by Alfredo Ortiz
Last Thursday, Senate Majority Leader Chuck Schumer filed cloture on the nomination of Julie Su, California’s top labor official, to become President Joe Biden’s deputy secretary of labor.
Su’s confirmation vote will likely occur soon after the Independence Day Senate recess. That’s bad news.
After all, Su leads California’s Labor and Workforce Development Agency, presiding over one of the most anti-small business regimes in the country. If confirmed as second-in-command at the Department of Labor, she would use her position to expand California’s war on small businesses nationwide. On behalf of their small business constituents, Senators must oppose Su’s confirmation.
Su’s record of failure is clear.
Su bears responsibility for failing to confront massive unemployment benefits fraud at California’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. That represents about 10% of the total unemployment benefits paid out over this period. For example, approximately $400 million in fraudulent payouts were sent to state prisoners.
The LA Times editorial board, no friend to small businesses, calls her work an “epic failure.” California auditors found Su and others 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. Su didn’t act.
California small businesses will likely have to pay for Su’s incompetence with higher unemployment insurance taxes. Somehow, California must replenish the funds drained by this fraud. There are already indications California’s unemployment insurance taxes, which are some of the highest in the nation, will have to rise further, penalizing state job creators for the failures of their public officials.
Due to Su’s mismanagement, as many as 1.8 million Californians who actually needed their unemployment benefits couldn’t access them. Less than 1% of calls to the EDD were answered. Even with Washington, D.C.’s long history of failing upwards, putting Su in charge of the national unemployment benefits system is absurd.
It gets worse.
Su has also presided over radically anti-small business labor rules unique to California. For instance, Su supports a state law known as AB 5, 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.)
Su also supports California’s Private Attorneys General Act, allowing employees to sue their employers over minor or unknown violations of the state’s byzantine labor code. As a result, small businesses often face frivolous lawsuits that can bankrupt them.
As California Labor Commissioner in 2012, SU created the Criminal Investigation Unit, armed labor police to investigate labor abuses, which she argued should be treated as seriously as rape and other violent crimes. Su bragged, “When we first implemented the unit, newspaper headlines warned of armed Labor Commissioner deputies coming to get employers in California and arrest them for crimes. And, well, we are!”
Senators who support small businesses should oppose Su’s confirmation.
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Alfredo Ortiz is the president and CEO of the Job Creators Network.
