If California were a sovereign nation, it would be the fifth-largest economy in the world, slotted in between Germany and India. So the decisions the state makes as it begins to consider how and when to reopen businesses and reboot the economy in the wake of the coronavirus crisis have major implications—and major lessons for both other states and other countries.
To figure out how to do it, Gavin Newsom announced April 17 that he would set up an encompassing task force of 98 members, comprising authorities from business, labor, government, philanthropy, and academia, to streamline economic recuperation in a way that takes into account the needs of different groups. It’s a way for Newsom to take stock before making decisions, in the short and long term.
We’ve got to get these people back to work, but we’ve also kind of build a stronger economy for them coming out of this crisis than we had going into it.”
The task force is co-chaired by Newsom’s chief of staff, Ann O’Leary, and billionaire and former presidential candidate Tom Steyer, who will “ensure the recovery plan is equitable, green, and lifts up under-resourced communities hit hardest by this pandemic,” says his spokesman, Benjamin Gerdes. The members include chief executives from Californian companies as Chipotle, Patagonia, LinkedIn, Gap, and Netflix; small business owners; labor leaders from industries including agriculture, hospitality, education, and construction; community leaders; and members of the California state legislature. It’s receiving advice from four former governors, both Democrats and Republicans.
Also involved is Art Pulaski, the chief officer of the California Labor Federation, an organization made up of 1,200 affiliated unions that work together to promote the interests of working people. Pulaski is also optimistic about Newsom’s task force, says Pulaski’s spokesman, Steve Smith, praising his open-door policy, and stating that the group “really touches upon every area of our economy,” and looks at not only immediate fixes, but more long-lasting ones, too.
That’s true: The task force is split into three separate parts, to address the short term (next 60 days), medium term (before the end of the year) and long term (2021 and beyond). That means a lot of members are looking at this as a fresh start—to rethink the economy and reboot it to include those often forgotten. “We’ve got to get these people back to work,” says Smith, “but we’ve also kind of build a stronger economy for them coming out of this crisis than we had going into it.”
Ninety-eight members is a large number—one that some have called “unwieldy,” expressing concerns about its manageability and reality of making change with so many stakeholders. But the governor’s office plans to not only have meetings with the whole group but divide it into subcommittees, which will meet on a regular basis to dive into more substantive material.
This task force has the opportunity to really set the tone for what economic recovery looks like around the country.”
In the first meeting on April 23, which followed an hourlong Zoom call between Newsom and the former governors, including Jerry Brown and Arnold Schwarzenegger, a few members were asked to take the (virtual) stage: former chair of the Federal Reserve, Janet Yellen, who introduced “the need for long-term economic planning”; Apple CEO Tim Cook, who addressed lessons learned from the reopening of China; and Manuel Pastor, director of the USC program for Environmental and Regional Equity, who urged the need for approaching recovery with a strong racial and social justice framework.
Pastor’s work has focused on the relationship between inequality and economic growth, and on “communities that are often left out of economic and social analysis.” Pastor, who’s also on the governor’s Council of Economic Advisors, says he’s heartened by Newsom’s commitment to an inclusive economy and the notion that “to protect ourselves, you have to protect everyone.” He’s also on Tom Steyer’s Fair Shake Commission, which aims to tackle economic inequality; and he praises Steyer’s commitment. “Tom is someone who’s definitely concerned about how do you grow the overall economy but is very concerned about equity.”
For Pastor, it’s important that the group ensures the most vulnerable are kept secure: the recently incarcerated who’ve reentered the labor market and must compete with other unemployed people; undocumented immigrants, who must be provided a sturdier safety net; and children of color, who may experience setbacks in their studies because they have much lower rates of access to high-speed internet and connected computers, essential for remote learning during a lockdown.
He has some solutions in mind, that would bring in the various elements of the task force: For remote learners, the state could implement lifeline programs that make broadband more accessible for low-income families. He may push for reentry programs for the formerly incarcerated, and governmental assistance as they reenter the job market; and for employers that have hired these people in the past to continue to do so. For undocumented immigrants, he recommends extending healthcare, which is already available to those under 26, to people over 55; relief through not only state government but also the philanthropy sector; and small businesses to support employing them, since the extensive background checks conducted by big businesses may mean they’re unwilling to do so.
Smith hopes that the recovery will address the fact that despite California’s wealth and prosperity, it ranks fourth in states with the greatest income inequality. He says Pulaski will be making the case for the recovery to allow workers to keep benefits and seniority as they go back to work; and to ensure business groups are not advocating freezing the minimum wage phase-in or putting in place austerity measures like after the 2008 crisis.
For Pulaski, this is also a chance to rebuild the economy from the bottom up, to tackle wealth disparities, and to seal up the safety net for workers. Much of that comes in the form of collective power, so a priority for Pulaski will be to ensure workers can join unions within the private sector, and that companies can’t retaliate or punish workers for trying to do so. And, while labor laws exist, they need to be enforced on the state level, so that companies don’t exploit employees with loopholes like independent contracting, which can allow them to dodge providing minimum wage, paid sick days, and safety protections. “It’s kind of like playing whack-a-mole,” Smith says. “You knock one down and you address it—and then they figure out another way.” He also suggests tax incentives, so governments can reward businesses for behaving in a just way.
When do you have people from such different sectors of our economic life in dialogue with one another, about what the state’s economy should look like?”
Garrett Patricio, president of Westside Produce, an agriculture company that grows cantaloupe and honeydew melons in a rural, mostly Hispanic community in California’s Central Valley, says that the governor’s office has been responsive and approachable via email, direct phone calls, and on the Zoom meetings. For Patricio, in the short term, safety is key, and wants to make sure PPE gets into the hands of those essential workers in the fields, and that rural health clinics have adequate testing kits. In the long term, California needs to ensure that it focuses its energy on small- and medium-size businesses—”the lifeblood of our economy” he says—and by way of traditional stimulus programs such as temporary payroll tax cuts, utility credits, and low-interest loans. He also hopes new and innovative ideas will emerge from the group as they diagnose specific pain points.
Newson announced Tuesday his plan for reopening the economy, which will slowly unfurl in several phases. The slow reopening of schools and lower-risk workplaces will still be weeks away. It will be months until gyms, salons, churches, and movie theaters could reopen, and longer still for concert venues, convention centers, and sports stadiums.
Like the reopening plan, some members view the task force as one that could form a model for the country. “This task force has the opportunity to really set the tone for what economic recovery looks like around the country,” says Smith, Pulaski’s spokesman. Still, it is California. Pastor says that, relative to other states, the left-leaning social justice groups in California are too big to ignore, and that the state has a business class that overall values diversity and generally shuns low-wage exploitation. He also says California is “uniquely blessed” with a governor who is smart, successful in business, has a progressive streak, and is willing to listen to others. “Just about everything I said is not characteristic of the president,” he says.
Of course, the ultimate aim of the task force is for it to generate actionable items (hopefully three to five per subcommittee, Pastor suggests, so that it’s a manageable number that can get done). And the members are committed to that goal. “Obviously, we have our differences with the business community in California,” Smith says. “But we have found areas in which to work together.” Patricio hopes that self-interest and partisan politics will be put aside for the greater good of all Californians.
But, for Pastor, the force is worth more than producing action. There’s value in simply setting up communication between a group of diverse and dynamic people who rarely engage with one another. “When do you have people from such different sectors of our economic life in dialogue with one another, about what the state’s economy should look like?” he says. While others have to hear Pastor speak at length about undocumented immigrants, say, he has to listen to Disney’s needs for reopening. In that way, an array of new relationships are formed. “You get to know each other,” he says. “It means that someone else’s issues become suddenly important to you.”