2021 Policy Highlights: “Building Back Better” with Employment Social Enterprise

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As California Governor Gavin Newsom advances his California Comeback Plan and President Joe Biden pushes his Build Back Better agenda, we are seeing policy movement towards building an inclusive workforce.

Government says it’s ready for innovative and big ideas. ESEs are a part of the solution to this economic crisis — and we are ready to act.


Employment social enterprises (ESEs) are often the first chance employer for justice impacted and formerly homeless individuals, opportunity youth, and so many more populations who want to work and cannot access a foothold in the labor market. In many parts of the country, they are the safety net for talented individuals who are sidelined to the margins of the labor market.

There are about 700 ESEs across the country and approximately 200 in the State of California. The economic crisis has illustrated so many flaws in our existing workforce system, like wages, training, flexibility. ESEs are supportive employers in a generally non-supportive market. They are not only providing a critical wage to people striving for a better life, but also on-the-job training, including essential and hard skill training, and very importantly wraparound supports.

Government says it’s ready for innovative and big ideas. ESEs are a part of the solution to this economic crisis — and we are ready to act. Here are some of the policy wins that we saw this year in California and Congress:

ESEs Recognized in California Labor Code (CA Senate Bill 779): With unanimous and bipartisan support from the State Legislature, Governor Newsom signed Senate Bill 779 into law, naming ESEs and worker cooperatives among the recognized “earn and learn” programs under the Workforce Innovation Opportunity Act. This trailblazing legislation opens State funding opportunities to ESEs statewide.

Breaking Down Barriers in the Workforce System (CA Assembly Bill 628): Governor Newsom signed Assembly Bill 628 into law, which will renew and expand the Breaking Barriers to Employment Initiative and ensure the workforce system is more inclusive and equitable. By expanding the list of partnerships that can receive grant funding, including specifically naming ESEs, and focusing the initiative to address racial, ethnic, and socioeconomic disparities more intentionally in the labor market, this legislation will help remove barriers that currently exclude thousands of Californians from accessing critical workforce development professional resources and career services across the state. This policy win is paired with a budget win of $25 million funding for the initiative.

Investments in ESEs through the Clean California Initiative: Within the much-acclaimed Clean California Initiative, there is a $150 million investment that will primarily flow into ESEs. The Governor called for a $1.5 billion investment to transform public spaces and clean public spaces near highways. This initiative includes the creation of an estimated 15,000 jobs, including for ESE employees — individuals who aspire for a quality job while they are overcoming steep barriers to work including incarceration and homelessness. This work will include litter abatement as trash has increased by 70%, fire fuel reduction, and HAZMAT. Additionally, Caltrans plans to create an ‘academy’ career ladders so ESE employees can be hired by Caltrans and work their way up within the agency for a quality career pathway.

Addressing Barriers to Employment Included in Federal Infrastructure Bill: Though the infrastructure bill has yet to pass, REDF was able to get inclusive language included in the current bill. In a section around workforce diversity, the Secretary of Transportation is to report methods to “address barriers to employment in transportation and transportation infrastructure construction industries for individuals who are former offenders…and individuals that represent populations that are traditionally underrepresented in the workforce.” The bill also asks for reporting on economic hiring of “nonprofit organizations that represent employees, outreach and support programs that increase diversity within the workforce, including expanded participation from individuals,” including the populations named above. To diversify the infrastructure workforce, ESEs could be a prime or subcontractor on infrastructure projects, and this language encourages the Department of Transportation to lean into their racial equity and workforce goals.

Reentry Funding Included in Federal Appropriations Bill: The final appropriations bill should pass by December 3, if not sooner. Within the Senate Labor Health and Human Services Committee appropriations bill, REDF was successful in adding ESE-friendly language for the Reentry Employment Opportunity (REO) program, which provides current or formerly incarcerated youth and adults with occupational skills training for industry-recognized credentials and apprenticeships leading to employment in good, well-paying jobs and careers with opportunities for advancement. The bill states: “The Committee encourages the Department to prioritize grants to intermediaries and community-based organizations that will address the inequities deepened by the pandemic by serving populations with multiple barriers to employment and providing wraparound services to the individuals served.” Knowing that many ESEs employ individuals with many structural barriers to employment, our aim was to include the entire sector in this program, which has helped other ESEs scale.

REDF Head of Policy Manie Grewal meets with Chike Aguh, Chief Innovation Officer at the Department of Labor and employment social enterprise leaders Will Avila and Michael Plummer of Clean Decisions.

On top of our legislative and budget wins, REDF and our partners continue to meet with Congressional offices and federal agencies and testify before Congress, demonstrating the role ESEs can play in stimulating the national economy, combating multi-generational poverty, and addressing economic, gender, and racial disparities.

All of this work is supported by our national coalition — Resourcing Social Enterprises Together (RESET). In just over a year, it has grown to almost 60 organizations nationwide and advocates for ESE inclusion in economic recovery packages to serve even more people who are especially vulnerable to the economic and health crises, and the racial inequities that so starkly persist.

These wins and organizing — at a critical time for shaping our economic recovery — will have ripple effects for years to come. Language is powerful, and we will continue to encourage our government leaders to ‘comeback’ and ‘build back better’ in partnership with ESEs.