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Labor's Edge: Views from the California Labor Movement

Labor and Business Standing Together to Make Progress for California

by Caitlin Vega, California Labor Federation

It is not every day that labor and business come together to co-sponsor legislation. But the truth is, we have a lot of shared interests. We all care about creating and protecting jobs, ensuring a skilled workforce and revitalizing our battered economy. This year, the California Labor Federation sponsored two bills with the business community to further these shared goals.

SB 469 (Vargas) takes aim at the supercenters that have sprung up throughout our state. Although developers always claim these supercenters will bring jobs, we have seen at the local level that they often bring more harm than good. Because of their market dominance, supercenters generally put their competitors out of business. The first to go are the small businesses that can’t compete with a supercenter’s predatory pricing. The next are the traditional grocery stores that provide middle-class jobs to longtime employees and can’t compete with a supercenter’s poverty wages. So rather than create new jobs, a supercenter typically replaces existing jobs -- and in fact, results in fewer jobs, eliminating 1.5 jobs for every one new one created.

Now, there's no doubt supercenters have their plusses and minuses, but if you've ever witnessed a community debate when a new supercenter comes to town, you know that facts are rarely discussed. Instead, the supercenter wines and dines local electeds, makes tons of promises about jobs and revenue, and is never fact-checked or asked hard questions.

That’s why this year, the California Labor Federation and Small Business California came together to take on the goliath of the superstores. We co-sponsored SB 469, which requires that a supercenter developer pay for an independent study of how a supercenter will impact jobs, wages, and local businesses prior to approval. This is not about stopping projects or causing endless delays. And local governments are still free to approve or deny any project they want. We just want these decisions to be based on facts, not promises.

We think strong communities are made up of workers who receive healthcare coverage through thier employers, and don’t have to depend on state-funded programs. We know small businesses keep revenue local, spurring greater economic activity. That’s why, on our side, we welcome independent analysis of the economic impact of these supercenters.

The other side says supercenters bring all sorts of great benefits -- but if supercenters are so good for a community, what are they so worried about? Why do they oppose any increased scrutiny of how their business practices impact the economy?  We are proud to stand with Small Business California, the Neighborhood Market Association, the Independent Booksellers, and many others to say, “Show me the facts.”

Supercenters are not the only thing we can agree with employers on. We all know the urgency of getting laid-off workers back to work and getting workers trained to find steady employment in this shaky economy. When federal training dollars under the Workforce Investment Act (WIA) were directed to local Workforce Investment Boards (WIBs), we assumed that money would go straight into training laid-off workers. We were shocked to find that some WIBs spent ZERO percent of that money on training and instead used it for administrative costs.  

Just as labor wants workers to have the skills they need to find jobs, manufacturers want a skilled workforce. So we joined with the State Building Trades and the California Manufacturers to sponsor a bill, SB 734 (DeSaulnier) requiring that this WIA money go directly to job training.  We didn’t know we were headed right into a hornet’s nest, where local WIBs reacted in strong opposition to any minimum training requirement. But we reached out to community partners who provide the training, and reached a deal that protected existing services and locked in a minimum of 30% of the funds committed to hard skills training. Now, manufacturers willing to invest in California know there will be skilled workers here who are ready to step in to the jobs of tomorrow.

These partnerships show that while the Chamber of Commerce may call any bill that helps workers a “job killer,” the employer community is not monolithic. Small businesses care about our local communities and are often ignored by their own trade associations. Manufacturers create the jobs that can rebuild our economy, and we plan to work closely with them to make that a reality.

When times are so tough, we need to look for any and all opportunities to work together and make things better for California workers.

Posted on 09/20/2011Permalink

More posts by Caitlin Vega

Reader Discussion

I am a lifelong supporter of labor and the union movement but I believe the labor support for SB 734 is extremely misguided and misleading.

The driving force for WIA funding is to place job seekers into employment. If SB 734 is enacted it would specify a pre-determined percentage of funding be utilized for the sole purpose of training. Said funds are currently being used to bring in additional leveraged and/or matching funds that support a broad array of employment services and programs, in addition to training.

Decisions on how and where resources are best deployed are issues that should not be legislated by the State. Chief Elected Officials should have the flexibility to determine how to best use resources at the local level. These issues should be taken up by the California Workforce Investment Board with local input. State legislation of activities would limit employment services which are absolutely vital to our local economy.

Often our local WIA office finds that the most necessary service to the unemployed is basic support such as gas money to get to a new job until the first paycheck or a pair of steel-toed boots for a new job. These are expenses which are often beyond the means of the long-term unemployed but are a quick resolution to a simple problem.

Nearly 511,000 Californians have exhausted their unemployment insurance benefits and simply want to get back to work.  In Amador County our current unemployment rate, as of August 2011, was 12.8% or 2,150 individuals. The experience of our local One-Stop, Job Connection Amador, is that the greatest demand from their customers is for career advice, counseling, labor market information and education in job search skills. Integral to job search are the computers, internet connection, printers, fax and phone available to them at the One-Stop. Establishing a pre-determined “one size fits the entire state” requirement for one type of service (such as long-term training) could result in the elimination of Business Services staff which currently supports our most heavily accessed services.

A number of our regional WIA offices are experiencing customer levels as much as 5 times more than previous years.  Legislating program activities on a state basis would most certainly limit current employment services to our local job seekers, including the long term unemployed. We believe that the most vulnerable populations will be negatively impacted by SB 734 because those most at risk, e.g. the long term unemployed who are no longer receiving unemployment compensation, cannot afford to enter a training program, even if the program is paid for by WIA dollars. Emphasis would unfortunately switch to the long-term expensive training of the few at the expense of more significant services to the many.

There are some who suggest that Labor is pushing this bill simply to get more WIA training dollars into their own Union training programs. I sincerely hope that is not the case.

Pamela Hill, Amador County,CA

at 7:52 am on Wed, Sep 21, 2011Posted by Pamela Hill

Despite an apparent misperception, SB734 takes no money out of the hands of local WIBs or local elected officials. Instead it sets a state-wide minimum bar on how much local WIA is invested in skills training. Local WIBs still make policy on what kinds of training to send participates to, who to invest those limited training dollars on, and what regional industry sectors get the focus. The chief local elected official (mayor or lead county supervisor) either approves the WIB’s plan or asks it to go back to the drawing board. Unions have influence on this outcome the same way that business does—by participating on local Workforce Investment Boards, which by law are 51% business and 15% labor. 

A second critical reality to point out is that SB734 has broad support, not just from labor. It is co-sponsored by the California Manufacturers & Technology Association, Jewish Vocational Services LA, and the Chicana Service Action Center.  It also has broad support from organizations like CLASP, National Council of La Raza, Council of Goodwill Industries, and the Pacific Asian Consortium in Employment.

It’s true that the Great Recession had a profound impact on working families. Officially, over 2 million Californians are unemployed, a quarter of whom have been out of work for two years or longer. The numbers are much higher when including the under-unemployed and discouraged. The reality is that most of these folks are not going to return to their former occupations. They will need to re-skill for new jobs and careers. 

The bill also is strongly supported by nationally recognized academics who recently evaluated WIA in several states on behalf of the US Department of Labor. Those studies clearly demonstrate that low-intensity services geared to fast re-employment are inappropriate for low-income and low-skilled workers and for those unemployed for long periods. Yet EDD reports that this is how California spends the vast bulk of its local WIA dollars. (Some local WIBs spend 80% or more on things like overhead, equipment, and job search). This is not the benefit we are supposed to achieve from local flexibility – a one-size-fits-all of the most inappropriate services.

This same academic research demonstrates that, relative to other WIA services, industry-based skills training is most beneficial to increasing employability and longer-term job outcomes. This is why Florida, Illinois, Michigan, Minnesota, Pennsylvania and Wisconsin have all adopted laws or regulations to drive more local WIA funds into skills training. We also know that labor and business will come to the table to partner, and will bring resources, if local WIBs have their own training dollars to invest.

We very much agree that there are far more services in addition to training that are necessary to help workers get back on their feet. That’s why we worked with many stakeholders, including local WIBs, to substantially reduce the training requirement from 50% of the local WIA funds to a phase-in approach of 25% (just above current state average) by July 2012 to 30% by July 2016. The bill also allows for a credit up to 10% against this requirement for leveraged dollars – training funds brought to the table by business, labor, community colleges, adult schools, and other public programs.

With the credit for leveraging, the minimum requirement is well below what most WIBs already invest in training.  The vast bulk of the local WIA funds can still be invested in those services the blogger identified as so crucial. SB 734 is a small step toward investing our limited federal dollars in what we know works best, but it’s an important step nonetheless.

at 3:29 pm on Wed, Sep 21, 2011Posted by California Labor Federation

Thank you so much for posting my comment! And thank you, even more, for your considered response. But, please, you do not have to call me “the blogger”. You may call me Pamela! I am your friend. I always shop at Union groceries, I have my own group on Facebook called “I don’t need/want anything so badly that I will buy it at WalMart” (please join us!) and I send pizzas to workers demonstrating for collective bargaining rights in Madison. But I do disagree with you on SB 734.
I am VERY sympathetic to the needs of workers (and industries needing those workers) for specific training for manufacturing and industrial jobs especially. But I am in Amador County where there are very few jobs which meet that definition or employers who want pre-trained workers. Were that it were otherwise! Part of the goal of WIA is to provide services to job seekers for employment in their own community or a community where they would like to re-locate. It is inappropriate for us to be training people for jobs which are not available in our own community. That is why the federal WIA legislation specifically designates the local Chief Elected Officers and Local WIBs to determine how the WIA funds will be spent within any given community. SB 734 removes that autonomy and forces our rural office to use the same criteria for expenditures as the industrial centers of California such as Oakland, Los Angeles and Riverside-San Bernadino. California is the 8th largest economy in the entire world and this legislation takes the tactic that it is one big identical economy. It is not.
Parenthetically, it is my understanding that the President’s Jobs Act mandates that as a condition of receiving UI benefits, recipients must go to the career centers for services; for California, this means potentially 500k additional folks coming through the doors for services, at a time when a one-size-fits-all percentage of funding is being redirected to training.
I realize that there are organizations other the California Labor Federation who support SB 734. There are also a lot of organizations who oppose the legislation. A partial list includes:
1.  California Workforce Association
2.  South County Central Labor Council
3.  Stephen Levy, Economist
4.  California State Association of Counties
5.  League of California Cities
6.  Regional Council of Regional Counties
7.  Association of California School Administrators
8.  California School Boards Association
9.  Madera County Office of Education
10.  Youth Build, Century Center for Economic Opportunity, Inc.
11.  Central Valley Business Incubator/Small Business Development Center
12.  Burbank Chamber of Commerce
13.  South Bay Association of Chambers
14.  Inglewood Airport Area Chamber of Commerce
15.  Hawthorne Chamber of Commerce
16.  Verdugo Hills Hospital, Inc.
17.  Los Angeles County Board of Supervisors
18.  Merced County Board of Supervisors
19.  San Bernardino County Board of Supervisors
20.  Mayor, City of Long Beach
21.  Mayor, City of Hawthorne
23.  Mayor, City of Sunnyvale, a consortia of seven cities with oversight of the NOVA WIB:
•  Cupertino, Los Altos, Milpital, Mountain View, Palo Alto, Santa Clara
24.  South Bay WIB
25.  Humboldt WIB
26.  Madera County WIB
27.  Work 2 Future
28.  Deloitte & Touche
29.  Adava, LLC
30.  Borgata Recycling
31.  California Waste Solutions
32.  Technology Business Accelerator Silicon Valley
33.  Lavante, Inc.
34.  Chromatic Lithographers
35.  Cygnet Stamping & Fabricating
36.  Innovative Rotational Molding, Inc.
37.  Sierra Oak Auto Body
38.  Verdugo Jobs Center
39.  Amador County Board of Supervisors

We all want the same thing: the best trained and equipped American workforce. This legislation is not the best means of achieving that goal. I hope we can all work together to find a better solution. Thank you so much for allowing me to participate in this conversation.

Pamela Hill, Amador City, CA

at 10:53 am on Thu, Sep 22, 2011Posted by Pamela Hill

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