Wage inequality is surging in California, and not just on the coast. Here’s why

From today’s Los Angeles Times:

Wage inequality has risen more in California cities than in the metropolitan areas of any other state, with seven of the nation’s 15 most unequal cities located in the Golden State.

San Jose, with its concentration of Silicon Valley technology jobs, had the largest gap of any California metro area between those at the top of the pay scale and those at the bottom. It ranked second in the nation after the suburb of Fairfield, Conn., home to wealthy New York financiers, according to a new analysis of 2015 U.S. Census data by Federal Reserve economists. San Francisco and Los Angeles also ranked high on the list.

More surprising, perhaps, is the inclusion of Bakersfield, where high-wage engineering jobs are juxtaposed with poverty-wage farm work.The heavy concentration of California metro areas is a striking turnabout from 1980, when just three figured in the top 15.

As inequality has soared across the United States, most sharply since the 1980s, it has been the focus of widespread debate and become a hot political issue. But less attention has focused on dramatic geographical differences in inequality.

“Wage inequality … has risen quite sharply in some parts of the country, while it has been much more subdued in other places,” wrote Jaison Abel and Richard Deitz, economists at the Federal Reserve Bank of New York, who titled their report, “Why Are Some Places So Much More Unequal than Others?

Large cities with dynamic economies tend to have higher wage disparities, while midsized cities with “sluggish economies” are less unequal because they attract fewer high-wage workers, the authors found.

Read the complete article here.

CA passes bill allowing college athletes to profit from endorsements

From today’s Los Angeles Times:

California became the first state to require major financial reforms in college athletics on Monday after Gov. Gavin Newsom signed into law a measure that allows players to receive endorsement deals, despite the National Collegiate Athletic Assn. calling the move unconstitutional.

Other states have proposed similar measures to pressure the NCAA, but so far only California is on a collision course with the governing body of college athletics, a billion-dollar organization that has repeatedly opposed efforts to allow players to profit off their sports.

Senate Bill 206 by Sen. Nancy Skinner (D-Berkeley) prohibits the NCAA from barring a university from competition if its athletes are compensated for the use of their name, image or likeness beginning Jan. 1, 2023. The University of California system, California State University schools, Stanford and USC all opposed the bill, saying they feared it would increase costs to ensure compliance with the law and lead to fines or even expulsion from the NCAA.

Newsom said university presidents and athletic boosters contacted him and urged him to veto the bill but that he felt strongly the state needed to address the racial, gender and economic injustices ingrained in college athletics.

“I have deep reverence, deep respect for the NCAA and college athletics,” Newsom said Monday. “I just think the system has been perverted, and this is fundamentally about rebalancing things. It’s about equity, it’s about fairness, and it’s about time.”

Read the complete article here.

CA Senate Approves State Rent Control Capping Increases at 5% Plus Inflation

From today’s KTLA5 News Online:

California lawmakers on Tuesday moved to cap annual rent increases statewide for most tenants as a limited housing supply in the country’s most populous state continues to drive up the cost of living while pushing more people to the streets.

The California Senate voted 25-10 to cap rent increases at 5% each year plus inflation for the next decade while banning landlords from evicting tenants without just cause. Democratic Gov. Gavin Newsom says he will sign the bill into law, but first it must survive a final vote in the state Assembly where the California Association of Realtors is pushing to defeat it. Lawmakers must act by Friday.

California’s largest cities, including Los Angeles, Oakland and San Francisco, have some form of rent control, but a state law passed in 1995 has restricted new rent control laws since that year. In most places, landlords can raise rents at any time and for any reason, as long as they give advance notice.

In Pomona, about 30 miles east of Los Angeles, Yesenia Miranda Meza says her rent has jumped 20% in the past two years. Monday, she marched with other tenants through the halls of the state Capitol chanting: “Once I’ve paid my rent, all my money’s spent.”

“I’m a rent increase away from eviction, and that’s with me having two jobs,” she said “So if this (bill) doesn’t go through and I get another rent increase, I really don’t know what I’m going to do. I’m either going to be homeless or I’ll have to cram into a room with a whole bunch of other people.”

Opponents have likened the proposal to rent control — a more restrictive set of limitations on landlords. California voters overwhelmingly rejected in a statewide ballot initiative to overturn the 1995 law last year.

Read the complete article here.

Opinion: You Call It the Gig Economy, but California Calls It “Feudalism”

From today’s New York Times:

Labor leaders cheered in the balcony and lawmakers embraced on the floor of the California Senate on Tuesday as it passed a landmark measure that defines employees, a move that could increase wages and benefits for hundreds of thousands of struggling workers.

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But the bill is as much a starting point as an endgame: It will drive a national debate over how to reshape labor laws fashioned in the industrial era of the 1930s to fit a 21st-century service and knowledge economy.

With the measure, which Gov. Gavin Newsom says he will sign, California will lead in a shift that will likely redefine the roles of governments, unions and worker organizations. Just as federal labor laws were promulgated to help the country recover from the Depression, the imperative to extend basic guarantees like a minimum wage stems from the staggering income inequality in California, the state with the highest poverty rate in the country.

The new paradigms will need to fit not the relatively stable industrial work force of the last century but a gig economy in which workers are increasingly likely to hold multiple jobs or report to no workplace at all. California lawmakers took a major step in constructing the foundation of such a model with the new measure, which presumes workers are employees, entitled to all concomitant protections and benefits, unless they meet strict criteria as truly independent contractors.

Read the complete article here.

Sweeping bill rewriting California employment law sent to Gov. Newsom

From today’s Los Angeles Times:

California lawmakers rewrote the rules of employment across a wide swath of industries Wednesday in legislation that could grant hundreds of thousands of workers new job benefits and pay guarantees.

After vigorous debates over what occupations should be exempted, Assembly Bill 5, which curbs businesses’ use of independent contractors, gained final approval in the state Senate and the Assembly and was sent to Gov. Gavin Newsom, who has pledged his support.

The 6,700-word bill is one of the most controversial of the year. It could upend the relationship between workers and bosses across businesses as varied as ride-hailing tech giantsconstruction, healthcare, truckingjanitorial servicesnail salonsadult entertainment, commercial fishing and newspapers.

The message of the legislation, said its author, Assemblywoman Lorena Gonzalez (D-San Diego), is “we will not in good conscience allow free-riding businesses to continue to pass their own business costs on to taxpayers and workers. It’s our job to look out for working men and women, not Wall Street and their get-rich-quick IPOs.”

Contractors, including many in multibillion-dollar technology companies, are not covered by laws guaranteeing a minimum wage, overtime pay, sick leave, family leave, unemployment and disability insurance, workers’ compensation and protection against discrimination or sexual harassment. Nor do businesses pay into Social Security or Medicare for contractors.

After months of lobbying by the California Chamber of Commerce and a score of trade associations, AB 5 exempted a host of occupations — but not platform-based gig giants Uber, Lyft, DoorDash, Postmates and others that mounted a powerful push to avoid reclassifying their workers as employees with labor law protections.

Read the complete article here.

A California bill that would ban forced arbitration heads to Gov. Newsom

From today’s Los Angeles Times:

When companies in California tell job candidates they have to give up their right to sue the company for most disputes, a bill headed to Gov. Gavin Newsom’s desk would let the candidates decline without fear of losing their job offer.

The bill is the latest effort by state governments to limit private companies from imposing forced arbitration agreements, whose surge in popularity has contributed to the difficulty of workers suing their bosses for sexual harassment in the era of #MeToo.

Federal law and some U.S. Supreme Court decisions do not let state governments ban these arbitration agreements. Supporters argue that the bill in California would not ban arbitration agreements, but make them optional: Employees could sign them, but they may not be punished for declining to. The bill would not affect existing arbitration agreements and would apply only to people hired after Jan. 1, 2020.

Still, Republicans and the state’s business groups said the bill is illegal and would probably be challenged in court. The state Senate voted Thursday to approve the bill.

The Economic Policy Institute says more than 67% of all employers in California require workers to sign these arbitration agreements. Companies like these agreements because arbitration costs less than going to court and moves faster. Labor groups argue that arbitration puts employees at a disadvantage because the employees don’t have an attorney and are subject to the ruling of an arbitrator who is often selected and paid for by the company.

Read the complete article here.

The 9th Circuit just blew up mandatory arbitration in consumer cases

From today’s Reuter’s Online News:

In a trio of rulings on Friday, the 9th U.S. Circuit Court of Appeals blessed a tactic that will allow plaintiffs lawyers litigating California consumer class actions to defeat defense motions to compel arbitration. If appellate rulings in the three cases – Blair v. Rent-A-Center, Tillage v. Comcast and McArdle v. AT&T Mobility – hold up, they represent a dramatic twist in corporations’ long-running, and mostly successful, campaign to force employees and consumers to arbitrate their claims individually instead of banding together in class actions.

If you don’t believe me, just ask the U.S. Chamber of Commerce and the National Association. In an amicus in one of the cases, the pro-business groups warned that under the theory the 9th Circuit just adopted, plaintiffs lawyers will be able to evade arbitration in “virtually every case” invoking California consumer protection statutes.

“It’s a very big deal,” said Michael Rubin of Altshuler Berzon, who represents consumers in the 9th Circuit’s Rent-A-Center case. And not just in California, according to Rubin. The three 9th Circuit decisions, as I’ll explain, involved consumers’ rights under several California statutes to seek injunctions forcing corporations to change their conduct. But Rubin told me the 9th Circuit’s analysis may just as well apply to other states’ consumer and employment statutes that include injunctive rights.

AT&T Mobility, which is represented at the 9th Circuit by Andrew Pincus of Mayer Brown, said in a statement that it is considering its options: “We respectfully disagree with the court’s decision, which we believe is inconsistent with the arbitration provision agreed upon by the parties, the Federal Arbitration Act and United States Supreme Court precedent.” Comcast counsel Mark Perry of Gibson, Dunn & Crutcher declined to provide a statement. Rent-A-Center’s lawyer, Robert Friedman of Littler Mendelson, did not respond to my email requesting comment.

The three appeals called upon the 9th Circuit to review the California Supreme Court’s 2017 ruling in McGill v. Citibank. In McGill, the state justices held that as a matter of California public policy, corporations cannot require consumers to waive their right to seek a public injunction. The California Supreme Court also held, without engaging in deep analysis, that California’s policy is not pre-empted by the Federal Arbitration Act.

Read the complete article here.

In Sacramento, CA teachers fight for “what’s right” with strike

From today’s CBS Evening News:

Teachers in Sacramento went on strike Thursday for the first time in 30 years. They’re accusing the school district of backtracking on promises of better pay and smaller classes.

In the past year, more than 400,000 teachers in nine states have gone on strike, affecting more than 5 million children.

Raising three boys on her own in costly California is a daily struggle for Victoria Carr, who has been teaching for 12 years.  

“It’s hard. It really is. Am I making a difference? Is it impacting people,” she said.

With teachers on the brink of a strike, Carr went to a school board meeting to confront the district superintendent.  
 
“I want them to see me fight for what’s right. I want my students to know that they’re important enough to me that I’ll fight for them and I’ll say what needs to be said as best I can,” said the seventh-grade teacher.

Nationwide, the average teacher salary has decreased by 4 percent in the past decade, when accounting for inflation. Eighteen months ago, the Sacramento School District avoided a strike by giving their teachers a raise. Thursday’s strike is solely about the students. The teachers say the district did not hold up the rest of that deal, which included smaller classroom sizes, more nurses, psychologists and after school programs.

Read the complete article here.

Rap Sheets Haunt Former Inmates. California May Change That.

From today’s New York Times:

After spending more than seven years in prison for robbery and auto theft, Jay Jordan tried to get work selling insurance, real estate and used cars, but was repeatedly turned away, he said.

People with a felony record are often barred from obtaining professional licenses, and an opportunity to be a barber at a friend’s shop fell through for the same reason. A nonprofit program he started ran into trouble when a school sought to prevent him from meeting with students because of his criminal past — a history that began when he stole a car at 18, almost 15 years ago.

Under a bill now making its way through the California State Legislature, millions of people in the state who have misdemeanor or lower-level felony records could be spared those problems: their criminal records would automatically be sealed from public view once they completed prison or jail sentences. The legislation would not apply to people convicted of committing the most serious crimes, like murder or rape.

“There are so many of us who just want to be better, but are constantly turned down, turned away,” said Mr. Jordan, who is now project director for Time Done, a program that is part of Californians for Safety and Justice, a nonprofit that advocates to make the criminal justice system less punitive.

In the United States, a record showing a criminal conviction or even an arrest that does not lead to a conviction can make it nearly impossiblefor someone to find jobs or apartments or to obtain professional licenses like those required in many states for barbers or real estate agents.

One in three Americans has a criminal record, according to the Justice Department, and a National Institute of Justice study found that having a criminal record reduced the chance of getting a job offer or a callback by 50 percent.

The legislation, introduced last week in the State Assembly, would make California — where an estimated eight million people have criminal records — the first state in the nation to automatically scrub the rap sheets of people whose records qualify. The law would apply retroactively, meaning that people arrested or convicted of various crimes dating back decades would have their records automatically sealed. The records would still be accessible to law enforcement agencies, but not to members of the general public, including potential landlords and employers.

Read the complete article here.


Local News: Why Santa Monica is fighting the California Voting Rights Act

From today’s Los Angeles Times:

By Ted Winterer (Santa Monica Mayor) and Gleam Davis (City Council Rep),

The city of Santa Monica received a letter from a Malibu law firm in late 2015 claiming that its at-large election system — in which all voters choose the whole city council — discriminated against Latino residents. We were both on the City Council at the time and found it surprising, not least because the then-mayor was Mexican American.

Still, the letter threatened a lawsuit under the California Voting Rights Act if the council did not immediately agree to change to district-based elections. It turns out Santa Monica wasn’t alone. Dozens of cities have received similar demand letters — many from the same lawyer — and many have altered their election systems in response.

Santa Monica, however, has decided to fight this lawsuit. Why? Because making electoral changes based on lawsuits instead of the will of voters diminishes rather than enhances voting rights. Equally important, the facts in Santa Monica and the experience of cities elsewhere show that carving the city into districts will not meaningfully enhance local Latino political representation.

The Pico neighborhood is the focus of the California Voting Rights Act lawsuit, but the 13% of Santa Monica voters who are Latino live in every part the city. Under our existing at-large election system, Latino candidates have won seats on all of the city’s governing bodies, including two currently serving on the seven-member City Council. As the Los Angeles Times reported, in this kind of racially integrated landscape, a change to district-based elections is unlikely to increase Latino representation.

GrassrootsLab, a consulting firm that specializes in local government politics, studied the electoral outcomes in 22 cities that switched to district elections because of a California Voting Rights Act legal threat. Only seven of the 22 cities saw any increase in Latino elected officials. Indeed, some people are trying to make the case that district elections create their own set of problems. The former mayor of Poway, for instance, in October filed a federal lawsuitarguing that forcing district elections ultimately violates the constitutional rights of other voters.

Santa Monica voters have twice rejected proposals to move to district-based elections, in 1975 and 2002. A district system may work well in larger cities like Los Angeles, but dividing up our 8.3-square-mile community will pit neighborhood against neighborhood, increasing balkanization and encouraging legislative deal-making to serve the interests of individual districts rather than the city as a whole.

Read the complete article here.