Senate Standing Committee on Labor, Public Employment and Retirement

Do I just jump in, too? After Senator Norris jump in, is there introduction? Just their name. Then you could do just their name. And who are there?

The Senate Labor Public Employment Retirement Committee and Budget and fiscal review sub five will come to order. Just to acknowledge, obviously, we have Committee Members here from both committees. Importantly, Senator Durazo is here, the chair of budget Subcommitee five sitting to my right.

And I just want to note, before I forget, as I go into some instructions here in terms of how the hearing will go along, that I will be leaving and coming back and possibly leaving and coming back again at some point because of a presentation I have to make over in the Audit Committee.

That said, let me get through some details here, including housekeeping for individuals wishing to provide public comment via the teleconference service, a participant toll free number is 877-226-8163 and the access code is 694-8930 again, that's for public comment on the teleconference line. For individuals wishing to provide public comment via the teleconference. I'm sorry. We also have representatives who are participating remotely for our remote participants, please mute your phones or computers. Please select unmute before you begin speaking.

Our IT personnel will put you back on mute when you are done. Once recognized to speak, please make sure you can be seen on the screen. State your name and then you are ready to address the Committee for Today's hearing. We will be hearing all the panels of witnesses on the agenda prior to taking any public comment. Once we have heard all the witnesses, we will have a public comment period.

For those who wish to comment on the topics on today's agenda, please limit your comments to 1 minute. Again, this is a little different than a policy Committee meeting where we have teleconference speakers and additional speakers in the room speak, typically with only their name, affiliation, and opposition or support. There's no opposition or support today, so we just simply have a 1 minute limit for those listening. Let me just make some brief opening remarks, and I will turn it over to Senator Rosso.

And I'm very excited, of course, to have Senator Smallwood-Cuevas on our labor public employment and retirement Committee. She's going to be a great asset. We've had an opportunity more than once, more than a couple of times, to talk about these very issues that we are dealing with today. And in addition to her broad expertise in all of these areas, she's going to be particularly helpful with us when it comes to the equity conversation. So looking forward to that.

We all know the struggles that Californians have experienced in the last decade due to climate change, California's simultaneous climate crisis, those things within that drought, wildfire, flooding, rising sea levels, and strains on the energy grid, of course, have presented many challenges. Climate change itself is no longer a theoretical issue, and the state has made multibillion dollar climate energy investments to help mitigate its impact.

Depending on which version of the budget you might be looking at at this moment, that would be just out of last year, $52 to $54 billion. As many of you know, with a goal of achieving carbon neutrality no later than 2045 and 90% clean energy by 2035.

We feel, I feel, and I can speak in this case on behalf of my colleagues here, this imperative that we plan and strategize at all levels of government and with the help of our community stakeholders to make sure we can meet these goals and take advantage of the opportunities they present. The Federal Government has also taken bold actions to address climate change by establishing greenhouse gas emission reduction goals and aiming to achieve net zero emissions economies by 2050.

Of course, two landmark bills passed by the Federal Government will come up today, the Infrastructure Investment and Jobs act. Some people are for short now, referring to that as Bill and the Infrastructure Reduction Act. Ira are making investments of nearly 700 billion to help us achieve these goals.

Against that backdrop and these changes on the horizon, these investments heading our way, or alternatively, out the door from our own agencies, it's crucial that we pause and study the impacts and opportunities that this presents for California workers and the people who employ them. What does the future of our workforce look like? What does growing the pie look like in the context of a California for all?

When we look at these investments, how do we integrate labor protections into the investments to ensure high quality jobs are created? How do we ensure equity in the access and implementation of these resources?

So, the hearing today is going to attempt to inform, if not answer, some of these questions by helping us identify and evaluate federal and state dollars, review the procurement process, an area that Senator Durazo has spent an immense amount of work in, and evaluate what labor standards are attached, or should be attached, as the case may be. If gaps exist. We need to take action now to close those gaps and position California to compete for federal funds and create high quality jobs along the way.

Again, this is labor, public employment and a Subcommitee five convening. But all of us, by prior discussion, are in agreement that this is an opportunity for workforce and employers alike. With that said, I'd like to invite our chair of Senate budget Subcommitee five to make some opening comments and again, I'm going to turn the gavel over her. We'll be alternating chairing this meeting all the way through. Obviously, it is a joint meeting. Thank you, Senator. Thank you for all your work in the procurement area.

We're very excited about the legislation you're bringing forward this year, and we'll go ahead once you're done and invite the first panelist to come forward. I will see you all shortly. Okay, thank you. You're always in control, Senator Durazo. I've learned that my first two years here.

Thank you. Thank you. And Senator Smallwood-Cuevas, the staff of Senators Cortez's staff, the Committee staff, all Senator Smallwood-Cuevas, everyone who helped put this together and everyone who's making presentations. It really, really took a lot of work. And so I appreciate, and I know this is the first time this sort of conversation has taken place, and so I'm very proud of it, and I'm really excited to hear from the panelists. But even though Senator Cortez just left, he led this.

He made this happen, and I'm really grateful to him for that. Rather than a lot of small pieces, he helped bring it all together. We all know we're in the midst of an industry changing moment in infrastructure, in manufacturing, in sustainability sectors. Our hope lies in a worker centered, climate resilient economy. So in the coming years, we have the opportunity to determine how billions, actually tens of billions of dollars are spent in our state.

A commitment to climate should also mean a commitment to the working men and women, to their families, to their communities, to equity. California has several examples I'm proud to know of reducing emissions, creating good jobs, broadening opportunities for disadvantaged workers. And I look forward to hearing more about these examples today and learning how we can replicate those successes statewide. Reducing emissions is critical to our survival period.

Our emission reduction efforts must include, though, community benefits agreements that protect family supporting jobs, quality training, and new opportunities for workers from some of the lowest wage earning counties in the state. Even though they work, they can't pay the rent or put food on the table. The research is clear that absent state policy, the new green jobs will not be the quality jobs that currently exist in fossil fuel industries.

And I'm talking generally because I know we have some businesses, employers who are doing the right thing in the right way today. Currently, green jobs pay 40% less than fossil fuel jobs. Think about that. Green jobs pay 40% less than fossil fuel jobs. Fossil fuel occupations pay an hourly wage that allows working adults with less than a college degree to provide for their family's needs. It doesn't have to be that way. It doesn't have to be that way.

So we must expand agreements between business, labor, community groups, not only to the construction careers and jobs, but especially for investments to non construction jobs and investments that do receive public funds. State and local agencies can use enforceable job commitments for energy efficiency retrofits, for electric vehicle charging infrastructure, and so many other activities. We can also use similar agreements in manufacturing, in waste management, in fire prevention, in food sustainability, and many other greenhouse gas reducing efforts.

So this same principle has been applied in many different initiatives in my district and can be replicated in statewide initiatives today. We'll hear about those successes. It's not enough to finance and incentivize major climate projects. We have to ensure that the people building those projects have access to quality jobs, training, and that California is not subsidizing Low road companies. We have a legal and moral responsibility to protect our taxpayer dollars, our taxpayer investments.

Our dollars must be invested in the greater good and not to make a few people extremely wealthy. We cannot go another year without a serious commitment to working families. In our climate planning, this means job commitments in procurements, contracts and subsidy programs. This means state agencies must make decisions using the lens of equity. This means formalized agreements between agencies so they can learn from each other and share the vast amount of expertise that already exists in California.

No need to start from scratch over and over and over again. And I'm proud that LA Metro is advancing these benefits for our communities in Los Angeles. This can be done. And if we want to meet our climate goals, it must be done to scale. By acting now, we can only bring needed infrastructure and other climate adaptation projects to our districts. I look forward to hearing from our panelists today.

We're going to create more middle class jobs for Californians, for all Californians, and your recommendations for creating the administrative architecture at the state level to protect taxpayer investments. So, with that, we're going to move on with the panel, right? Oh, I'm sorry. Senator Smallwood-Cuevas. Yes, I'm sorry.

Thank you, Madam Chair. And thank you again for your leadership and Chairman Cortesi's leadership in pulling this important discussion together. I think I'll just add, I appreciated all of the comments that you made and agree with those. The one thing I will add is that I represent the 20 eigth district. The 20 eigth district is the heart and soul of La County. It includes all of south central Los Angeles. It includes parts of skid row.

It also includes some of the most wealthiest census tracks in our state. But I want to say, across my district, there is one thing that I've heard from every corner and is that we've got to deal with the economic disparities in LA County. So, this can be a place where all Angelinos can live. My district has the largest number of Low wage workers in the state. An estimation of over a million workers in my district of La County are operating in poverty jobs.

And we know that's an undercount because there's so many of the workers that we haven't been able to reach because of status and other reasons. I say that because workforce is not about simply work, it's about communities. And when workers do well in our communities, our communities do well. And when our communities do well, our cities, our counties, and our states will follow.

So as California is poised to receive 41.9 estimated $41.9 billion in climate resiliency funding, in infrastructure funding, funding from the Federal Government, we cannot let this opportunity skip over our hardest hit communities. We cannot let this opportunity create more harm. And I want to tell you about the harm that economic shifts make in my district. South Central was the second largest producer of vehicles in the 1960s, largest behind Detroit.

The number one employment of black working age male adults in this county in 1970 was heavy and light manufacturing. That is what built the middle class black communities of Compton, of South LA, of the Crenshaw Baldwin Hills area. It was the opportunity to be in a good job and to be in a union. Over 30% of my district in those jobs were unionized. Good jobs.

And I want to say it is only in a union that black communities, particularly the hardest hit, it is only when black workers are in unions that they actually earn the same as white counterparts. And when we look at the public sector, it's the only sector, unionized sector, where black workers are equitably represented in quality work. The relationship between job standards, union contracts, real skills, and apprenticeship, Journeyman certification is what makes a difference in black communities. It is proven.

So when we talk about how we have to repair harm, when we talk about the deindustrialization of south central Los Angeles, the deregulation, when we talk about the deunonization of south central Los Angeles, we know what that fallout looks like today. We're dealing with it every day as we're addressing homelessness, we're dealing with it every day as we're addressing disproportionate numbers of black folks dying and sleeping on the streets every day. Disproportionate numbers of black folks incarcerated in our state prisons every day.

Black residents dying 17 years earlier than other folks in my county. Why? Because of compounded poverty and lack of opportunity. The fastest growing population in my district is black seniors who are now sleeping on the streets. Fastest growing homeless population. This boils down to not having a good job that provided a safety net and a pension later in life.

So as we look at the opportunities of making this investment and really critically meeting the climate resiliency goals, which are phenomenal for 2000 and 32,045, we absolutely must have a workforce roadmap that takes those communities most impacted by the deindustrialization of our inner cities and put them at the front of the line in this opportunity.

We have to make sure the industries that women do, which are disproportionately Low wage and not sustaining our families, we've got to put women at the front of this opportunity for climate resiliency. So I'm very excited about this hearing. I'm very excited about the work that we have to do, because whether you're an environmentalist or a worker rights advocate, we know California can and will do better. And where we go, the nation will go. So let's set that example for equity.

Let's work together to ensure that our roadmap for workforce and quality jobs is realized in this moment. So thank you very much, Madam Chair, for your time.

Thank you so much, Senator. And I'm so appreciative that you're on this Committee, so appreciative that you're here with your incredible life experience and organizing experience and commitment to California. So thank you very much. We're going to move to the panel now. The first panel, and our first panelists are Francisco RSu and Carol Zabin from the UC Berkeley Labor center. They will discuss the alignment of state and federal investments, and each panelist today is allotted 10 minutes to speak.

Francisco, do you want to come on up to the. Carol, do you want to just come up at the same time? And then, since you're both on the same panel, do.

I'm sorry, Ms. Aven. I shouldn't be calling you Carol. Thank you, Lola. You were excellent.

All right. Okay. Thank you. Good morning, Senators. Thank you for the opportunity to be here today and present. My name is Francis Kwarzu. I'm one of the co directors of the Green Economy program at the UC Berkeley Labor center. The Green Economy Program conducts research on issues of job creation, quality, access, and training in the emerging green economy. In addition, we provide research and technical assistance to state agencies, labor, and other stakeholders who are engaged in developing and implementing policy related to energy and climate change.

Over the past year, our program has been paying close attention to federal legislation that addresses climate and workforce goals. And this morning, I'm going to be providing you with a quick summary of the research on the bIL, the Ira and the Chips act that was requested by Senator Cortesi's office for this hearing. I'm going to start with the bipartisan infrastructure law, since it's the oldest of the three laws and the one that we have the most information on.

The bill, as is commonly known, was signed on November of 2021 and represents an investment of $1.2 trillion by the Federal Government for the purpose of modernizing our nation's physical infrastructure. These funds will be available and distributed over five years from fiscal year 2022 through fiscal year 2026. The funding is going to be distributed among 380 federal programs. $650,000,000,000 of that funding will be used to reauthorize existing funding, and 550,000,000,000 will go towards new programs.

The BIL, or Bill, also includes the build America by America act, commonly known as BABA. It's a domestic preference requirement that states that all iron, steel, manufactured products and construction materials used in federally funded infrastructure projects built after May 14 of last year have to be produced in the US.

In the materials that we submitted for this hearing, you're going to see a list of the federal agencies that have funding available through the Bill, but just to quickly go over those, they include the Departments of Energy, Transportation, Agriculture, commerce, the Interior, health and Human Services, homeland Security, the EPA, the US Corps of Engineers, and the General Services Administration. Of all of these, the DOT is by far the agency with the most funding at six hundred sixty-one billion dollars.

The type of funding that it's available through the Bill includes mandatory grants, discretionary grants, loans, bonds, technical assistance, and cooperative agreements. In terms of how much funding California will be receiving as part of the BIL, it is estimated that California will receive $41.9 billion over the five years of the BIL, this will be mostly through formula funding, but California will also receive additional funding as more of the discretionary grants get released and awarded in the state.

As of late last year, California had been allocated a total of $16.3 billion through the bIL, and there had been a total of about 480 projects identified for the funding. Now those numbers are higher. Now, the newest fact sheet for the State of California was recently released, so we can make sure to include those numbers for your offices. But it's higher. Now. The largest chunk of that money allocated so far has been for transportation, which has received 14 of the $16.3 billion in California.

And that money is going for things like roads and bridges, public transit, clean buses, electric vehicle charging stations, just to name a few. The report that we provided you also has more comprehensive breakdown of those numbers. And then just lastly for the bil, what I wanted to go over are just the labor standards that are included in the Bill. Projects funded through the BIL are subject to prevailing wage standards under the Davis Bacon Act.

President Biden also signed an Executive order last year requiring that project labor agreements for large scale construction projects that have an estimated cost of 35 million or more have a project labor agreement. A large portion of the BIL funding is also going to public works projects, which means that California's apprenticeship requirements for public works projects over $30,000 will apply for this. So that's for the bil. Now moving on to the Inflation Reduction act.

The Inflation Reduction act, or IRA, was signed in August of 2022 with the goal of building a new clean economy through the use of tax credits, loans, rebates and direct federal spending. The Ira will invest 390,000,000,000 in climate and energy programs and initiatives over a period of 10 years. It consists of 125 programs, 66 of which are new or contain new components. We're still at the very early process of implementation.

Rollout for the majority of the programs is expected to happen until late this year at the earliest, and will go into 2024 and beyond. Federal agencies have been taking some actions already to begin the implementation process. This includes releasing guidance and notices of available funding, requests for information and guidance for tax credits.

The federal agencies that will be administering this funding include the departments of Agriculture, Commerce, Energy, Homeland Security, Housing and Urban Development, the interior, Treasury, transportation, the Environmental Protection Agency, the General Services Administration, and the US Postal Service. Funding through the Ira consists of formuLA and non formuLA grants, loans, direct federal spending, and tax credits.

Of these tax credits are the largest component of the law under the IRA, state governments and other eligible entities without a tax burden can actually qualify for tax credit benefits via direct pay. Direct pay means that these entities can receive upfront payments to be used as capital rather than tax deductions or tax refunds. Similar to Bill, Ira funded projects are subject to prevailing wage requirements pursuant to the Davies Bacon act.

However, the Ira creates incentives in programs that don't use direct public funding, such as tax credit and loan programs, to encourage also prevailing wages in the deployment of that funding. So most of the tax credit programs increase the tax credit five times if it includes prevailing wage. Also similar to the Bill, public work projects of over $30,000 using Ira funding will have an apprenticeship requirement in the State of California.

The Ira also creates incentives in programs that don't use directed public funding, such as tax credits and loan programs, to encourage apprenticeship programs as well. Most tax credits increase by five times if apprenticeship requirements are met. Now moving on to the Chips and Science act the Chips and Science act was signed into law on August 9 of 2022. It commits over 280,000,000,000 in federal funding over the next 10 years to ramp up American semiconductor design, research, development and production.

A large portion of the funding, about 170,000,000,000, will go into research and development in advanced new technologies. Most relevant for this hearing, though, $52.7 billion of that funding is going to go to semiconductor research and development, manufacturing and workforce development as well. This 52.7 includes $39 billion for manufacturing incentives, 13.2 billion in research and development and workforce development programs as well, and 500 million for international communications technology, security and semiconductor supply chain activities.

The first funding opportunity for chips was actually just announced in February of this year. It is for the construction, expansion or modernization of commercial facilities in the fabrication of leading age, current generation and mature node semiconductors. Awards will take the form of direct funding, federal loans and or federal guarantees of third party loans. Applicants for this program are required to secure state and local incentives.

In addition to this funding opportunity, the ChIPS program office is expected to release a funding opportunity announcement for semiconductor materials and manufacturing equipment facilities in the spring of 2023 and one for research and development in the fall of 2023. The labor standards in the CHiPs act include prevailing wage where applicable, but the law also outlines specific goals around workforce and equity standards, such as, for example, creating good paying jobs and building strong communities.

This really seeks to create workforce development investments that will create opportunities to increase industry participation for economically disadvantaged individuals and populations that might be underrepresented in the industry, such as women, people of color, workers in the rural areas, and veterans. It also includes expanding the workforce pipeline to match increased domestic capacity. Workforce needs to this end, the Chips incentives program looks to prioritize workforce solutions that enable employers, training providers, workforce development organizations, labor unions and other stakeholders to actually work together.

The goal is to create more paid apprenticeship programs, provide wraparound services, prioritize creative recruitment strategies, and hire workers based on their acquired skills. So as you can see, this is a lot of information. Yeah, a lot of money, and I could go into many different ways, but I'm going to stop here and we'll be happy to conduct any additional research that might be needed for this. Thank you.

That's very good news. So I appreciate it. Thank you for all the work of putting that together.

Ms. David?

Yes. Am I on? No. Now I am. Thank you so much for the invitation, Senator Durazo and also Senator Smallwood-Cuevas and of course, Senator Cortese, too. What I want to talk about today was so well articulated by the two Senators already, but I'll go into a little more detail.

We do have enormous potential and power to create, sustain and grow high road jobs and open up those jobs to folks who've been excluded through both the federal funding that Francisco just talked about and also the state funding that Senator Cortese talked about. So what I'm going to do very quickly is talk about what our workforce standards and why we need them, the state commitment and progress so far, and then the gaps and the remedies that we are discussing and can put forward.

The need, of course, is that as you so articulated, we live in an economy that is full of Low wage jobs. And when we look at the actual work that is needed to reduce our emissions and get us to a zero-carbon economy, it's blue-collar work. 70, 80, 90%. When you look at the hundreds of programs at both the federal and state level involve work by construction workers and trades workers, also manufacturing and some service as well. But it's basically blue collar work.

And we know in our economy that unless those jobs are union or public sector, they very easily fall into our low wage job trap. So, we have to be really intentional. And our policy tools are workforce standards. And those standards include, there's specific ones for the construction industry, including our prevailing wage and public works laws, but also other tools like community workforce agreements, project labor agreements, apprenticeship standards, skilled and trained standards. But those same kinds of standards can also be applied to manufacturing.

We don't have as developed an infrastructure either in what the state does or what industry does. But in terms of, we don't have widespread apprenticeship, we don't have prevailing wage laws, but those can be built. They were built for construction, so they can be built for other industries. We have made a commitment in California to the idea of high road jobs and access to those jobs from folks of color, from Low income communities.

We see that in the jobs and climate action plan that Assemblyman Garcia mandated in AB 398. We see that in the future of work Commission recommendations. We see it in the Air Resources Board recent investment guidance, and we see it in a series of laws that some of you have been instrumental in, of course, and authored.

And I won't go into all of them, but in the brief that samapel of our center wrote and that you guys all have, it's figure three, but there's a whole lot of laws that have been passed that have targeted specific sectors or specific climate programs and put in a varying degree of labor standards. And this has hit residential and large construction. It's targeted school bus manufacturing, building retrofit, truck driving, transmission construction, ev charging station construction, et cetera. And so we've made a lot of progress.

In some ways, we're ahead of the feds. In other ways, we're behind the feds.

And I think we should acknowledge that we can catch up to them and also strengthen some of the ways we're behind the feds is they already have an MOU of understanding with memorandum of understanding between the Department of Energy and the Department of Labor, for example, where the Department of Labor has a real role in helping the Department of Energy set standards, because one of the problems is that the agencies in charge of implementing our climate policy, their expertise is climate.

And they know how to set environmental standards, but they don't know how to set labor standards. Those two things operate really similarly in the marketplace. Environmental standards set a bar that supports those employers who are doing good and doing the cleanest technology, and labor standards set a bar for responsible employers. And so they work really the same, but they take expertise on both sides. And the labor folks don't understand the details of the climate policies, and the climate folks don't understand the details of labor policy.

So that's one area that the feds actually, although it originated here, because we are Julie Sue's home base and we're also, I would say, the Department of Energy created a new climate jobs. What's it called? The Department of Energy jobs that is directed by a former staffer at the labor center. So those relationships that were built in California actually have succeeded in important improvements at the feds.

And of course, the tax credits is also a very powerful thing that we haven't done in California, but we've done a lot with these bills and with our overall commitment. There are gaps, though, and I'll turn to those before I end. And in the brief, we can see that of the state spending, and this is figure four, there is quite a bit, we have covered much of construction with very good labor standards, but it's not complete.

The whole residential sector hasn't been covered with standards, and the many programs that hit it don't have workforce standards on them. So there are gaps in construction and there are way bigger gaps in manufacturing. And in the other sectors that you mentioned, Senator Durazo from forest management, those are all public contracts and there aren't standards on them yet. And that's a huge amount of money.

Of course, the manufacturing that's involved in, for example, transmission, yes, the installation of the grid is covered by prevailing wage, but all the materials and the manufacturing that goes into that. We've made some progress with school buses, but we have to expand that to all big manufacturing things that the state procures. So there's a lot of room for improvement.

And again, what it takes is it both takes a mandate, a broad mandate that says this is our commitment and that directs agencies to really build up their own infrastructure to get down to the details in the myriad, myriad hundreds of programs that each put out contracts and each need some customized language that encourages or mandates labor standards and then also helps open up paths into those good jobs for folks who haven't been in the good jobs economy.

So we need the mandate, and then we really need staffing up and agreements and authority for those who do have expertise, the folks in the labor agency, to help the other agencies like the Energy Commission and the CPUC. And of course, ARB. And ARB, for example, is inviting that and looking for that help. But there's so many programs, and not everybody is as open armed as the ARB has been lately. So direction from the Legislature and the Administration, of course, are important.

So I think I'll stop there.

Smallwood-Cuevas, do you have any comments or questions for our panel?

Thank you so much. And it was certainly a lot of information and some light reading that we have. But I really appreciated the summaries. And I will start with you, Ms. Zabin. And I appreciated the opportunity for creating a good job onboard for communities.

When.

I talked about the industrial shifts. What we see a lot in my district is a shift from an industrial to a service economy, and we weren't in front of that service economy. And so we are paying this backup in terms of raising the minimum wage, trying to create ladders of opportunity, making sure that hardest hit disadvantaged communities aren't in the bad job, Low wage job trap. So I appreciated those comments.

I guess my question that I had you mentioned about you closed with the Legislature and the Administration giving direction. I wanted you to elaborate a bit more on what you mean by that. And I want to just follow up that question in terms of.

Maybe both presenters can speak to this, but how can we ensure that the state and federal principles, values, and articulated mandates are aligned, and particularly around the building of good jobs and making sure we are building good jobs for those hardest hit communities? So, question on the direction. What kind of direction do you see as being beneficial from the Legislature? And then are there very particular legislative tools that can help us better align the state and federal guidelines?

Um, well, I'll tell you what I've seen from the bottom up, because I've been working in this for about 15 years, and I think Tim Rainey is here and he'll be testifying, too. But I remember, like, I think I'm on. Am I?

Yes.

Okay. I remember early days when we were working on the mandate that Assemblyman Garcia gave us to write the jobs and climate action plan. Tim Rainey and I would go and talk to the energy commissioners or their staff about how they could incorporate workforce standards in various programs. And again, there were hundreds of them, and we really were talking on deaf ears at the time because they just didn't understand their role as economic development actors.

They cared about jobs, but it was about the number, and it was, how many jobs can we squeeze out of this? But it wasn't about quality jobs or career track jobs. There was a little attention, maybe we could call it lip service from this date towards equity and towards opening up those jobs, but they didn't marry job quality with job access. So we'd have programs to help Low income folks get into doing Low income weatherization, which is the worst job in energy efficiency. Right.

So I do think that we need staffing and agreements to share that expertise that I explained, and then we need some sort of overall mandate, and maybe that's in your Bill. Right.

And I'm not an expert in terms of exactly how to do it in terms of writing the legislation or negotiating with the Administration on what's possible and feasible, but what I do know is that having a governance over these programs where the labor agency has some role and where workforce standards are a commitment and then the staffing, those things are, I think at least some of what is critical. Does that answer your question? It does.

Thank you so much. And I had a question for Mr. Arzu, and I appreciate how we're talking about giving workers, particularly around these blue-collar sectors, an opportunity to get to good jobs. I'm also curious about, as you laid out, all of the investments and where they are, how do we also create good employers, particularly in the minority owned, women owned sector, to really participate in receiving these funds and also raising standards?

Do you see there's an opportunity for that in terms of the way, for example, I think it was mentioned the MOU that the DOL has with the Department of Energy, for example, is sort of spelling out some criteria there. Do you see there's an opportunity for the State of California to also create good, strong, quality job employers through the DBE community and these investments? And how do we get those dollars to those minority women owned businesses?

Yeah, absolutely. I think if you look at the presentation that I gave and some of the research that we conducted was really looking at kind of where we are in terms of these different laws. Right. But the spirit of the laws, actually, the intent is to address some of those issues specifically. They are living it up. I think the language is stated as goals, as a way to provide opportunities for governments to actually come up with ways to actually meet those goals.

And I think some of the funding is going to be about the language and the requirements that are placed into getting this funding, where we have the opportunity to actually address those issues of the get to equity and who actually gets access to this funding and so on. One big part of that, too, is going to be through the discretionary grants.

A lot of that funding is going to be to be going out to private employers who are going to have to bid to be able to get these programs. And through the bidding process, there's going to be an opportunity actually to include also language that specifically requires these employers to include plans on them that addresses these issues. Right. Of how do we make sure that they actually go to the people that are intended to go to. Right.

Because part of the legislation is that it's looking for the funding to benefit disadvantaged communities. Right. So I think that's going to be the opportunity to do.

Thank you.

Thank you. Senator, a couple of questions for Mr. Arzu. With regards to local hire initiatives. How have these interacted or worked together with tools like, I understand the US employment plan to be able to get resources to very specific, targeted communities. Could you talk about that a little bit?

I mean, one of the things that's a bit difficult to address on that question is that it really depends on which law you're looking at. Right. So the funding that has gone out through the bil, there's a lot more information of that, but it's actually just been like a small percentage of the funding that's been distributed.

When we're looking at the total package and when you're looking at the IRA, like I mentioned on the presentation, they're still coming up with the guidelines that actually are going to be dictating how these things actually can happen.

So I just think there's still a big opportunity for the State of California to actually make sure that as that money gets rolled out into the state, that we actually come up with language and requirements and the infrastructure to make sure that actually we include those kinds of programs into the legislation, into the funding programs.

Okay. We want to stay on top of that to be able to use tools specifically for local communities. And I know it's been an issue and an obstacle in the past, and I'm glad to see we have an opportunity to move more closer to using tools that allow us to hire from the local communities. I understand that, like the chips could or does require applicants to provide affordable childcare. Does that mean that there are other programs or other things that could be provided also?

Are we limited to as far as federal funding, or is it broad enough that we could do a more comprehensive community benefits types of agreements?

I will have to look specifically into this if there's anything additional, and I can make sure to get back to your office on that. But again, I think one of the things that I want to just remind. Right. Is that again, the spirit of the law is actually about not just doing the bare minimum, but actually setting minimum standards so we can actually get to the bigger goals. So I think there's an opportunity for additional types of.

Great. And then I know there's lots of questions that we have, and I'm sure we'll be getting back to you. Ms. Saban, do you have examples of public agencies in California that have adopted criteria in their contract process? How do you operationalize job creation and hiring initiatives?

Sure. I mean, La Metro comes to mind immediately. Of course, they're here where they have adopted a policy that includes encouragement of community benefits and minimum standards, which I should mention could also be supported by our workforce dollars. And I do think that we didn't really mention that piece because I always think that you have to create the good jobs first before you start talking about workforce development.

But right there, ready to go, is the high Road Training Partnership initiative, which is funding by the labor agency and the Workforce Development Board to support the kinds of standards that La Metro has adopted and really actually make the implementation happen in terms of getting folks trained and ready to be employed into good jobs and encourages those employers who make commitments to training and to local hire. So La Metro, as far as I know, is kind of the best example in California for the manufacturing sector.

We have many more examples in construction of agencies doing the right thing with plas and community workforce agreements. Okay.

And I think Ms. David mentioned, I'm not sure if Mr. Azu mentioned, is the familiarity and the much more experience on construction labor standards and a lot less, if any, on non construction standards. How do you see building towards that and continuing to build on the construction side, but how do we move on the non construction side in the same direction? What are some of the things that you think we could or should be doing?

Well, certainly the work of jobs to move America and the US employment plan are really key for the manufacturing sector and can be used for other contracting. That is really procurement, which I would include the forest management because that's state contracts. I would include waste, I would include some other sectors.

And so what that does is in that particular case, and there's variations of it which I think you all are familiar with, but essentially it asks employers to state what their commitments are to being a good employer, and that's transparent. And they are ranked as part of their bidding process so that, of course, they have to be able to produce cheap, efficient buses or whatever they're bidding on.

But they also get extra points and are ranked on their commitments to labor that can be strengthened through mandates. Again, you do have to customize it to the situation, but I think the US employment plan is a really good tool that is trying to replicate what we have in construction to the other sectors. Now, we do have to build up our certifications and training because that's the skill standards. They're not the only standard.

Wage standards are certainly as important, but skill standards help, and that's what construction has that manufacturing in this country has very little of. So that's a governmental and industry infrastructure that we have to build over time. I mean, it did take decades to get where we are in apprenticeship, but there's no reason why it can't happen in manufacturing.

Well, it certainly makes sense for efficiency that there be sort of centralized operations of training and apprenticeship programs, because everybody off on their own is a duplication, I think, of resources that doesn't make sense, but we'll hear from employers today, too. Okay.

I just wanted to do a follow up, and I appreciated the point of how you talked about the need to centralize and bring the pieces together and that the skills and the labor and the workforce development, sort of the building of the training, the recruitment and training of those workers and then the labor standards all come together. And I was just curious about, and this is my freshman showing in terms of being new in this space.

But as we think about the benchmarks for our state and then we think about what I'm going to call a cluster of sort of workforce goals that we've got to accomplish, is there a sense that, and maybe this is for a future panel, too, is there a way that even other countries have started to map out what those skills are, what those jobs are and overlaying that with the climate resiliency goals? Because in my mind, this is not an opportunity to do piecemeal.

This is going to be once in a generation money that's going to need to move and move quickly and get to the multiple sort of triple bottom line that we want, which is racial equity, economic equity, and then environmental equity and sustainability ultimately. But these three things have to run together. And I'm going to just ask you all, because you all have been studying how this money is coming out, what is the way that we actually build that comprehensive roadmap for us to accomplish this?

Certainly it's in the policies and the laws. Is it also moving interagency MOUs within the state that also brings these different agencies and departments together to build this? It's a little bit of a convoluted question, but I'm trying to get at how do we expedite and accelerate, but not lose sight of the comprehensive pieces of this that have to all move at the same time?

Yeah, well, that's a big question. I mean, we don't do industrial planning very much in the US, or at least we don't call it when we do it. And so it is, you know, for example, has these big industry councils around the whole battery supply chain, and unions are more at the table there. They're not so great on incorporating their racial minorities, which are largely immigrant.

But in terms of the industrial planning and unions, government and business at the table, every country is different, but they have way more structures than we do. So we are kind of building it from scratch. And I do think the policies that we've been discussing that include interagency MOUs that are directed by a law, that are sort of mandated by a law goes a long way.

But working with industry, and that does happen with the high road training partnership initiative because employers and workers are at the table in those funding initiatives, is a start. But it's not all about training. It's also about what infrastructure is needed for the industry and the climate agencies are in that. But it's still piecemeal and we have to play the long game. And there's once in a generation opportunity. So it's hard.

This stuff isn't easy and there aren't one silver bullet of a law that's going to make it happen. But I do think it's recognizing the spaces where community, labor and employers and businesses can be supported with funding. The serf may help with this. That's the hope. It's not an easy implementation task, but creating those spaces where the social aspects are integrated, but also that industry clusters are supported. Both those things are needed.

Thank you both for being with us.

You provided a lot of information and I really want to thank you also for AB 398 report. It's going to stand out and we keep referring to it all the time, and I know you're building off of that. So thank you both for your experience and sharing with us today.

Thank you so much.

Thank you.

We're going to move on to a second panel, which is on the procurement process and administrative perspective. We have with us Tim Rainey, Executive Director of California Workforce Development Board, and my Keever, Chief Deputy Director at Caltrans. Okay.

Good morning, Senator Durazo, Senator Cortese, thanks for coming back. I'm so lucky. Perfect timing. Senator, Smallwood Cuevas, really great to see you. I was so inspired by your opening remarks. It was a drop the mic moment for me, so I appreciate that. I don't think that I can level up to the way you articulated that. So thank you very much and it's great to see you.

I wanted to kind of take off from the supply and demand concepts that were in the materials that the labor center provided, supply of workers, and then the demand for jobs and pulling workers into jobs from a workforce perspective, because that's what I've done for a long know, when you have a hammer, everything looks like a nail sort of thing. So I come at everything from a workforce perspective.

We have a great workforce system in California, really great training programs run by schools, workforce boards, colleges, community based organizations, providing workers from disadvantaged communities the tools that they need to compete for jobs. But you run up against the reality there are not enough good jobs available for all the people. We need to put in good jobs and get connected to good jobs.

So on its own, workforce training is not enough to meaningfully impact employment, to move the needle on working poverty, as you talked about, Senator, and economic equity.

So the first intervention is something we've been doing for some time on the supply side, turn the workforce development system kind of on its head and the traditional approach on its head, rather than focusing on just the job seeker and what's wrong with the job seeker, focus instead on the jobs and how we can fix what's broken in regional labor markets. So we start with the best jobs in the high road context.

Build regional industry based partnerships of employers, unions, community based organizations and workforce agencies, and we create workforce pathways to the best jobs. This is sort of workforce development and maybe economic development in some ways coming together in a real sense. So the high road concept is, simply put, traditional industry sector work with a commitment to achieving the goals of equity, quality jobs, equity and access to those quality jobs, because you can't achieve equity unless you pay attention to job quality and climate resilience.

So the intent is to shape, our intent is to shape how employers whole industry sectors recruit, hire, train, promote and retain workers. Shaping labor markets, that's what we're after, but we're really running on all cylinders. Wait, electric cars don't have cylinders. So we're running on a full battery. That's a pass A metaphor. When that same high road commitment to quality jobs, equity and climate resilience is built into state contracting and spending. That's the demand side intervention that we're talking about today to shaping markets.

So again, on the supply side, with the high road workforce programs scaled across every relevant industry sector in California and in every region, we can then actualize those goals on the ground in real life and move the needle on the things we want to move the needle on in California. But you've got to connect the demand side strategies and the supply side work directly quickly. We have high road training partnerships all over California. We started with eight and we quickly moved to 70 really fast.

Just over the last few years. We're going to get to over 100 of these partnerships around the state. There's a lot of desire to do this work out in the field for our rfas, our request for applications for high road training partnerships, we get far more ass than we have funding for all the time. The demand is not nearly met. We're in to just name a few, of course, hospitality, as you well know, Senator, Janitorial Healthcare.

But we're also at the ports of LA and Long Beach with ILW. We're doing trucking and warehousing in Northern California and Southern California. The Inland Empire in Los Angeles with the Teamsters and other partners. Water and wastewater with a bunch of different unions, operating engineers, AFSME, IBW machinists. We're in transit all over the state. We're not at every transit agency, but we're at 13, we're at seven. Expanding to 13 really soon. Met with actually the international President of ATU, John Cassie, yesterday.

We saw you yesterday and Senator rather, Secretary Knox talking about ATU's, the international's commitment to high road training partnerships and what that high road training partnership in California is doing to meet their need for upskilling mechanics and operators as agencies adopt zero emission buses and electric buses. It's really important work. We have 13 regional partnerships with the building trades covering every corner of California, creating access to blue collar jobs in construction. The best jobs, blue collar jobs that I know about.

But we'll get manufacturing everything else. That's what we're talking about today. We've just recently added utility tree trimming with IBW Nica electric vehicle charging infrastructure with IBW Nica electric bus manufacturing. You're going to hear from Gillig, work with the Teamsters, with BYD and smart in Southern California. Offshore winds with the trades. We're in the central coast and we're up in Humboldt now. High road training partnerships, access to these jobs as we build stuff. Sounds like industrial policy. We're doing well capping also broadband with CWA.

I have a long list. I won't go through the whole list. It's really terrific work and we're excited about it. To our pleasant surprise in Sacramento, our sister climate and infrastructure departments and agencies, they want our help. They have equity goals that they need to achieve, that they want to achieve, and they're reaching out to us. We have an MOU with the Public Utilities Commission. We have an MOU with the Energy Commission. We started advising the Energy Commission, in fact, before the MOU was inked.

I don't think we've had actually time to finalize it because we've been so involved in the work with them in advising on how they could build standards into their own spending. Very exciting stuff. We are actively working with Calsta and Caltrans, with Gobiz Resources Agency, and soon with Calgem around capping orphan oil wells, helping them build standards into their spending so we can create workforce partnerships on the ground to get people into those good jobs. They all want to go beyond California's already strong standards.

They want to use their leverage to get disadvantaged workers just the way we do, and populations that are disadvantaged connected to the jobs that are going to be created with the BIL funds. Each agency, each Department, as Dr. Zabin said, and each program is different. I don't think there's a one size fits all to doing this.

The more I get into it, the more I realize that they're all interested in how different tools, however, can fit those different programs, hundreds of programs to maximize the creation of quality jobs and economic equity. So they want three things from us at the labor agency, briefings and materials that define the various tools, prevailing wage and living wage standards, skilled and trained workforce. A lot of questions about what that means and how it applies.

Project labor agreements, community workforce agreements, increasingly community benefits agreements, which is an exciting area of work. They want to get to targeted and local hire and how that's embedded in these tools and how all of that's embedded into various spending programs and procurement programs. They want advice, number two on how to embed those standards in ways that really fit the particular programs. And they want us to help crafting language for that purpose. And we've been doing that.

And finally, advice on how to track the workforce impacts. So once we do all this with bil, massive opportunity, how do we know all of this work is really making a difference out there in the real world? And we've got to figure out with them how to track metrics that make sense and will tell us if we're moving the needle on the things we want to move the needle on. We don't know everything at the labor agency and the workforce board. I certainly don't.

Most people know that when we don't have the answers, we bring in smart folks. We bring in our colleagues from the labor center. We also bring in other agency colleagues who've done this work, who have experience and who have expertise. Department of General Services, for example, we negotiated, help them negotiate a project labor agreement for all the state building construction. You see all the cranes around Sacramento. Those have community workforce agreements on those.

So those projects are pulling new apprentices from our pre construction training program in Sacramento that we've developed in coops with local building trades council and the state building and construction trades. There are people with experience in how to do this. So we get them together to share best practices just to get, I think, at the consistency question across all these programs in state government. I think it does help to have a single state agency like labor with the capacity to do this.

I think a challenge, I know a challenge is having the capacity to rise to the moment. This is think, as Senator Smallwood Cueva said, an open window that we've got to jump through quickly because this is going to move fast. So we're trying our darndest to work with everybody who's asking us to work with them, which is great to be invited. But we've got more demand for this than I think we have capacity for right now. But we're not afraid. Thank you.

Nice to see you again. Yeah. So want to follow up with some of the comments? Certainly agree with Mr. Rainey here. There's so much that we need to do together. Over the course of my career, I'm a bridge engineer, but I'm currently the Deputy Director at Caltrans. I've seen what we can do when we invest in our infrastructure, and certainly that's a big part of what we do.

But as we're becoming a people first organization and a California for all, with that outlook, we're looking at how do we invest in the people of California as well. And so I'm here talking about workforce standards. I'm not an expert in workforce standards, but we talk about workforce standards at Caltrans. We meet with our small business council, our disadvantaged businesses, and I'll talk about that more. We have a labor compliance unit. We work with federal highways.

Dr. Zabin talked about the Department of Energy having an MOU with the Department of Labor. So what does the Department of Transportation, and we work with FHWA as part of this. We just met with our equity advisory council, and so many of these same issues come up in our conversations with them. We're creating an equity index when we're looking similar to calendar screen but focused on transportation to look at benefits and burdens and how we make our investments here in California.

And so we have four foundational, our core four, we call them foundational principles. They're safety, equity, climate action and economic prosperity for all. And if you look at that, those are very well aligned with the high road job standards that we're talking about. And so we recognize that we have to take a leadership role and have a responsibility there. Mr. Arzu talked earlier about the funds coming in, and many of those funds are coming to transportation.

And so how can we invest those for the people of California, and how can we do that equitably and provide opportunities for all? And so we're looking at cross cutting opportunities for community partnerships, particularly in our underserved communities. We're seeking to align our financial investments focused on the state goals that we have while maintaining our fix it first responsibilities for the infrastructure that also serves the state and serves the economy that we hope for everybody to benefit from. And so we commit to equity focused actions.

So in terms of our projects, but also our partnerships and the people and the planet as a whole. So we have a delegated labor compliance program at Caltrans. And so we enforce labor laws to make sure that employees are paid prevailing wage, to make sure that the correct dir classification is being used to establish that fair prevailing wage that they should be paid.

We enforce our equal opportunity laws, ensure that there are safe workplaces that are free of harassment and discrimination, and we also have and enforce minimum apprenticeship standards. So trying to take the training that Mr. Rainey was talking about and ensure then they're going into the job. So what can we do to complete that with. And we have goals for disadvantaged business enterprises, disabled veteran business enterprises and small businesses. And often the same people that we're targeting are the people that work for these smaller contractors.

And so we have goals. We encourage them to get cross certified so they can take advantage of all of the opportunities that come with being a certified DBE, DVBE or small business. And we are increasing our support and education to these small businesses and seeking to try to grow the number of them that can come to work on the projects that we put out.

And we're increasing our investment in the outreach in order to try to attract people to say there is opportunity or come and participate in this growing program. And the results are telling. We have significantly increased our awards to small and disadvantaged businesses. We, by federal law, were required to set disadvantaged business goals to close the gap between the availability of the dbes and their use on our contracts. And so we track this very carefully. We do a triennial study and adjust that.

And in showing the growth. So knowing that you're targeting the availability, we've gone from 201718 fiscal year, from a 12 and a half percent goal to currently, beginning in the 2021 fiscal year, to a 22.2% goal. So nearly doubling in that four year period. And then with a growing program, the dollars available that are going to DBE commitments in fiscal year 1718. $356,000,000 went to dbes. And last fiscal year it was 641,000,000. Currently, after five months, we have $386,000,000 going to DBE.

So it's going to be substantially more than last year, which you would expect. The gold is getting larger because the participation is increasing and the program is getting larger. And so this is where that also creates that opportunity for the workforce also to come in and participate through that program. We're also engaged in other efforts to integrate high road principles.

Certainly, I don't need to talk about SB 674, Senator, but putting that to work with our zero emission transit vehicles and the charging equipment that goes with it. We're working with labor and Workforce Development agency in dgs to update the contracting manual associated with that law. And we're currently doing a best value procurement for our heavy duty vehicles and specialized equipment, which include collecting high road job information. So going into the manufacturing.

So certainly we have a lot of experience on the construction side, relatively know Davis Bacon goes back a long way. So we've been doing that part of it for a long time. But we're also getting into some of the things that are associated with now, the manufacturing and the supply chain, the things that we have.

Both of these efforts will help to inform us as we take further steps to provide high roads job standards in our state contracts, considering also the international supply chain that we utilize for the type of work that we do. And while this hearing focuses on climate, I just wanted to mention SB one. The $25 million has been invested in working together with CWDB to have a pre apprenticeship training program.

And certainly that's going to inform us as well as we seek to go forward along the same lines of what Mr. Raineyardi described. So just to conclude, I wanted to state, Caltrans is very committed to this. We are focused on creating a fair and level playing field for our contractors. So it's good from a contracting standpoint, the partnerships with the Workforce Development Board and the Legislature to create high road strategies and achieve climate mitigation and adaptation with the funds that we have available.

And we hope to accomplish through this the dual goals of greening our infrastructure and building an equitable pipeline of people who do the jobs that support that. Thank you.

Thank you very much. Appreciate your presentations. Senator, did you have any comments or questions?

Yes, thank you very much. And I apologize. I'm in between Committee hearings today, I had to vote, but I did hear.

Thank you for being at both, especially this one. Thank you.

But I did get a chance to hear Mr. Rainey's comments, and I'm excited to be here with the Caltrans leadership to pose some questions. So the one thing I want to recognize is the work that you mentioned, high road training partnerships, quite a bit in your opening statement.

And I want to recognize that project program, North Star setting initiative, that has put us on a pathway to bringing, and I think Ms. Zabin called it the cluster right of bringing the employers, of bringing community, bringing workforce and bringing unions together to figure out ways to work through these complex issues and to come out on the other side with equitable workforce sustainability, infrastructure and good jobs that our communities need. So I just want to recognize that vehicle.

And I understand that comes with working in partnership with a lot of colleagues, including our prestigious labor centers and labor education and research networks, as well as working with our workforce development centers and partnerships across the state. One thing I'm curious about is the ways in which we're working with the labor dir and the labor and workforce Agency. How embedded is that agency in the work of the California Workforce Development Board and some of our labor education and research partnerships?

Is that a standing, I want to say partnership? We don't have, I don't think MOUs yet in this space. And if we do, correct me if I'm wrong, but what are the institutional ways, institutionalized ways that the labor agency, the workforce board and our labor education and research centers are coming together? And is there proper capacity across that agency collaboration to make it work for the scale of what we've been talking about this morning.

Right, because you mentioned a few of the very precious and funding that you have around the HRTP work. But when we talk about the scale of what we're looking at in terms of building this green climate resilient workforce and infrastructure workforce, we've got a long way to go. What is that capacity like? How is that interagency play working out?

Yeah, that's a really great question. The labor agency, the California Workforce Development Board is a Department inside the labor agency. And I almost use those interchangeably because when they talk about high road and we talk about high road, we're talking about the same stuff completely on the same page. Also inside the labor agency is the employment training panel and the Employment Development Department that both have very important workforce roles.

So we're aligning across those programs within the labor agency around these high road standards and this vision. So that way the other investments in workforce are lining up with how we understand we need to approach workforce development from that high road perspective. That's been because of the leadership at agency, really strong leadership there. The division, apprenticeship standards is a really important partner of ours. They oversee all the apprenticeship work in the State of California, construction and non construction.

They recently put out a grant called the Erica Grant, and I wish I could remember what it stands for, but it's for childcare. They awarded several agencies and programs around the state, a lot of cbos, a lot of building trades councils to provide childcare so that people going through training, especially pre construction training, have childcare taken care of. And I think that's going to be a bit of a game changer in terms of demographics and getting more women into the trades.

So we really line up our strategies across the departments inside the agency. I heard something, or maybe I just wanted to hear something about how we work with the labor centers at UCLA and UC Berkeley. We do a lot of work with UC Berkeley. We actually contract with UC Berkeley to provide technical assistance and support to all of our high road training partnerships.

We kind of consider it a family, which now, as I say it, it sounds a little culty, but they provide space for peer to peer support among our high road training partnerships so we can really lift up the good work around the state and lift everybody's game. They also do a lot of work with us, developing materials for our projects and other things. There's a whole list of things we do at the UC Berkeley Labor center. Really proud and honored to have that partnership.

UCLA Labor center is actually doing the evaluation work on our hybrid training partnerships. They have a frame, kind of a theory of change built in that they're using to measure whether or not hybrid training partnerships are moving the needle on shaping labor markets for greater economic equity. It's a challenging thing to do because our stuff is not the only input that makes that difference. So they're trying to kind of pull that apart and understand what is our contribution to increasing economic equity.

So that's at the UCLA labor center. We do a lot of other stuff with them around the port of. So it feels like we're all kind of part of the same agency. But I don't know if I should say that out loud.

I appreciate that, because I think when we ended the first panel, it was clear that there's a need to have a collaborative table that brings employers, that brings our research, that brings our communities and unions to the table. And so I'm curious, in the same vein that you just laid out, Mr. Rainey.

Mr. Kiever, do you have a similar model for the scale of the jobs that you are doing in terms of connecting with this collaborative table that seems to be working and working well within the California Workforce Development Board and its partners to really establish the high road training program. What it seems is that place where these different entities that have unique interests can come together and find the common ground for moving forward, particularly around building a real roadmap and program for helping us accomplish our goals.

Is Caltrans as part of this partnership, or what do you have at play? Given the scale of the resources and job opportunities within Caltrans, what similar model, or are you connected to this model?

Thank you. We're part of the ecosystem that Mr. Rainey was talking about, so we interact and collaborate with. It's not on. Can you hear me? Okay. We interact. I don't remember which part of my presentation you were able to hear. But as part of SB one, we work together on the pre apprenticeship programs there. We're in discussions now on where we go with the opportunities, with the funds that we have from IJA or bail, however you want to refer to it.

But then in addition to that, we try to leverage our relationships. And so where can we create? We work with our small business and disadvantaged businesses, who often are the people that are hiring the same people that we're talking about here. And so we have goals on both the small business, disabled, veteran business, and disadvantaged businesses. And right now, I had mentioned, I'm not sure that you were here, but that is growing.

And so currently, on just the disadvantaged business side, our goal is 22.2% of our work goes to disadvantaged businesses, 25% to small businesses. And so through that, that works to expand. But we're also trying to complete. Several analogies have been drawn here, but trying to create that full circle. And then so the discussions with our contractors and creating from the pre apprenticeship program, getting all the way through to the jobs themselves, targeting what are their needs and what can we do.

We just had a heavy equipment operator, so another partner of ours is FHWA. So working with them, and the Department of Labor has an MOU like the Department of Energy, they have with the Department of Energy, with the Department, US Department of Transportation. And so working with them, we just successfully had a heavy equipment operator, a pre apprenticeship program, and we had 20 graduates.

Just looking at the picture is about 50% or so female, very diverse group, and they'll be able to come in and whether they come to work on the jobs, they work for Caltrans or elsewhere, but they'll be able to get and participate in these well paying jobs. We hope to leverage those as well. So it's a combination of just kind of sum it up working with CWDB, but also working with our other partners as well.

And I might add that we're aware of what La Metro is doing and looking at some of the things that they're doing as well that might be of advantage to us.

I think we were dating for a while and now we're getting married, us in Caltrans. I talk on the phone to David Deleuz, who's sitting back there multiple times a week, talking about how we can combine our work and leverage the money that's coming through Caltrans with our high road construction careers partnerships on the ground, which is our high road work focused on the construction industry.

So as we build stuff through Caltrans around the state, we're going to create access to lots and lots of jobs for people who otherwise wouldn't have had access to those jobs. And that is modeled on the SB one work we started with Caltrans, and we're hoping to expand that with some bil funds.

I'm glad to hear about the soon to be marriage. That's good to hear. I think one of the things that I've seen on the community side of this, where we're fighting for good jobs and we're fighting for access, is that when you have duplicative services, those hard to reach workers fall through the cracks. If there is a model by which we're building high road partnerships.

And I'm looking at you, Mr. Kiefer, because the number one question that I get in my district is where are the women and black worker on highway construction projects? Where do we see women and black workers? When I drive by the bridge project, where are the black workers and women when we're doing some of our roadway state roadway projects? It is a generational question, and it is one that we always are scratching our heads to understand.

And so as we are talking about these investments and we're talking about where we're spending these dollars, and we're talking about, again, the triple bottom line in this once generation, and I think our colleagues will, we are going to work toward the policies that help create the mandate and help us centralize some of this work.

But I'll tell you, there's a lot of work that needs to be done around equity, and there are models that are working, and we don't need to invest in models that may work or have a good fake effort, as the community will say, at working versus faith. They say it's a good fake effort. We need to make sure that there is an effort that is actually creating pathways for underrepresented populations into quality careers.

And with that, I want to just talk a little bit about, is there a partnership that you have in terms of improving, strengthening, or maybe you feel they're already there, your enforcement models, to ensure that there is a representative and equitable workforce in Caltrans projects? I'm understanding that these funds will be governed by Executive Order 11246, which is a federal goal project to make sure that we have representative populations that are in line with the census data that we have in our state.

I think Caltrans is already a subcontractor under this Executive order, and there are affirmative action plans that have to be created to ensure that we have a fair and representative workforce on federally funded projects that are over $10,000. How are you enforcing those kinds of rules and what are the ways that you see that scaling, given the investment of these federal dollars? And we're talking about 41 billion potentially coming into the state. What is the State of your enforcement on those plans now?

What are the vehicles that you see for scaling that level of enforcement? And do you work with the current, what used to be the Department of Fair Employment and Housing, but now is the Civil Rights Department at the state level?

And if you could give some conscious of time here with your answers. Thank you.

Thank you, Madam Chair.

So briefly, we have, the Department of Industrial Dir has delegated to the Department. We have a labor compliance group and we've had that for a long time. And certainly because we do public works for a long time, we've been responsible for ensuring compliance with labor requirements. And so we enforce those. We follow up on those and we have a long track record. I don't know the final part of your question on who exactly we're working with.

I could certainly get back to you, but I don't know. We'll get back to you.

I appreciate that. I would love to see how that works, how you're partnering with agencies to make sure that that work is happening. Thank you.

And I just want to clarify with Mr. Kiber. I appreciate all the work that you're doing with the small businesses and women businesses. I think that's really wonderful. It keeps coming decade after decade. We're still talking about it. So the more that you're intentional about it, that's the only way it's going to work to make it true, real. But somehow we need to follow up also on the workforce development standards. That's really what this hearing is all about. And it doesn't work when it's trickled down.

It's got to be very specific, very intentional, very deliberate with very specific requirements and enforceability. That's my experience. And so as we move forward on bills, legislation that I'm working on to apply standards for good jobs and to put high road language in the best value procurement, I look forward to your updates on that, on how you're doing. We've got to move forward on true MOUs between our agencies. Without the MOUs, this could get lost.

And I'm sure you've got a million things that the agency, Caltrans could be doing, but we need really specific MOUs that we could follow up on and would hold all of us accountable. So appreciate, thank you both very much for this and for contributing to our conversation and I'm sure we'll be talking to each other much more. Thank you.

Thank you.

We're going to move on now to our third panel. And I understand one of our panelists needs to leave ASAP. So if we could have Mr. Manas. Yes. Mr. Manas, CEO and President of Gillig LLC, followed by Miguel Cabral, senior Executive officer of diversity and economic opportunity for La Metro. And I think we could fit all up here, hopefully. Caitlin Vega, California Labor Federation Jeremy Smith, state Building Construction Trades Council and Scott Wedge, International Brotherhood of Electrical Workers. We'll do it in the order of Mr. Manas. Mr. Cabral.

Okay. You're the Caitlin. Okay. Followed by Mr. Smith and then Mr. Witch. So thank you very much for being here with us. I appreciate your patience.

No, thank you for having me. I'm sorry to be a little bit of high maintenance here. I have to get out of here for another meeting. But first of all, I'd like to thank the Senators for inviting me here today on this important topic. What I want to bring today is a little bit of a perspective from the private sector, from manufacturing sector. So my name is Derek Maunus and I'm the President and CEO of GILLIG, LLC.

Gillig is a leading heavy duty transit manufacturer in the US and a proud California manufacturing business. We're headquartered in Livermore, California. We do all of our manufacturing in Livermore, California, and then we also have an aftermarket parts facility and team over there in Hayward, California as well. Our customers are transit authorities, universities and airports across the entire United States. There's roughly 25,000 Gillig transit buses on the streets every day. In California, there's about 4000 transit authorities, or, I'm sorry, 4000 buses every single day.

A healthy transit system relies on federal, state and local support. More obvious investment benefits to transit mobility, to all connecting underserved communities, reduction of pollution, and reduction in congestion as well. But transit directly employs over 400,000 people directly. And additionally, there are thousands of businesses like Gillig that employ another 250,000 people across the United States. And many of these people here in California. Responsible deployment of capital recycles federal, state and local tax dollars back into our communities.

Gillig alone has 450 suppliers in California, and last year we spent over $240,000,000 with those suppliers. So that's just in California alone. Gillig's story is not really widely known. We tend to keep a little bit of a Low profile, but I'm glad to be here today because I think Gillig is a model on how investments in transit benefit the broader ecosystem, that we demonstrate that labor standards don't have to be compromised to have a successful private organization. So a little bit of background in our story.

Our California roots date back to 1890. So for the last 130 years, we've been a privately held family business. We began as a carriage repair shop in San Francisco, built automotive hard tops in the early 19 hundreds, built military vehicles during the wars, school buses, rv chassis. But today, we're 100% dedicated to building transit buses for the US market. We've been building transit buses in California for 45 years. We are headquartered and we manufacture out of a State of the art facility in Livermore, California.

Our facility was built in 2017. We design and build 1500 to 2000 clean diesel, compressed natural gas, hybrid electric, zero emission battery electric buses annually, and we look forward to one day also building hydrogen fuel cell as well. With our roots dating back to over a century, our business has to be consistently evolving. Recently, Gillig has become the leader in battery electric buses with 40% market share this last year of battery electric buses. To date, we've delivered 300.

A third of those are in California, and we have orders for over 700 battery electric buses since we began, and that is 25% of those are in California here. We're helping to roll out zero emission transit fleets with transit authorities like AC Transit, Santa Monica's Big Blue Bus, Sacramento Rtd, San Joaquin Rtd, San Diego, MTS, the City of Norwalk, Marin Transit Central, Costa County Transit Authority, Monterey, Salinas, City of Arcada, and the City of Norwalk.

Gillig is one of six OEMs that build transit buses in the United States. However, we're one of the few that are US owned. Our two largest competitors are headquartered in Canada and one is in China. Transit has always been a challenging business for OEMs, even before COVID and the broken global supply chain and hyperinflation. And over the last four decades, almost every transit bus manufacturer has either gone out of business, has had to restructure, or just frankly, gone through a bankruptcy.

Companies like GM, Daimler, Volvo, Neoplan, Flyer Industries, Am General man, Scania, and Optimum bus have all fallen into this trap. One of the key reasons for Gillig's long term success is our exceptional employees. We have nearly 1000 women and men living in and working in Livermore and Hayward. We've enjoyed incredibly strong labor relations for the last four decades. 500 employees represented by the International Brotherhood of Teamsters Local 853 and 75 of our employees by the International Union of Painters and Allied Trades Local 1176.

And I say this often, and I say this with a lot of confidence. Gillig has the best employees in the industry, and we compensate them fairly. At over $40 an hour, and nearly double this with their benefits, our employees receive top wages in the country. But beyond wages, in 2017, we demonstrated our commitment to our employees when we chose to invest hundreds of $1.0 million in a new headquarters and manufacturing plant in Livermore, California.

So for the past 60 years prior to that, we were in Hayward. We ran out of space. And instead of moving the business out of this state like a lot of manufacturing business had, we doubled down and we reinvested back here. And we reinvested to make sure that we took care of those employees that took care of us for the years that helped us grow to the business that we are today.

And not only that, we put the plant central to where all of our employees live. So we were in Hayward, and a lot of our employees over the years have been going over the Altamont pass. Some of our employees were driving over 2 hours, almost 3 hours, some every single morning. And mind you, our shift starts at 05:00 a.m. So they're getting up in the middle of the night to drive over the Altamont because of traffic.

We moved to Livermore, California, which isn't the least expensive place to build a manufacturing plant. But it was central to where our employees live. And again, that is commitment that Gillig made to our employees who took care of us over all those years. In 2020, when Covid struck, Gillig was forced to shut down our plant for two months. Two months we had a shutdown.

We continued to pay our employees that entire time for those two months to stay at home and wait for the all clear to come back to work. Transition to zero emissions here. Obviously, we talked a lot about that today. As more public investment goes into transits, there's an opportunity also to support well established businesses and preserve well paying jobs. A successful transition to zero emission requires a healthy supply chain of established companies like Gillig. There's a record federal funding available.

We talked about it at length today. This requires a proportional increase in state and local match funding. So I hope the State of California will continue to pursue funding programs like the HVIP Carl Moyer program and the Low carbon transit operations program as well. Transition to zero emission for oems requires an enormous level of private investment as well. And that is going to happen for the foreseeable future.

There's a constant evolution in battery and fuel cell technology, ongoing product enhancements, and the associated manufacturing changes required to accomplish all this. Significant ongoing investments will be required by companies like Gillig to remain competitive in the marketplace going forward. Until recently, we found ourselves significantly behind our Canadian competitors in terms of applying for and receiving any kind of grants for R and D or tax incentives for R and D programs or frankly, some of the expansions.

First, I guess to improve our competitiveness, we found that we needed to try to compete against the Canadian grants that were available. And, you know, this last year we were fortunate enough to apply for two and received two. The first was the California Energy Commission grant for the next generation battery electric bus. We were awarded $30 million to help launch and scale production of this new technology.

This grant will help Gillig retain, retrain and grow the workforce and invest in facility enhancements, and this is necessary to support these buses.

I think this is a great example of successfully investing in established, proven businesses that are driving innovation and preserving upskilling dedicated workforce in our second grant, working with the International Brotherhood of Teamsters, we were awarded a $500,000 high road training partnership research grant to allow us to formulate a world class training program aimed at upskilling labor at Gillig, but also across our customer base. One of Transit's biggest challenges today is attracting and retaining skilled mechanics. The dynamic nature of zero emission technology requires significant upskilling.

We hope to be in a position down the road to be able to help with this in a meaningful way. Transit investment that directly supports transit systems and direct investments for OEMs like the CEC grant and the HRTP grants help preserve established, well paying and stable jobs here in California.

While grants often find their way to new startups, this at times is accompanied by lower wages and a lot of instability, often at the cost of the established business and its employees that the startups completely compete with directly. So responsible funding for transit has a variety of benefits, including preserving, growing, well established, stable jobs. So I appreciate the opportunity today to share a little bit about Gillig and some of my thoughts on this very important topic.

On behalf of my entire team, we thank you for your continued investment in transit and the willingness to recognize companies like Gillig and most importantly, recognizing our key employees.

Great. Thank you. I think what we'll do is, Senator, if you have any questions to direct to Mr. Maunas now and then we could move on. I just want to thank you very much. Music to my ears. The idea that we could have both a successful, well established company like yours that's been around for decades, provides high wages, good wages and stability for the employees is really wonderful, especially when we get into the climate energy agenda.

So as you leave us, is there anything more specific that you believe we should be more focused on as state government that would help businesses like yours? Either they're already functioning like you are with the high road philosophy, or incentivizing and rewarding. I would say more rewarding than anything else. A high road approach to business?

Sure. Yeah. First of all, I think this last year was really a special year for us that I feel like with all the transition happening in the zero emission technology and the amount of investment that companies need to make to transition, I've been in my role now for 13 years. And I'd say the first five years were kind of, just don't screw it up, keep it between the lines. And this transition has changed the business dramatically.

It's investments in infrastructure within our facilities, it's investment in our people, it's investment in R D. The technology has changed so dramatically, and you're seeing that at the transit authorities as well. So the capital investment that's required is significant. So the support that we have found this year with the CEC grant was really an opportunity for us to compete better against some competitors that have easier access to those type of funds.

It was one of the frustrating elements of my job was trying to compete in what I thought was an unfair playing field. And the State of California really stepped up for Gillig this last year, and I appreciate that greatly. That will help us maintain our competitive position and maybe even grow that competitive position, which I think we all want. And then as a result, we support that great employee base that we have. So I think there's going to be other opportunities like that.

And as we look at manufacturing businesses in the State of California, it's supporting the well established manufacturing businesses. Because what I said at the end, it really is true, is that a lot of this money often goes to these new startups promising new jobs, but these new jobs aren't paying the same wages that we're paying. And the pie is only so big. And so those jobs put our jobs at risk. Put the Gillig jobs at risk.

Thank you.

Mr. Maunus actually answered my question, but I just want to say thank you for the work that you are doing. One helping us make our planet more sustainable, helping California lead in this space, but showing that it can be done, and also ensure families have a sustainable and living wage. Too often, we're pitting manufacturing, industrial and economic success against ensuring that our families are able to pay the rent, put food on the table, and take care of their families. So I thank you for that.

You said there was an easier process in terms of easier access, and I wanted to ask about the process for you as you think about the Legislature and what we can do to make it easier, how you defined how that was easier access. What is it that we can do to make this process more accessible for high road employers who are in this space? Was it technical assistance? That was it, of course, making the resources available.

But were there supports that helped you along the way to access those funds? And how do we need to think about not just making the funds available, but how you actually get access to them? I want to just ask that. And then the other question I have is, when you say competition and what you're up against, can you say more in terms of what you're paying your employees versus what some of your competitors are paying, and how does that create that unfair advantage for you?

Sure. Certainly. First axis, we have a great relationship with our labor counterparts, so on the high roads, we partnered with the International Brotherhood of Teamsters, and we've had a great relationship over the last multiple decades. So that has helped with the access as well. It wasn't something that we were focused on, and really, I've dedicated my time or any of my employees. Times we had our head down and we were focused, and we're feeling bad for ourselves because our competition had more access.

I think there's more funds available today, and it became more relevant with the transition to zero mission. Prior to that, the funds just weren't available for manufacturers in California or maybe even most of the United States for R and D, because those funds found their way elsewhere, but with zero emission is more readily available. So I think that's more of what I referenced with, too. But our partners with the Teamsters have been really helpful in helping us access that as well.

And then in terms of competition, we are a California based manufacturing business. It's more expensive to do business here. We compete against companies that are manufacturing up in Canada. We compete against companies that are manufacturing in small, rural Alabama. And so I don't know exactly what those wages are, but I've been told that our salaries are more than double. And really, where even larger expense comes in is just the Cadillac level of benefits that we provide our employees as well.

So when you look at it all in, it's probably three X. So what do we have to do to be successful there? We're in a competitive business. We have to do it better than everybody else. We have to remove waste from the system. We have to be more efficient and more productive. How do we do that? The secret sauce is having great employees, and we don't have a lot of turnover with our employees. Our employees, we celebrate 40 year anniversaries with our employees.

And that is a secret to the success, is having great, motivated employees result in great outcomes.

Thank you. And that's been the secret of success for our communities in the past, and so I appreciate that. Thank you so much.

Thank you. I think that's it for you. Thank you again very much. Thank you, guys for your work as well. Okay, we're going to move on. Mr. Cabral.

Thank you. Chair Durazo and to you, Senator Smallwood-Cuevas as well. My name is Miguel Cabral. I'm the Executive officer of diversity and economic opportunity at LA Metro. At LA Metro, we're in the midst of a very large infrastructure development program that includes a lot of purchases of transit vehicle equipment.

As part of those investments, we recognize that we have an economic impact on the communities that we serve, and we've made it a goal to be intentional with our procurement practices that go along with those investments that we are putting out there. We understand that our workforce is comprised of our community, and where it's not, we want it to be comprised of our community.

So we understand that we need to do some skills development as well to make sure that our community is there to take advantage of these good paying jobs that are being created by these investments. With that said, there's four projects that we have at Metro, or rather four programs that I will highlight today. One is one that was brought up by a few of our previous speakers. It's our project labor agreement and the construction careers policy that goes along with that.

I think I heard you call that, Senator Durazo, a community benefits agreement. Other folks call it that way. Ours is a little older. We've never changed the name. Our manufacturing careers policy, which applies to our transit vehicle equipment, our workforce initiative. Now, Los Angeles, we call that Win LA. That's for our internal workforce and also for professional service type contracts. And one of our newest programs, spearheaded by our CEO, Stephanie Wiggins, which is room to work.

And I'm kind of excited to specifically share that one because it's helping us with a lot of concerns that we have at Metro. In my prepared remarks, I didn't include our living wage program. So I'll briefly mention it before I get to those other four programs. Living wage is very similar to prevailing wage on public works construction contracts, the way we operate it. We operate it for our maintenance type, professional service type contracts. So we have a living wage component there.

We have a group similar to prevailing wage monitoring monitor those contracts to ensure that our maintenance contractors are paying a living wage. It mirrors the City of LA's program for efficiency purposes. So we have the same living wage detached there. So if I go back to our project labor agreement, we've had that for about 10 years. I know Senator Smallwood-Cuevas was very involved. That's where I met you 10 years ago, working on that project labor agreement.

It applies to contracts over $2.5 million, both federal and non federal. So locally funded through our measure M or other measures that we have at metro. Our PLA sets the terms for labor terms and conditions at metro. It's an agreement with the Building Trades Council and its signatory trades. So about 16 to 20 trades right now, I believe, are part of that agreement. We currently have 45 projects that have either been part of the PLA or are currently part of the PLA.

That's about $8 billion worth of projects that have fallen in under that currently active. With the closing of our Crenshaw Lax project, which means the opening of the K line, we have 14 active projects now. We set goals, targeted hiring goals for the project, depending on the funding source. We used to have to set nationally targeted hiring goals based on zip codes. If it was local, we could set local targeted hiring in LA County based on economically disadvantaged zip codes.

Tell you a little bit about that. And that's changed recently, and that's pretty 40% of work hours, 20% apprenticeship participation. We try to mirror the state division of apprenticeship standards ratios there as best we can, and this is key because this is really the entry. The next one I'm going to mention for our communities, especially our historically underutilized workforce and disadvantaged communities, is the 10% disadvantaged worker goal.

These are workers with historical barriers to employment, think formerly incarcerated, unhoused individuals, folks who didn't graduate from high school, things like that. And of course, that 20% apprenticeship goal is how we bring them in to our projects. A little bit about how we're doing in terms of those 4020 and 10% goals, I'm going to talk to you on our 14 active projects right now. Against that 40% goal, we're at 58.13%. So that goal is being met.

Local high?

Yes. Local targeted higher? Yes. For the apprenticeship, that 20% goal, we're at 21.44%. And for that 10% disadvantaged worker goal, we're at 10.84%. I think when we talk percentages, it's better to try to translate that sometimes into people or dollars paid, because those are the ones that are benefiting or not from it. But in terms of dollars, that's been 478,000,000 paid to targeted workers. Those are our local workers. 90 million paid to disadvantaged workers and $133,000,000 paid to apprenticeship workers.

On that 40% goal, that amounts to about 15 million hour. On the 20% goal, where we're at 21%, that amounts to a little bit over 4 million. And then on that 10% disadvantaged worker goal, that amounts to about 2.7 million hour. On those projects right now, we have a special focus on women in the trades. One is because these are very good paying jobs. They're union jobs, prevailing wage jobs, union scale jobs. They build careers and they lead to middle class families.

The other part is that it's practical. We have a construction labor shortage as well. If we were able to successfully bring more women into the trades, we wouldn't have a construction labor shortage. So we're looking at it at both ways. We're actually working with our labor partners specifically on this one. We're working with laborers Local 300 and their training program in the region to try to bring the tunnel training program to Southern California. It's currently in Washington, and that's great for Washington.

We need one here as well, especially in our region, considering that we're building out our transit system and this is a good time to bring that for us here. We're also doing a joint awareness campaign with the Building Trades Council to advertise these careers as really the careers of choice for our communities and what they can lead to. We're collaborating with our CEOs, which we've done since our inception of our project labor agreement in 2012.

And right now we're at the stage that we're really working on the retention process. So a few of our key projects have closed. Crenshaw LAX being the biggest one and actually the first project that were this PLA pride. So it was our first project, it was our pilot project, and now it's closed. We have a lot of lessons learned from that project.

Now what we're trying to do is make sure that those workers, the women, the people of color, and the folks that helped us meet the 4020 and 10% goals get transferred to our other projects. So that retention program is key in these projects. And we've seen employees go from, for example, on advanced utility contract, then move on to the big design build contract.

We have one worker who's now training actually other woman in the trades as part of the laborer training school who started as an apprentice on our project as well. So that's our project labor agreement construction careers policy. The next one that I'm going to talk about is our manufacturer and careers policy. It's a little bit newer than our project labor agreement. It's tied to our transit equipment, our infrastructure buys and related equipment there.

Our CEO likes to think of this as a sister policy to our construction careers policy, and there's a reason for that. The way we think about it is we're employing local and disadvantaged workers to build out our infrastructure. We want local and disadvantaged workers to build the rolling stock that then later get placed onto these projects. So that's the impetus for the manufacturer and careers policy. We've recently updated that policy. Our board approved those changes maybe four or five months ago.

We've strengthened it to add our wages that our contractors commit to at the beginning of the proposal stage, and they're evaluated against those wages. We don't set minimum wages, but we hold them to the wages that they commit to. We also hold them to the number of new jobs that they've committed to place on that. That's done through our us employment plan.

If it's a federally funded contract, if it's a non federally funded contract through one of our local measures, we call that our local employment plan. Someone mentioned JobsTube of America earlier. They've been instrumental in helping us develop this program at LA Metro. Just a few statistics in terms of where this manufacturer. Speed it up. Oh, sure. Why don't I move to winele Workforce Initiative now, Los Angeles is for our internal workforce.

We've partnered with the workforce Development centers in our region, nine of them, to train our community to bring them on to be prepared to work at metro projects with a focus on the same disadvantaged workers and historically underutilized workers. Going to our newest program is room to work.

The way our CEO envisions this program is having unhoused individuals who are living on our system, whether that be our stations or other equipment that we have out there, to bringing them on to work on our system and getting them housed and getting them the supportive services that they need to be successful. Literally. We just started this program last month. We've run our first cohort of room to work. 24 individuals. 24 formerly unhoused individuals graduated from that cohort.

They are living in supportive housing right now and receiving supportive services. 11 of those individuals are already placed at employment at metro, with the others being on that pipeline and getting them ready to be placed with positions at metro. The initial positions have been custodial positions, but we are looking at other positions for them as well. We will be looking at another 31 for our second cohort, individuals running them through that as well. Working with a lot of CBOs in our region to make that successful.

They're the experts at providing the type of supervisor services that we can't provide but they can. Chair Durazo, that concludes my testimony. I'll give it back to you. Thank you.

I appreciate. Thank you.

Thank you.

That was a lot of really good information and very practical and tactical ways. Thank you.

Thank you.

We'll move on now to Sarah Flocks, California Labor Federation.

Thank you, Madam Chair Members. Sara Flocks from the California Labor Federation filling in for Caitlin Vega, who I think is in Committee with Senator Cortese. And I just want to start by thanking you for holding this hearing. It is very exciting. When I started at the Labor Federation back during the Great Recession, we had the goal of ensuring that all public funds that were going out were creating good middle class jobs with a fair and representative workforce, as you said, Senator.

And this was back when it was ARA funds. And from that time, we continued to have the goal, that goal. But our work was very reactive. We were kind of chasing when a tax credit was moving forward or when good union jobs were being impacted by tax credits. And it is really exciting to be here today to see that there is an effort to have a statewide policy of defining how do we maximize the funds coming in. This is specific to climate funding and climate investments.

But how do we say what is the public policy of the state to make sure we're maximizing it and meeting the goals of creating good jobs, good middle class jobs, and investing in the regions of the state that need it.

And so to see the development of high road training partnerships and the work that, Senator Durazo, you have done in saying we need to have the development of labor standards that do this, because I agree we need to be very deliberate about how we harness the funding that is being invested so that it creates these good jobs across all of the occupations that are impacted, whether that's transit operator, who's driving an electric vehicle, whether it's the mechanic, whether it's in manufacturing, whether we're making sure that we're developing manufacturing in the state rather than just Assembly, whether it's in the building trades, who are constructing things, installing charging stations, that we're very clear about, that the investment might be for transportation, but there is a spillover effect, and we need to make sure that those standards apply there as well.

Along those lines, even though I think we need to be deliberate and have clear standards, it's not just a one size fits all approach.

And when Mr. Maunus was speaking from Gillig, I was like, he stole all my talking points, which never, almost never happens to me, that the CEO of a company took my talking points, but he very much did, because what I was going to say is that we both want to create good jobs in the state with this climate investment, but we also want to retain them. And sometimes those require two different sets of standards in the creation.

We want to attract companies to come to the state and invest, develop our manufacturing base. So we are create building the products for climate jobs and our climate economy. And a lot of times that's what gets a lot of attention. These are the, you have a press conference because you attracted a new company. And so it's really exciting and you get a bunch of new jobs. So those standards might be different.

You might be getting a bid preference or some kind of standards for creating a bunch of new jobs. And so the labor standards might have to do with hiring. Who are the workers that get hired? Do we want to have preferences to make sure that we have women and people of color and black and Latino workers that have access to these jobs? Is there a training program to make sure that these are career track jobs? Do we have any other standards?

So it might be one set there and that's where a lot of funding may go. But then you look at our industries are companies that are already here. And especially when you have a good union company, we hope they're not hiring that many people because they have such great retention numbers. And there are workers that are there for 40 years and are retiring with a pension and benefits. And so that might be a different set of standards to make sure that they're competitive.

Maybe the standards on retention numbers or that you're investing funds so that company is able to pivot to build fully electric buses or move from one from the old economy into the climate economy. So how do we both help retaining jobs and that transition? And I do think that is incredibly important to make sure companies that are doing the right thing aren't disadvantaged because there's an investment in a lot of these new companies and that we are helping them and paying attention.

And that also means looking out at where can we do this? How can we help companies transition or do whatever they need to do to get into, be able to create these climate jobs? And then the other piece of that is on the no one size fits all is that each industry or each agency may have different ways that they're dispersing this funding. And we have run into this in many different ways. It's not just that we're giving out grants.

There's also procurement, there's also tax credits, there's HVIP, there's car Moyer. There's lots of different agencies that are doing this. And we may have to tailor the labor standards to work for the agency that is giving the funding and for the industry. And we also have to make sure that each of these agencies have the support that they need to do it. And that underlying all of this is some kind of standardization. So both not one size fits all, but some standardization.

And our experience with this, which I think is a little bit of a best practice, since that was what I was supposed to talk about on this panel, is we had a Bill that we worked on with Assembly Member Carillo. It was AB 794, and it was around all of the money that was going out through CARB for zero emissions fleets at the port.

And we wanted to make sure that because there's a big issue of misclassification of workers at the ports, that these companies were following the law and not misclassifying drivers, that's not a very high labor standard, but that was reflecting the industry that this funding was going to. And so we started working with CARB on the standards that we wanted to set and how we wanted to do structuring the contracts. And they were like, we're not labor experts. We're not equipped to do this.

And so we worked with them, and they ended up being great partners and ended up getting funding for hiring labor specialists. But it really drove home that these agencies also need support to be able to do this.

And I think there have been conversations about how do we create that resources and support through the great Labor Agency, through the work of Tim Rainey back here, and the workforce board, to make sure that there's the support both for applying those standards as well as making sure there's compliance and enforcement. So that also brings me to the last piece, accountability and enforcement. We cannot just give this money and say we have standards and there's going to be good jobs created without making sure there's enforcement.

And I just want to raise, there is a company called Proterra. It is an electric bus company that has gotten a lot of funding from the state. It was a preferred vendor through dgs for contracting for electric buses for transit. A union company, they had a community benefits agreement. They did all this great stuff and got a lot of great press. They have announced that they are shutting down production in California and moving to South Carolina.

Are we doing about that? What are we doing about that? We invested in this company, and they're leaving. And so it's especially appropriate, given that GILLIG testified here today in that. That's a company that's invested in their workforce. Yes, we should reward them, but what do we do about the ones who are not fulfilling the promise? So with that, thank you very much for the invitation.

Thank you. Thank you very much. Mr. Smith.

Thank you, Madam Chair. Madam Chair. And Senator Smallwood Quavis. Jeremy Smith, here on behalf of the state Building and Construction Trades Council, we represent north of 400,000 construction workers in California, including about 65,000 apprentices in the state system. We would respectfully disagree with the assertion that there aren't enough construction workers in the state to do what needs to be done. What there is, the present company is excluded because you have a PLA.

What there is a lack of is a desire to not use the underground economy to build things in this state. Senator Cortese and Durazo - Senator Cortez is not here, but thank you. We appreciate that you took to our concerns late last session when the climate change bill package was unveiled and after the summer recess. And Senator Smallwood-Cuevas, we appreciate your similar comments.

You kicked off the hearing with today talking about the potential job loss that could come as we transition to cleaner forms of energy needs to be discussed at length so that we are not faced with a NAFTA-esque job loss tragedy that we faced at the end of the last century, one that decimated the car industry that Senator Smallwood-Cuevas mentioned at the start of the hearing, among many others, we are grateful to you and handful of your colleagues who heard those pleas.

And that's why we're here today. While we continue to advocate for our members' careers in the current parts of our energy production, in the current parts of our energy production and supply sectors, where, as Senator Durazo pointed out, workers earn high wages and good benefits, Right now, we want to be clear. We believe in climate change. In fact, the building trades has a unique perspective on climate change.

Our members have fought for the entitlements and then built the vast majority of the state's utility-scale, solar, wind, geothermal, pump storage, and other renewable sources of energy, making California a global leader in the fight against climate change. This occurred many times over the cries of some of the same environmental groups who supported last year's climate change package and who would rather shut down parts of the energy sector before figuring out where to replace that energy in the jobs that go with them.

Our members live with climate change now, making them keenly aware of the need for swift action. Our members only seek a pragmatic approach to the climate crisis that embraces science and common sense solutions that supports their jobs and workforce and does not in our workforce and does not price working families like their own out of California.

It is critical that policymakers help us keep our members employed, who have already trained for years to do exactly what they want to do, be pipe fitters, boilermakers, painters, electricians, iron workers, laborers, among many others. What they do not want is to be retrained to be anything other than a tradesperson. Assuming that our Members would have wanted less productive or nonindustrial job is a mistake.

One way to not make that mistake is to model the federal government, which has made deep and widespread investments in clean energy over the last several years, providing career advancement in new energy. We've heard about many of those today already. State government needs to intervene as well to create demand for these new industries. Once those are scaled up, the hope and history is that the private sector will come in and take over.

By creating the demand for new ways of heating our homes, driving to work, and providing a robust electric grid, you will create the demand for new ways of energy production, leading to more job sites to build that transition and, therefore, leading to new careers. What can California do? We can require investor-owned utilities to procure energy from green sources. I think my colleague will talk about that in a moment.

We can also incentivize the production and use of a host of new energy technologies, including offshore wind, carbon capture, utilization and storage, desalination, and several different types of new fuels, including hydrogen and clean diesel. But we can't just turn off one source of energy before we put things in place. To get new sources of energy up to scale, we have to embrace and build all the above. All these industries are ready to provide a career transition for thousands of our members.

If we do all those things, the workforce pipeline will create thousands of new workers, especially if you do what President Biden did and what Senator Durazo pointed out earlier: call out and support the prevailing wage, the use of project labor agreements, and the use of a skilled and trained workforce, something that all of you here do already support. We're grateful for that. The very problem that many policymakers claim exists again that we don't agree with: there aren't enough construction workers have helped.

When there are job sites to go to work on, along with the requirement to use apprentices and journeypersons who live and are trained in California, apprentices become journeymen by doing their work by journeying through their apprenticeship training. They are construction workers already. They don't sit and learn in the classroom too often. They need job sites to do the training on. While they are training, they are producing construction work and earning a living wage.

The very demand for workers that you can create by creating pathways and incentives to scale up new industries churns the apprenticeship system. It signals to our joint labor-management programs that they need to spool up and start providing opportunities for workers to join up and start getting trained. Finally, this also has to come with common sense measures to make it easier for construction workers to remain in an apprenticeship program.

For example, as was mentioned earlier, the Department of Industrial Relations just awarded $25 million in grant funds to 19 awardees only to be used for stipends to pay for childcare expenses. One of the reasons single parents, especially women, leave an apprenticeship program before completion is due to lack of viable childcare options. Policymakers need to provide these types of wraparound investments and services to make it easier to stay in a training program until completion.

We look forward to working with you to craft these solutions, to provide incentives to standard new industries, to require procurement of new energy to private industry, to scale up, and to ensure that workers are treated with dignity and respect on the job while earning a living wage. Thank you.

Thank you, Mr. Smith. And finally, thank you for your patience, Mr. Wetch.

Thank you, Madam Chair Members. Actually, Scott Wetch, on behalf of the California State Association of Electrical Workers, California State Pipe Trades Council, Western States Council of Sheet Metal Workers, California Coalition of Utility Employees, by far the largest driver of clean energy jobs in California has been California's mandates regarding renewable energy and zero carbon energy.

Really, the first pivotal bill to that effect was back in 2010 when Joe carried a bill that my client sponsored to require that all utilities in California purchase get to a 33% renewable portfolio standard by 2030. Then, following that, Senator De Leon, in 2015, passed SB 350. That took us to 50%, and then after that, subsequent to that, we moved with SB 100 to 60% and then to 100% by 2045.

When we did the original bill, we were faced with how do we ensure that we keep these jobs in California. Because the first way to ensure high-paying, quality jobs is to ensure that they're in California. And the challenge was we had to come up with a mechanism because the interstate commerce clause does not allow you to say, "Hey, it's all going to be in California."

So we came up with this mechanism called the "Bucket" system, which basically, the simplified version is it requires that 75% of all that renewable power purchased by utilities either be built in California or, if it's built outside of California, it has to be deliverable to California, meaning it has to interconnect directly with a Cal-ISO balancing authority.

As a result of that mechanism, the vast majority, over 80% of all the megawatts that we've built in these ensuing years have been built in California, almost all of them built with project labor agreements creating high-wage jobs. Why was that mechanism so important? Because we are surrounded by states that have cheap land, very thin environmental regulations, and their right-to-work states.

So if you're a big solar developer and you choose between California or building it in Arizona or Nevada, or Utah, the answer to your question is very apparent. So why this is important today is when we did SB 350, Governor Jerry Brown insisted that there be a study done on the impacts if we were to get rid of the bucket system.

And Cal-ISO went out and conducted a study, and the study came back and found that if we did away with those protections, we would lose 110,000 construction jobs. Okay, so now we've increased the bar to 100% by 2045. And that means to give you a scale of what that means: we have to add 53,000 renewable power by 2045 from today to then 53,000. We're almost doubling our total portfolio.

Where that number comes from is that we have to replace all of our carbon-based energy that utilities continue to rely on. And then we have load growth Cal-ISO projects that, just between now and 2031, because of all the electrification that the legislature has mandated, our load is going to increase by 28%. Our electricity load is going to grow between now and 2031 by 28%. So 53,000 megawatts of clean energy, that's more than $100 billion worth of ratepayer money, general fund money, and federal money.

And it's going to take to build that out if we don't protect the "Bucket" system. And there are proposals today in the Legislature to go to a multistate regional grid, which would basically render that bucket system ineffective. We would have a massive impact on jobs.

So my clients hired an economist that we use for all of our PUC work from Stanford to take that Cal-ISO study and look at it and say, "What would it mean today if we did what's being proposed by Cal-ISO," which is going to a regional, like, 11 state grid. If we did that today, based on the methodology of that study from 2015, what would the job loss impact be? 1.1 million construction jobs.

I brought copies of that study that we just got three weeks ago to give to all the committee members. So what I would submit is we have to just protect what we have, and the Legislature has already made the investment; you've already made that decision that we're going to invest that $100 billion in clean energy.

The question is, are we going to do what it takes to protect and ensure that that's going to be in California, cleaning California's air and creating and continuing to create those California jobs? Or are we again allowing those jobs to escape to these other nearby states, keep the dirty peaker plants in the communities of color that are there that we need when we get into tight spots, and then have the clean energy projects in other states?

And so that's the primary message that I want to deliver today: a lot of the hard work to create these high-wage, high-road, clean-energy jobs has been done. As long as we don't screw it up.

I promise we're not going to screw it up. Well, I don't know if I can make that promise. Okay, well, thank you very much; all of you brought in your own unique perspective on what we're facing here, and I really appreciate getting all of the information at once in a very condensed way. Senator Smallwood-Cuevas, do you have any comments or questions?

Well, I just agree with you, Madam Chair, about the detail and presentation of the information we have to ensure these jobs are in California. Mr. Wetch, I think we are all on the same page about to.

And I want to say how much I've appreciated working with the IBEW and the Sheet Metal Workers Union in particular, and their efforts to ensure that we are moving in terms of our curriculum and our training, our apprenticeship, and journey-level workers in taking our state to be a leader in this sustainability conversation. And I want maybe you and also Jeremy; I appreciated the comments that you mentioned in terms of care.

I think it's a reflection of where our building and construction trades have moved in terms of understanding what it means to have a good job, who gets access to those good jobs, and how do we ensure that we are building a workforce and that they have those wraparound services and tools that they need to succeed. So, I want you to talk a little bit about the ways in which you all are bringing those three things together.

This idea of good jobs and careers, economic equity, racial and gender equity, and moving toward this environmental and sustainability conversation. I know, having worked very closely with the building and construction trades in their pre-apprenticeship and apprenticeship models, the efforts to bring in communities. I think it's important for us to say what the evolution of this work has been over the last ten years.

And I think you pointed to it, Mr. Cabral, in your statements, in terms of these partnerships around the multiplier, the equity multiplier that the PLA, that apprenticeship can bring. And to your point, Mr. Wetch, how it's going to take us into -

- new transformation of our economy. So I just want you all to talk about that movement and how you all have been thinking about the equity multiplier effect in your trades and in your sector.

Well, I would start off first by saying a collective bargaining agreement is colorblind, and it's blind to how you identify as a person. The CBA says you make $65 an hour as a sheet metal worker. It doesn't matter who you are, what you look like. Right? So we've been doing that for a long time, and that's why incentivizing folks getting into the labor movement and beginning unions is so critical, I think. I'm glad that you mentioned pre-apprenticeship.

That's something we've hit on over the last 12 to 15 years. It started not only as a way to be more equitable but also to make sure people understood what a construction career is. I use the ironworkers as an example when I talk about this. Some people would get six or seven months into their apprenticeship program and realize that they're afraid of heights when they get off the elevator on the 45th floor of a building with no walls and no ceiling, and no floor.

So part of the pre-apprenticeship program is to make sure people understand not only what it means to be a construction worker in that sense, but also you got to show up on time, you got to show up early, you got to work hard. And I would just say that with the ERiCA Grant, the data is clear.

And it was through leadership of Senator Durazo and the budget, Senator Skinner, in the budget years before you got here, just behind us, where they recognized we got a lot of money floating around here, let's put some towards making sure people can get to work and stay at work.

And we're working very closely with Tim Rainey at the State Workforce Development Board and the high road strategy they've unveiled over the last decade, not only to allow for childcare issues, but sometimes people need bus passes, sometimes people need gas cards. Right. And some of our pre-apprenticeship programs have money to actually provide those types of basic necessities so that you can get to your pre-apprenticeship training or to your apprenticeship program. So, we are uncovering new ways of doing that.

But I think that we've been thinking about this for a long time, and it's been very clear over the last 20 years or so, kind of where we need to put some of those efforts. Most clearly.

Yeah. I'm going to focus a little bit on the utility industry because I think, and I want to talk about childcare as well. The utility industry, I think, has been a real model, and it's in large part been through the work done in this building and at the PUC, at least with the investor-owned utilities, as far as Senator Bradford has been at the forefront of creating requirements that at least the investor-owned utilities show equity in their hiring practices.

And so if you look at all three of the investor-owned utilities, they're some of the most diverse workforces, I think, that you'll find, and I can get some statistics for you on that. On the nontraditional sort of jobs that you don't see a lot of women in the utility industry, like in the area of linemen, linemen that are climbing poles and doing that. We've made some huge strides in going out.

We finance the programs going out and reaching out to high schools and junior colleges and other job referral services, workforce investment boards, and whatnot, and recruiting more women into that site. Unfortunately, during the pandemic, we fell back because we saw a lot of those folks who we had gotten women that we'd gotten into some of those nontraditional jobs drop out of our unions and out of our workforces simply because of the childcare issue.

And that's something we have not tackled in labor, I think, or at least in the construction trades. It's not something we've tackled. We're like most other industries; we've relied on government services to fill that void for our members. I think we need to try to tackle that. But it's not just an issue for women. I see this constantly with single dads in the construction industry, especially the dads have gone through divorce who want to be a full-time dad. They want a 50/50 custody.

They want to be involved in their kids lives. And they have to choose between their career and getting that custody because they have to be at a job site at 07:00 in the morning, that's 25 miles away, and they don't have the support network to do the drop-off and the pickup and the stuff after school. And so they have to forfeit that. They have to be one weekend a month, and they really want to be present in their kid's lives and they can't.

And so we really have to address that deficiency in childcare. On the utility side, on the lineman side, on the equity side, the last 45 years of the statistics that I've seen for our joint apprenticeship program because we have a north-south program, have been over 50% people of color coming into those journeyman jobs. So our partners in the utilities and the three unions that represent all those utility workers have done a really good job in that regard.

Yeah, I appreciate that. And I know we witnessed 2800 black workers in particular. So getting into equity, but into disparity, coming into the building and construction trades union in LA, through PLA, through the targeted local hire, when there's intentionality, we see it in the data, and we see it bear out. And Mr. Cabral, that brings me to a question I have for you.

In terms of those amazing statistics that you broke down, in terms of the apprenticeship number and the disadvantaged worker number and the wages, what type of process in your PLA, with unions, with community, with the agencies and your contractors, did you use to enforce the PLA to be able to produce that kind of evaluative information?

I think it's important, as we talk about this, that when we say high road, when we say union partnerships, when we say community partnerships, it doesn't mean that we don't put accountability measures on it, that we're tracking and measuring.

And I think the data that you shared is an example of the way that the state can also think about ways to measure the impact of these investments and really break it down to the disadvantaged worker, to the apprentice, and what share of the pie those communities are getting. $400 million coming back in wages to the LA County community because we weren't allowing folks from Utah and Nevada to come get our jobs at LA Metro is a statement -

- in terms of fighting displacement, in terms of dealing with homelessness, in terms of all of the things that we have to face here on this dais on a daily basis. So what was that enforcement tool to help track and hold accountable and for the whole collaborative to measure success?

Thank you, Senator Smallwood-Cuevas. I think I do have to start off with that. It was a collaborative measure with our trades partners, with the Building Trades Council specifically, and with the signatory unions, with the CBOs that were involved. It took a few years to get that project labor agreement approved.

It took a lot of work trying to get the USDOT FTA to get that approved because there was the prohibition of geographic preferences or there was the prohibition on geographic preferences on local hiring at the time. So we had to be very creative. And it wouldn't have happened without our trades partners and our CBOs and the willingness of our board and our leadership at Metro for it to happen. I would say that there's a few things that you have to have.

You have to have carrots and sticks incentivized where you can in your procurement documents, the achievements of these goals, and the commitment to meet these goals from your prime contracting community. And then maybe I shouldn't use the word sticks but definitely have clauses in your procurement documents that deal with non-compliance. You mentioned earlier good faith efforts just by their very nature. If you are going to have good faith efforts, they shouldn't be easy to meet.

Because if you're making good faith efforts and you're making them in good faith, sorry for the pun, you should be meeting the goals is the way that comes out. So you put in very good collaborative requirements in there. You bring in the resources to make it happen. We're a transit agency. We specialize in a lot of things. We don't specialize in everything. So, bringing in our partners who do specialize in this is key as well. And then reporting and monitoring.

We have a 13-member board who represent various portions of our county or cities or geographic regions of Los Angeles County, who have an interest in learning about what's happening in the communities that they represent. So creating a system that tracks and monitors these 40, 20, and 10% minority and female participation goals is important. And then making this information public is important. That's something that we did pretty quickly at Metro. When I first started, they asked me to do that within a month.

So we put that out within a month. So all of this data that I reviewed with you broken down by prime contractor and subcontractor is made public. The other thing we did at Metro is we are in a Prop 209 state that prohibits affirmative action based on race and gender. We can do it based on Executive Order 11246, which you mentioned earlier on our federally funded procurement.

But what we've also done to be creative is to grade our contractors on how they're doing in terms of female participation against Executive Order 11246, 6.9 female goal. So we make that public, and we invite them to participate in our Board Meetings as well. So there's various ways to make it do it. You have to incentivize, but you also have to have very clear terms and conditions in your contract for compliance and monitoring, and enforcement.

Thank you.

Thank you.

Thank you all very much. I just want to mention with regards to women in construction, we did have the women in construction priority unit that was funded with $15 million used for ERiCA grants. The current budget being proposed by the administration would really put in peril the $15 million. So we are going to have to work really hard to make sure we don't lose that in the budget, especially because it's targeting women in construction. So I urge us all to work hard on that.

A question on the lessons for the state as we design these procurement standards and enforcement standards: What do you all see as lessons? I know I've learned a lot since first dealing with LA Metro many years ago, where basically the response when we said, "Let's build here, let's build here, let's build the trains here, let's build the electric buses here." And frankly and honestly, the response was, "We don't do that anymore." Manufacturing is not something we do in this state. It's something that's been lost.

And so our choices were companies from France, Japan, and China, and then, if we were lucky, you might do the final assembly. But for the most part, we wouldn't even do that. It was a real struggle with the LA Metro to make that a reality. And it's great.

I think our struggles paid off because you listed at least 5,6,7 programs that have to do with labor standards, and where you recruit from and who you say you're recruiting from the formerly unhoused is a huge step forward. And it's something that kind of consciousness, I find, frankly, a very similar attitude in state government. And so what would you say are the lessons to break through, to continue to push through? I know you each, to some degree, represent different sectors.

We have a lot more still to make sure that we not only protect but we actually help to grow in the construction industry with the labor standards. We can't take those labor standards and enforcement for granted. Any one day, something could be proposed that eliminates them. Manufacture, I think it's great. I love hearing about a manufacturing policy. We have BYD and Kinki Sharyo, and northern part of LA County, that would never have happened without labor involvement to push those things through.

So lessons from you all, even if it's from your respective sectors or if you have general lessons that we could take with us. Mr. Wetch, start with you. Were you thinking about it, or anybody whoever wants to jump in?

Well, I remember those efforts at MTA as well, with local 11 in Los Angeles and all those fights and how that went, and I think you said it best, Madam Chair, is that they did say it couldn't be done until they put it into the RFP, that it had to be done. And lo and behold, we had multiple bidders that could beat that. And so I think you have to continue to push the bar.

It's like they said: we couldn't get to 33% renewable standards from all the utilities, and most of them are already procured beyond 40%. And so we just can't sit on our laurels. We have to continue to move the bar, I think, is the lesson.

I'm going to jump in. Sorry, because I just wanted to say I 100% agree with Mr. Wetch that this is the amazing power that you all have. You pass a law, and the industry will meet it. We're such a big market. I mean, we're California.

And I just don't think that we've harnessed our purchasing power and how much companies should want to be here and setting those standards and really pushing the envelope like Mr. Wetch's unions have done like you all have done the great work in MTA. We still have high-speed rail cars that we need to build, hopefully here. So I think that's a piece of it. Making sure there's also those incentives, that those are good jobs, that they're union jobs. That was so important.

And then kind of the wraparound services, not just for workers, but for the companies, the supply chain for manufacturing. What do we need to make sure that there's all of the support? Is there the other things that companies may need to be able to be here and be high road?

Thank you.

And I think that's the kind of support that I get from our leadership at Metro, from our CEO for sure, and that she gets from her board of directors is let's try it. If it doesn't work, we'll modify it on the next one. Our programs have grown incrementally. Our PLA has grown incrementally. It's applicable to more projects. And our manufacturing careers policy, I think, is a good example of that.

We definitely had some lessons learned after we applied it the first few times on a few contracts. And we've recently modified it again about six months ago. Even though it's now a six-year program, it's still subject to modification. So you're never going to get a perfect program out on the street, but if you don't put it out, you'll never have a program. So, my lesson learned to the industry is to put it out there and see how the industry responds.

Do your market research, do your risk benefit analysis, but you won't know unless you put it out on the street to see how they responded.

Thank you.

Great.

I would just add that there are a lot of really dedicated public servants who are very smart thinking about these issues. You heard from Tim Rainey today. He's not one of them. No, no, he's one of them. His team there at the Workforce Development Board they are thinking about the high road. They have a whole program there that's called high road construction careers, high road training programs. And I think we saw this.

There's a really good example of the power that you all have before both of your times here. In 2013, we created the skilled and trained workforce statutes, and that was specifically for one part of an industry that was using out-of-state workers. Five or six years later, we have project labor agreements throughout that industry. And so things that you all do here, to take Sarah's point and Scott's point, can really matter on the ground.

And you can stand on the shoulders of folks at places like the state workforce board who have the data and have the technical expertise to show you kind of what your bill should say and what's already worked because I know you guys go through a lot of bills here and you have a lot of priorities. There's lots of already good people thinking about stuff in this space.

Thank you.

And I'll just end just with my own personal story here. Having come out of the hospitality industry, where there was no training program, there was no connection between jobs and unions, well-paid jobs in the service sector industry, and what it does to the dignity of a person to have quality training in their lives. It just makes all the difference in the world. We started out really small, one hotel, two hotels.

And it was very difficult to get entire industry, a bigger industry to buy into it. Then, you get a bigger industry to buy into it. But then there's no guarantee that they're going to end up in a good union job because you're sort of training for whoever is out there and wherever those men and women land. So, eventually, getting all the pieces to work at the same time.

Quality apprenticeship, quality training, recruiting from all parts of our community so everybody has a chance to it and connecting that to good. I think, you know, when I was first elected at the LA Federation of Labor, the first thing I did was go out on these different construction sites and to the apprenticeship programs, which I didn't know existed. And it was extraordinary to see all the pieces work at the same time. You just can't have one or the other.

So I just want to end with commending you all for what you're doing, making a deliberate, help us make these deliberate decisions, not just reactive and doing it altogether.

So, anymore?

No.

Thank you all very much. Appreciate you. Thanks for your patience and staying here. And we have one final speaker in implementing and ensuring our equity. Saba Waheed from the UCLA Labor Center. And what we're going to do here because of technical issues is we are going to have a picture up on the screen, and then we're going to have an audio presentation made for us.

Okay.

I see she's here.

Oh, it did work.

The problem wasn't getting the video, it was getting both video and audio. So she's going to speak over the cohost line, but we will be able to see her.

Okay, so we have two things going on at the same time to be able to hear your presentation. Welcome. Thank you for your patience, and move on.

Awesome. Can you hear me?

Yes.

Okay, great.

Good afternoon, Senators.

My name is Saba Waheed, and I'm the Research Director at the UCLA Labor Center. With 20 years of experience, I'm here to speak as an expert on labor standards and industrywide policies, particularly as they impact women immigrants, workers of color, and other impacted communities. I want to begin by discussing the labor center's work with black workers, and I'll expand it to broader labor issues and conclude with some policy implications as we think about job quality and equity -

- in this new funding opportunity.

I believe starting with Black jobs and the Black jobs crisis gives us a framework for thinking about the broader economic trends and policy solutions from an equity lens. So, a few years ago, we ran census data on black workers in Los Angeles. We launched this project because our partners at the LA Black Workers Center were seeing an exodus of black workers from Los Angeles. Employment conditions had a lot to do with it.

The research showed that Black people were significantly more educated than previous generations yet experienced a lower labor participation rate and a significantly higher unemployment rate relative to their share of the overall labor force. Black workers were underrepresented in professional construction, manufacturing, and food service jobs. They had lower rates in manager positions and higher rates in frontline positions and earned less. For Black women, the wage gap was even more severe.

So what happened?

Going backward, if we look at the 20th century, Los Angeles experienced a wave of migration that significantly enlarged the region's black community. Manufacturing and employment, and unionization were the key factors that provided black workers with higher wages and middle-class jobs. Through organization and struggle, the community won access to quality jobs, housing, and opportunities. But then these industries departed, and Black neighborhoods that once housed well-paying jobs saw the depletion of stable and available union and good-paying jobs. Those that remained declined in quality.

We had an increase in criminalization of the community and over-incarceration, widening inequality, rising housing costs, and then glaring lack of opportunities. And while the Black community was once a thriving part of LA's landscape, the data showed that their share of the total population declined from 13% to 8% over the last few decades, at a time when the general population increased by 35%.

I wanted to start here because we saw there was an economic shift in the industries, and we didn't move forward thoughtfully and left an entire community behind. Its impacts we are still seeing today. But it's not just the black community. We have seen the impact of deregulation and disinvestment in industries across the state that impact women, immigrants, workers of color, and other marginalized communities. With a shift to the service sector and low-wage jobs, one in three workers today in California earns low wages.

It's even higher in industries dominated by women and women of color, such as domestic work and nail salons. The work is precarious. In our study of workplace violations in Los Angeles, we found that eight in 10 workers experienced a basic wage violation, at least in any given week, and women and people of color were disproportionately impacted. We have encountered decades of erosion of labor rights protections and benefits through arm's length employment relationships like subcontracting, hiring, temp work franchising, and misclassification.

Studies have noted that misclassifications have become increasingly common across various service industries, and we continue to see an overrepresentation of workers of color, workers of color in low-quality jobs, unsafe working conditions, and those with occupational segregation. So here we are once again at a crossroads in our economy. These government investments provide the possibility to lift up our economy and workers who are struggling in bad jobs facing unemployment or underemployment.

Many of the workers that I'm talking about aren't in the pipeline for the jobs we're talking about, and these communities were disproportionately impacted by COVID-19. Our recent research on COVID-19 recovery noted some of the ways that past investment efforts failed to support the Black community. We'll want to be bold in ensuring that we recruit and train workers who are not already in line in the know and those who are struggling the most in our economy.

Previous panelists have mentioned a whole great range of programs we already have in the state that we can build on. We have targeted hiring programs: consider what kind of benchmarks will ensure this funding is going out to reach those workers who are further in the margin. This also includes robust monitoring systems and audit studies that we're making sure that we're actually doing the diversity standards we're talking about.

We need to support policy efforts to respond to retaliation and discrimination complaints on the local level so that we can remedy civil rights violations and curb the unfair treatment at work.

We should think about how we can get workers into positions where they can be wait. We should consider boards that include impacted workers as key stakeholders and with decision-making power and oversight power. We also need to consider partnerships with credible community organizations. We have great models of these community partnerships with government that can be on -

- the front lines that implement targeted outreach, recruitment, and retention programs that will focus on underrepresented workers. And we should continue to center and support high-road business models. We have a historic opportunity to close the equity gap through community-driven public policy that creates good-paying, quality jobs that are accessible to workers. We have many successful programs and policies to build on. We should and can be bolder to create an inclusive and equitable economy on the front end rather than trying to reform it years later.

Thank you.

Thank you very much. Appreciate your patience and how important your part of this conversation is today.

Senator Smallwood-Cuevas?

Thank you very much, Madam Chair. Ms. Waheed, I did have a question. You talked about ways in which workers themselves can be part of this process. I think you talked about this notion of oversight boards to help ensure that we are creating these new jobs in this new economy with high standards, but also ensuring that those hardest hit communities, and particularly those folks who are trapped in low-wage sectors, have an opportunity to participate.

Can you talk a little bit about what kinds of models you've seen in terms of this worker oversight, and how do you see those kinds of models fitting in as we are kind of building and scaffolding this workforce of the future?

Yeah, I mean, some of the ways.

We've been looking at initiatives like a sectoral board for us. What's the most important part is that it is a body that actually centers workers in positions that can actually have some power over the things, whether it's participatory budgeting. So there's lots of models there where when we're talking about this money, we can actually bring the community themselves, the workers themselves, the worker representatives, to be able to also give feedback, review it. I think some of the processes.

They could be things like sectoral boards, which we've been doing some research on. Especially not to reach different workforces that have not traditionally been at the table. So we've been looking at it know, we've done some studies in the ways that it's been for domestic workers. We saw how it was for fast food workers in New York. I know the ones here in California is on hold right now.

So, what can we put into place that will bring workers into the room, that will provide the capacity for workers to be actually able to engage on the kinds of topics that we're talking about, whether it's budget or whether it's other kinds of decision making around this funding, a way to take it back into the community? The model we saw in Seattle is they had this back and forth.

They were constantly doing surveys with employers and workers as they were making decisions moving forward. And I know that's more processed in time, but it really made a difference both to get buy-in from the community and to use that process to reach broader communities who may not even know -

- about this, to reach other domestic workers. For example, through the board process and to build leadership itself. So how that participatory process in the budgeting, in the decision making, whatever aspects we want to bring it in has multiple levels, not just at the front end, but also kind of the processes that can be built in to gather input, to make sure that the programs are responding to the actual needs on the ground, to build more buy-in -

- and to reach more workers in that process.

Thank you. And my final question has to be about the educating of workforce. And I know the UCLA Labor Center has done a lot to look at ways to reach those workers who may not be in unions but who are organized and are trying to improve working conditions in their sectors. We talked a lot about the role of workforce development, the California Workforce Development Board, and our local workforce development boards.

Do you see an opportunity for, and maybe you could talk about what kinds of worker organizations we need to better include in this process to reach those workers who may not be covered by collective bargaining agreement but who are working in partnership with labor unions to improve standards in those low-wage industries, to ensure that we are building pathways for those workers as well into the sector>

Yeah, I mean, even I know from your experience with the LA Black Workers Center finding the community organizations that are on the ground, who have those direct contacts with the different workers who are, again, not already in the know, not already in the, you know, the LA Black Workers Center -

- of course, had the pre-apprenticeship program, which was, okay, we'll set you up.

So that you can get to the pipeline. And so, what are those markers that we need to create now? It's outreach and recruitment. And then what's the next stepping stone that we have to put into place that can then bring the workers in? The partnerships can take many forms.

The union worker center partnerships has been a great model that sets up, starting from the worker center that can reach those workers that have not been engaged in this way before and bring them into the union model. We've also seen government and community partnerships that bring those resources, and the community organization, again, can do the different outreach measures, the recruitment measures. But I think even whenever we're thinking about this, both in terms of what that partnership is, but then also what are the steps needed?

Is it that there has to be some training that happens on the community partner side? Is it just recruitment? Is it just outreach and recruitment and getting folks in and providing information? Or is it that the community organizations need to set up some of those initial structures that will then get them ready to move to the union or move to other potential job opportunities that this funding will open up? So what is that track?

What is the pipeline that will take it from the folks who are way out in the margins into the center? And what role can community organizations play in that?

Thank you very much.

Thank you, Senator. And I want to thank you very much, Ms. Waheed, for your participation today. Appreciate your patience. Also, coming at the end of all of our other presentations, we have orders here to leave the room by about 1:10. So we have less than 10 minutes. There is another hearing that they have to clean up the room before the next hearing starts at 130. So -

- moderator, I'm sorry. Do we have anyone here in the room in person that wants to make a public comments? We're moving on to public comment. No, seeing none. Moderator, do you have any witnesses waiting to provide public comment?

Ladies and gentlemen, on the phones, if you wish to make public comment today on today's presentation, please press one, followed by zero. One followed by zero. Madam Chair, nobody is queuing up.

No? Okay, good.

I mean, not good. I shouldn't say that. No, just good that we're not going to get kicked out. That's what I mean.

Okay.

Well, again, I want to thank my colleagues. Senator, thank you very much for sticking with us. I feel bad that our leader was unable to be here, but I know he's doing work that he has to do. Thank everyone, thank the panelists, thank the staff very much to the staff for all of your work and setting this up and helping it to go as smooth as it is. Appreciate everyone that shared their knowledge and expertise and stayed here for several hours.

The information that was presented to us is critical to our planning, to the strategy. And I look forward to continuing to work with everyone who made presentations. We want to make sure that California receives our maximum investment possible and use that investment for strong labor standards, and making sure that everyone in our community has equitable access to good jobs. Thank you all for your participation. This hearing is now adjourned.