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California experiments with social democracy

In summary

A flurry of laws signed by California Governor Gavin Newsom is an experiment in European social democracy. Will it work?

California, as everyone should know by now, has the highest poverty rate in the country, as determined by the Census Bureau when the cost of living is included in the calculation.

While family incomes in California aren’t particularly low compared to other states, our extremely high living costs, especially on housing, mean that those incomes don’t stretch as far as they would. elsewhere.

The Public Policy Institute of California takes it a step further by calculating how many Californians live in near poverty, using a methodology similar to that of the Census Bureau.

In total, more than a third of the state’s roughly 40 million people are in severe economic distress. They are, for the most part, workers in low-paying jobs and their families, and their plight has been exacerbated by the nearly two-year COVID-19 pandemic, which has hit them the hardest both in terms of medical than economic.

Backed by unions, Gov. Gavin Newsom and his fellow Democrats pledged to reduce the state’s high levels of poverty and income disparity and this year generated a basket of bushels of laws that they say will reduce deviations.

California is indeed testing the long-held beliefs of the political left that America should move closer to the European model of “social democracy” by expanding supportive public services and empowering workers in their dealings with it. employers.

The former include increasing eligibility for Medi-Cal, the state health care system for the poor that already covers more than a third of California’s residents, expanding early childhood education childhood to both improve learning outcomes and free up more parents to work, and increase housing expenses for low- and middle-income families.

The latter is a variety of bills that impose new labor and pay standards on industries that employ large numbers of low-paid workers, including clothing production, agriculture, and the ever-growing distribution centers operated by Amazon and other big companies.

“We can’t allow companies to put profit before people,” Newsom said as he signed a law to relax production quotas at Amazon’s huge “distribution centers”.

“The hard-working warehouse workers who have helped support us during this unprecedented time should not have to risk injury or be punished because of operating quotas that violate basic health and safety.” , Newsom added.

“California holds corporations accountable and recognizes the dignity and humanity of our workers, who have helped build the world’s fifth-largest economy,” Newsom said later as he signed a bill banning piece-work in the garment industry centered in Los Angeles.

Newsom also signed bills to extend protections for domestic workers, increase the minimum wage for workers with disabilities, increase criminal penalties for “wage theft” by employers, and provide agricultural workers with smoke protection equipment. forest fires.

This is not, however, a 100% sweep for union-backed legislation. Newsom has vetoed a bill allowing postal voting in elections for the agricultural workers’ union organization and one that would extend paid family leave.

Expanding government services will of course cost the state billions of dollars, which it can afford now as income taxes pour into its treasury, but its sustainability is questionable. California is overly dependent on high-income taxpayers, which means its income plummets during an economic downturn.

New benefits for workers, meanwhile, will drive up costs for employers, potentially prompting some to move their operations and jobs to less expensive locations. The clothing industry is particularly competitive, which is why a large part has already gone abroad.

Higher public and private costs are the flip side of the California experiment in social democracy. Ultimately, Newsom and the legislature cannot repeal the laws of economics.


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Rodney N.

The author Rodney N.

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