Legislation has been passed in California that would make striking workers, including writers and actors picketing Hollywood studios, eligible for unemployment benefits. Governor Gavin Newsom now has the decision to sign the bill into law, providing financial relief to striking entertainment workers and union members. If signed, California would join New York and New Jersey as one of the few states allowing striking workers to collect unemployment benefits. The bill stipulates that striking workers can collect benefits after being on strike for two weeks, and if signed, it would take effect in January.
However, Governor Newsom has expressed concerns about the state's unemployment insurance fund's debt, which is currently over $18 billion due to borrowing from the federal government to pay for unemployment benefits. While he has not indicated whether he will veto the bill, he has emphasized his efforts to work with both labor and employers. Democrats have shown support for the unions, highlighting the importance of ensuring workers can meet their basic needs during strikes.
Opposition to the bill comes from Republicans, who believe it may harm businesses and unfairly favor labor unions. Businesses argue that expanding unemployment benefits to striking workers would essentially be a tax increase, as employers fund the benefit through state and federal payroll taxes. However, these tax dollars have not been sufficient to cover the cost of unemployment benefits, leading the state to borrow $20 billion from the federal government in 2020. Repaying this loan requires employers to pay additional taxes annually.
The bill's impact on the unemployment fund is difficult to predict, as it depends on factors such as the number of striking workers and the duration of the strike. The estimated cost to the state's unemployment insurance fund is likely to be in the low millions to tens of millions of dollars, according to the Assembly Appropriations Committee's analysis.