State Workers Say California Paychecks No Longer Cover the Bills

BY JEANNE KUANG, CalMatters

When Tammy Rodriguez landed a job with the California Department of Motor Vehicles 27 years ago, she felt like she had “struck gold.” It was her first job, she said, and she felt secure knowing she was earning not just a salary, but a pension for later in life.

Over the years she thought about looking for work at private companies to make more money, especially after she had a child. But she liked the other benefits of state work: the health care coverage, the flexibility of transferring departments when her family moved and the job security when she went on maternity leave. 

Now, at 52, she’s feeling less financially stable. The $2,100 monthly rent she pays for the home she and her teenage daughter share eats up half her earnings at the DMV in San Luis Obispo. Halfway through each month, she takes stock of their expenses and budgets to ensure she can afford gas for her 30-mile daily commute.

“I want the stability I had before, where I don’t have to worry about (living) paycheck to paycheck,” said Rodriguez.

That sentiment undergirds the contract talks this year for the Service Employees International Union Local 1000, the largest union representing California state government workers. The union has called for a 30% raise over the next three years and the full cost of health premiums covered. 

Rodriguez is active in Local 1000, which represents nearly 100,000 state government employees, from administrative staff to janitors to health care workers. Their current contracts expire at the end of June.

Can California Pay?

Theirs are not the only labor demands the state has to contend with as Gov. Gavin Newsom and lawmakers seek to close a $31.5 billion hole in the budget. 

Local 1000 covers nine of the state’s 21 worker bargaining units. Five other units also have contracts that are up this summer and some are also seeking raises. 

In total, expiring labor agreements cover more than half the state’s workers.  

For every $1 in potential raises there is an additional 32 cent increase in pension costs, making the 30% raise proposal total more than $3.8 billion over the next three years, the union said.

Irene Green, Local 1000’s vice president for bargaining, said there has been little response from the state on their proposals for the raise and full health coverage. California Department of Human Resources spokesperson Camille Travis declined to answer CalMatters’ questions about contract negotiations.

The union’s efforts come after teachers and staff at two large school districts held strikes this year — in Oakland and Los Angeles — netting double-digit raises. 

Would state workers strike? In 2016, Local 1000 voted to strike but workers did not walk out.

“Are we considering all our options? Absolutely,” Green said. “We’re not leaving anything unconsidered at this time.”

So far Newsom’s budget proposals this year have included funding for previously negotiated raises for other state worker unions, and he has spared workers from furloughs. But his administration has said there’s little room for new spending.

“We value our workforce; we value their sacrifice, particularly over the last number of years,” Newsom told reporters in May. “And we are mindful of the inflationary environment. We’re also hopeful that they’re mindful of our current budgetary environment.”

Lagging California Paychecks

Public sector employees are among a broad swath of workers demanding higher pay amid record inflation, months after many were deemed “essential” during the pandemic. 

Advocates this year often point to a growing gap between wages and California’s cost of living. The United Ways of California this year sponsored a bill that would have forced the state to calculate what wages it takes to afford the basics in each county. The bill died in the Senate Appropriations Committee in May.

As the union prepared to bargain this year, it commissioned a report by UC Berkeley’s Labor Center that found more than two-thirds of workers represented by Local 1000 don’t earn enough to support themselves and one child, and 35 percent don’t make enough to support a family of four, even with a partner earning the same wages.

Would state workers strike? In 2016, Local 1000 voted to strike but workers did not walk out.

Nationally, wage growth among state and local government workers was close to or exceeded private sector wage growth from 2001 to 2010, federal data show. But after the Great Recession, in 2010, government wage growth began lagging behind private sector wages and has not caught up, said Sara Hinkley, policy research specialist at the UC Berkeley Labor Center. Tax revenue uncertainties may be why, she added. 

A Path to a Middle Class Life

State workers in California often accept lower salaries than they would get at private businesses in exchange for a state pension, better benefits and job security. But rising costs coming out of the pandemic and wage hikes as the private sector responds to labor shortages are giving state workers pause. Is the tradeoff still a good deal? 

“Whether (state employment) is a pathway towards what we traditionally think of as the middle class is, I think, more questionable now,”  said David Lewin, a professor emeritus at the UCLA Anderson School of Management who studies public sector unions. 

Even so, he said, public sector work is still a better deal in the Golden State than almost anywhere else.  California has not made substantial cuts in state jobs or in state workers’ bargaining rights the way states like Wisconsin have.

The union says there have been other de facto cuts to state workers’ pay in California.

Over the last two decades, state workers have contributed more of their paychecks to health care premiums and retirement health plans. Former Gov. Jerry Brown signed a law that, among other things, made workers hired in 2013 or later pay more toward their pensions. 

Contributions to health care and pensions took up 5 percent of a typical Local 1000 member’s paycheck two decades ago and now consume 15%, the union says. The figures are based on pay and benefits for an associate program analyst, the job category the union says is closest to its members’ median salary.

During the pandemic, the state trimmed worker pay by 9% for one year, anticipating a deep recession that did not materialize. Workers got two days off each month in exchange. In 2021 the pay and work days were restored — as were raises from the current contract that totaled 7% over three years — when the state brought in record revenues.

Stuck Working Side Jobs

On June 8 the state workers union held a rally outside the Governor’s mansion to demand better raises. Rita Krone, a 55-year-old program analyst who helps refugees, was there. 

When she got her job at the state Department of Social Services about a year ago, she thought she could finally put aside her side jobs.

But her rent is $2,200 a month and Krone, a Rocklin resident, is the wage earner and caregiver for her husband, who has a disability. She works Mondays through Fridays, then delivers groceries for DoorDash on Friday evenings and weekends. 

“We’re down to our last dimes,”  Krone said. “So I work seven days a week.”

Pay for analyst positions like Krone’s was 17 percent less than equivalent jobs in the private sector in 2021, says the California Department of Human Resources. That’s with state benefits and pension factored in.

Looking at wages alone, analysts like Krone made 30 percent less than market pay.

The article titled "‘Down to our last dimes’: State workers say California paychecks no longer cover the bills" appeared first at CalMatters here: https://calmatters.org/california-divide/2023/06/california-paychecks/