California Bars Unemployment Benefits for Striking Workers, Citing Debt

Newsom Overrules Bill Backed by Union Allies as Recession Risks Loom

Sacramento, CA — California will not permit workers engaged in prolonged strikes to collect state unemployment benefits, despite support from powerful labor allies, after Democratic Governor Gavin Newsom vetoed legislation Saturday he argued could worsen a looming budget shortfall.

Inspired in part by recent Hollywood and hospitality employee walkouts, the vetoed bill aimed to deliver jobless aid to strikers once disputes extend past two weeks. Proponents called those relying on picket lines for income victims of forces beyond their control deserving a safety net.

But Newsom maintained the move would have inflated debts California’s depleted jobless insurance fund cannot currently shoulder as economic red flags emerge. “Now is not the time to increase costs or incur this sizable debt,” his rejection message read.

Unemployment coffers ran dry early in the pandemic before borrowing billions from Washington, leaving reserves $18 billion underwater even after two years of job gains. Newsom’s administration warned outdated tax formulas cannot finance benefits under the status quo as conditions deteriorate.

Labor leaders blasted the move denying strikers critical stopgap support during lengthy negotiations or for forgoing wages securing better workplace standards. The shortfall projections were also dismissed as overblown relative to helping vulnerable pockets of workers cover basics until disputes resolve.

By spurning allies advocating on behalf of recent hotel and showbiz stoppages, Newsom risks friction with a vital Democratic constituency ahead of an anticipated 2024 presidential bid. The veto burnishes his fiscal centrist bona fides but reopens recent wounds over pandemic aid as Sacramento girds for leaner budget years.

Lawmakers could attempt a veto override vote unseen in decades, teeing up an election year clash between Newsom and sympathetic picketers. For now, the governor has paralyzed momentum behind additional unemployment access that could have pragmatic plus political benefits for him and his party if economic instability worsens in 2023.

Image courtesy of Jeanne Menjoulet under CC BY 2.0 DEED Attribution 2.0 Generic