Gavin Newsom is considering approval for a California Senate bill that would allow striking workers to be entitled to unemployment benefits, despite the fact that the state already owes $18 billion in debt for these payments. The state Senate passed the bill as The Golden State has been suffering several major work stoppages, in addition to taking the brunt of the blow from the Hollywood actors' and writers' strikes.
#SB799 (unemployment insurance for striking workers) by Senator Anthony @Portantino just passed the Senate and is on its way to Governor Newsom's desk. pic.twitter.com/naFGQWMa5F
— Daniela Pardo (@danielapardotv) September 14, 2023
New York and New Jersey, the only states with similar legislation
The rule has been strongly supported by unions and completely opposed by the California Chamber of Commerce. The text states that workers who maintain a strike for more than two weeks would be entitled to receive unemployment benefits. Currently, New York and New Jersey are the only states with similar legislation. When asked about the matter, Newsom has been cautious, recalling the state debt of $18 billion with the federal government. However, the governor has not said at any time that he would veto the bill.
Republicans opposed the proposal, noting that it tips the scale in favor of unions and could hurt Californian businesses. Democratic legislators, led by the bill's author, Anthony Portantino, claim that they "want people to be able to pay their rent and want people to be able to put food on their table during a strike or not during the strike. It's the right thing to do."
Pressure from unions to approve
Unions, including the Writers Guild of America and SAG-AFTRA, are pushing for the bill to pass as soon as possible, and even attended committee hearings. On Sept. 7, members of those unions protested to demand that SB 799 be approved. Unions have strike funds to help workers pay their bills, but union leaders say that's not enough, especially when strikes drag on for months.
According to the Los Angeles Times, the state Chamber of Commerce indicated that this rule essentially means a tax increase for entrepreneurs, who will be the ones to finance the aid. The unemployment insurance program is funded by taxes that companies pay to state and federal governments on the first $7,000 of annual employee payroll.
However, these funds have not been sufficient to finance benefits in recent years. In 2020, California was forced to borrow $20 billion from the federal government to finance unemployment claims. To repay that loan, entrepreneurs will have to pay additional taxes annually. In addition, the state's general funds must pay annual interest on the loan, which could be paid off by 2032, according to calculations by the Legislature's Office of Analysis.
