California Democrats have finally found a cause that’s worth suspending their environmental passions. The United Automobile Workers are struggling for a presence in Tesla’s Fremont plant, and organized labor has called in a political favor.
Since 2010 California has offered a $2,500 rebate to encourage consumers to buy electric vehicles. But last week, at unions’ behest, Democrats introduced an amendment to cap-and-trade spending legislation that would require participating manufacturers to get a sign-off from the state labor secretary verifying that they are “fair and responsible in their treatment of workers.”
Charles Schwab is emblematic. Since announcing its relocation strategy in early 2013, the company has shrunk its San Francisco headquarters to fewer than 1,300 people, a 45% decrease. Its 47-acre campus south of Denver is now Schwab’s largest office, employing almost 4,000 people. An expanded office in Austin, Texas, will be completed next year, and construction is under way on a new location near Dallas.
. . . While the finance industry has been relocating entry-level jobs since the late 1980s, today’s moves are claiming higher-paid jobs in human resources, compliance and asset management, chipping away at New York City’s middle class, said Kathryn Wylde, president and chief executive of the Partnership for New York City, a nonprofit that represents the city’s business leadership.
California’s slowing economic expansion was evident in August as the state lost 8,200 net jobs and the unemployment rate rose to 5.1%, from 4.8% a month earlier, according to data released Friday from the state’s Employment Development Department. The drop in employment follows a robust July in which the Golden State gained the most jobs in more than a year: 84,500, revised up from a previous estimate of 82,600. August’s slide back was in large part driven by employers in the leisure and hospitality sector: They cut 12,400 jobs on a seasonally adjusted basis — the largest decrease by any sector in the state. Professional and business services and the public sector also lost jobs. Manufacturing and the trade, transportation and utilities sector, meanwhile, gained jobs.
So, yes, California remains a capital for innovation, but only until all the union work rules crush that one bright spot in the economy. Meanwhile, the rest of the state is becoming something of an innovation-free zone, given lawmakers’ ongoing efforts to saddle businesses with bone-crushing regulations and tax rates. If Brown really believes in innovation, he ought to worry less about federal funding and more about the way his union allies mess with the Golden State’s economy.
Organized labor doesn’t rack up a lot of wins these days, and Silicon Valley isn’t most people’s idea of a union hotbed. Nonetheless, in the past three years unions have organized 5,000 people who work on Valley campuses. Among others, they’ve unionized shuttle drivers at Apple, Tesla, Twitter, LinkedIn, EBay, Salesforce.com, Yahoo!, Cisco, and Facebook; security guards at Adobe, IBM, Cisco, and Facebook; and cafeteria workers at Cisco, Intel, and, earlier this summer, Facebook.
The workers aren’t technically employed by any of those companies. Like many businesses, Valley giants hire contractors that typically offer much less in the way of pay and benefits than the tech companies’ direct employees get. Among other things, such arrangements help companies distance themselves from the way their cafeteria workers and security guards are treated, because somebody else is cutting the checks. Silicon Valley Rising, a coalition of unions and civil rights, community, and clergy groups heading the organizing campaign, says its successes have come largely from puncturing that veneer of plausible deniability.