Union Blueprint for Service Workers in California Could Spread

One union was a particularly big winner during a California legislative session marked by some significant victories for the labor movement: the Service Employees International Union.

The union, which has 700,000 members in the Golden State from janitors to airport workers to nurses, was at the forefront of dealmaking in Sacramento over the past month, including passage of landmark measures to raise the minimum wage for fast-food and health-care workers.

Top union officials helped salvage bills that seemed dead, drawing on substantial clout in the capitol’s Democratic supermajorities and forging deals with coalitions of deep-pocketed opponents that it typically squares off with on organizing campaigns. Gov. Gavin Newsom (D) heaped praise on the union last week during a bill signing and then turned on Sunday to appoint a former president of SEIU California, Laphonza Butler, as the US senator for the state after the death of Dianne Feinstein.

The victories represent a political and economic shift. The union demonstrated its power at the state capitol, bolstering a model for organizing that bypasses campaigns to unionize workers one shop at a time by instead using the power of state government to set wages and standards across entire industries.

The union’s president says these two bills offer a blueprint for other sectors and other states.

“SEIU members in this state have a long view about the need to expand worker power,” said SEIU President Mary Kay Henry, who herself rose through the ranks of SEIU in California in roles that included strike coordinator.

Newsom Qualms

The success of SEIU also comes against a backdrop of a “hot labor summer” of strikes throughout the state from film writers, actors, and hotel workers. But the labor wins have been narrowed by Newsom, who also has referred to himself as “a business guy” even as he battles red state governors on TV.

While he signed legislation raising the minimum wage for fast food workers, he has yet to act on the SEIU-backed measure to raise the minimum wage in the health care industry. Newsom also vetoed a bill that would have required drivers in autonomous trucks, a measure backed by the International Brotherhood of Teamsters. And on Saturday, Newsom nixed a bill to extend unemployment insurance to striking workers, an issue that has been of particular interest in a state rocked by major strikes this year.

While those strikes have given the labor movement more political momentum at the state capitol, the SEIU’s demands are also running headlong into concerns about how they can be accommodated with California’s cash-strapped budget and its broader economy in an era of inflation. The actions also are testing the limits of what is politically possible even in one of the bluest of states.

“I think it’s the times we’re living in,” said Assembly Speaker Robert Rivas (D), of the progress that labor unions made this year in the state legislature.

Backers of legislation to raise the minimum wage for health-care workers have credited the speaker for supporting the measure even after a narrow vote and opposition from major medical providers put its prospects in doubt.

The law (S.B. 525) requires large health systems and dialysis clinics to pay workers—from technicians to janitors and food service workers—no less than $23 an hour starting next year. The bill also sets different minimum wages for different parts of the health-care industry, with increases built in over time. And after backing ballot measures to regulate dialysis clinics in each of the last three elections, the SEIU agreed not to sponsor any such measures over the next few years, winning support for the agreement from the dialysis industry.

Political Force

The legislative success SEIU has built can also be attributed to a sprawling network of political allies.

The SEIU’s California state council reported spending nearly $12.8 million on political activities and lobbying in 2022, according to reports filed with the U.S. Department of Labor.

And SEIU officials in the state have gone on to public office, like Butler and Los Angeles-area Assemblymember Wendy Carrillo (D).

The union was able to work with the governor’s office to craft the law raising the minimum wage for fast-food workers. In the process, it also reached an agreement with fast-food companies and the group that represents its franchisees to make it more palatable for them.

The law (A.B. 1228) requires fast-food chains with more than 60 restaurants nationwide to pay at least $20 in California starting in April 2024. The measure also creates a council that can raise that minimum wage and will bring fast food workers together with industry representatives to discuss working standards.

The measure contained much of a bill Newsom signed last year that would have set an even higher minimum wage for fast-food workers. But the industry targeted that measure through a referendum campaign, blocking its implementation until at least after the 2024 election.

In response, the SEIU backed the new bill. In its original form, it would have held big fast-food companies, like McDonald’s, liable for labor violations at restaurants owned by franchisees.

Ultimately, industry and the union entered into negotiations, which culminated in the new law that still provides a minimum wage increase while calling off next year’s referendum.

Newsom signed the bill at a union hall in Los Angeles last week, an event that felt like a pep rally for a Democratic governor who has not always endeared himself to labor. But surrounded by fast-food workers, he touted the measure’s scope—something that bargaining with one restaurant or a few restaurants at a time could not have achieved.

“557,000 people, 30,000 locations—this is a big deal,” he said.

And to Henry—who Newsom described as his hero—it also represents a playbook, giving workers a platform to address working conditions and wages even without large union membership.

“It leapfrogs over going store by store, which just doesn’t work in the fast-food sector, and creates a stable, permanent way for workers to have a say,” she said.

It’s a blueprint the union will seek to build on, Henry added, and scholars say it represents a different way to think about organizing in the United States, where such sectoral bargaining is less common.

“It made sense for the fast-food industry because of the highly fissured nature of the industry,” said Enrique Lopezlira, director of the Low-Wage Work Program at the UC Berkeley Center for Labor Research and Education.

The SEIU is pursuing a similar approach in other sectors, such as at nursing homes in Minnesota, he noted.

Fourth Branch

As a lobbying force—part of the so-called “fourth branch” of California government—the union’s success represented a level of influence that has made some lawmakers plainly uncomfortable.

“The fourth branch of government in this building has a little too much influence this year,” said state Sen. Shannon Grove (R) on the last night of the session, as Democrats passed a succession of labor-backed bills.

But that influence may only go so far, as several labor-backed bills push Newsom to weigh his support for unions—and their support for him—against other priorities.

In vetoing legislation that would have extended unemployment benefits to striking workers, Newsom cited the substantial debt facing the state’s unemployment insurance fund, which borrowed substantially from the federal government to keep up with payments during the Covid-19 pandemic. The system now owes more than $18 billion, which will be repaid through higher taxes on employers.

The SEIU-backed bill raising the minimum wage for health-care workers remains on the governor’s desk. He has until Oct. 14 to act on the measure. And while his office doesn’t typically comment on pending legislation, there are concerns about costs for state-run medical facilities and insurance programs if the measure were to be enacted.

State lawmakers grappled with a $32 billion budget deficit in the last session. While tax revenue has been better than expected in recent months, state officials are still cautious.

But Henry said the health care workers SEIU represents are counting on the bill being enacted.

“Workers are expecting that the heroic sacrifices they made during the pandemic are going to be recognized,” Henry said.