Report to Newsom: support California workers with fair pay and benefits

A 750,000-square-foot Amazon fulfillment center. (Photo by Scott Olson/Getty Images)

Shoring up working conditions at the bottom of the economy will be a priority for state political leaders. A new report could shape policy.

By Sasha Abramsky, Capital & Main

This article was produced by the award-winning journalism nonprofit Capital & Main. It is co-published here with permission.

Margaret Caldwell has worked for nearly 14 years as a certified nursing assistant at a nonunionized wellness center in Northern California, earning less than $16 per hour.

At the moment Caldwell works part time and so doesn’t qualify for the center’s health care plan – even though during some months of the pandemic she was assigned to the center’s red zone, working with COVID-positive patients. But, she recalls, when she did work enough hours to get health benefits, every paycheck had $140 deducted as her contribution to the insurance premiums. And then, when she needed foot surgery, she still had to pay a $4,000 deductible before the insurance even kicked in.

A couple of years later that deductible had increased to $6,000 and, the 55-year-old CNA recalls, “I was avoiding going to the doctor. I was so afraid [of high bills] — because I was still paying off that foot surgery.”

Caldwell, who stretches her pay as far as she can and shares a small apartment with her mother, has in recent months been involved in attempts to unionize her workplace, arguing a labor contract would prevent arbitrary dismissal of employees and lead both to higher wages and to better benefits for workers.

Over the coming years, shoring up working conditions at the bottom of the economy will likely be front and center for political leaders in California. Indeed, participants in the Future of Work Commission — ranging from Labor Secretary Julie Su to trade union leaders, technology innovators, economists and business representatives — believe fundamental questions of equity and economic betterment for the state as a whole can’t be answered without bolstering work conditions and labor protections at the lowest levels of the state’s economic pyramid.

The commission’s new reportA New Social Compact for Work and Workers, was released this week, the culmination of a year’s work.

The FWC was established by Gov. Gavin Newsom, under the auspices of the state’s Labor and Workforce Development Agency in late 2019 to set in place “moonshot goals” that will fundamentally reimagine and restructure the work environment in California over the coming decade. Its members, appointed by the governor, include union leaders such as Service Employees International Union (SEIU) president Mary Kay Henry; think tank members and academics focusing on labor issues; a number of technology and business leaders; state legislators; and other public officials. (Disclosure: SEIU is a financial supporter of this website.)

Anmol Chaddha, research director of the Equitable Futures Lab at the Institute for the Future, is one of the chief designers of the FWC framework, which established the basic investigative principles and priorities of the commission at public hearings held up and down the state before the pandemic, and during virtual meetings over the past 10 months. Chaddha had long thought that the conversation about the future of work was too skewed toward a simplistic discussion of technology change and automation.

“Who’s doing work? Where is it taking place? How are workers being compensated?” he asks today. Chaddha believes that technological discussions miss two large aspects of the problem.

The first is that working conditions are being increasingly regimented in a way that degrades workers and pushes them to their physical breaking points. (Witness Amazon using algorithms to determine precisely how many items per hour each worker should be able to move.) The second is that, increasingly, entire workforces are being redesigned around casualized, nonbenefitted, gig work. Unless tackled, these trends threaten to undo many of California’s self-proclaimed progressive policy goals.

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This is especially evident in the wake of Proposition 22’s passage this past November and its greenlighting of the hiring of “independent contractors” in place of salaried employees, which has had a profound impact on the state’s rideshare drivers.

“A lot of us aren’t able to get health care coverage,” says 53-year-old Cherri Murphy, who drives for Lyft in the Oakland area. “If there were standards in place to ensure gig workers could get health care, that’d improve our quality of life exponentially.”

Expanding other basic workplace benefits would also dramatically change the labor environment for Murphy and her fellow drivers. “We’d be [eligible] for workers’ comp. With gig drivers, we know there’s been an increase in deaths during the pandemic. Workers’ comp and unemployment insurance would be wonderful. We would have the right for collective bargaining — the ability to negotiate our wages. Right now, our wages are unpredictable. We’d create economic sustainability for our drivers, which is important in a democracy.”

A crucial question for Chaddha, as he wrestled with what the FWC should look like, was how to set in place policies and regulatory reforms that would “upgrade jobs” such as Caldwell’s and Murphy’s instead of casualizing them. How could it be made easier for workers to organize into trade unions and, in consequence, to push for higher wages? How could labor protections be extended to gig workers?

Or, for domestic workers and others who work for multiple employers simultaneously, how could portable benefits systems be developed so that they were covered by the social safety net? And, given the dire economic impact of the pandemic, how can the economy be rebuilt, post-pandemic, in a way that provides jobs and labor protections to the millions of California workers whose work and financial situations were upended by more than a year of economic disruption?

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The National Domestic Workers Alliance (NDWA), which has worked with FWC members to develop recommendations, and whose deputy director, Mariana Viturro, is an FWC member, has in recent years piloted a benefits program, called Alia, that pools benefits contributions paid in by employers of hourly workers, such as house cleaners. This gives employees the ability to claim paid sick leave, holiday time and other benefits. But, until recently, it has been a voluntary program, paid into by some conscientious employers and accessed by relatively few workers. Now, the alliance is pushing to make these programs mandatory.

The new FWC report recommends that the state develop legislative tools to build up a portable benefits system for low-income hourly workers. If it does so, this will be one of several tangible workplace reforms — one of Newsom’s “moonshot goals” — triggered by the FWC’s yearlong deliberations and public hearings. It will also bring the state in line with Philadelphia, where the city council is on the verge of adopting a portable benefits system.

The need for these changes is stark. In California, the world’s fifth largest economy, millions of workers — especially immigrant workers, many of whom exist largely outside of the social safety net — are caught in low wage, poor benefits traps. Viturro estimates that there are perhaps 400,000 people in the state earning their livings as domestic workers. Add in low paid employees and hourly laborers in restaurants, in construction, in agriculture and in small mom-and-pop businesses, and the scale of the challenge becomes clear.

The COVID crisis has only exacerbated this – and made it more immediately visible. “The pandemic has highlighted the need for a basic safety net for all workers,” argues Viturro.

A 2019 Brookings Institute report found that, depending on where they lived, even if they reached the legal minimum wage, many low-wage workers still weren’t making an income that took them to where they needed to be so they weren’t economically insecure and having to juggle bills.

Yet, even though California has legislated one of the most progressive minimum wage laws in the country, which will increase that minimum to $15 per hour for most employees by next January, that still leaves a poverty gap between what is legally required of employers and what is, in practice, needed by workers. The MIT living wage calculator finds that in high-cost regions of the state, a single adult in California with no children would need to make more than $18 an hour to scrape by, and, if they have children the living wage threshold increases significantly beyond that.

“Fifteen dollars is no longer enough,” says Natalie Foster of the Oakland-based Economic Security Project. Given that, she argued it was vital for the FWC to address ways of shoring up workers’ economic security – through protecting and increasing their access to noncash benefits; through tax credits from the state; through making it easier to unionize; and through creating job quality indexes that allowed workers to easily identify which industries and employers were creating desirable workplace conditions.

For trade unions such as the SEIU, several members of which were involved in the Future of Work Commission deliberations, being part of the FWC conversation has opened up a window to visualize what the state’s work environment could look like with enough political capital invested in structural changes. “There is really a commitment to try to have the visions and goals in the FWC report become reality,” says Kristin Lynch, director of strategic growth at SEIU California.

The past year of FWC conversations has been “an opportunity to take a deep dive” on labor issues, says Steve Smith, a California Labor Federation spokesman. “How do we improve the lives of workers, make work safer, more efficient and address income inequality?”

The FWC’s recommendations were sent to Newsom’s office on March 2 and the ball is now firmly in the governor’s court as he seeks to translate a series of well-intentioned recommendations into specific legislative and regulatory changes that can, over the coming years, transform the lives of California’s low wage workers.

The changes can’t come soon enough for Danielle Eisenstaedt, a full-time CNA at a state-listed institution for mental disease. “One of the big issues is the livable wage. Where I work, we’re short-staffed all the time. A lot of people I work with work two jobs, which means they don’t get a lot of time for their families or energy to give to their clients. You see a lot of people burn out and leave the profession,” Eisenstaedt explains. “There’s usually a big disconnect between the administration and the licensed staff: ‘Work harder, do more, don’t be sick — don’t be human.’”

By contrast, she argues, “When you’re paying people what they should be paid, more people will want to do the job. You won’t be short of staff. The feeling of reward is there, of being valued at a monetary level.”

For Chris Hoene, executive director of the nonprofit California Budget and Policy Center, the FWC report offers a chance for California to stamp a progressive mark on the American workplace for years to come. “What the future of work looks like will be fundamentally defined in California likely before it’s defined elsewhere, both because of the nature of the industries that started and have thrived here, and because of the state’s progressive politics,” Hoene argues.

“This is fundamentally a fight about whether government is going to require that employers take care of their workers,” he continues. “And, if the employers’ answer is that they are not, eschewing the traditional employer-employee bargaining model in particular, what structures are needed to transform that model in future public structures?”

The FWC’s report is, Hoene says, a reset moment, an opportunity after years of escalating inequalities “to step up, step out, and lead on this with a groundbreaking new model that recognizes the importance of labor and industry.”

Copyright 2021 Capital & Main

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