In summary

California’s beleaguered Employment Development Department could be asked to dole out benefits to striking workers if Gov. Gavin Newsom signs a bill providing them the right. Critics say the EDD has enough problems to address before the next economic downturn.

Guest Commentary written by

Scott Syphax

Scott Syphax

Scott Syphax is the president of Syphax Strategic Solutions. He is a board member of the 21st Century Alliance, an organization of philanthropists, civic leaders and public advocacy groups focused on California’s long-term success.

More than 150,000 California workers who lost their jobs since 2020 are still fighting for delayed or denied unemployment benefits. At the same time, the state paid out an estimated $30 billion in fraudulent claims, dramatically more than any other state on both a real and per capita basis. 

The state fund that supports unemployed workers is more than $18 billion in debt, with no fix in sight.  

With an unemployment system so clearly in crisis, one might have expected lawmakers to spend the final days of the legislative session this month focused on shoring up the Employment Development Department, which administers the unemployment system in California.

Instead, they made it worse.

After a fierce lobbying blitz, lawmakers approved granting unemployment to an entirely new category of beneficiary: striking workers. The move was a dramatic departure from the program President Franklin D. Roosevelt created through the Social Security Act of 1935, which was intended to relieve economic hardship for workers who had lost jobs through no fault of their own.  

New responsibilities are clearly the last thing the EDD needs. In her recent book, “Re-Coding America,” former Obama administration official Jen Pahlka detailed just how dramatically the agency collapsed three years ago. Legislators will recall how their offices were inundated with calls from thousands of constituents desperate to secure their unemployment benefits and unable to get through to the EDD. 

Perhaps more troubling, the EDD did not even know how large the backlog was: The agency estimated 239,000 cases. In reality it was five times that amount.

Another recession is still possible.  A recent Wall Street Journal poll of economists puts the chances of a recession in the next 12 months at greater than 50-50. Now is the time to make the system capable of providing jobless benefits to folks out of work. This is about blocking and tackling – the most basic work of government on behalf of the people. It is not the time to be drawing up new plays in the dirt. 

Even if California’s unemployment system were in good condition, this law would break troubling new ground. California has a relatively supportive unemployment system, in which even workers who quit their job may receive unemployment benefits if they had good cause to leave, and made all reasonable efforts to keep the job. The new legislation, Senate Bill 799, has no provision for evaluating whether there is just cause to strike. If signed, any strike becomes a good strike. Yet history makes clear that even as the strike has been a critical tool for workers asserting their rights, it has also been at times abused by labor leaders focused on their own power and prestige.      

With the jockeying of the legislative session behind us, all eyes now turn to the governor. Unlike the Legislature, he does not have the luxury of indulging narrow interests in the face of hard fiscal reality. He has wielded his veto pen accordingly in recent years, including difficult choices like denying unemployment benefits to undocumented workers last year.

If the state could not afford extending unemployment benefits to those doing uneven and backbreaking work in the fields, we should think long and hard before extending such benefits to folks with a job waiting for them.

To gauge what Californians think about this policy, we should consider the hundreds of thousands of low- and middle-income workers who have left California in recent years. They have not gone to the two states that provide unemployment insurance for striking workers (New York and New Jersey). Instead, they have left for states that have lower housing costs, better schools and less poverty.

If we want some commentary on what workers closer to home think about the priorities of our unemployment system, however, the EDD has the names of 150,000 Californians who would likely be glad to share their opinions.

The California Legislature this month sent a bill to Gov. Gavin Newsom’s desk that, if he signs it, would provide unemployment benefits to striking workers. A Hollywood writer says California workers who help pay for the state’s unemployment insurance fund are entitled to benefits when they take action for equitable pay and workplace conditions.

more commentary on senate bill 799

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