University of California Institute for Labor and Employment

In recent years, California has seen a number of high-profile work stoppages such as an extended dispute in Southern California supermarkets. Despite this, the state does not seem more dispute-prone than other states when California’s unionization rate is taken into account. About half of California’s unionized workers are in the public sector, where recent pay settlements seem to reflect the state’s fiscal crisis. In the private sector, NLRB charges tend to reflect California’s industrial composition and areas where organizing activity is occurring, such as building services. A special sample of state union contracts suggests that they have relatively long durations, often years or more. Only 13% have escalator clauses reflecting the relative low and stable inflation rate of recent years. Close to a third have two-tier pay provisions.

California unions generally opposed the 2003 recall of Governor Gray Davis. When Davis was replaced by Arnold Schwarzenegger, however, unions supported the new governor's ballot propositions, enabling the state to issue “Economic Recovery Bonds.” Various propositions scheduled for the November 2004 ballot will undoubtedly engender new union political activity, including a referendum on a new law mandating employer-provided health insurance. Among the sectors experiencing contract renewal negotiations in 2004 are entertainment, construction, hotels, and supermarkets in Northern California.

List of contributors for the 2004 volume of The State of California Labor, an annual publication of the UC Institute for Labor and Employment.

California’s new economy is fostering far more growth among high- and low-wage jobs compared to middle-income jobs. The development of the hourglass economy means that there is a growing number of low-wage workers who cannot support their families even if they work full-time. As a consequence, they must turn to public assistance to meet the basic needs of their families. This study by Carol Zabin, Arindrajit Dube, and Ken Jacobs is the first to quantify how much it costs the public to provide what paychecks don’t. In California, two million working families received public assistance in 2002. The price tag for this assistance was $10 billion per year, with most support going to families with full-time workers who earned near the minimum wage.

The authors analyzed the ten largest means-tested public assistance programs that Californians participate in: Medi-Cal, the Earned Income Tax Credit, CalWORKs, Food Stamps, Free or Reduced Price Lunch, Women, Infants, and Children Nutrition Program, Low Income Heat and Energy Assistance, Healthy Families, and Section 8 Rental Assistance. They matched 2002 administrative data from the programs with 2002 detailed demographic and employment data from the federal government’s Current Population Survey. They estimated how many program participants are in working families and the savings that could accrue if workers earned higher wages and received benefits.

The authors found that half of all means-tested public assistance dollars are going to families who are working and that most workers on public assistance earn wages that are close to the minimum wage. They conclude that full-time employment at low wages does not bring self-sufficiency to these families and that small improvements in wages could move many off public programs, freeing up scarce resources for families currently on waiting lists. If all workers in the state earned a minimum of $8 an hour, program costs would be reduced by $2.7 billion. A movement to $14 per hour would reduce expenditures by 5.6 billion dollars. Likewise, if jobs included health benefits, even at current wage levels, $2.1 billion in expenditures could be put to other uses.

Ruth Milkman summarizes the contents of the 2004 issue of The State of California Labor, an annual publication of the University of California Institute for Labor and Employment.

Ruth Milkman and Eileen Appelbaum examine one of California’s most important recent legislative initiatives: the paid family leave law that was passed in 2002 and took effect in mid-2004. California is the first state in the nation to provide paid family leave to its workers. The authors review the developments leading to the establishment of this new program, which builds on California’s longstanding State Disability Insurance system. The paid leave program covers virtually all private sector workers (unlike the federal Family and Medical Leave Act which is restricted to relatively large employers), and thus should in principle provide universal coverage. The authors use data from two surveys: the Golden Bear Omnibus survey, which investigated public attitudes about paid leave, public awareness of the state’s new paid family leave law, employees’ previous experience with family and medical leave, and employees’ expectations about future needs for leave; and the Survey of California Establishments, which examined the extent to which California employers provided family and medical leave benefits beyond what was legally required prior to the implementation of the new law, as well as employers’ recent experience with such leaves. The authors’ analysis reveals that relatively few Californians—only about one in five—are aware that the new paid family leave program exists. Moreover, workers with the most family-friendly employers are more likely to learn about the paid family leave law than are those who are employed by “low-road” companies and who are most in need of paid leave. The danger is that the benefits from the new program will go disproportionately to the state’s more privileged workers, many of whom already enjoy the functional equivalent of paid family leave via other employer-sponsored fringe benefits. If nothing is done to increase the visibility of the state’s much-celebrated paid family leave program among low-wage workers, immigrants, and others who need it most, the already entrenched inequality that is so deeply embedded in the state’s labor market and wider social organization may become characteristic of this arena as well, despite the fact that the clear intent of the law is to provide universal coverage.

Candace Howes examines the recent history of one of California’s rapidly growing occupations: home care. As the author’s analysis demonstrates, home care has been extensively transformed in recent years through large-scale unionization and coalition-based political action, which have led to major improvements in wages and benefits. Apart from providing many home care workers with better pay, the upgrading of this occupation has also improved the quality of care that clients receive, since higher wages make for lower turnover. The improved working and living conditions that result benefit caregivers and those they serve alike. The author’s empirical analysis has obvious ramifications for low-wage employment generally, particularly in the burgeoning health care and personal services sector.

Previous research focusing on the impact of immigration on native-born workers demonstrates that workers experience wage penalties when they are employed in local occupations with a large share of immigrants. Does unionization mediate such pay penalties? Lisa Catanzarite utilizes the 2000 5% Census Public Use Microdata Sample in conjunction with pooled unionization data from the 1998-2002 Current Population Surveys to investigate the impact of union density on pay penalties in brown-collar occupations (with overrepresentations of recent-immigrant Latinos). The results indicate that unionization, particularly in the private sector, significantly eases the downward pressure on wages in brown-collar fields for both native workers and earlier-immigrant Latinos, net of individual and occupational characteristics. The analyses focus on the greater Los Angeles and San Francisco Bay Areas (California’s primary immigrant destinations) and also use data on immigrant-receiving Consolidated Metropolitan Statistical Areas nationally. The finding that union density lessens brown-collar wage penalties indicates that policies to address immigrant wage competition can be mutually beneficial to newcomers and to the more established groups with whom they may compete. Strengthening the position of marginal workers may, indeed, protect those higher in the employment hierarchy.