Oppose Julie Su’s Confirmation as Deputy Labor Secretary
California Gov. Gavin Newsom has called the Golden State “America’s coming attraction.” Take it from us, California’s small business owners: Americans should be terrified of the horror show to come if that’s the case. California’s crushing small business climate is no model to emulate.
California’s Julie Su, President Biden’s nominee for Deputy Secretary of Labor, would expand the state’s war on small businesses nationwide if confirmed. Su has been the state’s top labor official, leading the California Labor and Workforce Development Agency, presiding over one of the most anti-small business regimes in the country. On behalf of the small business owners in your state, we urge you to oppose her confirmation.
Su is responsible for the massive unemployment benefits fraud at the state’s Employment Development Department, which she oversees. Due to her mismanagement, more than $11 billion worth of fraudulent unemployment claims were processed between March and December 2020, representing about 10 percent of the total unemployment benefits sent out over this period. Approximately $400 million in fraudulent payouts were sent to state prisoners. The LA Times editorial board, no friend to small businesses, calls her work here an “epic failure.”
California auditors found that Su and EDD leaders responded to the spike in unemployment claims associated with the pandemic by allowing the staff to bypass unemployment insurance verification controls. Adding insult: In 2016, California allocated $30 million to modernize the EDD, which was using 30-year-old computers and a 60-year-old programming language, yet Su didn’t act.
California small businesses will likely have to pay for Su’s incompetence in the form of higher unemployment insurance taxes to replenish the fund drained by fraud. There are already indications that unemployment insurance taxes will have to rise, penalizing California job creators for the failures of their public officials.
Golden State small businesses already pay some of the highest unemployment insurance taxes in the country, making it more difficult for us to hire, expand, and raise wages, reducing economic growth and employment opportunities. Raising these taxes further will only worsen state unemployment, which is currently the second-highest in the nation.
Due to Su’s mismanagement, as many as 1.8 million Californians who actually needed their unemployment benefits couldn’t access them. Less than one percent of calls to the EDD were answered. State Auditor Elaine Howle said, “EDD’s inefficient processes and lack of advanced planning led to significant delays” in unemployment claim payments. Even in Washington D.C.’s long history of failing upwards, putting Su in charge of the national unemployment benefits system after her failures at the state level is unacceptable.
Su has also presided over radically anti-small business labor rules unique to California. These include a state law known as AB5, which outlaws many independent contractor job opportunities, hurting upstart entrepreneurs and single mothers who benefit from the flexible schedules that come with being your own boss. (In a ballot measure last November, California voters significantly curtailed this law.) And they include the Private Attorneys General Act, which allows employees to sue their employers over minor or unknown violations of the state’s byzantine labor code, resulting in thousands of frivolous lawsuits that can bankrupt small businesses and reduce job opportunities.
American small businesses, including those of us in California, can bring back and surpass the national economy of 2019. Confirming Julie Su as Deputy Labor Secretary will make that effort more difficult. Senators who support small businesses should oppose her confirmation. California’s haunting “coming attraction” need not become the nation’s main feature.