Through these reforms, California can take a huge step towards creating a worker-centered ecosystem that protects the right to organize, creates pathways to quality jobs, and raises wages.
California’s unemployment rate has long been higher than the national rate, and it’s labor force participation rate has long been lower as well. We also have a wage problem. From 1979 to 2018, hourly wages for the lowest-wage workers grew by only 4 percent, while hourly wages for the highest-wage workers grew by 43 percent.
It is people of color who suffer the most from low wages, with the median hourly wage for Hispanic, Black, American Indian/Alaska Native, and Pacific Islander workers much lower than that of white workers. Women are also paid much less than men throughout the economy as well. While these statistics have been long known, the policy response has been too weak. Here is what a bold plan to improve jobs and raise wages looks like.
Ensure That Those Who Want to Work, Can Work
If anyone didn’t know this before the pandemic, you sure know it now: workers with young children—especially mothers—are often unable to work due to a lack of reliable, affordable child care. For working families with children, child care is typically the second largest basic-needs expense, behind only housing.
If we want to reduce poverty we need affordable childcare!
Prior to the pandemic, just 1 in 9 income-eligible children received subsidized care. Since then, thousands of providers have been forced to close, making the problem even worse. A California task force has done excellent work to identify solutions, among them: expanding and upgrading facilities, investing in child care training, raising child worker pay, and improving working conditions.
Through state and federal funds, including the pending Build Back Better legislation, these recommendations can be implemented.
We must provide high-quality training for the jobs that are available in California.
Sectoral training programs have proven successful when they target high-quality jobs in growth industries, reflect a close partnership between training organizations such as community colleges and employers, and integrate learning with on-the-job activities.
Subsidized employment is designed for individuals who face significant barriers to employment—for example, people reentering the community after incarceration, workers with limited English proficiency, former foster youth, or people with significant education or work experience gaps.
Because these workers require more support, employers are provided with wage subsidies for a fixed term while transitioning the worker into regular employment; and workers are provided with ongoing support services. This model has long-term positive effects on both earnings and employment.
The heart of the wage problem is this: Low-wage workers have less power, relative to employers, than they once did.
The share of California workers who are union members or covered by a union contract dropped from 25 percent in 1984 to 16 percent in 2018. As unions have declined, workers have lost leverage and wages have fallen. Here are three key ways to reverse that trend:
Expand the right to organize: The federal PRO Act would increase the number of workers who have a protected right to organize by reclassifying independent contractors as employees. It would also allow public unions to raise funds through required union dues.
Sectoral bargaining: We can revive California’s legacy wage boards and use them to negotiate wage standards and workplace conditions for entire sectors of industries. In early 2021, a legislative proposal to establish sectoral bargaining for California’s fast food workers was narrowly defeated, but proposals of this sort could be pursued again.
Stakeholder model: Empower workers by requiring corporations to either directly include worker representatives on their boards, or consult worker councils when appointing board members. In Europe, this model has often led to higher wages and lower income inequality among workers.
Increasing power and leverage among workers is also key to protecting them against workplace health threats, safety hazards, wage theft, harassment, discrimination, and retaliation. With more leverage, workers can demand compliance or leave for safer workplaces.
Additionally, we need to upgrade workplace regulation and enforcement of existing protections.
Upgrading enforcement: There are important new state and federal workplace protections regarding health, wage theft, worker breaks, and piece-rate pay systems. But new regulations mean new enforcement challenges that require additional funding for relevant agencies. These agencies can also increase effective enforcement by partnering with unions and other worker organizations to inform workers of their rights and uncover violations.
Upgrading protective regulation: We also need new regulations for workers that face especially high risks of exploitation. Domestic workers are currently excluded from coverage under workplace safety laws. Independent contractors are also excluded from most standard worker protections, including wage and hour laws, anti-discrimination laws, and workplace safety laws. These workers can be protected either by extending workplace protections to independent contractors, or expanding the share of workers classified as employees rather than independent contractors.
Read our paper with the Stanford Center on Poverty & Inequality!
A Roadmap to An Inclusive Economy