Julie Su might not be the worst pick for U.S. Labor secretary in the 110-year history of the job, but many Californians might say as much if they had a chance to testify at her Senate confirmation hearing this week. Su, who for more than two years served as secretary of the California Labor and Workforce Development Agency, has served as acting U.S. Labor secretary since the previous one, Marty Walsh, left office in March. The Senate has confirmed her once, as deputy secretary in July 2021, but given the mounting opposition to her nomination, the story might end differently this time.
In a letter to President Joe Biden, House Speaker Kevin McCarthy of California and other House members said that they were “deeply concerned by the prospect of” Su’s serving not only as permanent secretary of Labor but also of her running Labor “on an acting basis,” as she is currently doing.
While leading the California Labor and Workforce Development Agency, Su was also in charge of the state’s Employment Development Department (EDD), the agency responsible for paying jobless benefits—a straightforward task that it hasn’t been able to get right. On her watch, the EDD handed out $170 billion in pandemic jobless relief funds, but a significant portion of that sum (estimates range from $20 billion to nearly $36 billion) was obtained fraudulently.
Two years ago, the California state auditor concluded “that significant weaknesses in EDD’s approach to fraud prevention have led to billions of dollars in improper benefit payments.” The auditor also reported that “EDD suspended a critical fraud prevention safeguard during the pandemic” due to “poor planning” and blamed the “EDD leadership” for making decisions without adequately understanding “how the stop payments worked” and for waiving “the barriers to payment for almost 77,000 claims.”
While the wrong people were cashing in on EDD’s loose payment policy, financial relief was delayed for 5 million Californians eligible for this assistance because the government had killed their jobs by shutting down businesses; 1 million Californians were denied benefits though they qualified for them; and another 350,000 became victims of fraud because EDD-issued debit cards lacked safety features to prevent thieves from duplicating account and PIN numbers. So when McCarthy and other lawmakers say that “Su demonstrated an inability to ensure taxpayer funds were appropriately spent in California,” it seems like an understatement.
Though her glowing federal biography portrays Su as a “nationally recognized expert on workers’ rights,” she has not acted like a friend of workers. As a supporter and an “aggressive enforcer” of California’s Assembly Bill 5 (AB 5), which virtually outlawed gig or independent contract work in the state, she’s been an opponent of worker freedom. In an interview with CalMatters, Su promised that “investigations and audits,” citations, and wage and tax penalties would be part of her office’s enforcement of AB 5. She made a clear warning that “those who want to comply . . . can do so and those who don’t will understand that’s not the kind of economy we want in California.” Who is this “we” whom she refers to, and why does it get to decide “the kind of economy” that should exist in California? She can’t be talking about the many, probably millions, of Californians who prefer working in the gig economy and watched helplessly in 2019 as lawmakers passed AB 5 and stripped them of their livelihoods.
Should Su become secretary of Labor, there’s no doubt that she would work for a national version of AB 5—first through the PRO Act and then, if that fails, through an executive order drawn up by the Labor Department. She doesn’t seem to care that AB 5 is so despised among gig workers that they continue to express their frustrations and anger on Twitter through hashtags like #RepealAB5, #FightForFreelancers, #independentcontractors, and #NoProAct.
In her defense, Su deserves credit for her record in rooting out forced labor. In 1995, as a staff attorney for Asian Americans Advancing Justice–Los Angeles, she sued “the captors and the manufacturers and retailers who benefited” from the sweatshop drudgery of 72 Thai immigrant garment workers “virtually imprisoned” in a guarded El Monte, California, apartment complex. For this, she deserves public thanks.
But those stung by AB 5, especially entrepreneurs, and the many affected by the EDD scandal would probably say that these good points aren’t enough to make Su a good choice to run the Labor department.
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