Striking Worker Jobless Aid Up for Debate Beyond California Veto

Growth in union activity across the country may spur blue-state legislatures to pursue measures offering unemployment benefits to striking workers, despite Gov. Gavin Newsom’s recent veto of a bill passed by California lawmakers.

Newsom (D) said the measure (SB 799) would put a financial strain on the state’s already ailing unemployment insurance trust fund, which owes nearly $19 billion to the US Treasury to cover what it borrowed to pay jobless benefits during the Covid-19 pandemic.

The measure vetoed Sept. 30 also would have tipped the balance of power to help workers and put pressure on employers during labor contract disputes. In most states, where striking workers aren’t eligible for jobless benefits, workers can only pay their rent and buy groceries for so long before their personal savings and limited union strike funds run dry, potentially forcing them back to the bargaining table with diminished leverage.

Newsom’s veto comes after a year heavy on strike activity in California and nationwide. Strikes have hit Hollywood film studios, the Big Three automakers, and Kaiser Permanente, to name a few.

The California bill had backing from affiliates of the AFL-CIO, the Service Employees International Union, the Communication Workers of America, SAG-AFTRA, the United Auto Workers, and the Writers Guild of America.

Business groups such as the US Chamber of Commerce opposed the California bill and similar proposals in other states. They say giving benefits to workers on strike skews the dynamics of labor negotiations and undercuts the purpose of the unemployment program.

Jobless aid is “meant to be temporary to keep someone afloat until they can get back into the workforce,” said Stephanie Ferguson, an employment policy director at the US Chamber. “Providing UI benefits to striking workers goes against the principles of the system.”

State Attempts

If Newsom had signed the bill, it would have taken effect in 2024 and applied only to strikes that last more than two weeks, due to a waiting period included in the measure. California workplaces saw at least 56 labor strikes between 2012 and 2022, with only two of them lasting more than two weeks, according to a legislative staff analysis of the bill.

California also caps the amount of weekly benefits that UI recipients can get at $450, roughly one-third of the state’s median weekly earnings. The state allows a worker to receive up to 26 weeks of benefits—subject to extension in special circumstances such as the pandemic.

The benefits aren’t enough for most Californians to pay their bills, much less to incentivize workers to go on strike, said Jenna Gerry, senior staff attorney at the National Employment Law Project.

“It provides a cushion, an important cushion, but it is simply not enough,” she said.

Although still a relatively rare policy choice, more states have considered providing jobless aid to workers on strike this year, including Connecticut, Illinois, and Massachusetts.

New Jersey and New York are the only states that currently provide jobless benefits to striking workers, although workers in other states affected by a lockout or out of work indirectly due to a labor dispute might qualify in some instances.

The Massachusetts legislature’s labor committee advanced a bill last month to grant jobless benefits to workers on strike for more than 30 days, similar to a measure that cleared the same committee last session but failed to advance further. Current Massachusetts law lets workers on strike receive benefits if the employer is able to continue its operations, but union supporters have complained that law is murky and workers’ ability to get those benefits depends on how labor-friendly the current governor is.

New Jersey Gov. Phil Murphy (D) signed legislation in April to reduce the waiting period to 14 days instead of the previous 30 for striking workers to receive benefits, applying retroactively to claims filed on or after Jan. 1, 2022.

The New York legislature also considered but didn’t pass a bill this year to shorten the waiting period.

Movement Continues

The idea of expanding eligibility has been nudged along in part by high-profile labor union activity as well as lessons learned during the Covid-19 pandemic about the importance of unemployment insurance, both in helping individual workers and bolstering the local economy, Gerry said.

“I see this movement continuing. There’s a lot of momentum there with what’s happening with the labor movement generally in this country,” she said. Michigan, the epicenter of the current auto industry strikes, could be another good candidate for extending benefits to striking workers, given its spate of pro-union legislation passed this year, according to Gerry.

“Relatively few” members of the Writers Guild of America East applied for jobless benefits in New York during the 148-day strike, said Lowell Peterson, the guild’s executive director, but he added having them available if needed was significant.

“We live in a time when employers have used their privileged position to undermine people’s ability to sustain themselves, and sometimes the only possible response is to withhold labor,” he said in a written statement.

California has struggled to sustain its UI trust fund for decades, partly because of the limited income base to which the state applies UI payroll taxes, Gerry said, and extending eligibility to striking workers wouldn’t make a notable difference.

“The number of potentially eligible striking workers simply pales in comparison to the overall workers eligible for unemployment insurance,” she said.

Regardless of the size of the impact, Ferguson said providing benefits during a labor strike unfairly asks employers to subsidize the strike through their UI taxes.

“The system is designed for people who lose their jobs through no fault of their own,” she said. Giving benefits to striking workers “simply is not what all employers agreed to pitch in for.”