local support. Some ideas follow.

Subsidize innovation: Way back in, say, 2009, a rooftop solar array was out of reach for most middle-class homeowners. Large, “utility-scale” plants, built in remote areas to power cities, made little sense for utilities that could buy coal-generated electricity or build new natural gas plants for less. The only way solar was going to make sense was if somebody figured out how to make it more efficient, or cheaper.

The U.S. Energy Department in the Obama administration therefore put its weight behind research. Stimulus funds were made available for grants and guaranteed loans, and the Energy Department’s SunShot Initiative went looking for ways to wring more watts from a photon. There were many auspicious ventures. A California company called Solyndra, for example, had designed cylindrical solar modules that converted more light into electricity using a material called copper indium gallium selenide, or CIGs to convert sunlight to electricity, which proved more efficient than the traditional crystalline silicon.

Solyndra notoriously went bankrupt, defaulting on its loan. At least one of the reasons (there are many), is that the Chinese started rapidly churning out solar panels, with abundant government subsidies. By applying its innovative muscle to manufacturing processes, not advances in technology, China went from producing almost no solar panels in 2001 to, by 2010, producing half the world’s supply. Manufacturers in the U.S. and other countries accused China of flooding the market, but solar prices dropped by as much as 90 percent. That price drop fueled an international energy revolution with ordinary silicon photovoltaic solar cells.

That rapid transition from conventional to renewable energy, still underway, was a boon for the climate. But it wasn’t so good for innovation. Solar still takes up too much space, creating conflicts between environmentalists and conservationists over open space and wildlife. Alternative materials, such as Solyndra’s CIGs and gallium arsenide are still more efficient solar-to-electricity converters than silicon. A team at Stanford University has developed a way to manufacture gallium arsenide more cheaply than ever.

There are indications that federal decision-makers understand the importance of inventing new solar things. The day after the tariff announcement, Energy Secretary Rick Perry announced a $3 million prize for solar innovation, with the intent of reenergizing domestic manufacturing of solar technology.

Build a better battery: Methods of storing solar-generated energy are proliferating, from Tesla’s Powerwall to the molten salt tower at Nevada’s Crescent Dunes concentrating solar thermal plant (it uses mirrors, not photovoltaic cells, to harness the sun’s energy). Right now, California often has so much solar during daylight hours that the system operator sometimes pays other states to take it. Storage means solar could feed a steady stream of electrons into the grid, making it ever more valuable to the people whose job it is to maintain a reliable electricity supply.

Let solar installers off the hook: When a solar developer sells energy to a utility, the two parties agree to a certain price based on the developer’s cost to develop, design, construct and operate the project. Because companies bid these projects to utilities, that price is the lowest feasible cost at one point in time, says Patrick Hodgins of the Renewable Resources Group, a clean-energy developer. “The utility says, ‘We want X quantity of solar, so let us know what you can deliver it for.’ It’s a race to the bottom on procurement.”

Some developers have loaded up on panels in advance of the tariff. But the ones that have not assumed they were getting them at a lower cost than they can buy them for now. The utilities signed those contracts in a pre-tariff environment, “so if someone’s coming to them saying ‘all of my costs have changed,’ the utilities are not likely to give them any concessions, since they planned on paying the price that was bid,” Hodgins says.

Concessions are even less likely since most of California’s utilities are well on their way to surpassing at least near-term state mandates for procuring renewable energy. “If they don’t get relief, many of those projects are going to die,” Hodgins says.

One of the ways to get that relief would be for utilities to waive the penalties they charge to let developers out of contractual obligations. That would enable them to bid their projects to “community choice” aggregators, or CCAs — municipal entities authorized to purchase power on behalf of their communities. CCAs often have specific requirements for carbon emissions that their consumers demand. “They have a need,” Hodgins says. “They’re in the process of figuring out what their loads are going to look like. They’re offering programs to their consumers beyond what’s required by statute.” Some CCAs say they can provide electricity from 100 percent renewable sources — which means they need all the solar they can get.

Partner with China for stateside manufacturing: Because Trump’s tariff steps down by five percent each year for four years and then expires, it won’t automatically spur investment in stateside solar manufacturing. Only specific policies can do that, and the U.S. so far doesn’t have them. But if Trump is serious about ramping up domestic manufacturing of solar panels — and the tariff might work to that effect — he should invest the money in a solar gigafactory, similar to the one Tesla has for batteries.

This idea comes from Jigar Shah, the president and co-founder of an energy company called Generate Capital, but also a well-known thinker on renewable energy matters. Shah writes in Quartz that the tariff will bring in an estimated $1.6 billion every year to America’s coffers. “It would be the incentive the industry needs to refocus on domestic manufacturing instead of taking advantage of cheap overseas panels.”

In a nod to U.S. solar module manufacturers who import the cells for their panels from other countries, the administration has allowed 2.5 gigawatts of solar cells to cross our borders tariff free, which means that assembly in the U.S. is still possible. But factories ought to make the cells, too, and find “world-class plant operators,” Shah writes. And really the only place to find them is China.

Shah isn’t optimistic about Trump’s ability to negotiate a solar factory partnership with China. But if Trump can’t or won’t make a deal, then states, including California, can. Already the Chinese solar manufacturer JinkoSolar is looking for space and tax breaks to build a $54 million headquarters and manufacturing plant in Jacksonville, Florida. California Gov. Jerry Brown has already been clearing a path to climate collaboration with Beijing. California — or at the very least, our low-tax neighbor, Nevada — could be headed for a plant of its own.


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Why The Future Of Gig Work Might Not Be As Bleak As Many Believe

On the latest episode of The Bottom Line podcast, Thumbtack CEO Marco Zappacosta discusses how those on his platform are happily earning about $75 an hour.

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When people think of the kind of work they can hustle up via a digital platform, it’s often marked by completing “mind-numbing tasks for hours on end, sometimes earning just pennies per job,” in the words of one recent report.

Those who find work through Thumbtack, however, occupy a very different part of the online landscape.

“It is a part of the gig economy in the sense that . . . they go job to job,” Marco Zappacosta, the co-founder and CEO of the marketplace for home services and other professional freelance jobs, told me on the latest episode of my podcast, The Bottom Line. “But it is not the gig economy in the way that some people think of it, which is sort of these commodity labor platforms, be it ride-sharing or delivery.”

“These are really differentiated, non-commoditized services,” he says. “When you keep the focus on that, you really see . . . what the future of work holds.”

If Zappacosta turns out to be right, it’s actually a pretty bright future. The average wage for the plumbers, painters, caterers, dog trainers, tax preparers, and a thousand other types of “pros,” as Zappacosta prefers to call them, on Thumbtack is nearly $75 an hour.

They seem remarkably happy, too: Four in five on Thumbtack, the company’s surveying shows, say they love what they do.

“I think their pride comes from seeing that their talent is valued,” Zappacosta says. “It just feels good. And it gets to this fact that work is ultimately more than a paycheck. . . . It’s also about feeling purposeful.”

In this sense, many of the 250,000 folks offering their services on Thumbtack might be characterized more as entrepreneurs than as independent workers—and the company thus affords a fascinating glimpse into an often-overlooked slice of the American economy: what Zappacosta describes as “the smallest end of small businesses.”

Indeed, sixty-five percent of those on Thumbtack work alone; just shy of 30% have two to five employees.

For all of its upsides, trying to make a go of it on Thumbtack isn’t necessarily stress-free. Zappacosta acknowledges that inherent in hanging your own shingle is “less security” than what one might have in a traditional job.

With that in mind, the No. 1 priority for Thumbtack—which makes its money whenever a pro bids on work—is clear: “The first thing, and honestly the most important thing, is just to be a steady source for new customers . . . keeping their order book full,” Zappacosta explains. “Ideally, the dream is they tell us, ‘Hey, I want to find five to seven new customers a week . . . and Thumbtack is able to deliver on that request time and time again.”

At this point, he adds, Thumbtack is “better now than ever before” in meeting that vision. “But we’re still not as good as we need to be.”

Over time, Zappacosta has even bigger plans: becoming a source of back-office operations, and perhaps even health and retirement benefits, for those on Thumbtack. Another longer-term possibility is for Thumbtack to provide skills training.

Before any of that, though, Zappacosta figures that Thumbtack can at least begin to share information, which it routinely gleans, to help right the imbalance between supply and demand in various local service categories.

For example, “if you want to be a yoga instructor, do not move to San Francisco,” he advises. “San Francisco has a lot of yoga instructors. Move to Memphis, Tennessee. It turns out than in Memphis, there is a lot of demand for it and not enough pros.”

You can listen to my entire interview with Zappacosta here, along with Larry Buhl reporting on why entrepreneurship in America has been declining for so long, and Rachel Schneider commenting on the terrible toll exacted by the financial volatility that many families experience.

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Culture & Media

Landslide Union Victory at Los Angeles Times

By 11:30 a.m. Friday morning the votes were tallied in the first-ever union vote taken by L.A. Times editorial staffers: 248 in favor, 44 opposed.

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Los Angeles Times editorial staffers react to announcement of union-vote victory. (Photo: Bobbi Murray)

All was quiet nine floors above the noisy corner at Figueroa and Ninth Streets in downtown Los Angeles Friday morning. There, in a National Labor Relations Board hearing room packed with spectators, two NLRB staff members began counting ballots in the first union vote by editorial staff in the Los Angeles Times’ 136-year history. (The newspaper’s pressroom has had union representation since 2007.)

L.A. Times newsroom writers and editors who had worked for months building support for NewsGuild CWA representation watched (and tweeted) in silence as the counting began at 10:16 a.m., with union and company representatives present.

By 11:30 a.m. the vote tally revealed a landslide union victory— 248 in favor, 44 opposed. The election had been held in the Times‘ headquarters January 4, but the NLRB count was conducted today to include mail-in ballots.

The room erupted. “The ‘yes’ column was crazy!” said data journalist Anthony Pesce.

“I had this urge to laugh and cry—we had been working towards this for months,” said copy editor Kristina Toi. “This was a day we all knew was coming but at the same time it felt like it was never going to come.”

The Los Angeles Times is owned by Tronc, formerly Tribune Publishing Company. Editorial staff argued that Tronc management has challenged both working and journalistic standards, causing tumult at the top and eroding pay and benefits. Tronc’s chairman, tech CEO Michael Ferro, took a $5 million consulting fee for himself late last year, and the company also paid $4.6 million for him to use a private plane over seven months. “That $9.6 million could have been used to hire more than 70 reporters,” Steven Greenhouse, a former longtime New York Times labor reporter, wrote in an email to Capital & Main.

If Tronc executives continue trimming the size of the L.A. Times‘ newsroom, Greenhouse said, the resulting product “could result in an accelerated loss of subscribers, whether digital or paper.  And any further reduction of the editorial staff will be bad for the citizens of Los Angeles,” who count on the coverage of neighborhoods, City Hall, Sacramento and Washington. He called the vote “an emphatic statement that the staff “wants more of a voice in the future of the newspaper to which they’ve devoted so much of their talent and energies.”

It will take about a week to get formal NLRB certification, Pesce said. Union activists don’t expect ballot challenges from Tronc management and will begin surveying the newsroom to determine member priorities. “After that we need to move right into bargaining,” said Pesce.

In a statement, Tronc expressed support for the outcome, despite emails and leaflets it sent out during the Guild’s organizing campaign opposing the union:

“We respect the outcome of the election and look forward to productive conversations with union leadership as we move forward. We remain committed to ensuring that the Los Angeles Times is a leading source for news and information and to producing the award-winning journalism our readers rely on.”


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Trump Businesses Could Profit From Supreme Court Case

Co-published by International Business Times
Justice Stephen Breyer has said a case pending before the Supreme Court could cut out “the entire heart of the New Deal.” It could also enrich the Trump Organization.

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Illustration: Define Urban

The Trump Organization’s reported requirement of mandatory arbitration agreements makes it part of a growing trend of private employers requiring their workers to sign such agreements as a condition of employment.


Co-published by International Business Times

An upcoming U.S. Supreme Court decision could strip key rights from tens of millions of American workers — and also be a boon to the Trump Organization, which could benefit from the Trump administration’s reversal of the government’s position on the case. At stake in the case is whether employers can require their employees to sign arbitration agreements in which they give up their right to file class action lawsuits.

A ruling in management’s favor in National Labor Relations Board v. Murphy Oil would be no mere tweak of American labor law. Justice Stephen Breyer has said it could cut out “the entire heart of the New Deal,” which put in place the modern framework for labor and management relations.

In arbitration agreements employees surrender their right to file a lawsuit and must take complaints to a third-party arbitrator paid for by the employer. About 60 million people—more than half of the non-union private sector workforce—are covered by mandatory arbitration agreements, according to an Economic Policy Institute study. An estimated 25 million of these arbitration agreements also include “class action waivers,” in which employees give up their rights to band together to bring class action suits to address workplace disputes in the courts.


Photo: Jessica Goodheart

Celine McNicholas, an EPI labor counsel, said that without the ability to bring joint actions, workers often lack the means to bring wage, sexual discrimination and other claims forward — or to even attract the interest of lawyers.

“It’s very difficult for individual workers, particular low-wage workers, to find attorneys for those cases if they can’t aggregate their claims,” she said.

Attorneys arguing in favor of retaining the class action waiver say that the 1925 Federal Arbitration Act supports their position that such contracts are legally binding. The NLRB, which brought the suit against Murphy Oil—and labor attorneys like Michael Rubin—argue that employees’ rights are protected by the National Labor Relations Act and can’t be signed away.

Since 2003 Trump’s business ventures have been the target of at least seven lawsuits involving allegations of unpaid wages and overtime, missed lunch breaks, age discrimination and retaliation.

The class action waiver “strips workers” of basic rights established by federal labor law and therefore constitutes an “illegal contract,” according to Rubin, a partner at Altshuler Berzon, which filed a friend-of-the-court brief on behalf of 10 international labor unions in the court cases. (The court consolidated arguments in the Murphy case with arguments from two other similar cases, Epic Systems Corporation v. Lewis, Ernst and Young v. Morris.)

In a blog post, EPI’s McNicholas added there are serious policy implications to a ruling that favors employers, as many significant cases dealing with workers’ rights have been brought as collective or class actions.

Murphy Oil may be the last workers’ rights case the Supreme Court has the opportunity to consider for the foreseeable future,” she wrote.

Last June, the case’s defendants received a powerful boost from the Trump administration. That this happened says as much about the embrace of big business and this administration as it does about the precarious status of American labor.

Murphy Oil attracted media attention when President Trump’s acting solicitor general, Jeffrey Wall, reversed the government’s position last June. Under the Obama administration, the solicitor general had filed a petition supporting the NLRB’s view that the right to collective action was protected under federal labor law. (Unlike the solicitor general’s office, Trump’s NLRB has not changed the agency’s position on the Murphy case.)

Because of the government’s reversal, the Murphy case pits the solicitor general’s office against the NLRB. Seeing two representatives of the federal government argue opposite sides in a case was a first for Justice Ruth Bader Ginsburg in her 25 years on the bench, she told Georgetown University law students last fall.

What’s drawn less scrutiny is the degree to which this decision could potentially benefit the Trump Organization, the holding company for the president’s many business enterprises.

The degree to which the acting solicitor general’s reversal could potentially benefit the Trump Organization has drawn little scrutiny.

Since 2003, according to a Capital & Main review, Trump’s business ventures have been the target of at least seven lawsuits in which Trump employees achieved or sought class action status. These involved allegations of unpaid wages and overtime, missed lunch breaks, age discrimination and retaliation.

A USA Today investigation found 130 state and federal employment cases involving Trump companies dating back to the 1980s, a figure that Jill Martin, a vice president and assistant general counsel for the Trump Organization, insists is small for an organization of its size.

CBS News has reported the Trump Organization has tried to keep employee complaints out of the courts: Last August—two months after the acting solicitor general reversed his agency’s position on Murphy Oil — Trump Organization employees were told they must sign arbitration agreements if they wanted to keep their jobs.

It’s not been disclosed whether those arbitration agreements include the class action waivers at issue in the Murphy Oil lawsuit. But Capital & Main has viewed a copy of an arbitration agreement between a Trump Organization employee and management that contains a class action waiver. The worker at the Trump National Golf Club in Rancho Palos Verdes, California signed the agreement as a condition of employment in the spring of 2011, two and a half years into litigation against the oceanside golf club, according to the agreement that was viewed.

By signing the arbitration agreement containing the class action waiver, this employee gave up the right to go to court to address violations of the labor code, age discrimination statutes, Title VII of the Civil Rights Act, and the Fair Employment and Housing Act, a California statute used to fight sexual harassment and other forms of discrimination in employment and housing, according to the document that was viewed.

The Palos Verdes lawsuit received significant media attention during the 2016 presidential campaign because of sworn testimony by its lead plaintiff, Lucy Messerschmidt, who said she was fired after she complained about not being scheduled to work when Trump was on the premises, allegedly because of his “preference for young pretty women in the hostess position.”

Her claims were backed up in court documents by former employees, including Hayley Strozier, who said that Trump told managers “many times” that “hostesses were ‘not pretty enough’ and that they should be fired and replaced with more attractive women.”

The case, settled in 2013 for almost half a million dollars, resulted in service workers with little individual clout joining together to address a work environment where employees said they were regularly denied rest breaks, and where female employees claimed they faced discrimination. The lawsuit also led to lasting changes in the club’s operating practices, said Jeffrey Cowan, one of the attorneys who brought the suit against the club.

At the time Cowan filed the lawsuit, the club “was not being run in a very controlled or careful way,” he said. Now “they’ve got someone there who is riding herd on the managers and on the general business operations to make sure that California and federal law is followed.” The club’s management did not admit to any fault in the lawsuit, according to court documents.

The Trump Organization did not respond to a request for comment on this story.

Whether conditions at the club have improved would be hard for an outsider to verify. Some club staff say they have been told not to talk to the press, and, according to CBS News, employees throughout the Trump Organization were asked to sign non-disclosure agreements, which require them to keep any information about the Trump family confidential. It is not known whether the class action waivers are still in place at the Palos Verdes club, how many workers were asked to sign the agreement at the time or whether they are widespread in the Trump Organization.

The gag order may be unusually stringent, but the Trump Organization’s reported requirement of arbitration agreements makes it part of a growing trend of private employers requiring their employees to sign arbitration agreements as a condition of employment. The high court could issue a ruling as early as this month.

Additional research by Roxane Auer and Stephanie Rosenfeld.


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The Most Successful Union Organizer in America Thinks Traditional Organizing Is a Lost Cause

On the latest episode of “The Bottom Line” podcast, David Rolf of the SEIU explains why worker advocates need to move to a different model.

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David Rolf (Photo: SEIU)

If anyone has shown a keen understanding of how to unionize workers in America, it’s David Rolf.

In the 1990s, he was a key player in the Service Employees International Union winning the right to represent some 74,000 home care aides in Los Angeles—the largest union organizing campaign since the 1940s. In his present post, as president of SEIU Local 775 in Seattle, he has spearheaded growth from 1,600 to 45,000 members. In 2014, The American Prospect called Rolf “the most successful union organizer of the past 15 years.”

All of which makes Rolf’s take on the collective-bargaining system—that it is a relic, and that those who truly care about workers should stop focusing their efforts on promoting it—particularly provocative.

“I think we made a valiant . . . bet that if we put enough talent and enough resources behind traditional union organizing that we could somehow bring back the old model,” Rolf told me on the latest episode of my podcast, The Bottom Line. “It wasn’t the wrong theory to try necessarily. . . . But ultimately, when you try something over and over again and cannot achieve the results you want, it’s time to try something new.”

Instead of being sufficiently innovative, Rolf adds, most labor leaders have been “reinvesting and doubling down on our American system of enterprise-based collective bargaining since the union movement started to shrink in the early 1950s.” The result: “Through decades . . . we’ve seen unions grow weaker and weaker every year while continuing to repeat the same strategic directions.”

Today, less than 6.5% of the private-sector workforce in the United States is unionized, a steady drop from nearly 35% in 1955, 26% in 1975, and 10% in 1995.

To move forward, Rolf has plenty of ideas, including promoting worker ownership and introducing “ethical workplace” certification and labeling programs designed to appeal to socially conscious consumers.

Especially important, he believes, is to supplant firm-by-firm bargaining with a European-style paradigm in which representatives of the employees, employers, and the government set standards for wages and benefits throughout an entire industry or across a geographic area.

“The more there’s bargaining centralization,” Rolf says, “the less anti-union the culture is, the more union coverage you have in the workplace, the lower inequality is within the overall society, the lower the level of gender wage inequality is, and the more time people get for social and leisure activity.”

Another part of Rolf’s strategy has been to build advocacy organizations like the Fight for $15, which, in his words, has put forth a “bold and morally compelling demand” to elevate the pay of more than 20 million low-wage workers.

Whether a critical mass of labor leaders will ever agree with Rolf and push hard to replace the status quo is far from certain. But nobody, he says, should interpret the organizing triumphs that he and a relatively small number of others around the country have enjoyed as a sign that 20th century trade unionism can survive the 21st.

“Overall, the trend lines are not good,” Rolf says, suggesting that the current system is simply “marking time until its eventual extinction.”

“It’s not to say that you can’t find a few dozen black rhinos left in the wild somewhere,” he continues, “but that shouldn’t make us think that they’re suddenly going to take over the world.”

You can listen to my entire interview with Rolf here, along with Marty Goldensohn reporting on the state of employee stock ownership plans, and Kanyi Maqubela reflecting on why the toughest obstacle facing driverless cars is psychological, not technical.

 

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Study: California Economy Unhurt by Progressive Policies

A new report shows that California, with its higher minimum wage, Medicaid expansion and ambitious climate policy, has done better than 19 Republican-led states with lower taxes and fewer regulations.

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A California worker installing solar panels. (Photo: Danita Delimont/Alamy)

Reducing carbon emissions, raising low-wage workers’ incomes and increasing access to health insurance have not, as critics warned, led to job stagnation and lower GDP.


 

In a direct rebuke to anyone using the term “job-killing regulations,” a recent study shows that a group of progressive policies enacted since 2011 have had no negative impact on the California economy. If anything, the report, “California is Working: The Effects of California’s Public Policy on Jobs and the Economy since 2011,” shows that California has done better than several states that have lower taxes and fewer regulations.

The report’s author, University of California, Berkeley Labor Center researcher Ian Perry, examined 51 progressive policy measures – including environment, safety net, taxation, infrastructure and housing – that Perry coins the “California Policy Model,” or CPM. These policies include laws that provide a path to a higher minimum wage, expand Medicaid as part of the Affordable Care Act, raise taxes on corporations and promote California’s comprehensive and ambitious climate policy.

Perry chose 2011 as a starting point because that’s when Democrats captured majorities in the legislature as well as the governor’s office. Also that year, Proposition 25, which let Democrats approve a state budget with a simple majority vote rather than a two-thirds requirement, went into effect. That opened the floodgates to a wave of progressive policies that have been scorned by conservative politicians, pundits and think tanks.

Perry told Capital & Main that he set out to see whether critics of California’s progressive policies were correct — that, for example, California’s higher minimum wage would increase unemployment, or whether the state’s strict regulations on carbon would send businesses to other states in droves.

To do so, Perry compared wage growth and employment growth in California with statistics from 19 Republican-controlled states. But he also had to create a legitimate control group to weight factors like California’s tech boom, which might have skewed economic results, or a Republican-controlled state’s downturn, which may not have been due to conservative policies. To combat an apples-to-avocados comparison, Perry used a “synthetic control” method to weight data from Republican states to create an alternate California (or alt-California) in which CPM had not been enacted.

Perry found that California – the real California with its CPM – enjoyed higher total employment, private sector employment and GDP than the 19 Republican states and alt-California.

The study, by design, looked at the cumulative impact of policies instead of evaluating specific policies. “Still, one policy stood out to me,” Perry said. “My study found that the expansion of Medicaid through the ACA was one of the more pro-growth policies because it led to a greater demand in health care services and a growth in health industry jobs.”

The biggest takeaway from the study, Perry said, was that policies that make up the CPM – reducing carbon emissions, improving income for low-wage workers and helping more people access health insurance – have not, as critics warned, led to negative economic effects like job stagnation and lower GDP.

“There are warnings from conservatives that [progressive policies] will slow down economic growth, but California is a big piece of evidence that the fears are unwarranted,” Perry said.

Kansas, which went all in on supply side economics under Governor Sam Brownback, showed that the converse is true, that cutting taxes can sometimes kill growth, Perry said.

In a Washington Post op-ed, Jared Bernstein, chief economist to former Vice President Joe Biden, praised the study. He said that, while it didn’t convince him that there’s a direct line between progressive laws and job growth (a relationship Perry did not set out to prove), the study did, “in tandem with tons of other research, convince me that these progressive interventions do not hurt growth.”

The Berkeley study was released as Republicans on Capitol Hill pushed a tax bill heavily weighted to tax cuts for corporations and wealthy individuals, legislation that a majority of Americans are firmly against.

Despite the report’s generally rosy economic picture, Perry points out that some issues threaten California’s prosperity. First, progressive labor standards need to be enforced to combat rampant wage theft in California’s low-wage industries. Second, the effect of very high housing prices in much of the state could undermine some economic gains.

“High housing prices and lack of supply could force more people to live farther away from their jobs, which would increase carbon emissions and make it harder for [businesses] to attract workers,” he said.

And the possible repeal, or undermining of, the Affordable Care Act, could undo some of the economic benefits of the past seven years, Perry said. Another study from the UC Berkeley Labor Center earlier this year showed that California would have lost more than half a million jobs if the Graham-Cassidy repeal-and-replace legislation had passed.


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