This week, California Governor Jerry Brown signed Senate Bill 190, co-authored by Senators Holly Mitchell and Ricardo Lara — ending the regressive and racially discriminatory practice of charging administrative fees to families with youth in the juvenile system.
California and nearly every other state charge parents of youth involved in the juvenile justice system with various fees, including fees for detention, legal representation, probation supervision, electronic monitoring, and drug testing. These fees trap poor families in debt, particularly families of color, and according to a study by the U.C. Berkeley Law School Policy Advocacy Clinic, significantly increase the likelihood of recidivism. Though the fees are designed to reimburse local governments for costs related to a child’s involvement in the juvenile justice system, counties often spend as much, if not more, to collect the fees as they take in.
PolicyLink, working in coalition with state advocacy organizations, co-sponsored and advocated for SB 190, which will prevent California counties from charging juvenile administrative fees. As the first state in the nation to eliminate the fees, the passage of Senate Bill 190 could spark similar reforms in other states. According to PolicyLink senior associate Lewis Brown Jr., “Imposing fees on poor parents who are struggling to make ends meet is not the way to fund our juvenile justice system. Hopefully, Senate Bill 190 is the first step toward eliminating these destabilizing and counterproductive fees throughout the country.”
We applaud our coalition partners, as well as Senator Mitchell, Senator Lara, and Governor Brown, for their leadership in addressing this important issue. We look forward to working with others to ensure that SB 190 will serve as a model for other states looking to address juvenile, and other types of criminal justice fines and fees.
This week, California Governor Jerry Brown signed Senate Bill 190, co-authored by Senators Holly Mitchell and Ricardo Lara — ending the regressive and racially discriminatory practice of charging administrative fees to families with youth in the juvenile system.
The impact of Los Angeles' postrecession housing crisis became clear in 2014, when a UCLA report found that L.A. is "the most unaffordable rental market" in the United States. Since then, L.A. has seen renters become the majority of households in the market. And earlier this year, a report marked a 23 percent rise in homelessness countywide, a number that some experts say is directly tied to out-of-reach rents.
To kick off an awareness campaign called the Renter Week of Action this week, a number of organizations released an analysis of the city's and nation's increasing rent burdens, noting in a summary that renters from coast to coast now "face a toxic mix of rising rents and stagnant wages."
On June 27, Governor Jerry Brown signed a budget that significantly expands the California Earned Income Tax Credit (CalEITC), a refundable state tax credit that increases the economic security of low-income working families. Effective for the 2017 tax year, low-income workers with self-employment income and working families with incomes up to about $22,300 will be able to benefit from the credit. Initial estimates from the Institute of Taxation and Economic Policy indicate that more than one million additional families could benefit under the expansion.
“The expansion of CalEITC represents a significant step toward creating a more equitable California, one in which all Californians, no matter race, gender, or socioeconomic status, can thrive and reach their full potential.” – Lewis Brown, Senior Associate, PolicyLink
Advancing Health Equity and Inclusive Growth in Fresno County, released on Monday, highlights persistent inequities in income, wealth, health, and opportunity. The profile and accompanying policy brief were developed by PolicyLink and the Program for Environmental and Regional Equity (PERE) at USC, in partnership with the Leadership Counsel for Justice and Accountability, and with support from the Robert Wood Johnson Foundation.
“These findings confirm what community residents and advocates have long known—racial and place-based inequities continue to dramatically impact residents’ access to economic opportunity, housing, health, and well-being in the Fresno County region,” says Ashley Werner, senior attorney at the Leadership Counsel for Justice and Accountability. “We must continue to work together and strengthen our efforts to demand that our elected officials do not remain complicit but actively and strategically work to create opportunity for all.”
Key findings in the report include:
- Fresno has the 12th highest renter housing burden among the largest 150 metro areas in the country. The county’s Black and Latino renters are more likely to be burdened: 68 percent of Black renter households and 60 percent of Latino renter households are cost-burdened.
- Very low-income Black and Latino residents are extremely reliant on the regional transportation system and limited numbers have access to automobiles. 12 percent of Black workers who earn an annual income of less than $15,000 use public transit compared with 1 percent of White workers.
- The average Fresno resident is exposed to more air pollution than 70 percent of neighborhoods nationwide, but Black and Asian or Pacific Islander residents have the highest rates of exposure.
- Latinos are nearly three times as likely as whites to be working full time with a family income less than 200 percent of the poverty level.
- At nearly all levels of education, Latino workers earn $4 dollars less an hour than Whites.
Since 2011, PolicyLink and PERE have engaged in a formal partnership to amplify the message that equity—just and fair inclusion—is both a moral imperative and the key to our nation’s economic prosperity. Advancing Health Equity and Inclusive Growth in Fresno County incorporates indicators that undergird policy solutions to advance health equity, inclusive growth, and a culture of health.
The profile provides unique data and actionable solutions for residents, advocates, funders, business leaders, and policymakers seeking to reduce racial inequities and build a stronger Fresno. This engagement with Fresno advocates is also a part of the All-In Cities initiative at PolicyLink. Through this initiative, PolicyLink equips city leaders with policy ideas, data, and strategies to advance racial economic inclusion and equitable growth.
Nearly 40 years ago, when San Francisco’s struggling Bayview-Hunters Point neighborhood was losing yet another business to hard times — in this case, a grocery store — one attorney had seen enough.
Angela Glover Blackwell, an early believer in the need for fresh foods in the inner city, petitioned the governor’s office to intervene and make sure the community maintained a full-service grocery. The alternative was letting residents shop at liquor stores and gas stations.
The petition didn’t go as planned — a new store didn’t open. But the case marked the dawning of Blackwell’s long and distinguished career in social justice, which most recently had her working with the Obama administration to bring grocery stores to underserved cities nationwide.
“I think the last 10 years have been my best,” said Blackwell, now 71, as she sat in her window office on a recent weekday at PolicyLink, the Oakland research and advocacy group she founded 18 years ago. “We need to keep working to make sure we’re creating opportunities.”
From her desk, which sits beneath pictures and posters that sound rallying cries such as “Equity” and “Protect Oakland renters,” Blackwell oversees a staff of 70 public policy experts and attorneys in California, Washington, D.C., and New York. Her organization partners with communities all over the country to help disadvantaged people, often minorities.
The effort, which not only involves healthy food but issues ranging from housing to transportation to education, earned Blackwell a nomination for the 2017 Visionary of the Year award sponsored by The Chronicle and the School of Economics and Business Administration at St. Mary’s College.
“With shifting demographics, the big story is that the majority is becoming people of color,” she said. “The fate of our nation will depend on what happens to people of color.”
Among her organization’s recent work is helping implement the federal government’s Sustainable Communities Initiative. The program assists with planning in depressed neighborhoods; for example, making sure residents have basics like public transit and Internet.
PolicyLink is also helping with business development in poorer parts of Detroit, Baltimore and Pittsburgh. It’s also aiding in the creation of community art projects from Alaska to Mississippi.
“We cross all the issue areas and all the work domains,” said Blackwell, as she clutched a copy of “The Equity Manifesto,” PolicyLink’s call to action that takes its employees to wherever they might find inequality.
While Blackwell frequently travels in the pursuit of social justice, as well for speaking engagements and fundraising, sometimes the need is right in her backyard.
PolicyLink recently helped create Oakland’s affordable housing strategy, a work in progress designed to protect 17,000 city households from being pushed out of town by rising real estate prices and to create 17,000 new homes over eight years.
“They’ve been a critical partner to me as mayor,” said Oakland’s Libby Schaaf, noting that Blackwell was a source of inspiration for her long before the two got to know each other and exchange cell phone numbers.
“As a young college student, I saw her speak at a League of Women Voters event, and it’s really the first time I felt inspired to get involved with local politics,” Schaaf said. “I remember almost feeling drawn, like you’d be drawn to a minister.”
Blackwell lives near Oakland’s Lake Merritt in a house she’s been in for four decades. She is married with two grown children, and three grandchildren, all of whom live locally. Trying to make time for work and family — her husband is an orthopedic surgeon — is tough, she said, but she manages, eating out a lot and waking up early to go to the gym.
Blackwell grew up in St. Louis, where her neighborhood was anything but the neglected communities she advocates for today. It was an economically diverse area with good schools, parks and a healthy mix of businesses, she said, though as she got older she saw it slide.
“Rather than walking to a grocery store, or driving, we were driving farther and farther into the suburbs,” she said.
Blackwell got her bachelor’s degree at Washington, D.C.’s Howard University before going to law school at UC Berkeley.
Before PolicyLink, she worked as a senior vice president at the Rockefeller Foundation in New York, overseeing the organization’s cultural activities. Before that, her career had a number of chapters, including 11 years practicing law at the nonprofit firm Public Advocates in San Francisco.
It was during her time there, in 1979, that she fought unsuccessfully for a grocery store in the Bayview, though her effort prompted Gov. Jerry Brown, during his first time around in the office, to form a commission to explore the problem of “food deserts.” The state Department of Agriculture followed up with money to support farmers’ markets in communities that lacked fresh food.
As chief executive officer at PolicyLink, Blackwell’s push for fresh foods continued when she helped the Obama administration launch the federal Healthy Food Financing Initiative, which today provides funding for groceries and markets in low-income areas.
While she worries that government assistance programs may take a hit under President Trump, she tries to remain optimistic.
“It’s too early to say there’s going to be no opportunities,” she said.
This winter, Blackwell authored an essay called the “The Curb-Cut Effect” in a Stanford University journal about how assisting one group, say the disabled, benefits everyone. She hopes Trump’s moves to help red state voters who supported him out of economic concerns will also help those suffering in poor, urban areas.
“The good news,” she said, “is that the economic inclusive agenda that will reach people who are white, rural and working class is the same economic inclusive agenda that will reach people of color.”
Visionary of the Year award
This is one of six profiles of nominees for The Chronicle’s third annual Visionary of the Year award, which is presented in collaboration with St. Mary’s College’s School of Economics and Business Administration. The honor salutes leaders who strive to make the world a better place and drive social and economic change by employing new, innovative business models and practices. The six finalists were nominated by a distinguished committee that included Chase Adam, co-founder of the nonprofit Watsi and winner of the 2016 award; Greg Becker, president and CEO of Silicon Valley Bank; Emmett Carson, founding CEO of the Silicon Valley Community Foundation; Ron Conway, angel investor and philanthropist; Zhan Li, dean of the School of Economics and Business Administration at St. Mary's College; Libby Schaaf, mayor of Oakland; Jennifer Siebel Newsom, a documentary filmmaker; and Michael Walker, executive vice president and regional executive of City National Bank.
Chronicle Publisher Jeff Johnson, Editor in Chief Audrey Cooper and Editorial Page Editor John Diaz will select the winner, which will be announced during a March 30 event.
To read more: www.sfchronicle.com/visionsf
Current events leave many feeling disillusioned and in despair. Yet hope emerges from the visionaries, disrupters, activists, and all those who are taking to the streets to resist attacks on our constitutional and human rights; to defend hard-fought policy gains; and to safeguard freedom, dignity, and equity.
That hopeful spirit recalls the wisdom of poet Mayda del Valle shared in Our Moment, the video that opened the 2015 PolicyLink Equity Summit: “A movement is not a flash of light — it is a flame, a torch passed from one generation to the next."
Recent changes have only strengthened the resolve to fight. “Our moment” is not lost, far from it. Now is the time to build on the progress and diversity of powerful movements — from Black Lives Matter, Occupy Wall Street, the Dreamers, the Fight for $15, and water protectors to the bold display of resistance in the women’s marches in the United States and abroad and protests against travel bans and deportation. Resolution is essential; Resistance is the call to action.
As many cities struggle with rising income inequality and unemployment, some urban leaders are looking to businesses as potential sites for social action.
"The question becomes, how can we support and encourage businesses in being good employers and good community members?" said Christine Curella, director of business initiatives and job quality in the Mayor's Office of Workforce Development in New York City.
Enter the "Best for NYC Challenge," a first-of-its-kind, New York City-based program designed to teach businesses how to create high-quality jobs and be a stronger force for good in their communities. The program is directed by the Mayor's Office of Workforce Development, with support from the New York City Economic Development Corporation (NYCEDC) and in partnership with diverse community-based business organizations. Now in its second year, Best for NYC gives participating businesses access to tools and services that help them measure and improve their business practices.
"Cities cannot be only a place of regulating business practices; they will need to foster a culture in business where companies are voluntarily striving to do good for their workers above and beyond what is required," said Hardik Savalia. Savalia is a senior associate at B Lab, the organization that invented B Corporation certification and the technical partner that powers the Challenge's assessment tool. Though New York City was the first city to launch the Challenge, B Lab has more cities in the pipeline, and Savalia noted that several dozen cities are interested in launching similar efforts.
In its inaugural year, the program reached more than 1,200 New York City businesses with its impact assessment tool, which provided businesses with insight into how their practices compare to other businesses, by sector and size. The 101 top-scoring businesses were recognized in 2016 as "Best for NYC Honorees." For those already doing well, or those who wish to do better, the idea is to "get companies immediately in communication with peer businesses who can discuss best practices and share lessons learned on implementation," Savalia explained.
"Most business owners aren't trying to make a quick buck. They want to leave a legacy in their community," he added, and campaigns like Best for NYC can help shape that legacy in the mold of a more inclusive economy.
The three businesses profiled below, representing three New York City boroughs, were honored as some of the top scorers in the Best for NYC.
The Bronx: Spring Bank
Spring Bank is an exemplar of equitable business practices — from the services it provides to the jobs it creates to the assets it brings to the community.
"We opened our doors to provide affordable and transparent banking products to low-income customers and to move people away from predatory lending and check cashing," said Melanie Stern, director of Community Lending. The bank is a federally certified community development financial institution, which allows it to leverage U.S. treasury grants to offer services to low-income communities that are underserved by mainstream banks.
With 3,500 customers and assets of just over $160 million, Spring Bank offers a variety of products and services. Small business loans make up the bulk of their business and help subsidize unique products aimed to meet the needs of low-income residents.
"Our small-dollar loans have become our marquee products because they give people an alternative to predatory payday loans and use a more holistic gauge of ability to pay — not just a credit score," Stern said. Through its newest product, Employee Opportunity Loans, Spring Bank partners with employers so that they can offer employees loans of up to $2,500 that are paid back over time through paycheck deductions. These loans are designed to encourage savings by deducting monthly paycheck payments into a Spring Bank savings account, from which the loan is repaid.
"The idea is that once the loan is paid, employees can continue to save into that same account because they've become accustomed to the paycheck deduction," Stern said. Of the 30-plus customers whose loans have been fully repaid, the majority have chosen to continue saving in this way.
As an employer, Spring Bank focuses on hiring locally so that the majority of staff are bilingual (the majority of its customers are Spanish speaking). They also start wages at $15/hour and employ staff full time with benefits, including health care and retirement plans.
As a community member, Spring Bank provides free tax filing services, lends its office space to community organizations, offers free financial counseling days, and is pursuing ways to share its business best practices with others.
"It's more than doing good work, it's being part of a movement of corporations doing good," said Stern.
Queens: Valente Bakery Supplies
At the height of the recession, Valente Yeast Company, Inc. was struggling. Though Valente had been a leading bakery ingredient wholesale supply business serving NYC bakers and bakeries since 1909, the recession required an overhaul of the business's operations. It was then that employees Bob Chory and Tom Siegenthaler saw an opportunity to take the company in a new direction that could help turn its fortunes around.
"We both believe a successful business had to be based on our customers loving us and our employees feeling that they are valued as an important part of our team," said Chory, now CEO of Valente Bakery Supplies. "When you're driven only by profit you risk skimping here and there; and you might lose sight of what makes your company great and stop investing in your future and your people."
On the business side, Chory and Siegenthaler updated the company's facilities with energy-efficient systems and brought in business consultants and technology solutions to help modernize and streamline operations to increase efficiency and boost sales.
On the employee side, they adopted a holistic view of seeing their workers as long-term partners in growing the company. For Chory this means that basic benefits are a must: in addition to standard medical and dental benefits, Valente contributes to workers' retirement plans, and offers profit sharing to all employees after their first year.
The company's new approach also means investing in professional development for employees who want to learn a new skill set, or promoting from within to enable career progression such as transitioning a driver to a leadership role. It means offering compassionate paid leave when a worker's child or spouse is sick. It means hiring those that may face barriers to employment, including recent immigrants, veterans, and formerly incarcerated workers.
"The way I see it, making a business better starts with enabling your employees to better themselves and their life opportunities" Chory said.
Brooklyn: GreenHouse Eco-Cleaning
When GreenHouse Eco-Cleaning began in 2006, founder Saudia Davis had a vision of a healthier, safer cleaning service — one that spared both clients and workers from exposure to harsh chemicals. This mission was a deeply personal one, as Davis's grandmother, a housekeeper from the West Indies, had lost a battle with cancer that was likely caused by a lifetime of inhaling toxic cleaning fumes.
Eleven years later, GreenHouse Eco-Cleaning is a certified B Corporation that employs 40 full-time workers and uses its own line of products made from vegetable-based, organic, biodegradable ingredients.
"When we started it was about bringing healthy options to both our employees and our clients, but it has grown into a place where we not only keep staff healthy, but empower them," Davis said.
In addition to benefits like paid sick leave and paid time off, the company partners with local community colleges to provide financial literacy classes and with Neighborhood Trust to bring in financial advisers skilled in the socioeconomic challenges of lower-wage workers. They also provide paychecks on ATM cards that allow employees to withdraw money free of charge without having to set up a bank account.
"We try to bring in resources that can assist them with whatever goals they're setting for themselves," Davis explained. For example, when employees reported that changing apartments is prohibitively expensive in New York, because move-in costs require tenants to come up with multiple months' rent, GreenHouse Eco-Cleaning responded by forming a new partnership with Spring Bank to offer Employee Opportunity Loans — short-term loans to help longstanding employees access capital without turning to predatory payday lenders.
"We are in an industry that considers workers a commodity; where people are often abused, underpaid, and not given the security or benefits of full employment. We wanted to set a new standard, and B Lab has helped us see that there are others in the city fighting the same fight," said Davis.
On January 10, Governor Jerry Brown revealed his proposed budget for the 2017-2018 fiscal year, which projects a state budget deficit ($1.6 billion) for the first time since 2012. The $179.5 billion proposal maintains the state’s commitment to implementing the Local Control Funding Formula (LCFF), preserving the California Earned Income Tax Credit, and expanding healthcare access to vulnerable groups. Unfortunately, the budget proposal also recaptures nearly $1 billion in one-time expenditures provided in the Budget Act of 2016 (Budget Act) and delays spending increases for various programs and services, some of which, like LCFF, are designed to improve outcomes for low-income communities and communities of color.
We applaud the Administration’s continued commitment to important issues like healthcare access, LCFF implementation, and transportation, but believe more should be done through the budget to build an equitable California, one where all of the state’s residents can participate, prosper, and reach their full potential. We urge the Governor to work with communities, advocates, and the Legislature in the coming months to develop a budget that allows California to address its intensifying housing crisis, maintain health insurance for the newly insured, guarantee immigrants targeted for deportation have effective legal representation, and protect and invest in the state’s most vulnerable populations.
Below we highlight areas of the budget that are likely to be of interest to equity advocates, including health and human services, education, housing, transportation, public safety, and climate change.
Health and Human Services
The budget maintains current spending levels for programs that ensure California residents have access to quality, affordable health care and services. For example, the proposal provides funding for the Children’s Health Insurance Program, as well as the expansion of Medi-Cal coverage to undocumented children and individuals earning up to 138 percent of the federal poverty level. It also maintains funding for substance abuse programs and the transition of new immigrants from Medi-Cal to Covered California. In addition to continuing financial support for these services, the budget provides new funding to reflect the repeal of the Maximum Family Grant rule.
While we are encouraged by these aspects of the budget, we urge the state to continue investing in care coordination and integration programs for vulnerable residents, including the Coordinated Care Initiative, health care workforce initiatives, community infrastructure grants, and children’s mental health services grants.
The education budget provides a small increase of $2.1 billion in Prop. 98 funding for K-14 education and proposes cost-of-living adjustments for LCFF funding targets, as well as for various programs funded outside of LCFF. Unfortunately, due to the projected revenue shortfall, the Governor’s proposal, while providing an additional $744 million for LCFF implementation, “maintains the implementation formula at the current-year level of 96 percent.” Though we understand the new economic reality the state faces, we urge the Governor to fully implement LCFF as quickly as possible.
The budget also boosts investment in California’s Community College system. Notable areas of increased spending include efforts to address student disparities; the Guided Pathways program, an institution-wide approach to improving student completion rates; and school facilities energy efficiency projects financed through the Prop. 39 Clean Energy Job Creation Fund, which, in addition to improving energy efficiency on school campuses, targets training and jobs to individuals with barriers to employment.
Despite these positive investments in the community college system, the budget disappointingly proposes to phase out the Middle Class Scholarship Program, which provides has helped thousands of student to afford enrollment at CSU and UC campuses.
Even though the state faces a growing housing affordability crisis, the budget provides virtually no new funding for affordable housing. The proposal recaptures $400 million for affordable housing development included in the Budget Act, and conditions continued financial support for the Affordable Housing and Sustainable Communities Initiative (AHSC), a major source of state funding for affordable housing in recent years, on the extension of the cap-and-trade program by a two-thirds vote of the Legislature.
In the coming months, we urge the Administration to partner with the Legislature to allocate resources for AHSC without condition, provide meaningful new investments in affordable housing, and establish a permanent source of funding for the construction, preservation, and rehabilitation of affordable units.
Although much of the transportation budget continues to focus funding on maintaining highways and roads in California, we are pleased to see an annual increase of $100 million for the state’s Active Transportation Program, which aims to improve the mobility, health, and safety of vulnerable residents by targeting walking and bicycling infrastructure in low-income communities.
To ensure our increased transportation spending achieves state equity and climate goals, funding should be targeted to grow investment in transit operations and complete streets, prioritize transportation projects that provide meaningful benefits to low-income people of color, and connect disadvantaged community residents to transportation sector training and jobs.
Public Safety and Justice
While the budget’s public safety proposal highlights many of the anticipated positive effects of Proposition 57, we hope the revised budget will deepen California’s commitment to investing in our people and communities, divesting from systems that separate families and perpetuate trauma, and eliminating policies that serve as barriers to the success of low-income people and people of color. These values are reflected in the budget’s proposal to end the use of driver’s license suspensions as a debt collection tool, a counterproductive practice that has caused financial insecurity throughout California’s low-income communities of color.
We hope the May Revision will build on the proposed repeal, by reducing funding for harmful institutions, including immigration detention centers, prisons, and law enforcement, and investing in reintegration services, quality legal representation for immigrants, and support for other vulnerable groups.
Climate Change and Natural Resources
The budget proposes a $2.2 billion dollar Cap-and-Trade Expenditure Plan using revenues generated through the State’s carbon trading program. This plan includes needed investments in transportation, housing, pollution reduction, and other programs that provide benefits to low-income, pollution-burdened communities. Unfortunately, the budget makes allocation of these proposed investments contingent upon the Legislature approving an extension of the state’s cap-and-trade program. Accomplishing this will require support of two-thirds of the Legislature and poses a significant hurdle to securing these important investments.
The Governor’s environmental and natural resources proposal also acknowledges the severe drinking water challenges faced by disadvantaged communities across California and commits to working with the Legislature and stakeholders to address these challenges. This commitment is very encouraging. However, with over one million Californians being served drinking water from systems that do not meet safe drinking water standards, we urge the Administration to take this commitment further and prioritize developing a sustainable funding source to ensure that all Californians have safe and affordable drinking water.
As we learn more about the incoming presidential administration’s policy goals, the Governor’s budget proposals are likely to change. In the coming months, advocates should engage their legislators and the Governor to ensure that hard fought gains for California’s low-income communities and communities of color are protected and expanded.
 Governor’s Budget Summary – 2017-18, “K-12 Education,” 20, http://www.ebudget.ca.gov/2017-18/pdf/BudgetSummary/K-12Education.pdf.
 Proposition 57 allows non-violent offenders who have completed the prison term for their primary offense to be considered for parole and authorizes the Department of Correction and Rehabilitation to establish a “credit” system under which individuals can earn an early release from prison. The law also provides that only judges may determine whether juveniles 14 and older can be prosecuted or sentenced as an adult.
Thanks to nearly a decade of advocacy and research, and to the inspiring leadership of California Senate President Pro Tem Kevin de León — the kind of leader the nation needs — California has taken another step forward by making portable, auto-enrolled, individual retirement accounts available to millions of Californians who lack such benefits. Workers participating in the newly passed Secure Choice Retirement Savings Program will have at least 3 percent of their earnings deducted from their paycheck and deposited in an individual retirement account, managed by the Secure Choice Retirement Savings Investment Board. They will be able to opt out at any time.
Given that many participants will have no experience with saving for retirement and many may currently rely on public benefits programs, PolicyLink worked with partners and De León's office to advocate for equity measures within the bill to ensure that the program best serves the needs of low-income workers. Thanks to this advocacy, the Board is required to establish a comprehensive outreach and education program to inform eligible workers of the risks and benefits of the program, and there is now increased attention on ensuring that retirement savings do not count toward assets, which could potentially disqualify low-income workers from receiving vital public benefits.
Touted as the broadest enhancement of retirement benefits since Social Security, Secure Choice provides a crucial opportunity to prove the merits of state-backed retirement pans.
Senator de León spoke with Christopher Brown, director for financial security at PolicyLink, to share his insight into this innovative new policy and discuss how other states might follow in California's footsteps.
Why is it so important that the state step in to provide opportunities for workers to save for retirement?
We have close to seven million workers in California in the private sector with no access to any retirement security plan — neither a defined benefit nor a defined contribution plan. This means that 50 percent of middle-income workers are at risk of retiring into poverty. The numbers are worse for women retirees, who make up two-thirds of retirees today who live in poverty. When I think of women like my mother or my aunt, women who raised us, clothed us, fed us — it's immoral that these women should retire into poverty. After a lifetime career of hard work, helping to make California the sixth largest economy in the world, they deserve to live with a modicum of dignity and respect. This is a not a partisan issue. Retirement insecurity impacts all Americans, regardless of the hue of your skin or your geographic location. Secure Choice is a complete game changer. It gives millions of workers the option to save automatically, through their employer's payroll. No matter what job you hold in California, you can plan for your future.
What were some of the challenges you faced in creating this legislation, and how were they overcome?
It's been a long, arduous journey to get this approved. The first iteration of this measure failed in 2008, and again in 2009. But in 2012 Governor Jerry Brown signed a measure that allowed us to appoint a Secure Choice Board and raise money to conduct the necessary feasibility studies and market analysis to show that this would be financially viable and self-sustaining. It took years of going back and forth to Washington, DC to meet with the Department of Labor, the Treasury Department, and other key players on Capitol Hill. We rolled up our sleeves and went to work, going over the arcane technical aspects and trying to find a solution to this vexing problem of retirement insecurity.
All along the way we had very strong opposition on Wall Street and in Washington, DC, because our program was seen as competing with financial markets for retirement. However, we were able to make the case that this wasn't about competition or cannibalizing an existing financial market sector, because we are trying to reach a highly fragmented, diverse community made up largely of lower-income workers who need retirement security the most and aren't being reached by private financial providers. We also stressed that this is a policy issue, not a commercial one — that too many people are hurting because they don't have access to retirement savings as part of their employment, and too many people would be forced to rely on government assistance in retirement because they had not had the opportunity to save throughout their careers.
What will be the next steps in implementing Secure Choice?
The law will go into effect on January 1, 2017, and will authorize the Secure Choice Board, chaired by Treasurer John Chiang, to begin the development of the program. Over the course of three years we will phase in employers by company size; ultimately, all employers with five or more employees will be required to participate. We still have a lot of work to do to educate consumers about what's going to happen and why it's important. We have seven million people in California who will be eligible for this, so we need to take them all on a journey to educate them about the importance of retirement savings, and the power of saving early so that you compound your principal investment.
We've scaled the mountain and withstood the powerful, well-moneyed opposition, but now we need to roll up our sleeves and take this to the people to make sure the outcomes are positive.
The Department of Labor recently issued a proposed rule that would pave the way for local governments to follow California's lead in providing retirement plans. What advice would you give to other states wishing to provide their own retirement savings plans?
I'd say the critical thing that is going to help expand these policies is leadership — both nationally and within states. This leadership needs to be bipartisan, as it was in California, and they need to step up and make their fellow politicians understand that their citizens are hurting in retirement. They have a choice: they can represent the people and try to increase access to retirement benefits, or they can represent the interests of Wall Street and do nothing. The good news is that the concept of state-backed retirement savings has caught on like wildfire. We know of at least 15 other states that are following our lead with plans to adopt similar programs in the future, and we couldn't be more excited.
What are the humanities, why do they matter? How have they made a difference in your life?