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Capital & Main
Capital & Main
Mark Kreidler

Newsom Said Cost Made Him Veto Unemployment Pay for Strikers. Unions Say It Was Disrespect.

California Gov. Gavin Newsom at a press conference on February 1 in Sacramento. Photo: Justin Sullivan/Getty Images.

California Gov. Gavin Newsom vetoed a widely discussed bill that would have provided unemployment insurance to striking workers, but he didn’t much want to talk about it.

The governor’s rejection of SB 799 was announced on a Saturday night in a batch news release that rounded up the fates of more than three dozen pieces of legislation. In a statement accompanying the veto, Newsom cited concerns about adding to the federal debt associated with the state’s Unemployment Insurance trust fund.

“I have deep appreciation and respect for workers who fight for their rights and come together in collective action,” the governor’s statement added.

That wasn’t immediately evident to the labor union groups who pushed for and supported the bill. According to Lorena Gonzalez Fletcher, head of the California Labor Federation, Newsom refused to meet with any of them as they attempted to persuade him to sign the measure.

“He had time to spin room the Republican Debate” in Simi Valley, Gonzalez wrote on X, formerly known as Twitter, referring to Newsom’s appearance at the debate on behalf of the Biden campaign. “But [he] couldn’t even sit down with the countless workers advocates & union leaders pushing for this (and other vetoed) bills.” Newsom “wouldn’t even allow us to make our case. That’s a new level of disrespect,” she wrote.

Gonzalez also issued a statement in which she said the veto “tips the scales further in favor of corporations and CEOs. … At a time when public support of unions and strikes are at an all-time high, this veto is out-of-step with American values.”

Both Gonzalez and the bill’s author, State Sen. Anthony Portantino (D-Burbank), said they will bring similar legislation next year. But it’s highly unlikely the state’s UI fund debt will be resolved anytime soon — and the same powerful business groups that opposed the idea this time around, including the California Chamber of Commerce, will undoubtedly push back on it again.

Amid a “hot labor summer” that is spilling into fall (and this week may incorporate a massive strike against healthcare giant Kaiser Permanente), the impetus for SB 799 appeared to be anchored in a Hollywood job action. Members of the Writers Guild of America had been on strike against the major studios for more than four months when the bill passed the Legislature in September, and the studios’ reported plan to starve out the writers was seen by many as a perfect example of how the labor bargaining system is skewed in favor of corporations over workers.

In reality, SB 799 was unlikely ever to apply to the WGA workers this time around, because the measure wouldn’t have taken effect until Jan. 1. The WGA settled its strike on Sept. 24 after gaining major concessions from the studios on wages, staffing and restrictions on the use of artificial intelligence as a means of limiting writers’ pay or eliminating their jobs.

But the bill was no symbolic gesture. For hotel workers in Los Angeles, part of the UNITE HERE Local 11 job action against nearly 60 area properties, drawing up to $450 per week in unemployment insurance might allow them to picket more often without fears of going broke. As it is, the union is striking hotels more randomly and for short periods of time, which injects an element of uncertainty but also prevents workers from going too many days without pay.

Some of those close to Newsom suggested that the governor didn’t want to be seen as putting his thumb on the scales of the negotiation between the Hollywood studios and the writers, since that was the highest-profile strike of the summer. But if anything, a bill like SB 799 would only marginally close the gap on the enormous advantage that corporations hold over workers generally in such labor negotiations.

“The federal labor laws are 50 years out of date, and they overwhelmingly favor management over labor,” Occidental college professor and labor expert Peter Dreier said this summer. “Businesses willfully break the law, knowing that the fines they’re going to pay — if they pay any at all — are the small cost of doing business.”

Such lax enforcement can prompt little issues, like NBCUniversal allegedly obstructing a picket path by setting up a construction zone near one of its studios. More seriously, companies sometimes simply refuse to negotiate or do so in bad faith, knowing that the resulting unfair labor claims against them will take months or years to be resolved — and with little penalty.

Both New York and New Jersey have laws on the books that provide UI to striking workers. Portantino’s proposal limited the benefit to those who’ve been on strike for two weeks or longer, which labor experts say dramatically shrinks the eligible field. Indeed, the Assembly Appropriations Committee’s bill analysis estimated the cost to the state as “likely in the low millions to tens of millions of dollars.”

Ignoring that legislative analysis, Newsom, in his veto, suggested that California’s federal UI debt could hit $20 billion by the end of the year. But SB 799 would have had only a modest financial impact, while it could have given striking workers “a small piece of security to working families that is needed and deserved,” Portantino said in a statement. Still, in a year in which several pro-labor pieces of legislation will become law, this bill was too rich for the governor’s blood.

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