The Future of Work Commission – A Bird’s Eye View

The adage, “As California goes, so goes the nation” typically inspires Californians. But today, while we have a lot to be proud of, California also has some unwelcome distinctions – including the highest number of people experiencing homelessness and incarceration, and an income gap that in many parts of the State puts us among the highest in the nation. Clearly the economy is not working for everyone. That’s why Governor Newsom formed the “Future of Work Commission.”

I am honored to be one of the 18 Commissioners, made up of leaders from technology, labor, business, education, venture capital, and other sectors that will provide recommendations to Governor Newsom by mid-year 2020. Meetings are open to the public, and the Commission is led by an all-star team of top Administration officials who emphasized that there is nothing inevitable about the future of our economy, and that together, we have the chance to shape it.

While the topic generally brings to mind the ‘robot job apocalypse’, the Governor and his team challenged us to focus on something more inspirational and aspirational: framing a new social compact for work and recommending how to make the future of work more equitable and inclusive, while leveraging the Golden State’s proud history of productivity and innovation.

Understanding emerging trends in automation, technology, outsourcing, and globalization, and their impact on racial, economic, geographic and gender inequities will help inform this work.

I plan to share my top takeaways after each of our monthly meetings; hoping to inform our growing social enterprise community and allies and provoke your questions and recommendations. I will do all I can to insert these imperatives into the conversation:

1. To make our economy more inclusive of the individuals employment social enterprise serves;
2. To pay working people enough to afford the basics – foremost stable, secure housing; and
3. Policies and practices that provide resources and incentives to grow the social enterprise field and encourage more employers to take the ‘high road’ by providing better compensation, benefits, training, and working conditions to all employees, including those at the frontlines.

At every meeting we are privileged to interact with panels of employers, top economists, academics and writers, and people working in the social sector. And most energizing of all, there are panels of working people from various sectors – janitorial and warehousing at the first session – who spoke about impressive organizing efforts to reduce sexual harassment, and offered comparisons of what it’s like to work in a business that provides ‘high road’ jobs – focused on providing strong compensation packages, training, and recognition to the frontline workforce; contrasted with the anxiety and lack of opportunity when working at a relatively ‘low road’ employer not particularly concerned with day to day issues confronted by frontline workers.

Top take-aways from the panels/discussion: Meeting #1

1. While skill building (e.g. job training, education, et. al.) is essential for individuals to contribute their full range of talent, and improve their incomes, it will not solve inequity or reduce poverty by closing the huge and growing gap between a small percentage of working people at the top of the income scale, and everyone else, nor fundamentally shift gender or racial inequities. To close the gap requires an all-out effort to raise wages across the board for front-line jobs and low-income workers.

• Today, 35% of California workers earn $15/hour or less (half of Latinx workers; 35% of African Americans; 25% of whites) across many industries; 21% of them have an AA or BA, and 29% have some college.
• Between 1978 and 2018, worker productivity rose by 259%; but worker compensation rose by 11.6%.
• Comparative data definitively shows that the race and gender wage gap cannot be explained by differences in skills or education.
• Decisions by employers and policymakers on wages/working conditions matter and have the greatest impact on the most vulnerable/disadvantaged workers and those impacted by racial inequity.
• The median wage rose 1% annually pre-1973 but 0.2% annually since 1973. If it had risen at 1%, it would be at $26/hour. This while a much higher percentage of the workforce now has college degrees than pre-1973.
• A Commissioner asked that we stop speaking about ‘low skill’ work, and instead name it as ‘low wage’ work which requires significant skill to do well (from hospitality to recycling to child care).

2. The growing wage gap and deterioration of the quality of work at lower wage levels have been caused primarily by the ‘fissuring’ of work which includes outsourcing, temporary work, independent contracting; and the decrease in union membership.

• In California, unionized workers earn 13% more and are 37% more likely to have employer-paid health coverage; but union membership has dropped from 26% of all workers in 1983 to 16% today.

3. Inequality itself obstructs economic growth and has other negative impacts

• It obstructs the supply of people and ideas into the economy
• It limits opportunity for those not already at the top
• It distorts demand through its impact on consumption and investment
• Low wage jobs and lack of economic well-being are often at the root of domestic and workplace assaults and violence against women

Solutions section. I’ll end each of these blogs with a few of the solutions that are bubbling up – again urging you to send in your comments and ideas which I’ll include in future blogs, as relevant:

• High road jobs. The Federal Home Loan Bank, among others, have defined criteria* for ‘quality jobs’ – let’s provide procurement incentives and low-cost capital to employers/companies to create more. From my perspective, let’s make sure ‘quality’ employers provide job opportunities to the people served by social enterprise and that investments are made in social enterprise growth; and we must view job quality through an equity lens to get to the right solutions
• Enforce standards. Accountability/enforcement to meet current wage and other labor standards
• Invest in worker training. Encourage and incentivize employers to see labor as an ‘asset’ worthy of investment and to share responsibility for training with other employers in their sector (GE, as an example, paid people 95% of wage during training).
• Job Growth. Fighting climate change and ameliorating the disasters it is driving are job growth opportunities

* Based upon research and experts that participated in the FHLBank San Francisco’s 5 Roundtable discussions, the following are key components of what a quality job provides:

1. A living wage that supports a decent standard of living.
2. A safe workplace.
3. A benefits package, including health insurance, paid time off (i.e. sick time and paid vacation time), and a retirement savings plan.
4. Access to training and professional development.
5. Potential for upward mobility and wealth-building, so the employee can save to buy a home, send children to college, and retire with security.
6. Dignity, respect, and agency.

Please reach out to me with your ideas and questions. Please also keep in mind that although this is a CA-focused commission, because of the size of California’s economy and our leadership role in progressive policies, the ramifications of this work have the potential to influence the national conversation.