Senate Labor Public Employment And Retirement Committee

Good morning.

Thank you.

Thank you so much for that thorough overview and the outlook that we have for working people. I do have a few questions

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?

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.

Right.

Yeah. So thanks for the question. So in some sectors like healthcare, I mentioned that these cuts to Medicare medical 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, from the funding cuts in health care. 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 forecasts 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. So actually health care has a lot of workers in health care 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 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.

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, 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's not, 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 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.

Yeah. So I'll try really hard not to be a dismal economist, which is dismal science. 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 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.

Thank you so much.

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. 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 influence. Enforcement Escalations and declines Figure 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 think, 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 panelist, we, 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 the 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 about 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 enforcement actions. Thank you.

Good morning, Chair Smallwood. Can you hear me? Okay. Good morning, Chair Smallwood Cuevas 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 laadc. Today, I'll briefly summarize the findings from our recent analysis examining economic impacts of intensified 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 county 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 participants 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

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 Democratic 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 and 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 discovery 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, 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 pattern 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 2020, 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 tax 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 commercial, commercially active areas of the region and demonstrates how these localized disruptions can translate into measurable economic 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 significantly 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.

The downturn in private sector work, the number of people having reported working in the private sector during the CPS 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 happen 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 into 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.

Unfortunately, we don't have any data projecting, you know, what we expect to be the tax revenue loss. 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 the growing economy. And so as a comparison point, when the 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 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's 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 that, 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.

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 and so are catered 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 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, if you think about the economy in terms of GDP, right? That's about 60% of our GDP is based on consumption. Right. 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.

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 close an area down at night, that's where they have the largest amount of revenue associated with sales. But it was a one time impact and they're able to come back. But when you have this climate of fear that has a longer term influence 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.

Sure, we created multiple stages 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 in 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 instability is still there. So even now you have

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, 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.

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 Regents Small Business Resiliency Fund. And that was to help businesses who were 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, 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 that they can encounter. There were Know youw Rights recorded webinars that, that people accessed. So 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.

Yes. Hi everyone. My name is Flor Melendrez. I serve as the executive director of the Clean Car Wash Worker center. And I want to share my screen for my presentation. So please let me know if you can see this.

There, that's better. Okay, so I want to talk a little bit more about, you know, the car wash industry trends and what we have seen in the reports that we just heard just a few minutes ago really relate to what we have seen in the ground. And I want to make a little bit of a focus in the car wash industry. Before I jump into that, I just want to share a little bit about who we are. Clean is the country's first car wash worker center transforming the lives of thousands of car washers in one of Los Angeles most exploitive industries. Hand car washes. Throughout direct organizing at Clean Car Washers lead outreach and advocacy efforts around job safety, workplace hazards, wage and hour loss, environmental protection and community health initiatives. Clean unites car washers to a growing and innovative Worker center movement who aims to improve the quality of life for all working people. I want to talk a little bit about key facts about the industry. And some of those key facts are as we heard in some of the reports, right, Employers are typically immigrants. There are approximately about 2,500 car washes in California. Most of them are considered small businesses, single owners. The workforce is largely monolingual to Spanish immigrants and indigenous. I want to talk a little bit more about addressing the current crisis. Since June 6, over 109 car washes have been targeted by federal agents. Clean has been able to identify at least 372 car wash workers that have been kidnapped from their workplace during this rate. We have done a lot of outreach to employers since to provide them with information about their constitutional rights. We have done worker outreach. We have connected with over 1,500 car wash workers. We were able to connect with over 450 workers to provide them with resources or connect them with resources. And we since then and until now continue to provide rapid response. We have been able, and obviously we cannot do this alone. So we have been able to activate over 100 volunteers to adopt a car wash and help deliver either groceries or directly to workers homes or provide on the ground support for workers and employers. Out of those 372 car wash workers that have been kidnapped at their workplace, with many struggles and a lot of community support, we have been able to successfully bring back 35 workers back home to their families after fighting their deportations. This image that you see here are some of those workers who behind those faces comes a horrible experience when their car wash was raided. There are many different kinds of car washes and we have seen a focus on the raids in hand car washes, tunnel car washes and mobile car washes. We understand that there is a hierarchy of the car wash. But the workers most affected are usually workers who are considered front of a house like the dryers. The workers who are the drying and giving back the vehicles who are more most exposed. As we all know, the car wash industry is created to be able to walk in and walk out, drive in, drive out. And I think that has been one of the major focus for these rates. When rates take anywhere between five and seven minutes, when agents are approaching the car washes, covering all entrances and exits and taking anyone that they can find, usually being those front of the house workers. There's many violations to the industry. I won't focus a lot of time on that. But just know that it's an industry that you know, has been considered tips only. Industry that have daily rates sometimes going from anywhere around 75 to $100 a day involving a nine to ten hour work, having a peace raid, not having rest breaks or meal breaks, having retaliation, unlawful deductions, many health and safety exposures and suffering from harassment and discrimination. We have focused our efforts as the initiation of the Clean Car Wash Worker center on helping workers collect stolen wages and we do that through education and outreach efforts ensuring that car washes continue to register, that they have a surety bond and that workers are able to collect from the restitution fund. But the immigrant the impacts of immigration rates on the industry have been large. Many car washes have shut down. I have just a few named here to share in the last Since June till now there's been a lot of automation of car washes and there's been definitely a change in the demographics due to the ongoing rates. Many workers have been pushed out of the industry because they don't feel safe at their workplace, many of them not being able to go back. They have managed to go mobile to try to continue maintenance meet. But also many employers have the same workforce that they used to rely on before. So they are now targeting a younger workforce. We seen that last summer. With a younger workforce we know that they're most likely to continue to be heavily exploited. And I think this is given all the changes in the car wash industry, the Clean Car Wash Worker center will continue to play a key role to connect car wash workers to resources, provide them updated and trusted information and to continue to be a driving force for echoing the voices of the car wash workers. We understand that the industry requires training and not only annoying rights, but on the job hands on training to connect to knowing more about the rights in the industry. This is why we urge the legislative legislature to do everything in its power to protect Californians from the Federal Administration's discriminatory and violent attacks and to support the families who have been harmed. Several bills have been introduced this year to do just that and I like to note a particular bill, AB 2271 by assembly member Robert Garcia which would provide financial benefits directly to families whose who have lost income as a result of the DHS activity. This will be vital for car wash workers and many others fighting to keep food on the table because of Federal administration and the devastating attacks. I heard the reports and I hear the many industries that are under attack. But I come to talk about how the car wash industry continues to be one of those industries that been the main target for the last few months and that continues to be heavily affected with the ongoing effects of living in fear. Thank you.

Thank you.

Thank you for having me and the nurses voice today. My name is Michelle Gutierrez, V.O. i am a registered nurse of 29 years and President of the California Nurses Association.

Thank you. We represent over 100,000 RN members across the state. As nurses, our duty is not just to care for our patients, but to protect and advocate for them during their toughest times. And as you just heard from the previous witnesses, times are extremely tough and about to get a lot tougher. In health care. One of the biggest threats comes from the budget reconciliation bill that Congress and Trump recently passed. HR1 is a cruel piece of legislation that will have disastrous consequences for health care workers and our patients. Current projections show that the bill's $1 trillion in cuts to medical and covered California subsidies will result in up to 3.4 million Californians losing access to medical care. Also, the Trump administration can fund ICE and give trillion dollar tax cuts to their billionaire buddies. The consequences of these cuts will be dire. More than 400 nonprofit and community hospitals nationwide, including 53 here in California, are at risk of service cuts and eventually potential closure if swift and action isn't taken by the legislature. Hospital closures and service cuts devastate communities and we see that front line and center. As nurses, hospitals are often major employers providing meaningful, stable employment with opportunities for career advancement, particularly in rural areas of our state. Allowing these hospitals to close or reduce services would mean a devastating loss of employment and care, endangering the well being of workers and patients across the state and overburdening remaining health care facilities. The patients do not go away. They just have to drive farther. And most of the time these closures are deadly. They are deadly across lifespans. This downward spiral will result in deteriorating working conditions for nurses across the state. As I mentioned, nurses, I mean, the patients don't go, they just have to go somewhere else. We'll see more hospitals with unsafe staffing levels, with sicker patients entering emergency room doors. Hospital employers will demand that nurses do more with fewer resources and in unsafer conditions. These federal cuts are being felt already across the state today. We are already seeing health care facilities announce plans to cut services or lay off staff. Nurses are fighting back against Watsonville Community Hospital's plan plans to close its intensive care unit and against Contra Costa Health's Imminent budget cuts that would eliminate 46 public health nursing positions and other vital patient care services. Federal healthcare cuts come in combination with other federal tax on the nursing profession. Just last month, Trump advanced a proposal to exclude graduate nursing students from federal professional loans. This would make it harder for nurses who are pursuing graduate degrees to become nurse practitioners or other positions requiring an advanced degree, which threatens the supply of essential rural healthcare providers and nursing school faculty. With increased federal immigration enforcement funding, ICE agents are entering hospitals to kidnap our patients, bringing fear and violence to places of healing. ICE's presence in hospitals endangers our patients, inhibits our ability to do our jobs and puts everyone at increased risk of workplace violence and injury. And I know everyone has seen how these situations are so highly emotionally charged and that is what we are at risk of in our patients every day. Every single day with ISIS presence in the communities. And nurses are facing an all out attack from this administration on our science based practice, including on vaccines which are an essential part of our collective defense against deadly infectious diseases. Nurses are in the front lines of every pandemic and Trump's attacks threaten our very lives. And it is absurd that this is happening just when we are just now getting over the COVID pandemic. These threats can feel overwhelming. I know many of us lay awake at night wondering what will happen to our patients, our co workers, our neighbors. We saw many of our co workers die when all they wanted to do was wake up, give the best care to the patients that we have. And a lot of us didn't make it through that pandemic and our co workers. But I also know that is exactly what they want. For us to feel so overwhelmed that we are frozen into inaction. But nurses refuse that option. Nurses are working to pass Cal Care AB 1900 to establish a single payer healthcare system that would guarantee comprehensive health care to all Californians. CalCare would finally take health care off the bargaining table for union workers and untie our ability to get health care coverage from our jobs. Nurses are also supporting placing a temporary moratorium on hospital closures and renewing the distressed hospital loan fund for facilities that are truly in financial need. This would stabilize hospital finances so we do not lose the critical health care infrastructure and jobs that sustain our communities. Now is the moment for California to lead the way. Nurses are also advocating to support the healthcare workforce that cares for our most vulnerable rural and underserved communities with legislation to support new graduate nurses and increase Song Brown funding for nursing programs. As with any emergency in our hospitals and clinics, nurses are jumping into action, ready to help our patients and save lives. But returning to the status quo before the federal cuts is not enough. California must have a vision of a better world where nurses can provide our patients with the care they need in safe and healthy working conditions and in good union jobs. I'd like to highlight a few areas which have significant detrimental impacts to nurses in our communities. As I've said, now more than ever is the time for calcare. In the last year, Trump and Republicans in Congress have gutted life saving health care programs like Medicaid and the aca. Millions of people in California risk losing their health care coverage if no action is taken. California leaders can fight back against Trump's health care attacks by passing CalCare. From Prop 50 to Zorin Mamdani, voters across the country have made it clear they strongly support a bold response to the right wing billionaire agenda and a transformative vision for this country. Voters support CalCare A January 2026 poll commissioned by the California Nurses association found that 58% of likely 2026 voters, including 86% of Democratic voters, support a proposal for a state single payer health care system, with 64% of all voters saying that our health care system needs major reform. What CalCare would do AB 1900 would enact a single payer healthcare program which is CalCare for all residents in the state of California. It would include medical, dental, hearing, vision, mental health, reproductive and long term care. Every person living in California would be included regardless of income level, immigration status, prior health conditions or ability to pay. Undocumented Californian residents would be included. Calcare would be care guaranteed free at the point of service. Nearly all individuals, families and businesses would save money with no co pays, no deductibles and no premiums. CalCare saves money. Under CalCare, California would spend less money on health care every year than we do under our care, our current system, while providing comprehensive care to all Californians. In its April 2022 final report, the Health Healthy California for All Commission found that under a single payer model with no cost sharing and long term care for all, California would save between 32 billion to 213 billion over 10 years compared to our current system. And I do just want to note I've been a nurse for 29 years in a private sector organization. I have witnessed the evolution of health care in this country because I work in adult family medicine which is a primary care department and I can tell you more and more. My patients, our patients in the communities work two to three jobs to pay for health Care coverage, health insurance that they have no intentions of using until they are dying because the deductibles are so high. What kind of life is that that is not sustainable? In regards to hospital closures moratorium California has experienced decades of rising hospital closures and and service reductions with maternity care, behavioral health and other essential supplemental services especially vulnerable. These trends disproportionately harm rural areas and low income communities with already limited options for care. Hospitals commonly cite financial losses, inadequate reimbursement and rising operational costs as reasons for reducing services or closing facilities.

Yes, ma'.

More importantly, hospitals have warned that anticipated Federal cuts under HR1 will trigger further reductions in closures. Nurses advocate for strengthened oversight of hospital closures and service reductions and a temporary moratorium. Hospital closures and service reductions on the nursing workforce, we want to make sure to be very explicit there is no nursing shortage. There is currently half a million registered nurses in the California with active licenses who are not employed as RNs because they are too scared to go back into the workforce because of unsafe working conditions. And I know California can do something about that. In regards to. I've already talked about the. Oh, in regards to ice. ICE poses a major public health threat. Everybody here has already mentioned it. We had a nurse who had encountered a patient with tuberculosis, which is a highly infectious disease, and the patient did not want to disclose contract tracing for fear of exposing other immigrant patients. Other than that, the removal of nursing degrees from professional loans. We want to make sure that everybody who have interest in entering the nursing profession are able to afford entering the nursing profession and that is it. I know that was a lot, but thank you for hearing the voices of the nurses.

Can I just use this? Okay.

Well, thank you, Senator Small Cuevas and members of this committee for the opportunity to speak before you on the impacts of federal funding policy on California's healthcare and innovation economy. My name is Rafael Jaime and I'm the president of UAW 4811, the Union of 60,000 Higher Education Workers at the University of California. Since the start of the Trump administration, California's higher education and scientific research industries have been under attack. The federal administration has proposed cutting billions of dollars in federal funding that fuel vital parts of California's economy and and drive its future. To put this into perspective, here's how federal funding cuts are impacting the University of California, one of the state's largest employers and the driver of California's $226 billion research and development industry. What you see here is a table from the National Institutes of Health, one of the largest federal funding granting agencies in, in the world. And what you see there is the average grants that the NIH has awarded from 2015 to 2024, broken down by areas of research. And the next column under 2025 is where you can see the funding that is allocated this year. And then, of course, the change on the last column. And so here is just some of the areas of research. Minority health, which has seen the largest cut in funding. Mental health is also one of these that has been impacted. And of course, you know, we can.

Given Trump's rhetoric, it's not surprising that minority health has suffered many cuts. But it's also other very basic types of research. Cancer, heart and lung and blood research, aging, diseases that get across all identity types. And yet these have been cut from the nih. And we'll say NIH is just one of dozens of federal granting agencies that have suffered major cuts over the last year. And the way that this is translating to the University of California is that currently there's about $230 million in research activity that is on hold at the University of California, and there's over a billion dollars in funding that is under threat. And this is important because for every dollar in nih, funding generates about two and a half dollars in economic activity. And these cuts are already having a real impact on thousands of workers who form the backbone of the state's economy. All right, so I want to zoom in now and focus on a very specific group of workers at the University of California. Postdoctoral scholars. These are early career scientists with eight to 10 years of higher education training who conduct cutting edge research on anything from new treatments for cancer and Alzheimer's to the next generation of supercomputing, microchips and fire resistant materials for home construction. Their contributions to science generate billions of dollars for the economy, produce thousands of patents, and result in thousands of new startups in the state. And UC employs thousands of them. As you can see from this graph, year after year, the number of postdoctoral scholars employed at the University of California has increased, a reflection of the vitality of this sector of the economy. However, this trend changed dramatically over the past year. As you can see from this Graph. Last year alone, the number of postdocs at UC decreased by 10%. And further funding disruptions are threatening even more job cuts. I mean, you can see the top graph year after year and then sudden, sudden drop. A job loss of this magnitude will have severe long term impacts on California's ability to remain a worldwide leader in the research and development industry. These are highly skilled workers with over 10 years of training and education who are being pushed out of the uc, out of the state and even out of the country. And they are taking with them skills that cannot be easily replaced. It's also important to note that what is happening among postdocs is an early indicator of what will happen to other groups of workers in the R and D sector. Postdocs are directly funded by federal funding grants, so they are the first to go when grants are cut. But there are also hundreds of thousands of other jobs that are indirectly supported by federal funding grants that will also be impacted. Now I want to zoom in further and focus on the stories of the workers in the communities that are being impacted by these cuts. This is Nicole, who's a graduate student researcher at UC Berkeley. Nicole studies pfas, or forever chemicals from airline and airplane fuel near airports with the goal of understanding the basic chemistry of these compounds that pose serious health risks to communities that are constantly exposed to them. Her research has been funded by the EPA and the NSF National Science Foundation. But these agencies have experienced massive funding cuts and many of the grants that funded Nicole's lab have been cut. Now Nicole's career is under threat. This is Metzli. Metzli studies how people's blood vessels change as they age in order to develop new therapeutics to treat cancer, cancer and other diseases. Metzle also works at a training center at UC Merced that works with K12 students in the Central Valley to educate them about careers in science. This center has trained over 1,000 students, but the NSF recently cut funding and now it will likely close at the end of the summer. Next is Sita, who's a graduate student researcher at usc. Sita studies inequities in colorectal cancer outcomes for Latinx communities working directly with Latinx cancer patients in the LA area. Her lab had their funding reduced because their research relates to racial diversity. And the lab has now had to lay off staff and can no longer work with as many patients as it did before. And now over the past year, UAW workers have been organizing to protect public funding for scientific research. The fight to defend federal funding Scientific funding is ongoing, but we as Californians must find other ways to ensure that public funding that is so vital to California's economy continues to produce jobs and the scientific innovations that Californians depend on. This is why UOW workers are supporting SB895, which would put a $23 billion bond measure on November's ballot to fund health and scientific research disrupted by Trump's funding cuts. SB95 is vital to California's future, and I encourage everyone in this room to support it. Thank you.

Hi, can you hear me? My name is Wallace Wade. I'm a TSC employee for over 18 years and a member of the American Federation of Government Employees. I won't be using a lot of flashy slides. I appreciate everybody that was up here. The situation that we do have is rather unique within the context of the discussion today we are considered at tsa, there are two classes of workers, the working class that I'm involved with. They're called basically essential federal officers. What this means is basically that no matter what happens, whether it be natural disaster, federal closure payment, which, anything like that, we're expected to be at work. We're no different in most aspects to law enforcement, government protectors, etc. One of the things that we endure during these times, however, is the fact that we are not paid. We cannot miss work, we cannot go to doctor's appointments, we cannot go take care of vacation issues that were preplanned. Everything is shut off. What they expect us to do is to be at work and work our shifts regardless of anything else. When a government shutdown happens and everyone comes to hear the first announcements, we get the oh well, well, you know, this is the situation that we were employed to and they warned us about. What a lot of folks don't understand is that these situations are now becoming commonplace. We are pawns in a much bigger game. The last major shutdown was 43 days. That's 43 days without paychecks. We got one hell half paycheck two weeks into it and then afterwards we receive nothing. Folks have to pay bills, so we have to dip into savings and then we have to dip into retirement funds. Then we have to dip into loans, Then we have to rely on family and our own co workers to be able to get through the day to day. Gasoline, food, medical expenses, you name it. But we are expected and it is demanded that we be at work. I listen to everyone and I totally understand their situations. Ours is just a wee bit different. We don't have. We're guilt by association. We are part of the same organization, unfortunately, which is causing no end of trouble for a lot of folks that are sitting at these tables. That Senator, you have listened to their testimonies. And first thing we'd like to say that is, that is not us. We rely on the same people that you do every day to help us

And we find it abhorrent that these people are being treated in the way that they are treated. However, we are different in one major situation. We have no other choice. 43 days, the last one before, 37 days. Right now we're into three weeks. Shutdowns have become to the point in these issues that it's become commonplace. This was never the way this law, the law that was signed during the late 70s was to be implemented. And the whole situation goes is now I look at folks that have been working with this for three to five years that are coming into their own spheres of growth that can't feel comfortable because they can't meet the simplest requirements for their own personal lives and able to secure basically security in their own lives. You can't pay bills, you can't afford child care, food. We had to run food banks to help take care of people in our

and that we appreciate everything that outside folks have done for us. It is now getting to the point where they look at it like, why do you keep enduring this? We have no choice. It is not an easy thing for me to come here and discuss this, but it is necessary. I commend Senator smallwood crovz for SB 1155 to look at our situation and help us protect our own abilities to stay in the places we live. Because once we have to determine how we're going to take care of the funding that we have our own bank accounts, sometimes we can't afford payments. And it seems that there's a small amount of people that seem to be preying on the point that they're counting on we can't pay our rent so they can evict us and move their properties forward. But again, this isn't a situation where we're in control of what's happening. It goes far beyond us. And so this bill basically says, hey, these folks are federal employees. Maybe we should stop for a moment and say, look, because you're going through what they're going through, maybe we can work with them and help them get through. Everything will be resolved hopefully within a reasonable amount of time. But until then, let's take a moment and think about what we're doing to them. Again, we're a small, we are a small group in this. But that small group is responsible for a whole lot of things that go on in the side point of your lives. We are getting ready to go into spring travel period, which is a big vacation. And already you've noted on TV there have been reports where airports are reported and passengers have reported their uncomfort. The fact that they have to wait for hours upon hours to be able to board their plane to go on their vacations. My heart goes out to them,

my heart also goes out to those people that are trying to do the job with reduced capabilities that are showing up in trying to help these folks get to their leisure time activities. And I can't go on vacation.

what to do? How do we handle this? What positions do we take? I appreciate you the fact that you're from Southern California and you've looked at this and decided to submit and try to help us with the situations. I questioned the representatives of my own area here in the north and why they have not contacted us and said, hey, we need to be aboard this situation. I also have problems with the way that we are treated. We are not the, if you excuse the quote, redheaded stepchildren that they so easily promote us to be. We are responsible adults. Some of us have been there, as I said earlier, 18 years plus. You're suffering from a drain just as the other organizations are from intelligent personnel that can no longer function in positions where they receive no support either from the public who likes to harass us constantly because they feel that it's not necessary for them to follow simple basic safety rules. To our current management who has been. Insanely derogative towards us. We have been called names by people who we are supposed to Support openly

I'll be glad to. Thank you. Appreciate your time. Used to be a middle class career that could be relatively proud of what we do. We're beginning to question this. Their move towards privatization is an issue. We have spent a lot of time and effort training people who have left us for jobs in food preparation because at the time they realized they could make as much money and not have to go through the issues that we've gone through. We have had to protect our people and provide for our people. In ways that we never thought, and this is via the union. There was. We never thought we'd ever have to do. We tend to wonder. We need to basically structure better protections. We're not trying to deal with partisan blame here for the simple reason that both sides need to come to the table and actually figure out what they need to do. What we need to do is what we're asking you to take a look at is preparations for health care for folks that need to be, you know, need the assistance in small groups for small amounts of time loans situation. There is a small movement to trying to get us 0% loans and everything else. But people need to understand that we are not openly trying to find handouts. We're looking for solutions. We want to remain a vital part of this entire state.

But we feel that sometimes it's difficult being a federal operative to provide, you know, or actually inquire for state help.

thank you. Madam Chair, just also want to say thank you for. Well, it's really been heartfelt testimony. I appreciate that. It's, you know, not that common in these kind of hearings where folks just, you know, kind of open up about what's happening on the ground in terms of real human impact. And that's been a concern, I know, for the elected officials that are here on the dais because we work closely together, together a lot on the kind of issues that you've been presenting on. And I think we come at it from, mostly from that place. What is the human impact really? Not to say that the previous panel wasn't also important where we take a look at the actual economic impact of some of these. In fact, when you look at the reduction in GDP or gst, I guess, at the state level and see these multi billion dollar astronomical, you know, cascading impacts not just on the state government or local governments or local employers, but really taking all ships down. I mean, I mean it's a tide that's going down as these things are happening. But then what is the human impact of it should be always issue number one and so appreciate that. I think the two areas of further bad news fall into the category of the difficulty of that the state has trying to keep up with callbacks and cuts and impact, you know, putting our finger in the dike, as the old metaphor goes, just because of the fact that we have to have a balanced budget. We can't keep up with an entity that has been basically put trillions of dollars out there by printing money and then turn around and pulling the rug out from under people afterwards.

I know those of us up here and I don't want to try even attempt to speak for our broader set of colleagues, although I trust that most of them see what's coming. But you're actually, this is the bad news part of it, I think, really testifying on the tip of the iceberg of what's coming and you know, that urgency to right the ship at the federal level and also just try to keep doing what we can, I think, you know, medical. Figuring out how to, how to, how to bring in revenue that would go back into the medical system, for example, is something that is real. And my two colleagues here have especially worked very hard on that. There are some things we can do. So I'm not trying to throw up my hands and say, sorry, it's a, you know, a federal problem. It's Hurting us all. It's. And we can't do anything about it. But the areas that we're going to be able to help, perhaps like Medi Cal, are going to be these very surgical pieces of a much larger catastrophe that's starting to set in economically unless we change the political winds at the federal level. So again, appreciate your comments. Know that we understand the gravity of the situation. What you're seeing and testifying to is we understand is not only not exaggerated, but again, just an indication of just how badly things can unravel, you know, if we aren't able to turn the ship around. So we'll keep working at it and you know, hope that the state's own fortunes in terms of its budget go in a better and better direction so that we do have more resources at a minimum to help people who are falling off because of these problems with safety net resources. I mean that's the one area that we have some significant control over, you know, so long as we have resources available to us. Thank you. Apologize, I'm not a presenter. I didn't mean to make a monologue, but I don't really have a question. You've answered the questions. I think it was just wanting to let you know that we're hearing. You have been. Thank you.

Thank you. Hey, everyone. I appreciate you all. My name is Dr. Kendrick Roberson, national vice President with the American Federation of Government Employees. And I really appreciate all of y' all's support. But to answer the question directly on a couple of things that are coming down the pipeline, two I want to talk about the shutdown and then one, on the amount of federal workers that are left here. So here in California, we represent 100,000 federal workers that are throughout the state. That's part of our bargaining unit. And what we've seen is we've seen a lot of folks nationwide, over 300,000 federal workers have left the federal workforce. And that has major impacts for places like California. And it also means places in particular like the VA in the va hospitals and the VA centers, call centers. We're actually seeing a lot of workers that have left, but then seeing that because of the hiring freezes, these jobs are not being filled. So you're going to see a lot of veterans who are going to be in, you know, having longer and longer wait times, and there's going to be a needed pressure on the federal government to ensure that they're staffing, fully staffing these VAs across the nation and specifically here in California, that's something that we're going to see coming down the pipeline. And then the other one with the shutdown and the shutdown impacts, as you heard with TSA in particular, a lot of these folks right now don't have the funds or resources to pay their bills. And they're relying on their relationships with their, with their landlords. Right. And with their loan service providers to say, hey, can we, you know, work out a deal in the meantime in the interim time? And like Wallace was saying earlier, there are many who are trying to use this as an excuse to get out of their lease agreements with their, with their tenants. And so we're going to see that coming down the pipeline. But then also as we continue to see some of the longer effects, the longer range effects, you have this brain drain where people who are tired of experiencing shutdowns, tired of figuring out how they're going to pay their bills, how they're going to survive and feed their families, they're leaving the federal government because it's such a toxic work environment when these types of things are occurring. And when that happens, you then now have an entire system that has to be rebuilt. And then you're talking about safety concerns because now it's like, hey, if you've got these people leaving the workforce and you have to train up a whole bunch of new people, well, now these new people have to get up to speed very quickly in order to fill in the gaps that are left from these issues. So these are a couple of things coming down the pipeline that could be of impact.

Well, he brought forth the answers for veteran administration and said what we were going through basically. You should also understand that we not only respond to them, but Social Security and their particular issues dealing parallel with Veterans Administration. Thousands upon thousands of jobs have been eliminated. Your response time have been increased. Getting appointments and everything else has just become much more difficult in certain counties. It's now ridiculous for people to try to get through to do the basic things. I bring this up also because I'm looking at retirement. I'm over 65. I have to address these issues like everybody else and become incredibly frustrated by answering simple questions about Medicare and Social Security and a few thousand other things. We look at what people are going to have to go through as far as, you know, stability.

Yeah.

I'm a nurse so I'm going to focus on the community first and then the nurses second. So we want support on Calcare AB 1900 and that will enact a single payer healthcare program for California, all residents of California. And it includes medical, dental, hearing, vision, mental health, reproductive and long term care. Every year we we've done this, we're getting more and more support from Californians and as you can tell especially with this administration, there's less and less people that have access to health care every year. And this is devastating. And if you are a nurse and you are on the phone and you're trying to bring in somebody that's having a heart attack and they don't want to go because they don't have the money for a $200 EKG. But this is, this is a life and death situation. This is no joke. California needs to do better. The second thing that we need also is for the nursing workforce. We need California to put more. For example in 2025, 26 funding cycle song Brown primary care residency programs received 33 million in funding while RN pre licensure programs received just 2.725 million. A 91% gap. We need California to invest in ADN graduate programs to make sure that we get everybody to become a nurse.

And we will close out with where we started. Ms. Melendrez, please. Closing thoughts what's coming?

Well, I want to thank this panel very much for your information, for your courage, and for what you do every day to protect workers. We so appreciate it. Thank you. Next, we will be having our fourth and final. Nope, fourth, not our final, near final. So this is not last but least, but getting to our fourth panel, which is an employer response. As we've heard about the federal impacts on California's labor market, this panel will include the California Retailers association, the California Grocers association, the California Farm Labor Contractors Association. We will first hear from the retailers president, Rachel Mishlin. Please begin when ready.

Thank you. Thank you very much. Next we will hear from the Grocers Association, Mr. Louis Brown.

Thank you.

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. Hi, 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 raids. 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 in 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 $500 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?

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 counted 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 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.

Madam Chair, if, 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. 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 fully forecasted what the changes from HR1 will mean going forward, but that was the potential loss from the impacts from last year.

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 being. 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 forgot 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.

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.

Questions this time. 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 the 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, 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?

Yeah, I appreciate that. And it 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, 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, 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.

Yeah, 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, 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 want 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 have 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 Durazzo 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 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, just do doom and gloom, but it can, it can lead to a much more significant undermining or collapse 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, keep us apprised of is 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, 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. 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 Eddie. I wanted to also thank Senator Laird, who I know is not here, but we are here because of his bill, SB390 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 for 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 developed 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 signals 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 health care 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 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 maintain 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, 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 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.

Sure.

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 Para from our Workforce Development Board. It's my favorite board because I, I'm on it. So I work very closely with Kyne, so please proceed.

Thank you very much for your testimony. Senator Cartesi, do you have any comments or questions you want to answer? 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 Farris, 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?

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?

There's been a substantial number of war 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 because 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, ticks in those and particularly the tech service industry and software development.

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 whatever a downturn brings us and that Californians would be protecting. I know, within the EDD next 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.

to

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, all of these federal actions are creating new scenarios that we have to prepare for. How is that, how are the, 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.

Well, I'm glad to hear there wasn't overwhelming concern that surfaced through the public comment of the process. And I asked 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.

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 HR1, 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

So I could attempt.

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. To understand what level of care they had, what requirements they're now gonna have to subside, 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 gonna 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 is a requirement for. For the workforce. Pel 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 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?

Because it really did make a huge difference and it will make a huge difference in the recession if there is stabilizing things.

Because I was one. One of those offices back in the day and I won't say much more about that, but trying to do casework.

For the thousands. So we appreciate that.

You're ready for the next.

Thank you.

Thank you so much. Senator, my name is Christian Ramirez. I'm the political director at SVIU uswd. I'm here with members of our union. These are Save Mart workers and 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. My name is Pedro Toscano. I lost my union. I was working there for three years at Save Our 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.

My name is Victor. I used to work for SafeMart. We had a really good contract that had full medical benefits. And one day from the next, it 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.

Gracias.

Hello, every. Hello, everyone.

I'm a security officer in the East Bay.

own contract, we also here in solidarity with our security, with our janitors. Janitors lost their coverage and all their

So we just need you guys to

Thank you.

Mucha bida de pendemos de la salud mucho.

We're raising our voice today because we desperately need our medical health, our health coverage. We depend on it. Now we're making half the last wages we were making before. Thank you. I 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, USW 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 health care. Thank you so much and God bless you.

So please wrap up.

Thank you.

at Valley Voices, a community based organization serving the community of Kings County. I want to echo the comments made

agricultural communities like Bakersfield and Camarillo. In one tragic incident, a farm worker

Agricultural drives California's economy and this industry

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,

report workplace violations across the state. We ask that the state take action

Thank you.

Just to thank you for your leadership as chair of this committee and of course your committee staff for making sure this happened. 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.