Senate Standing Committee on Labor, Public Employment and Retirement

Good morning. Senate labor and Public Employment Committee will come to order. We are excited to have our very first oversight hearing of the session.

This oversight hearing will focus on federal policy impacts on California's labor market and I really want to thank all of our panelists and the Members who will be coming in and out today to participate in this important and necessary discussion.

The Federal Government, as we know and have been witnessing and have been protecting and defending our state against, has been focused on dismantling California's core values. As a result, our workers are hurting, our employers are hurting, and our communities are hurting. California has the fourth largest economy in the world and is home to several influential industries.

Yet many Californians experience economic security and over the past five years, economic disruptions from COVID 19 inflation, technological changes, foreign conflicts and shifting federal policies have heightened the insecurity. The most recent unemployment rate in California was 5.5%. Unfortunately and certain populations have experienced much higher rates of unemployment.

For example, in 2025, Black unemployment in California rose to 6.4%. In LA County alone, the Black unemployment rate is at 6.1%. And we know that the 6% unemployment rate is an indicator of recessionary conditions. Black unemployment in California and Los Angeles reflects this convergence of entrenched structural inequality with concentrated economic and policy disruptions in 2025.

If that wasn't enough, this federal Administration is also wreaking direct havoc on our workers in their own communities. They are rolling back our hard fought economic progress by cutting funding for health care and other social net Programs at the expense of our most vulnerable populations.

Indiscriminate immigration enforcement actions are not only creating a culture of fear and I want to say a deep culture of fear, but they are reducing our workforce and threatening our economic growth. California's status as an economic powerhouse would not exist without the hard work and dedication of of the very people being targeted by enforcement action.

The same people that just a few years ago we called essential. Just a few years ago we called heroes. Erratically imposed tariffs at the same time have caused the price of goods to skyrocket, making it harder for everyday Californians to afford basic necessities and our business community to predict, plan and grow.

Today's hearing is important to acknowledge that these are not normal times. And as difficult as it is to have conversations knowing there is much outside of our control, it is important to document the lived experiences of Californians suffering under the Trump Administration.

Unfortunately, federal policies being implemented right now are so far reaching, are coming from so many sectors, are impacting so many workers we may not always be able to fill the gaps that they create, but we need to know what those gaps are. We need to know what those on the ground believe are solutions.

And we need to create a space for business and workers to come together to discuss strategies. We also need to be prepared, whether that be preparing for a recession, ensuring we get our unemployment insurance benefits out to those in need, or adjusting our workforce development plans to meet the needs of our changing world.

California must not back down from our core values for sure. We must ensure livable wage, we protect worker safety and we continue to deliver equitable access to quality careers in this state. My hope today is that we identify policies that support those values so that we can work towards a brighter future.

We have the right, we have what we need, and we have that responsibility. And there are other Members who I know may want to speak on this today, and we will welcome that. And for now, I see some of our panelists are here and we're very glad that you're here and on time.

So we will begin with our first panelists to please come forward. And in this panel we will hear from an economist who will give us an overview of our economic status of the state. Professor Enrique Lopezlira from the UC Berkeley Low Wage Work Program. Please stand. Step forward. Have a seat.

Make sure your mic is on and working so we can record the discussion. And please proceed whenever you are ready.

Good morning. Can you hear me okay? Good morning, Chair Smallwood Crevass and Members of the Committee, thank you for the opportunity to speak today. My name is Enrique Lopezlira. I'm a labor economist and the Director of the Low Wage Work Program at the UC Berkeley Labor Center.

Today I want to briefly highlight various economic trends affecting California workers, especially low wage workers in the state where women, workers of color and immigrants are overrepresented. While the state's economy has grown over the past five years, the labor market has been much weaker and many workers are feeling increasing economic pressures.

The state's affordability crisis, particularly housing and care costs, continues to strain household budgets. On top of this, current and proposed federal policies that erode the safety net and enforcement actions that destabilize communities are disrupting key sectors of California's workforce. If we can go to the first slide, do I control that? Thank you.

California's labor market is still large and dynamic, but job growth has slowed considerably compared with strong recovery we saw after the pandemic. This chart here shows changes in employment month to month, and the data show that employment growth has been virtually non existent since January 2023.

So if you were to fit a line of average growth, you'd be right at the zero line there since 2023. This raises concerns that national and global economic developments could further weaken an already fragile labor market for workers who remain employed. Paychecks have not kept up with rising prices.

This is true at both the national and the state level. At the national level, in this chart, we can see that the rate of inflation, the dashed line, has been clearly above the growth rate in earnings for private sector employees, the solid blue line for most of the post pandemic period. Similarly in California.

If we look at California, real weekly earnings for private sector employees also rose in 2021 early in the pandemic recovery, but then fell sharply in 2022 as inflation surged. While real weekly earnings recovered a little bit in 2024, that growth was very modest. Growth is not just important, but the distribution of those gains matters as well.

About 35% of California workers, roughly 5.6 million people, earn low wages, defined as workers getting paid less than 2/3 of the area median full time wage. That number would be $20.83 in 2024.

So that means that more than one out of every three workers in the state struggles with earnings that fall far below what is needed to afford basic living costs. In California, low wage workers are not only paid less than the median worker, they are also more likely to face unstable work schedules, limited benefits and fewer workplace protections.

Many working sectors where hours fluctuate and access to employer provided health insurance, retirement plans or paid leave is limited. All these conditions make it much harder for these workers to weather the next economic downturn and and adequately support their families. California's affordability crisis magnifies these issues, especially for the most vulnerable workers.

Housing costs in particular place enormous pressure on working families. Even workers earning average wages often struggle to afford typical rent in many parts of the state. when we look at housing data, we see that full time workers earning typical rent or wages cannot afford average rent in many areas.

In this chart here, you can see that the market rate for one bedroom is about it's over $2,000. So a worker who's making 30% of the median income can only afford $928 in rent a month. So they cannot afford the market rent in many places.

At the same time, child care and long term care costs consume large shares of family budgets, making it harder for workers, especially parents, to stay attached to the labor force. In this chart here, you can see that on average about 1/5 of the household budget goes to childcare costs.

And if you're a single parent, especially a single mother, you're looking at almost 2/3 of your budget going to child care costs. Proposed federal policy changes will exacerbate these pressures. HR1, which was passed, includes major reductions to programs such as Medi-Cal, which millions of Californians rely on. These policies can also directly affect employment.

Our estimates suggest that large federal cuts to medical funding could lead to significant job losses, not only in California's health care sector, but other industries as well, along with billions of dollars in local and state tax revenues. Similarly, HR1 will cut funding for the Supplemental Nutrition Assistance Program, which one in seven Californians rely on.

Our research also shows that low wage workers rely on SNAP, called CalFresh, in the state at higher rates than other workers. These federal policies are targeting programs that support working families and help stabilize local economies at a time when we need more stabilization, not less. Finally, California's economy depends heavily on immigrant workers.

About one third of the state's workforce is immigrant, and immigrants contribute over $1 trillion to the state's GDP. Increased federal immigration enforcement is disrupting key industries such as agriculture, construction, hospitality and care work, creating labor shortages and adding to the economic instability of our state.

Taken together, these trends point to a labor market where many workers, especially low wage workers, are facing increasing economic insecurity, slowing job growth, rising costs and federal policy changes will only deepen that insecurity. Thank you again for the opportunity to present and I'm happy to answer any questions.

Thank you so much for that thorough overview and the outlook that we have for working people. I do have a few questions you showed in the first two charts. Just sort of what the overall outlook has been for wages and the overall economy.

I wonder, how do these, how do, how do these tables look when we are moving into or approaching recessionary levels? Are we, are these, are there indicators here that can show that this outlook, how it compares to the state when we sort of really hit the hardest economic times?

Yeah, so thank you for the question. Yeah, so I was focusing on the labor market side of the economy and showing weak job growth is one indicator. You mentioned unemployment rate increasing. That's another indicator. You know, the economy is, is vast for California being the fourth largest economy.

And so it's really, it's hard to predict when the next recession will come. But these are all indicators of uncertainty, which businesses don't like uncertainty for consumers and they cannot plan for their purchases.

So yes, I think if the market, the labor market keeps getting weaker and we start seeing inflation spike up, especially around some of the recent geopolitical events. We're seeing gas prices spike up. Yeah. Taking together all these indicators could signal that the economy will turn into a recession. But it's.

Recession is a technical term, is hard to predict. But, but these are all important indicators that are worrisome when taken together.

No, that's, that's helpful to understand because it's as we are keeping an eye on these different indicators, whether it's the unemployment, whether it's the lowering of wages, suppressing of wages, it's something for us to watch.

But one of the things we're also seeing, and there was a recent poll done by PPIC that was just talking about the ways that middle wage jobs have just been flatlined, like they just have not moved at all. But we are seeing a really intensely sort of growing number of low wage jobs and very high wage earners.

And so I'm curious, what does that, what impact does that kind of trend have and what's driving that? Where, where we're seeing growing unemployment in some places, we're seeing no growth at all. And then we're seeing in low wage and very high incomes, you know.

Right.

Growth.

Yeah. So thanks for the question. So in some sectors like health care, I mentioned that these cuts to Medicare Medi-Cal are coming. We have seen that and heard from folks that some employers are already reducing employment based on the expectation of decrease funding.

So you know, the recession doesn't need to happen for employers to react, trying to anticipate one. And that means less employment and less opportunities for workers. So we're seeing some of that from the funding cuts in healthcare. We also see in the tech sector, especially in the Bay Area, lots of layoffs happening there.

Part of that is from overstaffing during the pandemic. But we're seeing beyond that, some of the layoffs. There's also the uncertainty from new technologies. Everybody's trying to figure out what AI is going to mean. Like I said, a lot of employers try to anticipate and start making decisions based on those expectations.

Then as you mentioned, there's just a tremendous need for the work that occupations that are traditionally low wage occupations are still important and essential. They were considered essential during the pandemic, they're still essential today.

And if you look at some of the forecast from the EDD, you see that most of the job openings expected in the next 10 years are pretty much low wage occupations, which speaks to the need to, to improve the quality of those jobs, increase labor standards, better Pay make sure that folks can earn a living wage and take care of their families?

Yeah. And I feel that's part of our calculus here at the state because when workers obviously don't have the wage and the income to allow ends to meet in terms of dealing with spiking gas prices, rent, healthcare cost, then our safety net has to really be durable and robust to be able to hold the increases of numbers who are going to rely on services.

Unfortunately, now at the same time we have HR1 that is just slicing through the safety net, particularly when it comes to health care and hurting families. And I'm curious, do you do in the calculus as we're thinking about, well, what can the state do to prepare for that?

What types of workers do we need to be watching and sectors we need to be watching? Which industries have the highest rates of employees who rely on social services? And you know, what are the ways that we particularly thinking about this Committee can really best support those workers.

Yeah. So actually healthcare has a lot of workers in healthcare who rely on Medi-Cal. And we also, as I mentioned also one out of seven Californians rely on CalFresh. And we know from our research that low wage workers rely on CalFresh at higher rates than other workers.

So low wage industries, retail, leisure, hospitality, those have large numbers of workers who rely on these safety net programs. And those are large industries for the state.

And so, you know, in the Bay Area we talked about the super bowl coming and the last year and then the World Cup or this year and the World Cup coming this summer.

These are all industries are going to rely on those low wage workers to make sure that those events that are supposed to drive economic growth can happen. And so these workers are relying on the safety net to make ends meet. And these are very important industries to the economic condition of the state.

Well, I really appreciate that sort of identifying core large and precarious sectors that we need to keep an eye on in terms of the safety net.

I mean, at the same time, and we sort of alluded to this in my opening statement, we see a lot of impact of tariffs and we also see sort of the political football of do we have them, do we not?

And you know, most Californians were not thinking day to day what impacts those kinds of policies from the federal Administration have on our daily lives. When you and we all use the term unprecedented.

And I'm sort of thinking that's not the right term anymore because these programs just seem to have these ripple effects that we don't even can anticipate. But what impacts does this have on our workforce?

When we have these kinds of economic policies, particularly as we are, you know, the largest part of Los Angeles and Long Beach, one of the largest in the world, we have logistics all over the state, big part of our economy. How does that shifting and changing policy impact the day to day lives of workers?

Yeah, thank you for the question. Yeah. So in two ways. One is it creates uncertainty for employers. And like I said, when employers see uncertainty, they tend to want to mitigate it. And usually the first place that they want to mitigate uncertainty is by reducing labor costs.

And that means either reducing the increases to wages or laying off workers. It also creates uncertainty for these workers in terms of consumers. So when you have policies like tariffs which affect prices, but it doesn't happen immediately because sometimes employers or firms eat some of those prices, sometimes they pass them on, it makes it harder to budget.

And, and as I mentioned, for low wage workers who are already stretched thin not knowing what their budget is going to look like when there's a spike in gasoline prices from right now during the war, or from tariffs increasing food prices, it makes it really hard for them to budget.

So it hits them on both sides of their lives as consumers and providers of their families, and then also as workers, not just providing for themselves, but also as part of the economic engine of the state.

Well, I really appreciate the thoroughness of your presentation in indulging these questions.

I'm sure as an economist, you've been in this business for quite a while and like so many of us, just watching day to day, as more policies roll out and seeing more impacts across our communities, is there any closing, parting words of sunshine, of hope of that we can take from this to help us at least?

You know, for me, preparation is hope, because if we aren't prepared, that's when we really face the toughest challenges.

Yeah. So I'll try really hard not to be a dismal economist with dismal signs. But. So, you know, what gives me hope is that workers are engaged in California. We put out a report last year about the state of unions in California.

And what our report showed is that unions in California have been very stable in terms of growth and membership over the last two decades. And part of that is because workers are organizing, they're engaged, not just in terms of their contracts, but in terms of policy.

So we see a lot of some of the policies that were passed recently. You know, labor organizations were a part of that. So we, what gives me hope is that workers in California are organizing and continue to push back as much as they can against some of these federal policies that are detrimental to the state.

Well, I really again, thank you again for your presentation. I absolutely agree that is good news. And one, because it means we have some standards in terms of safety and we wages and protections for workers. But two, we also have a communication channel with factual information and tools and resources to help workers.

And that's the other added benefit of unionization and having worker networks. And so I absolutely agree with you and hold that hope with you. Again, thank you for your presentation and we will be in touch on this issue as we continue forward this year.

Thank you so much.

Thank you. Okay. As Professor Lopezlira leaves the table, we will invite for our next panel immigration Federal Immigration Enforcement Effects on California's Workers and Labor Market. And in this panel we will have UC Merced Community and Labor center and the Los Angeles County Economic Development Corporation Corporation have a seat at the table.

They will be discussing the impact of federal immigration enforcement on California's labor market. I want to say welcome to Professor Edward Orozco Flores with UC Merced. And you are going first, so feel free to start when you're ready.

Thank you. Thank you. To the California Senate Committee on Labor, Public Employment and Retirement for the opportunity to present testimony on behalf of the UC Merced Community and Labor Center. The current federal Administration is attempting the largest mass deportation campaign in US History with profound implications for California.

And as a Member of the University of California system, we recognize the obligation to conduct research and education on issues that advance the public interest here in California and beyond.

So today I'll be sharing findings from the Center's recent report, the Effects of Federal Immigration Enforcement on Private sector employment in six states and Washington, D.C. the center sorry. The center has been tracking monthly employment trends since the COVID 19 pandemic. Last year, we published multiple research briefs that focus on California.

Our February report communicates much of the same data, but with additional historical context. And in our report, we ask one simple question. During escalations in federal immigration enforcement, how does private sector employment change? The report utilized Current Population survey data from January 1983 to 2026.

The CPS basic Monthly is a representative survey with responses from 40,000American households per month. It is the largest survey of its kind that provides insight into current US Work and employment. We analyzed private sector data, private sector employment trends in those states targeted by the federal administration's major immigration enforcement operations.

Tennessee, California, Oregon, Washington, D.C. and Illinois, Louisiana and Minnesota. In this presentation, we'll refer to these as the enforcement states and the rest of the US as rest of the US Table 1 reports how we coded periods of escalated immigration enforcement to measure employment trends before, during and after periods of escalation.

We can see that California experienced roving patrols and workplace raids from June 6 to July 11, after which a federal judge placed a temporary restraining order on the roving patrols and racial profiling. This was in effect until September 8, when the Supreme Court placed a stay on the TRO.

We examined private sector employment trends in targeted states during the first year of the second Trump Administration, and we found that private sector employment and enforcement states declined 1.8% while the rest of the US experienced a 1.1% increase. In California, the number of private sector jobs remained flat from January 2025 to January 2026.

But when we look at May 2025, just before the roving patrols began, and January 2026, the most recent month we have data for the state experienced a 2.6% decline in private sector employment from 15.2 million to 14.8 million jobs.

What we term enforcement states experienced an overall downturn of over half a million private sector workers between January 25th and January 26th versus the rest of the US gaining over 1.1 million workers.

When we looked closely at monthly changes, we found that job declines were associated with periods of escalated enforcement but not before or after enforcement states experienced private sector worker gains before escalations, declines during escalation periods, and partial rebounds following escalation periods, and this trend held for California.

Table 3.2 demonstrates monthly trends in enforcement states in the rest of the US and the periods of escalation are bolded. When we look closely at monthly trends in California, we can see that California experienced a decline in June and July after immigration enforcement escalations, but before the TRO took effect.

When the TRO took effect between the CPS reference weeks in July and August, California's private sector employment rebounded not completely, but mostly. Then in September, after the Supreme Court placed a stay on the TRO, enabling the roving patrols and racial profiling to continue, employment declined again by 1.9%.

In contrast, the rest of the US experienced slight private sector job gains between 0.1% and 0.5% during California's periods of enforcement. Escalations and declines. Fake year 3.3 visually represents the multiple declines California experienced in private sector jobs compared with the rest of the US during the escalation periods.

So this is a big question how common were California's private sector job declines during Its periods, immigration escalation periods. Going back and examining 43 years of data, the furthest back we can go. With this type of data we're examining, we found that California's May to July decline in 2025, which was 4.9%, was unprecedented.

In fact, it was over one and a half times that of the next highest year. When we look at California's August to September 2025 jobs declines of 1.9% this also far surpassed the previous worst years on record. Okay, so policy, what should we be thinking through?

During historic periods of economic downturn, policymakers have mitigated economic crisis with stimulus bills. We saw this with the Great Recession and the COVID pandemic. And if I can reference the previous conversation with the previous panelists, you know, the question was what industries should we be keeping an eye on? You know, what is this telling us?

And California's budget depends in large part on capital gains because it has a progressive tax structure. The wealthiest people earn from investments in stocks rather than working. And so we can have like during the pandemic, we can have the stock market growing a large budget without workers seeing that benefit in employment.

And you know, one of the things we should be mindful of is with public monies, what is in the public's interest.

And so the jobs that so many immigrants concentrate in that are being affected by the downturn, agriculture, construction, these outdoor jobs that have been have a history of being racialized, but also too where people fear being outside if roving patrols are happening right in construction.

We have models of how we attach labor standards to public monies, to awards, right to contracts in agriculture. California hasn't done that yet. The USDA did it with farm labor stabilization protection pilot program, which our work informed the development of.

And so they gave $50 million of public subsidies to growers that showed they were raising their labor standards. But California has not yet devised something like that. So something to think about in terms of policies. But I'll be talking right now specifically with regards to this presentation.

There are two General approaches to infusing cash into economy during a downturn. One is to say let's subsidize businesses, let's help businesses, and there will be a trickle down effect.

Another is to think about the workers that are impacted in wage replacement programs because workers who need money, who need to make ends meet, they will immediately spend the money, buy household essentials. And that has a multiplier effect. It goes through the economy, so it has the effect of benefiting the broader economy.

And so the state is confronting an economic uncertainty right now, along with humanitarian concerns.

And so what we knew before the crisis is that the majority of children living in non citizen households, more than six in 10 children living in non citizen households, already subsist on less than a living wage, the amount needed to avoid chronic and severe housing and food insecurity. And this crisis has only worsened that situation.

But yet not all workers are eligible for unemployment benefits. Undocumented workers are prohibited from accessing federally funded benefits such as unemployment insurance. In the past, some states have created solutions to stimulate the economies of those communities where undocumented households have been impacted by economic disruptions.

So New York created a temporary Fund during the COVID pandemic, the Excluded Worker Fund. And two years ago, California established a permanent wage replacement system for excluded workers called the Benefit Recovery Fund. So the last thing I'll say is California could also consider creating a wage replacement system for excluded workers.

Doing so could help mitigate the economic and humanitarian crises associated with the federal administration's escalated immigration. Escalated immigration enforcement actions. Thank you.

Thank you very much, Mr. Flores. Thank you. And our next panelists is Shannon Sedwick. She is vice President of research for the LA County Economic Development Corporation. Ms. Sedgwick, you can proceed when ready.

Good morning, Chair Smallwood, can you hear me?

Okay. Good morning, Chair Smallwood Cuervas and Members of the Committee, thank you for the opportunity to speak today. My name is Shannon Sedgwick. I serve as Vice President of Research at the Institute for Applied Economics at the Los Angeles County Economic Development Corporation, or LAEDC.

Today I'll briefly summarize the findings from our recent analysis examining economic impacts of intensified Federal Federal Immigration enforcement activity in Los Angeles county during 2025. Our research was commissioned by the Los Angeles County Department of Economic Opportunity at the direction of the County Board of Supervisors.

And the goal of the analysis was really to quantify how enforcement activity may affect the regional economy so its labor markets, businesses, and economic activity across communities.

Los Angeles county provides a useful case study because it contains one of the largest and most diverse labor markets in the US With a substantial immigrant and specifically undocumented workforce participating across many of our key industries. To begin, it's important to understand the scale of immigrant participation in our county economy.

Los Angeles county is home to approximately 3.5 million immigrants, representing about 35% of our population. Within the labor market. The USC Equity Research Institute, which we collaborated with, estimates that nearly 950,000 undocumented workers participate across a wide range of industries.

LAEDC's economic modeling finds that these undocumented workers generate approximately 253.9 billion in annual economic activity, including indirect and induced effects. That's representing roughly 17% of countywide economic activity. This activity supports over a million jobs, including both direct employment and broader supply chain effects, and contributes about 80 billion in labor income.

So these figures illustrate that undocumented workers are deeply integrated into the regional economy and they contribute significantly to economic activity across our various sectors. Turning now to enforcement activity, Federal Immigration enforcement in Los Angeles county intensified in the first, you know, especially in June of 2025.

So using federal enforcement data sets, we estimate that over 3,100 ICE arrests occurred just through July, representing 143% increase year over year. The data also indicates that enforcement activity expanded beyond cases involving individuals with criminal histories and increasingly occurred in community settings such as workplaces and residential areas.

And this was the impetus for the commissioning of this study. Our analysis also examined where economic impacts are most likely to occur geographically. So to do this, we developed the LAEDC Immigration Enforcement Vulnerability Index, or the LAEDC IEVI. It combines multiple demographic and labor market indicators into a single score for each zip code across Los Angeles County.

So this map shown here highlights areas where economic activity may be particularly sensitive to enforcement disruptions. Communities with higher Vulnerability scores included Mission Hills, Panorama City, Bell, Pico Rivera, Southeast Los Angeles, and neighborhoods surrounding downtown Los Angeles. So these communities tend to have higher concentrations of immigrant workers and industries that depend heavily on in person labor.

So across these areas, the industries most exposed include retail trade, construction, manufacturing and accommodation, and food services. A key finding of our research is that the economic effects of immigration enforcement extend beyond the individuals directly targeted. So our analysis indicates that enforcement activity can reduce labor supply in sectors that rely heavily on immigrant workers.

These disruptions can then translate into business impacts, workforce instability, and changes in consumer behavior. We also find that these effects reach beyond undocumented individuals themselves. So more than 2 million residents of Los Angeles county lived in mixed status households, meaning that they're either undocumented or live with a family Member who is undocumented.

So because of this, changes in mobility, employment participation, or consumer spending can ripple through our communities and local economies. Another important dimension of our analysis is industry dependence on undocumented labor, so certain industries rely on this workforce at significantly higher levels.

For example, undocumented workers account for approximately 31% of the workforce in agriculture and nearly 29% in construction. They also represent significant shares of employment in manufacturing, wholesale trade, and retail trade. When we look at the distribution of undocumented workers across industries, the largest concentration occur in retail trade, construction, personal services, and manufacturing.

So together, these sectors account for a large share of employment opportunities in the regional economy and are particularly sensitive to workforce disruptions. So to better understand business impacts, we conducted a survey of businesses across Los Angeles county and supplemented it with interviews and community engagement sessions.

The results indicate that many businesses reported operational disruptions during the enforcement period, and among respondents, 82% reported being negatively affected, 52% reported reduced daily sales, 51% reported decreased customer traffic, and 67% reported workforce disruptions. Nearly half of respondents indicated that they were very concerned about the long term viability of their business.

In interviews with small business owners and community organizations, a recurring theme emerged. Changes in consumer Behavior Many businesses reported customers staying home, avoiding certain areas or reducing spending due to concerns about enforcement activity. Our research also examined broader economic indicators that can reflect changes in community activity. One example is public transit ridership.

We analyzed ridership patterns on Metro bus routes and found that lines serving high vulnerability communities experienced an average decline of about 17,000 monthly riders during the peak enforcement period. We also examined trends in international passenger traffic at Los Angeles International Airport year over year.

Passenger changes in 2025 were mostly negative, suggesting reduced international travel compared with the previous year. Global Perceptions Matter While multiple Factors influence travel patterns. These indicators illustrate how economic activity and mobility patterns can shift during periods of heightened enforcement. Our analysis also included a focused case study examining the economic effects of a temporary disruption. Following protests.

In June of 2025, the City of LA imposed a one week nightly curfew in downtown Los Angeles. So, using economic impact modeling, we estimate that the curfew produced approximately 840 million in lost economic output and impacted 3,900 jobs over the course of a year. That's associated with about 312 million in lost labor income.

Under scenarios where disruptions persist longer, losses could reach up to 2.5 billion in economic output, affecting nearly 12,000 jobs. So although the curfew lasted only one week, it affected one of the most commercially commercially active areas of the region and demonstrates how these localized disruptions can translate into measurable economic losses.

So to conclude, our analysis really highlights several key findings. First, undocumented workers represent a core component of the Los Angeles county labor market and they contribute significant to our overall economic activity. Second, business disruptions have been widespread, particularly among small businesses and service oriented industries. Third, workforce instability is emerging in sectors that depend heavily on immigrant labor.

Fourth, consumer behavior shifts and mobility changes appear to be amplifying economic impacts. And finally, the data shows that economic effects extend beyond the individuals directly targeted by enforcement. They're affecting businesses, workers and communities across the regional economy. So thank you for your time and I appreciate the opportunity to share these findings with the Committee.

Thank you very much, Ms. Sedgwick, for that overview and appreciate both of your presentations. I see my good colleague Senator Curtasi has arrived. I will start with questions. I don't know, Senator, if you have comments or questions you want to make, and then I have some that I'll raise later. Okay, thank you. So.

We hear and we saw, we witnessed, we bear witness to the immigration enforcement and saw the havoc that it wreaked on the lives of those individuals who were confronted with such brutality and lawlessness.

But what you have presented is what we didn't see, which is the ongoing repercussions of those actions on our economy and particularly on our workforce and on our small businesses. And I really want to thank you for bringing what was in the dark into the light and giving us a sense of the scale.

Professor Flores, I want to start with you on some of my questions because we know LA is my county and Los Angeles is my city.

I represent South Los Angeles and Culver City, and we had enforcement actions across the region, but particularly in our, in our downtown areas, in our south Southeast Side but our mayor was very clear when the first troop, the first set of troops hit the ground that LA was the first point of contact of federal action, that this would be happening.

They were testing this model out on us and they would be taking it across the country. I'm curious, your data and what you saw happen here in California. What did it look like in places like Illinois and Minnesota? Was this the surge in enforcement?

Did those communities experience some of the same impacts in terms of just the overall unemployment levels, the surge, as you were speaking, I was thinking yo yo, the yo yo effect of having a workforce one day and disappear the next and then having to find that workforce, to put it, you know, and folks coming forward and getting their lives together and trying to go back to the normalcy of work.

What did that look like?

Well, the downturn in private sector work, the number of people having reported working in the private sector during the CPS's reference week, it wasn't the highest in California, but in terms of looking at the past 43 years, the year to year comparisons were unprecedented for both of California's downturns.

When the raids immediately happened and then when the Supreme Court placed the stay on the TRO. So I think that's what jumped out in the data in Oregon as well. You know, the downturn was unprecedented in the other places.

In some cases like Washington D.C. had a greater month to month downturn when the Executive order went to effect, when Trump federalized the police. But looking at the historical record, you know, it was unusual but not unprecedented. But with California and Oregon, what we observed was unprecedented. Sure.

Here at one, because we have such a sizable workforce and two, we have such a diverse economy base that so many different sectors were impacted at the same time. So I could totally understand that, the distinction, but also how we experience the brunt and the hardest part of that enforcement action.

You know, you touched on this point about, you know, obviously the unemployment, but also the loss in local tax revenue.

And I'm curious, what is the projected net net loss in our state and local tax revenue, particularly when we think about sales tax and we talked about what what immigrants spend in our communities in terms of income tax, particularly for cities where we have a higher population of targeted workers.

And in 2025 we saw these trends of mass voluntary and involuntary departures as well. And I wonder if there's any data that also sort of hints or points to what that also has in terms of the overall tax revenue loss as a result of these.

Unfortunately, we don't have any Data projecting, you know, what we expect to be the tax revenue loss. But, but as I had mentioned, California has a progressive tax structure. And so we can see economic growth.

We can have a budget that grows at the same time that workers are not seeing their share of that of, of the growing economy.

And so as a comparison point, when, you know, downturns that we saw in California's economy just in that first month in June matched what we saw in the first year of the Great Recession, and only it was only surpassed by the second month of the COVID pandemic.

And in both of those cases, during the Great Recession and during the COVID pandemic, lawmakers knew they had a crisis on their hands and worked to develop stimulus packages.

And so we think that the next logical step is for the state to begin thinking about what does it look like to have to create some kind of stimulus plan.

We know that DHS has gotten record funding, that what they did back in June, they're only intending to scale it up and that it's a matter of time before it happens again. And we don't know when that will be.

So for those reasons, you know, those are the considerations we think through, and we don't have a crystal ball, but we know the dynamics that are at play and what we should begin considering.

And because of your work, we know the impact and where we may need to shore up, tighten up, and figure out ways to reinforce with services and programs and resources that protect workers. Thank you so much, Mr. Flores, for the presentation. Ms. Sedgwick, I had a few questions for you.

You and the thing that I was thinking about, and I know I have some prepared questions, but I was thinking about the small, the micro business, the small businesses that rely on this population of workers who, who spend almost 100% of everything that they earn and who have proximity, meaning they shop local, they support merchants that they can do business with, whether it's language, whether it's bringing goods that you know are familiar to them in their community.

Can you talk a little bit about the impact on the small businesses and those kind of micro businesses that were in and around that incredible grid that you showed in terms of where these actions took place.

So we actually partnered with LEAF there out of Cal State, LA. They have established relationships with a lot of these small and micro businesses that are either owned by immigrants or cater to the customer base that is comprised mostly of immigrants.

And it was intentionally done to leverage that sense of trust that they have already built by engaging with these companies to understand and get A little bit more clarity about how the enforcement, increased enforcement was really impacting them.

So they interviewed close to 200 businesses and when I just recently spoke with them, I think it was about 15 of them have already closed their doors since our engagement with them in August. So it does have real impacts. And there are certain parts of Los Angeles that activity has significantly declined in terms of customer activity.

And so you know the, if you, if you think about the economy in terms of GDP, right, that's about 60% of our GDP is based on consumption.

So when you're thinking about changes in consumer behavior, changes in investment in businesses looking to potentially expand, all of the instability that's happening is influencing those behaviors and they're going to have a direct effect on our economy because of it.

So in each individual business is experiencing the effects in different ways, whether it be from their workers who are afraid of coming in or as I said from the customer traffic. But I do want to highlight too that it's not just the undocumented that are feeling unsettled and that are reducing their activity, it's immigrants in General.

And you captured some of this impact in your report in finding that the 44% of affected businesses reported revenue losses exceeding 50% during the raids. And I was curious about sort of thinking where, where this impact hit the hardest. So could you explain the factors that contributed to the losses and which factor was the most impactful?

Because the enforcement action has so many elements to it, both just the presence and then the actual removal of individuals and then the returning of individuals and then the curfews. So is there a sense of where you saw of all, of all of the sort of sequence of these actions?

What had the most impact on businesses what you say on the losses.

I think the longer lasting effects are what affect businesses more.

You had, when you're thinking about the curfew, it was a week long because of the curfew really hitting during the hours of operation that were busiest for a lot of these companies that were there, restaurants, bars, that type, when you, when you close an area down at night, that's where they have the largest, the amount of revenue associated with sales.

But it was a one time impact and they're able to come back. But when you have these, the, this climate of fear that has a longer term influence on activities, then that's what's going to impact businesses because it's that compounding that cumulative like effect of decreased activity that's going to impact their bottom lines and affect their solvency.

I know we did a lot of work in the state to sort of think about small business and to ensure that the programs that we had to support those businesses, that we did all that we could to maintain those. But have businesses been able to recoup much of these losses?

Especially when you look at the impact of just that one week and how long did it take? Is recovery still happening or was there sort of a period or a timetable for recovery?

Sure, we created multiple scenarios because we understand that activity doesn't just bounce back overnight. So we came up with multiple scenarios, which is how we came up with the immediate short term impacts versus long term. We looked at foot traffic data to understand who's frequenting these places and the decreased activity and that guided our scenarios.

And you could see that even though that curfew was lifted, you still had depressed levels of activity. And those, you know, would last until the end of the year, we estimated. So there's not a complete rebounding as long as that sense of uncertainty and instability is still there.

So even now you have just the decreased activity in these areas that have higher concentrations of immigrant populations. And even, you know, Los Angeles county really went through it in 2025 with its exposure with the wildfires, our exposure to the uncertainty and stability of tariffs and then immigration, increased immigration enforcement.

And so because construction is one of those industries where there's a large share of, immigrant labor, there's a lot of speculation on the negative effects that's going to have in terms of our ability to rebuild post wildfires as well.

And so you have, anecdotally, you have stories that are out about how ICE is moving through these burn areas and basically your workforce dries up and disappears. So we're still feeling it. As long as there's that climate of fears and uncertainty surrounding what's happening at the federal level.

And I think that's as we don't know when these resume, when we, as we look at what it will take to recover that process is also unprecedented. And the reality is that cities and counties, you know, should they choose to participate in increased detention, which you know, we'll see how long term this will be.

And we know that these are non reimbursed costs that are be associated with managing higher detention numbers as well, particularly if using private contractors, is there, is there a sense that, is there a sense that the long term effects of cities and counties engaging in these detention programs and I don't know, you know, as we think about those impacts, you know, is there a sense that the business community is preparing long Term for what will be the ways to educate businesses to provide technical assistance to businesses who are maybe dealing with this yo yo effect longer term, Just how does the business community prepare for that and prepare its workforce?

I think, you know, you had asked previously what, you know, what we saw moving forward or what's kind of the ray of hope, right. Of the whole situation. And I'd have to say that the reaction of our local governments and the business community and our residents just in General to what has taken place is pretty inspiring.

So, you know, the work that we have done, our analysis in partnership with DEO, you know, led to the development of the LA Region Small Business Resiliency Fund. And that was to help businesses who are going through some of the disruption related to immigration enforcement to help weather some of the expenses associated with that.

You know, we part of our study, we created in collaboration with DEO, a resource guide for businesses and individuals. So if something did take place, they knew where to go for resources. There's a business toolkit that was developed to help businesses again prepare or know how to react to certain situations at the they can encounter.

There were Know your Rights recorded webinars that, that people accessed. So there's, there's really, you know, there was a huge showing of individuals that took to protest what was happening.

And so there was grassroots actions and local jurisdictional actions that took place through the county and some cities that I think are inspiring to help really kind of bolster and support and mitigate some of the negative effects that are associated.

I want to thank you, Ms. Sedgwick, and thank you, Professor Flores, for this informative discussion today. We know our work will continue as we figure out how to support workers and businesses through this very difficult time.

Next, we will prepare for our third panel because as we have heard the data and what is happening in the overall economy, what is how this is impacting federal actions are impacting our businesses and impacting our overall workforce. It's important that we have an employee response.

And so our third panel, I would like to invite some of our worker representatives and organizations to step forward to the table. From this panel, we will hear employee representatives who will share their firsthand experiences. First, we have Flor Melendrez, who is going to be joining us remotely.

She is the Executive Director of the Clean Carwash Worker Center. Our panelists, let's see, we have the California Nurses association and UAW and as well as our American Federation of Government Employees. You all can just have a seat at the table. We are going to start with our remote panelist first.

Ms. Flor Melendrez, can you hear us? And we see you. Great. Please begin when you're ready.

Yes. Hi, everyone. My name is Flor Melendrez. I serve as the Executive Director of the Clean Carwash Worker Center. And I want to share my screen for my presentation. So please let me know if you can see this.

Yeah, we can see it.

Good morning. It is still morning. And first, thank you so much to the chair and all the Committee Members for your time this morning. Yes, I'm Kimberly Clark, the Executive Director of the California Farm Labor Contractor Association.

So similarly, our members are all over the state, wherever there's agriculture, and actually, FLCs provide over 40% of the state's agricultural labor. The most common concern that we hear from employees and employers is fear and uncertainty. It's an issue in its own right, of course, but it's also one that is particularly difficult to plan for.

Agriculture has seen a handful of high profile immigration enforcement actions, though the industry has not experienced large scale worksite rates. That said, individual enforcement actions have had some impact. Stories spread very fast via social media, much faster than fact checking can keep up.

So reports of enforcement in the Central Valley can affect how many people show up for work or school or even medical appointments on the Central Coast. While we have seen workers miss time in response to enforcement activity, the majority are returning within two to three days in response.

Here at CFLCA, we focus on educating employers about their rights and obligations, how to support employees, and training on private property rights, field access and worker rights. Workforce concerns remain significant in ag availability, fitness and upskilling among them. And we may have expected to see greater labor shortages if not for other factors that are actually reducing demand.

Some of you may have heard about California peach farmers whose long term contracts were canceled following Del Monte's bankruptcy. Canned fruits have struggled due to shifting consumer preferences. But a 50% tariff on steel certainly didn't help for these farmers. It isn't just about the $550 million in lost sales, but also the investment.

Do you tear out the trees and replant? How long until they mature to produce? 4 years? 6? 8? Many of you are also aware of the challenges in the wine market. With thousands of acres of vines torn out and many grapes left on the vine to rot, a market correction may have been coming regardless.

But Canada's boycott of the US Wine compounded the issue, given that Canada previously accounted for 35% of California's wine exports. China is another top export market for California agriculture, typically representing 1.5 billion per year. But in 2025, that number fell to just 554 million. Some commodities have found alternative markets.

Tree nuts, for example, have shifted to India rather than China. But developing new markets and partnerships, of course takes time and comes with real costs. The Federal Government has at times offered relief to farmers, but assistance has historically prioritized row crops like corn and soybean over Specialty crops that define California agriculture.

Which crops that are labor intensive and higher in value. During the last Trump Administration, $23 billion was distributed to U.S. farmers, but California received less than 2% despite producing 11.5% of the nation's agricultural output. So what can we do here in California? I'll echo Rachel and Louis comments.

We can partner better with employers rather than just focusing on regulation, but involving employers in the process, actively collaborating with businesses and supporting local CBOs that are trust and trusted grassroots groups that can really connect with workers most effectively.

Simplifying the regulatory landscape because when even expert attorneys struggle to interpret laws, employers have very little chance of understanding or implementing them properly, particularly small businesses. And when federal, state and even local laws conflict or give diverging guidance, it's even worse if we can streamline and clarify rules so compliance is achievable.

And with a focus on the real principal goals rather than quotas or revenue streams, I think we're on the right track. And similarly, reducing administrative and compliance costs, navigating state regulations, protecting against an increasingly litigious environment consumes an ever increasing proportion of businesses budgets, making it harder to weather external pressures and invest in their workforce. Thank you.

Thank you, Ms. Clark. And thank you to everyone for your testimony and sharing those impacts in such detail. And I was curious and I have questions. I'm going to turn it over to my good colleague Senator Cortese, if he has a comment.

But for you, Mr. Brown, the SNAP percentage, you said it was 33 and in some places 85% of the populations are relying on those benefits. What does that comprise in terms of your overall revenue in your sector? Is it, is it, does it play a significant role?

So when, so it's obviously those families not having benefits, but that means those goods are not purchased and sold and part of your right.

Madam Chair, if the issue would not have been resolved last fall where the Federal Government was not going to fully fund snap, we had estimated that was going to cost the this was from our federal program that they were saying that the impacts for California at that time could have been as much as $40 billion in lost sales.

Now, I don't know that we've fully forecasted what the changes from HR1 will mean going forward, but that was the potential loss from the impacts from last year.

Very, very helpful to see the significant impact that that has on business bottom line and revenue that could then be reinvested in workers.

I guess my question that I have for both of you, all of you, is just trying to think about the workforce and it seems that the reduction in workforce is still being determined and it's also kind of a moving target.

So I'm wondering how have you put practices policies in place in your businesses, in your Members businesses to help to deal with what may be a reduction in workforce or a two or three day absence and then workers returning? How do businesses adjust when you're seeing the reductions sort of fluctuate like this?

Thank you. So of course in agriculture it's not like in many other industries where you can say, oh well we'll just do this next week, right? It very much, it's very weather dependent and when the fruit is ready, it doesn't really care what's going on with the business, with the enforcement actions going.

And so in some cases in emergency situations you can't really adjust honestly as far as workforce because we have these other market pressures that have made it so actually there's not as many, there's not as much demand in the wine market and the peach market and other areas.

We've actually seen the employees that would normally be in those jobs because they don't have them at this time, they're actually looking for work elsewhere, they're looking in different parts of the state, they're looking for work in different commodities.

And so we actually, for the first time that I've heard in agriculture, honestly I talk to a lot of employers who actually have too many people asking for work right now because they're coming over from other industries. So in the moment, in the emergency moment, if you can't get people out in the fields, you can't.

But in a larger picture, when you're looking at months, we're actually not seeing really that lack of workers yet in the field at this time.

I concur. I think in retail, first of all, we're very seasonal. So you know, we're just coming out of holiday season. So there's always a large group of hires happening there. We start October till probably end of January as kind of holiday season, but same kind of thing.

I think we are seeing more folks coming in from other industries that are more impacted and we're actually able to provide them work. And we're not seeing a huge reduction in our workforce. I think for retail it's very diverse too. There's a number of jobs in the industry.

So you might see folks in the store, we've got folks running on marketing online, you've got folks doing shopping in the store for pickup on the curbside. So we offer a lot of diversity.

The other thing I will say is we invest a lot in a program called Rise up with our federal trade, which actually helps train folks to come into the retail industry. And so we work with, I work with a group of folks with developmental disabilities. We're helping them get into the retail industry. We're working with community colleges.

I have member companies that are investing in Los Angeles with teen tech centers where they're training young people on all of the aspects of retail because retail is not just going to check out and purchase your products.

There's so many opportunities within the industry that a lot of the Member companies are also looking to see how we can train our current employees to up train them them into new jobs within the industry. So to Kimberly's point, we're not having that same issue at the moment.

Yeah, I would agree with the same. You know, the grocery industry is still one of those where you can start as a bagger and work your way up to store manager, work your way to a distribution center, work your way to the corporate headquarters.

And so I think because we offer that opportunity for people to continue to grow and see different benefits from being part of the company, that we don't necessarily see the depression in employment like other sectors might see. So it's not an issue that we hear much from our Members about.

I appreciate that and hearing how it sort of impacts each of these sectors.

We had an earlier panel that sort of looked more at the aggregate and the picture is not as rosy, but it is one that we are all going to have to continue to watch and work together to ensure that we protect our workforce from whatever federal action will come and do that in partnership with our businesses.

I want to turn it over. Senator Cortese, do you have a comment before we move to the next panel please? Yes.

Thank you, Madam Chair. Let me just ask two questions for Mr. Brown.

When I was a retail developer, before I got into full time politics, one of the best business persons I've ever encountered, a guy named Bob Piccinini, who started with one Save Mart store and built that into basically an empire of grocery stores not only in Central Valley, but when he came to the coast, I got to build his first and flagship store in East San Jose.

And I took him on a tour of the radius around that property. And my bias was admittedly at the time to show him every affluent neighborhood I could find in that area. Which, you know, those do exist, you know, even in an area that has a lot of lower quartile, you know, income households.

And when we finally came full circle and came back to the parking lot of the property where we were going to build a new 55,000 foot store. He said he hadn't made that decision yet, but he said, why did you show me the households that you showed me?

And I said to him, I wanted to make sure you knew there was disposable income here to support a 55,000 foot store. And he laughed and he said, you don't really know what to look for. Our business model is not based on disposable income per household.

It's based on household because as long as we have a population of folks around us, they all need groceries. But my question is this. He was counting this 33 to 85% in his calculation in his business model, right. He's saying every household is going to come in for groceries.

So I don't really care if they're affluent or in the lower quartile of poverty, they're still going to buy groceries. They have to.

At what point does industry have to level set if this trend continues to go in the direction it's going, you know, with SNAP and with subsidies, what we call safety net here for those households that are, that are in those lower quartile neighborhoods, at some point, doesn't the industry have to, in effect, I don't want to use the word redlining because they're not, that wouldn't be the reason for it.

But have to essentially shut down stores where up to half or more of your revenue is no longer coming in and locate and refocus the business model more along the lines of what I was trying to sell Mr. Piccinini with, you know, you need to locate where there's disposable income.

Does the industry, I mean, how much longer can we go? Is it one more federal administration? Is it eight more years? 12 more years?

Well, I think that obviously, Senator Cortese, great question and I think that comes back to a little bit of the consistency that we were talking about. How do we prepare for those changes? Our federal counterparts are working on these issues daily to try to address these through Congress.

And if we can make some changes to the SNAP program through a potential farm bill and use other opportunities that are available in Congress to, you know, provide some security in those, in those programs. That's where our focus is right now.

Our focus is trying to right that ship so that our consumers aren't as concerned about losing those benefits. And then at the same time, then we can, we can plan our businesses accordingly. So I don't think we've gotten to the point yet of, of white flag and saying that, you know, we need to refigure our business model.

We're right now focused more on the policy side on how can we make the corrections necessary so our consumers can still benefit from those programs.

Yeah, I appreciate that. And this is a policy question, not, you know, a story or a financial question, an economic development question only on my part.

But you know, there's our assessor in Santa Clara County, pretty big county, Silicon Valley, sat down before Speaker Rebus and I a year ago and said in 10 years there won't be bricks and mortar retail in this county at the rate we're going. And that does become something that we need to be aware of.

You know, on the policy side, as we start thinking about how we want to approach non bricks and mortar delivery retail, how we want to approach our own safety net decisions in terms of do we want to try to reverse that from happening by doing whatever we can to augment programs that put something in people's hands so that they can go purchase their groceries.

So that's really the broader.

And we've, I, I still believe that, that our focus and is, is brick and mortar. And we do believe that if we're given a level playing field, then brick and mortar can compete. And we believe our customers like that.

They like to go to their local grocery store, they like to see the clerks, the, that they've known that have been there for a while in the produce, in the butcher. But all we need is a level playing field to compete with that so that we can continue to serve communities.

And that's where I come back to, you know, some of the rules and regulations that we were talking about that seem to create a disadvantage for those that want to continue to invest in brick and mortar.

I hope you're right because I have a lot of constituents, some of them very close to my heart, who are depending on that to happen. And I know, I know our chair is hoping that those humans will continue to be there to greet people in those bricks and mortar stores when they come in and out.

I used to be one of those, as you know, so somehow went from there to becoming a guy who builds stores instead of bagging groceries.

But those relationships really count when people come in the door and have the same person to the same butcher, the same produce manager, the same checker, you know, in the checkout line that they're comfortable with.

And I think especially if they're underserved because there could be a certain stigma sometimes to that that you know, really doesn't get called out when there's a relationship there. The other thing I wanted is really not a question, but a comment on the farm labor side.

It seems to me that, you know, the percentages of individual folks who so far, you know, have left and come back and have been subject, you know, to raids, which has been going on in California farm labor since I was a kid at some level. So there's always been that.

But with your particular representation here, it's, it was always been. Senator Durazo and I were talking about this just earlier in the week. It's always been the farm labor contractors who had to have the certainty that they were going to be able to, to provide the workforce that they were, that, that they were guaranteeing to the farmer.

And it seems to me as that gets undermined, it can, you know, I'm not here to just do doom and gloom, but it can, it can lead to a much more significant undermining or collapse of, of, of the worker supply, you know, the workforce supply itself.

If contractors all of a sudden are finding themselves unable to perform because a significant percentage of their workforce is not, they're not able to deliver. And so it's something I hope you will keep us apprised of as hopefully again, it doesn't happen.

That's really the hope here is that things start, we get, somehow we get the ship turned. But if not, I think those are important things for us to know policy wise, all during the year, this session, the next session or whenever it may be happening.

Thank you.

Thank you so much, Senator Cortese, and I just want to agree and echo with those points that strong businesses ensure a strong workforce and these disruptions have the potential to really undermine the protection sustainability of workers across California.

And so really appreciate you sharing the information today, and we look forward to working with you on ways to ensure that we do all that we can to protect California, particularly our workers and workforce, so thank you.

Thank you.

We are going to move to our next and final panel in this long and flowing conversation where we started with the impacts of federal action on our economy, our workforce. We heard from workers, we heard from our businesses, and now we will hear California's response.

In this panel, we will talk with our department representatives who will walk us through some of our workforce plans and how we recession-proof our state in the face of some fairly consistent and strong headwinds from the federal government. We will hear from Nancy Farias, who is our director of Employment Development Department here at the state, as well as Ellie Terry, who is the Senior Economist with EDD.

I want to thank you all, and I think we have one other-- the California Workforce Development Board--my favorite board--with us today to talk about what we are doing in terms of preparing and supporting our workers. So we will start with you, Director Farias.

Thank you. Good morning, Madam Chair, member of the committee, Senator Cortese. Thank you so much for the opportunity to appear before you today. My name is Nancy Farias. I am the director of the Employment Development Department, affectionately known as EDD.

I wanted to also thank Senator Laird, who I know is not here, but we are here because of his bill, SB 390, and that's the update that I'm going to give you today on the recession plan.

As you are aware, EDD implements some of the state's most vital programs for workers: unemployment insurance, disability insurance, and paid family leave, as well as for employers. We collect the most income tax in the nation, second only to the IRS, and assist those seeking employment through our Workforce Services Branch.

I want to thank the almost 9,000 state employees at EDD who do all of the work--answer the phones, collect the taxes, determine eligibility. I am incredibly grateful for their dedication to the department as well as to the State of California. I also want to thank the former panels that were here-- it is-- for their perspective.

I think that EDD is just one piece of the labor market puzzle, and I think it's really important to hear from the other perspectives and I really appreciate that they were here and I really appreciated their remarks.

So today, I just want to focus on how recent federal policies shift-- the recent federal policy shift interacts with the Employment Development Department's recession planning framework, specifically how EDD plans to respond to an increase in unemployment insurance claims during a downturn. Our approach is deliberately structured and data-driven.

It's not built on speculation about any single federal policy. It's built on indicators. Under Senate Bill 390, EDD develops and updates a comprehensive recession plan that evaluates lessons learned from prior downturns and establishes measurable triggers tied to workload and economic conditions. At the core, we monitor objective economic signals and scale our operations in phases when those phases reach defined thresholds.

First, what do we monitor? Recessions reveal themselves through a contraction in economic activity. They are usually not defined in advance. EDD tracks national and state indicators-- which Ellie will go into briefly in her remarks--with the most important indicator being California's unemployment rate.

Federal policy can influence these indicators through monetary policy, fiscal actions, trade shifts, immigration policy affecting labor supply, or healthcare funding that affects household and income stability. EDD does not attempt to attribute cause. Instead, we assess impact if national-- instead, we assess impact.

If national economic conditions begin to deteriorate, California's labor market will reflect that and our triggers respond accordingly. The unemployment rate is our primary operational indicator. Historical analysis shows a strong correlation between rising unemployment and initial unemployment insurance claims volume. Our response plan has three operational phases tied to specific unemployment rate thresholds. At 6% unemployment, phase one is activated.

This phase increases capacity using existing staff, we authorize overtime, prioritize workload based on service-level agreements, reduce discretionary time off during peak demand, and maximize determination schedules. We will also start to prepare for further escalation. We are not there yet. If unemployment reaches 8%, phase two begins. At that stage, workload demand is projected to exceed existing staffing capacity, even after phase one actions.

We implement structured hiring plans, deploy retired annuitants, and utilize cross-branch support for less complex workloads. If unemployment reaches 12%, phase three is triggered. At that point, temporary vendor staffing resources may be activated, of course, contingent upon funding, similar to surge models used by other departments during operational periods.

This framework reflects lessons learned from both the Great Recession and, of course, from the Covid-19 pandemic. The Great Recession unfolded gradually, allowing time to scale. The pandemic was sudden and extreme. This plan is designed to handle both gradual deterioration as well as rapid shocks.

A key improvement since 2022 is the establishment of the Unemployment Insurance Command Center Division and its Workload Forecasting Unit. This unit integrates historical data, Department of Finance forecasting, and modeling to project workload effects. This includes not just initial claims for benefits, but also determinations, appeals, and contact center volume.

Our forecasting infrastructure allows us to translate economic signals into staffing and operational decisions. The plan exists with the reality of federal structural constraints on states. Federal administrative funding for unemployment insurance lags economic conditions. In response, we maintained some reserve capacity through cross-training and flexible staffing.

We strengthened hiring processes, improved training roadmaps, and reduced oversight ratios to preserve quality under expansion. We adopted modern solutions customers want, like live chat, online eligibility questionnaires, and simplified applications for programs like Workshare. Importantly, the plan provides for altered policies and procedures if claim volumes become significant. These modifications are predefined and tied to measurable thresholds.

Federal policy shifts that contribute to broader macroeconomic volatility ultimately matter to EDD if they affect California workers. If they influence the unemployment rate in California, those effects will appear in the indicators that we monitor. When they do, our response is operational. We scale according to data.

California cannot control national macroeconomic conditions, but we can control how prepared we are to respond when labor market conditions change. The 2024 Recession Plan is designed to ensure that when objective thresholds are met, EDD moves in a disciplined, phased, and accountable manner. Thank you. I look forward to your questions.

Thank you very much, Ms. Farias. We'll move on to Ms. Terry.

Sure. And thank you, Madam Chair, committee members, and staff for your time and your interest in EDD's recession plan. My name is Ellie Terry. I'm Senior Economist at EDD. I'd like to provide a bit more detail about the recession risk indicators that the EDD monitors and what those indicators are currently showing.

EDD closely tracks economic conditions at both the national and the state level. At the national level, we monitor a set of consumer, business, and financial activity measures that are identified in the state recession plan. Tracking national conditions is essential because California is unlikely to enter a recession without a broader national downturn.

As of January 2026, these national measures overall do not show that the national economy is contracting. We also closely monitor state-level measures, because shifts in the business cycle can appear in California's data earlier than in the national data.

So at the state level, EDD closely monitors several quarterly forecasts of state-level economic conditions, the unemployment rate, and initial claims for unemployment insurance benefits. These latter two indicators are particularly important because while every recession impacts the economy in slightly different ways, all past recessions have been characterized by a rapid rise in unemployment.

So further, the earliest signal of a potential rise in unemployment is initial unemployment insurance claims, which are released with only a one-week lag. So they're very timely data. However, UI claims can also be volatile. They may rise briefly and then fall without a corresponding increase in the unemployment rate.

So for that reason, UI claims are informative but not sufficient on their own. So together, these indicators guide EDD's operational planning. And as Director Farias mentioned, the department activates phase one of its recession plan when California's unemployment rate reaches 6%, and we are not there yet. It's also not clear that we're heading that way.

California's unemployment rate has been relatively stable since summer of 2024, fluctuating between 5.3 and 5.6%. Further, the last data point we have showed a decline from 5.6% in November to 5.5% in December. In February, initial unemployment insurance claims were down year over year, indicating no upward pressure on the unemployment rate at this moment.

In summary, the national and state-level data are not currently pointing to an imminent need to activate EDD's recession plan. However, we will continue to monitor for signs that EDD is-- so that EDD is best positioned to respond to a potential recession.

And I also want to add that the labor market data the EDD produces, including the state's unemployment rate, has a broad purpose beyond monitoring recession risk. EDD compiles and generates a wide range of detailed labor market data for California.

This information does help lawmakers, state agencies, workforce boards, educational institutions, employers, and economic development organizations make informed policy decisions, and analysts use these data to track labor market trends by industry and by region, see how wages vary by occupation, and assess projected changes in demand for various jobs.

And the data EDD produces is available to the public on our website, including an easy-to-read dashboard format. Ultimately, these data are not-- are used not only to monitor for signs of deteriorating economic conditions, but also to identify opportunities such as high growth industries and to help prepare individuals for in-demand careers.

And I want to thank my fellow colleagues at EDD's Labor Market Information Division who work hard to produce California's labor market data. That concludes my overview, and I'm happy to answer any questions.

Thank you very much, and especially because our federal government is no longer keeping accurate labor data, so we are very grateful to the researchers for keeping California's data. Thank you, Ms. Kelly. We are now going to turn it over to Executive Director Kaina Pereira from our Workforce Development Board. It's my favorite board because I'm on it, so I work very closely with Kaina, so please proceed.

Well, good afternoon, and thank you Madam Chair and distinguished board member of my board, the California Workforce Development Board, of which I'm proud to serve as executive director. My name is Kaina Pereira, and I thank you for the opportunity to address this committee.

Over the past year, our board members and myself have been traveling through the 13 regions of the state to understand what these effects are from the local board perspective and from the over 200 AJCCs who see people every day.

It is quite interesting that, at this time, we are looking at ways to improve communications, to share best practices, and understand the effects of federal policies because they have yet to take full hold.

You know, understanding that as we continue to provide that technical assistance to those 45 local boards and the 200 AJCCs, especially in the shifting environment as the folks coming in, are often folks who have never experienced the job centers themselves. We're seeing declines in areas that have higher wages than previous and are not typically those that come into the doors of the AJCCs on a day-to-day basis.

It is happening especially in Senator Cortese's area of Santa Clara and San Jose more recently. As benefits shocks ripple through the workforce system, our AJCCs will see an increase in need for the potential workers.

But we'll also need to increase their collaboration with the health services agencies, both locally and with the state, to understand how those benefit changes need to change their intake policies, their intake practices, how they deliver their folks to those other opportunities to improve their ability to meet the worker expectation requirements of 80 hours per month.

We're also seeing the dramatic need for upskilling as it relates to certain shocks and disruptions in the ecosystem, particularly in the tech industry, as I mentioned before. Our ability to improve that responsiveness and to understand what those shocks are going to be, for both the workers on the benefit side but also in the work readiness side, is where we're-- really where we're principally focused on delivering those technical assistance opportunities.

As we were doing these tours, we were able to meet with a ton of businesses in the areas too and seeing how there are effects on them in terms of their delay in hiring certain workers until some of these effects are more well-known. And so at this point, I think a lot of our organizations are in a sort of a waiting game to try and understand what the full effects are.

But I will say at the local board level, there is deep consternation about the lack of monetization available for the increased service load that they will have to handle--increased number of intakes, increased number of handoffs to health services or support agencies, and the increased influx of folks coming through the doors. Thank you for the opportunity to address this, and looking forward to any questions.

Thank you very much for your testimony. Senator Cortese, do you have any comments or questions you want to--

Thank you and turn it over back to you. Thank you, Madam Chair.

Well, thank you, and I really want to say that why this part of the discussion was so important is because we don't know what the federal actions will be and what the sort of convergence of them will have in terms of the aggregate impact, but we do know what California feels like when we have an economic downturn.

And very important for us to understand how we monitor that, how we track that, what are the warning signs? And warning signals, as you heard from the earlier panel-- you know, businesses, you know, trying to make adjustments, but, you know, they don't have the capacity to do all of it.

And so I think this panel is very important. I wanted to just ask you, Director Farias, about--or anyone else on the panel who wants to comment--in terms of our unemployment insurance rate, are we seeing any concerning trends there?

Meaning in certain areas?

Yes, yes. In terms of are there certain sectors where we're seeing higher numbers of unemployment? Are there some that remain steady, that are consistent? Are there others that, you know are-- we're fine and we don't have any challenges and concerns?

So, if I can remember--and I don't have the information in front of me and I'm happy to get it to you--but I do know that the healthcare sector and the education sector are two areas that are continuing to hire as well as hospitality. I'm not sure the sectors that are not hiring-- I don't know. Do you know, Kaina?

There's been a substantial number of WARN notices from the tech industry, as have been indicated previously, but in many cases, we're not seeing that in terms of folks coming into AJCC level, and often their earnings are too high to be able to qualify for a lot of the services that are available in those centers. But we are seeing, you know, some upticks in those, particularly the tech service industry and software development.

And I will say as far as the WARN notices go--thank you for that reminder--you know, we do collect the WARN notices through our Workforce Services Branch and they are all available online. It's not necessarily compiled probably in the way that you'd want to see it maybe, but it does show the sector.

But there is-- there can be a discrepancy in what a company says that they're going to lay off and what actually happens. So it's not always 100% accurate, but there definitely has been, as we've all read in every newspaper article from the New York Times to the New York Post about the technology sector--

Sure.

--decline.

And that-- I guess that's one of the concerns we've all had, and that's just, how do workers access information? What is the technology that we have that can make improvements and investments?

I know we did a lot during the pandemic to be prepared for, you know, whatever a downturn brings us and that Californians would be protected. I know within the EDDNext, sort of investment and improvements that support the UI program and unemployed workers during the downturn.

Can you talk a little bit about what those improvements look like and how we've made those adjustments to that system to be able to accommodate any sort of surges that we will need to prepare for?

So, lots of what we did during the pandemic-- you know, we did over 200 IT projects during the pandemic in UI and now our focus is on DipFL, but in UI, we did things that were just basically automating the process-- which we still have a paper application process, but we even automated the paper application process where when there's an application, it comes to EDD and it gets automated at EDD; not automated for the consumer or the customer, so to speak, but more automated for EDD.

But we have done so many things. We have translated-- we have simplified the application, we have plain-languaged the application, we have translated the application, we have automated many, many things, we have improved our contact center. So-- and there's many more self-help available. There's much more self-help availability.

There's a claim status tracker which was-- if you remember, during the pandemic there was 14 million calls in a week or something, and it was mostly just about, what's the status of my claim?

And so we have anyone who does UI online, which is 85, 87% of the population, they get the status of their claim in a minute. We have a chatbot that is a live person chat bot, so we use our state employees to answer questions that way.

And so we've just made it a little bit more accessible. We've listened to our customers, we have a customer experience team that talks to customers, real customers who have come to EDD or potential customers that may need to come to EDD, and we've asked them, what is helpful for you?

And the automation really is one of the biggest things that I think we have done that if there is a downturn in the economy and the unemployment rate does go up, I feel confident, you know, pandemic notwithstanding--that was a little nutty--but, you know, any sort of a downturn as I've just mentioned, that I do think that we would be prepared for anything in the realm.

Thank you for that response, and I'll ask you kind of a question, and this is just how you are looking at the state's workforce plan and as you're doing these surveys, and all of these federal actions are creating new scenarios that we have to prepare for. How are the drafting of the changes coming, and, you know, what are stakeholders, you know, sharing with you around what we expect to see when you talk about the plan?

Yeah. So we have recently finished, actually, the modifications to the state plan and are in the process of submitting to the Department of Labor and we'll hopefully get their responses pretty quickly, especially considering just about every state has asked for a delay on the modified state plan to be able to address some of the concerns raised by HR 1, raised by the intake procedures, raised by the changes in the ETPL policy federally as well.

At this point, we've received very-- I would say very minimal public comment on the modified state plan, maybe because there is a lot of overhanging questions about what the effects will really be, but I think also because we were well ahead of some of the issues that-- understanding that this change in Administration would probably cause some consternation at the local board level, I think that they were diligent in ensuring that we understood what those impacts could be.

And we're also in a process of obtaining waiver requests from the local boards on how to adjudicate some of these issues and to work within the system as it's being redesigned for them, but also how to do it in a way that maximizes benefits for the people who come through the door.

I think the bigger concerns that we're hoping to outline in future considerations of the state plan is the modifications related to the 80-hour work requirements and understanding, like, I have principal questions around certain types of jobs, for example, the creative economy, right?

What amount of time goes into work in the production of something that is of physical nature that can then be sold? You know, similar in the education space where one hour of training typically needs an hour or two of substantive training outside of the training environment to really get the skill developed.

Well, how are we able to track that amount of time in a way that is beneficial to the worker who needs to have the supports necessary to go through the training? And that comes from the benefit side.

So making sure that the trainings meet the expectations for the skills that are being needed, but also for their eligibility requirements, and that's something I think we still need to figure out, especially what counts as work, what counts as community service, because that's another component which I have assumed that our AJCCs will have to take on to a certain extent, especially for folks who are having more difficulty finding gainful employment or finding fine trainings in career paths or in career pathways that lead to, you know, family-supporting wages.

Well, I'm glad to hear there wasn't overwhelming concern that surfaced through the public comment of the process, and I ask that question just because I know so many, particularly workforce providers, that are in communities of color that have particular programs that target vulnerable workers.

And you know, the federal funding mix has been difficult for certain folks, but it sounds like in the workforce space, the federal dollars are continuing to flow. We're not seeing--

One silver lining there is that WIOA was reauthorized at nearly the same level as previous. It doesn't change the amount of intake that they're going to have to do, which is going to rise substantially, which means their capacity challenges are still going to be persistent, and the pressure on the amount of funds that will be available for training or be available for the career services will potentially decline because of the number of folks that they have to serve. That is something that was definitely raised by a number of local board directors as we did the tour and is something we're looking to see how we can address.

And then I have one final question and I-- because my time here, going into my fourth year, so I haven't lived through those downturns, but this question of healthcare and HR 1 from your vantage point-- I know you all are looking at the overall economic workforce conditions of workers, but how does HR1 impact? What are you anticipating?

Should these proposals, the work eligibility require all of the things come to bear? And of course the state hopes to intervene to protect as many workers as we can to keep folks with their health insurance, but what are some of the implications for you all of this bill?

From an employment perspective? You know, I mean, I think that if-- I don't know. Kaina, do you have a better answer than I'm going to mumble something out?

I could attempt.

Yeah. You can mumble then.

So I think that from our perspective and from the local board's perspective, it's going to require an increased understanding of the nuance, right, from the case manager perspective.

How do you do the intake to understand what level of care they had, what requirements they're now going to have to succeed, what trainings could be available for that, but then also, like, looking at as a holistic care of the individual to ensure that they have the right contact at the health service agency locally to be able to understand that they've met those requirements.

It's also going to require a data-sharing element between the health agencies and the local boards so that they know when somebody's coming in, what service rendering they already have so that they can ensure that the trainings will meet the expectation to continue to receive those benefits.

You know, the workforce boards are charged to get people able to work and trained and ready to work. And so in a lot of sense, how that handoff from health services to the workforce board will matter, but also, if they are unable to do certain trainings or unable to do-- how do we hand them back in an efficient and effective manner?

Because I think at the end of the day it's about-- yes, the work readiness is what our charge is, and so we're going to do everything to ensure that they're able and capable of going into trainings to upskill for the jobs that are in demand. That being said, they're going to have a different intake procedure because of it. They're going to have to ask different questions than they've ever asked before.

They're probably going to have to go a little bit deeper. The inclusion of FAFSA as a requirement for the Workforce Pell will also lead to a different set of questions and a different set of forms that they'll have to assist and fill out with.

So I do see there will be an increase in the amount of time in the case management system space more particularly, but what they're doing is not going to change that dramatically. It's really just going to be a lot more boxes to check, if you will, and a lot more connections to maintain.

And then the data-sharing element, which is always a challenge, especially when we're talking about labor data versus health data and understanding that one's governed by HIPAA and one is governed by, you know, the SSN and SSI data, so, like, how do we marry that without creating exigent risk on the data-sharing principle itself?

Well, no, I appreciate that answer because, you know, many of our Medi-Cal recipients are working, and they're working more than one job, and we also know that these eligibility requirements and increasing the frequency of the eligibility process ensures that people are going to for sure lose their healthcare and does not necessarily result in more employment.

So you're right. It's a bunch of busy work that's going to cost us a lot of time and energy, but with very little result. But on that happy note, I want to say thank you to this panel for sharing our plans, our indicator strategies that we're watching, and the Legislature will certainly stay in close contact with you as as we prepare for what we know will be in the fall, sort of a landing point for all of these policies.

And we want to make sure that the State of California is ready for whatever that will bring, and certainly what you've shared gives me a lot of hope that we are in a good place. So thank you so much for your testimony, and I believe that-- oh. Did you want to--

<inaudible> because it really did make a huge difference and it will make a huge difference in the recession if there is a

--stabilizing things because I was in one of those offices back in the day, and I won't say much more about that, but trying to do casework by the thousands. So we appreciate that. You're ready for the next--

We are.

--big issue. Thank you.

Thank you. So we now have concluded all of our panels and testimony and we will now open it up to the public to give public comment. If you would like to provide a public comment, please step to the mic.

Thank you.

I believe you have one minute, and we are trying to keep folks to the one minute because this room has to to shift into a new committee in a few moments. So please state your name, organization, and one minute.

Thank you so much, Senator. My name is Christian Ramirez. I'm the political director at SEIU-USWW. I'm here with members of our union. These are Save Mart workers who were-- their contract was taken away. From one day to the next, they went from making $22 an hour to minimum wage. They lost their benefits. They've lost their pension.

They lost their union protection. All those things were won 30 years ago. We literally set back the time 30 years, and these are workers impacted across Northern California. Unfortunately, this pattern of corporations preying on immigrant workers is not exclusive in Northern California.

Just yesterday, NBC Universal Studios laid off 200 janitors and now those workers are working without union protection. This is a growing trend in our state and we must put an end to it, and these workers will give more testimony on that. Thank you so much.

[Testimony in Spanish]. My name is Pedro Toscano. I lost my union. I was working there for three years at Save Mart Lucky Stores, and I'm proud of my family. I raised two strong boys. One is in the Navy and the other one's a deputy sheriff in Contra Costa County. And the many workers like me who started, who formed our union 30 years ago, lost their contract as well. And many families will be impacted like I am. Thank you so much.

[Testimony in Spanish]. My name is Victor. I used to work for Safe Mart. We had a really good contract that had full medical benefits. And one day from the next, they took our union away and they left us without any protection. And I'm here to ask for your help and your support because this can be a matter of life and death. People could literally die because they need medical coverage. Thank you so much.

Hello. Hello, everyone. My name is LaTasha Reed. I'm a security officer in the East Bay, and while we're here fighting for our own contract, we also here in solidarity with our security-- with our janitors. Janitors lost their coverage and all their wages and everything overnight. It is really, really unfair, so we just need you guys to support them and please, please help them. Thank you.

[Testimony in Spanish]. My name is Ana Mesa. I'm here to raise my voice because they've taken away our contract. We're raising our voice today because we desperately need our medical health-- our health coverage. We depend on it. And they lower our wages. Now we're making half the last wages that we were making before. Thank you.

[Testimony in Spanish]. I have worked for Lucky's for 27 years, and in one month, our healthcare will disappear and we're not going to have wages anymore. I'm very proud of being a member of my union, USWW for 27 years because, thanks to my union, we have a great contract that we still have, but we're about to lose.

Imagine the pain that I feel when you reach my age of 56 years old, and from one day to the next, they tell you you lost everything you fought for. And 46 of my co-workers lost their job because this company decided to hire a non-union company that pays minimum wage with no benefits and no protections. Please do everything you can for us and our families because we're going to lose our healthcare. Thank you so much and God bless you.

Good afternoon. I'm Tim Shaddocks with the Warehouse Worker Resource Center, speaking on behalf of the California Network for Immigrant and Worker Justice, of which we are a member. First of all, thank you so much, Chairwoman Smallwood-Cuevas and other members of the committee for holding this hearing today.

I think it really brought to light a lot of what our coalition members have been seeing on the ground in terms of the devastating impact across multiple industries of the federal administration's discriminatory and unconstitutional attack on our communities under the guise of immigration enforcement.

I want to highlight something that I think came up in one of the earlier panels, which is the compounding nature of this harm. Not only are we seeing our members and families suffering the trauma and the violence of the militarized enforcement, we also then often have members who are losing a primary wage earner and suffering extreme hardship.

And many of these families are also not eligible for unemployment benefits because of status. This is a huge problem that our coalition has been fighting for years on to figure out how we can, as a state, expand our unemployment safety net to cover all workers, regardless of status. This is a huge gap in our safety net.

It creates a lot of hardship and it really undermines the promise that California has made to apply workplace protections to all workers. Secondly, we would want to highlight that this year, we're--

You're over time, so please wrap up.

I will. Thank you so much. We're working with Assembly Member Garcia on AB 2271, which would create an emergency program to provide direct financial benefits to families who have been impacted and lost income because of the federal administration attacks, so we really hope we can get your support on that bill. Thank you.

Thank you.

Good afternoon, Madam Chair and members of the committee. My name is George. I am the Workers' Rights Program Director at Valley Voices, a community-based organization serving the community of Kings County. I want to echo the comments made by my colleague today about the urgent need for a robust safety net for workers across the state.

We know that the testing ground for enforcement was not in LA, but in agricultural communities like Bakersfield and Camarillo. In one tragic incident, a farm worker named Jaime Alanís Garcia lost his life amid the chaos created during the ICE enforcement action. Agriculture drives California's economy, and this industry relies heavily on undocumented workers, yet these workers have no access to unemployment.

In Kings County, we are already seeing the impacts of federal immigration policies in our community. We are seeing an increase in our local unemployment rate, we're seeing an increase in food insecurity, long lines at our local food distribution, and a growing fear of employer retaliation which makes it harder for workers to report workplace violations across the state. We ask that the state take action to protect California workers and California families. Thank you.

Thank you so much. I think we have heard all of our public comment today. I will turn to the dais. Is there any closing remarks or comments you want to make, Senator, before we conclude?

Just to thank you for your leadership as chair of this committee and, of course, your committee staff for making sure this happened. It's very important, you know, across a number of topics that are going to impact not only the state but our decisions this year on budget and on policy bills. So it's very much appreciated. Thank you.

Thank you. Thank you, Senator Cortese, for being here and sharing your really insightful comments, and again, I also want to echo your gratitude to the staff for putting this amazing hearing on today and to all of the presenters and panelists, and particularly to the workers who spoke. We stand with you.

And when we hear about a contract being busted and more workers being forced into a safety net, it means that we have to do a lot more to ensure that we're protecting bargaining rights, we're protecting union contracts, and that we are fortifying the safety net, which unfortunately seems to be growing more and more.

You know, the statistic that sticks with me was in our first panel where they talked about the overgrowth of low-wage jobs, the overgrowth of jobs that don't pay enough to allow workers to make ends meet, the lack or stagnation of jobs at the middle, and the extraordinary number of jobs that are created at the high end.

And I was looking at a report this week that showed, you know, CEO pay, for example, is about 530% times higher than what the average worker is earning, and so as our economy is growing, it's only growing in one top half percent while the rest of us who work--and that's all of us who work, those on this dais, those in the audience, those who are watching--find it harder and harder to make ends meet.

And I think today's panel did give us a lot of information and insight on what we can can do, what indicators we need to watch, what are the conditions that are worsening right now when we think about the federal workers and that they are now in their second working while not being paid due to federal actions.

It's incumbent upon us in the state to take the necessary steps to deal with the suffering and to make sure that under this Trump Administration, California stays true to our values, ensuring that all workers are protected, all workers have access to the safety net, and all have the opportunity to be able to work and then provide a real life of thriving for families and communities.

So we will not be deterred in fighting this administration and fighting for our values, and it sounds like Californians are with us. There was also a recent study done that shows, you know, almost half of Californians say we need to raise some revenue in this state, we need to raise some taxes, and we need to make sure that our wealthiest corporations and wealthiest individuals pay their fair share.

So our sustainability and our protection as a state is going to be a shared responsibility, and I know many of us here on this committee are very much committed to ensuring that the most vulnerable and lowest wage workers will not bear the burden of these federal attacks. California will stand up.

So with that, thank you for your participation today. Thank you for sharing your stories, and for the workers who testified, thank you for your courage to share your story, not just for yourself, but the other workers who you will never meet but who will benefit from your testimony today. Thank you. And with that, this oversight hearing is adjourned.