From California Business Roundtable <[email protected]>
Subject California Business Roundtable eNews September 4, 2020
Date September 4, 2020 9:00 PM
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Web Version [link removed] | Update Preferences [link removed] CBRT in the News Yellow, Orange, Red And Purple: Color-Coded System Will Guide California Reopening

On Aug. 28, Gov. Gavin Newsom announced a new framework for re-opening businesses in California counties shut down because of the COVID-19 pandemic. The state will move away from the previous “watch list” system and use a new four-tiered classification system to determine which counties can open.

At the Aug. 28 press conference, Gov. Newsom said, “We wanted to make adjustments based upon the input we received from county health officers, input we received from experts, our own experience here in the state of California, to adjust the frameworks from the old monitoring list to a more dynamic list that we hope is not only more dynamic, but is much more simple to understand. Stringent, though, nonetheless in terms of its application but statewide in terms of its consequence.”


Rob Lapsley, president of the California Business Roundtable, released a statement responding to the state’s new COVID-19 reopening framework.

“Unfortunately, [Gov. Newsom] has also sent a long term signal to the business community that they will likely not be able to operate at a sustainable level until spring 2021 at the earliest. As the rest of the country begins on a path to economic recovery, we are gravely concerned that California will see a wave of permanent job loss, especially since the Legislature has not passed any policies that will help businesses adapt to this ‘new normal,’” the statement read.

Read More [[link removed]] California Cracks Door To Economy, Schools An Inch With Tiered Reopening

As coronavirus cases and hospitalizations continue trending downward California’s second reopening wave will be deliberate and plodding under rules introduced Friday by Governor Gavin Newsom.

The long-awaited framework places features four tiers and will require counties to show multiple weeks of declining coronavirus cases before advancing. Nearly 40 of the state’s 58 counties are listed in the most restrictive tier, meaning indoor dining, religious ceremonies and schools will remain closed for the foreseeable future.


Business leaders like the California Business Roundtable weren’t amused by the plan either.

“Unfortunately, the governor has also sent a long-term signal to the business community that they will likely not be able to operate at a sustainable level until spring 2021 at the earliest. As the rest of the country begins on a path to economic recovery, we are gravely concerned that California will see a wave of permanent job loss, especially since the Legislature has not passed any policies that will help businesses adapt to this ‘new normal,” said Rob Lapsley, president of the California Business Roundtable, in a statement.

Read More [[link removed]] California's New Rules For Coronavirus Reopenings: It's Not All Or Nothing

California overhauled its rules for when businesses can operate during the coronavirus pandemic, imposing a statewide system that will allow for partial openings in areas where the disease is under better control.

Under the plan, unveiled Friday by Gov. Gavin Newsom, counties will be placed into four color-coded tiers — purple, red, orange and yellow, in descending order of severity — based on the prevalence of the coronavirus in their communities and gradually move through those levels. Restrictions on business and public life will be eased as transmission drops.


“I do have concerns about how ‘slow’ the approach should be, considering the high numbers of businesses on the brink of closure and those who have already lost their jobs,” said San Mateo County Supervisor David Canepa.

California Business Roundtable said it is “gravely concerned that California will see a wave of permanent job loss.”

Read More [[link removed]] Business Climate and Job Creation U.S. Unemployment Rate Fell To 8.4% In August As Hiring Continued

Unemployment fell sharply in August and hiring gains moderated, as the U.S. economy continued to recover from the steep downturn triggered by the coronavirus pandemic.

Employers added 1.4 million jobs last month, helping push down the unemployment rate to 8.4% from 10.2% in July, Friday’s Labor Department report said. The jobless rate’s decline—it has dropped from near 15% in April at the beginning of the pandemic—put it below the peak from the 2007-2009 recession.

That puts unemployment in line with past major recessions, though it is significantly higher than pre-pandemic levels. The jobless rate stood at 3.5% in February, a half-century low, just ahead of the coronavirus crisis.

State reopenings of their economies helped boost employment this summer, but the gains have cooled in recent months. The economy is operating with about 11.5 million fewer jobs than in February.

Read More [[link removed]] U.S. Trade Deficit Widest Since 2008 In July As Imports Outpaced Exports

The U.S. trade deficit widened in July as Americans’ appetite for foreign-made goods bounced back while exports rose more modestly.

The foreign-trade gap in goods and services expanded 19% from the prior month to a seasonally adjusted $63.56 billion in July, the Commerce Department said Thursday. That was the largest monthly trade deficit since July 2008, during the 2007-2009 recession.

The growth of the deficit reflected a pickup in U.S. demand for foreign-made goods and services as states eased restrictions on business activities across the country.

“The import side pretty much has bounced back, but the export side has not,” said Joshua Shapiro, chief U.S. economist at MFR Inc.

Imports grew 11% in July to $231.67 billion as Americans bought more foreign-made vehicles, industrial supplies, capital goods and consumer products like cellphones and furniture. That pushed the monthly goods deficit to its widest level on record.

Read More [[link removed]] The Economy Is Limping, But Wall Street Is Booming

Investment-banking and trading revenues hit an eight-year high in the first half of 2020, a counterintuitive boom that shows the heavy hand of the Federal Reserve and a growing gulf between financial markets and the real economy.

Global banks raked in fees from companies scrambling to raise cash and panicky investors scrambling to sell, then buy again as markets surged. Revenue in these traditional Wall Street businesses was 32% higher than in the same period last year, bucking years of sideways and downward drifts, according to industry research group Coalition, which compiled data from the 12 largest global investment-banking firms.

The surge is being driven by two factors: huge need for cash from pandemic-hit companies and the Federal Reserve flooding the system with money, which props up market prices and nudges investors into its riskier corners. The result is a borrowing boom that has pulled companies back from the ledge and lifted Wall Street’s fortunes.

Read More [[link removed]] Layoffs Continue: 881,000 Americans Filed For Unemployment Benefits Last Week

Another 881,000 Americans filed for unemployment benefits last week as the economic shock from the coronavirus continued to reverberate through the job market with no additional federal rescue legislation in sight.

The fresh job losses come as the labor market sees tremendous turnover. Some e-commerce and delivery businesses are desperate for workers, while travel and tourism continue to feel the squeeze from the coronavirus. The apparent paradox is explained by the virus’ insidious effects on the workforce, drying up demand for some kinds of work, making workplaces newly risky, and knocking some out of the job hunt altogether.

Under the separate Pandemic Unemployment Assistance program, 759,000 self-employed workers filed new claims.

Read More [[link removed]] Fraud Concerns Over California's Unemployment Benefits

Concerns are growing about possible widespread fraud in California’s unemployment system following numerous reports of people receiving unsolicited letters, some with debit cards, from the state's jobless agency, and a suspicious number of claims involving independent contractors.

The California Employment Development Department has paid a staggering $76.9 billion in unemployment benefits since the start of the pandemic, processing more than 11.9 million claims, most the result of Gov. Gavin Newsom's decision to shut down much of the economy to slow the spread of the disease.

The U.S. Department of Labor reported Thursday that California had processed more than 405,000 Pandemic Unemployment Assistance claims last week, accounting for more than half of all such claims nationally. Congress authorized the program earlier this year to help people not normally eligible to receive unemployment benefits, including independent contractors.

Michael Bernick, former director of the Employment Development Department and now an attorney at the Duane Morris law firm, called that a “ridiculously high percentage.”

Read More [[link removed]] California's Coronavirus Stimulus Was A Bust... What Now?

So much for California saving itself from the economic wreckage of the coronavirus.

As state lawmakers ended the year with a profanity-laced, partially remote late-night voting session this week, several pillars of a sweeping $100 billion economic stimulus proposal became political casualties of a chaotic summer at the Capitol.

Restarting supplemental $600-a-week unemployment payments? Not happening. Investing in wildfire prevention and broadband infrastructure to create jobs? Nope. Offering tax vouchers to raise revenue and stave off future cuts? Maybe, if state agencies find their own path forward.

“I think we made lives better,” Senate leader Toni Atkins said during a 2 a.m. Zoom press conference after the final votes Monday night. “Were we able to get everything done we’d hoped to? No, we weren’t.”

Read More [[link removed]] How Tom Steyer Is Advising Gov. Newsom On California's Economic Recovery During Pandemic

Shortly after the pandemic hit, Governor Newsom announced a star-studded task force to advise him on opening up the economy. It included Apple CEO Tim Cook, Disney Executive Chairman Bob Iger, former Chair of the Federal Reserve Janet Yellen, and billionaire environmental activist, and former presidential candidate Tom Steyer.

“Some of the most well known business leaders in the world happen to reside here in California. Some of the great social justice warriors. And we have tasked 80 of them to begin to work through each and every sector of our economy to put together tangible actionable ideas for short term, medium and long term economic recovery,” Newsom announced in April.

Now there are nearly 640,000 confirmed COVID-19 cases and more than 11,000 deaths in California. The spike in cases and deaths is tied to the economy reopening around Memorial Day. That reopening had to be partially rolled back. Unemployment in the state was nearly 15% in June.

Read More [[link removed]] California Lawmakers Vote To Exempt More Professions From Landmark Gig Economy Law

California lawmakers have voted to exempt about two-dozen more professions from a landmark labor law designed to treat more people like employees instead of contractors.

California Senate Approves Bill Regulating ‘Gig Economy’

Among other things, the legislation approved Monday would end what critics had said were unworkable limits on services provided by freelance still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists.

The bill has certain restrictions to make sure they are not replacing current employees.

Lawmakers separately approved giving newspapers one more year before they have to start treating newspaper carriers as employees.

The law that took effect this year was primarily aimed at ride-hailing giants Uber and Lyft.

Read More [[link removed]] Energy and Climate Change Oil Industry Is Fading Away In Land Of The World's Richest Reserves

Venezuela’s oil industry—rich in reserves, a crucial Allied resource in World War II, a founding member of OPEC—is grinding toward a halt.

Venezuela has greater oil stores than any other country. But after years of corruption, mismanagement and more recently U.S. sanctions, its oil output has dropped to a tenth of what it was two decades ago.

From Lake Maracaibo in the west to the Orinoco oil belt in the east, abandoned wells rust in the sun as looters scavenge the metal. The last drilling rig still working in Venezuela shut down in August. The country is on course, by the end of this year, to be pumping little more oil than the state of Wyoming.

“Twenty percent of the world’s oil is in Venezuela, but what good is it if we can’t monetize it?” said Carlos Mendoza, an ambassador under the late socialist president Hugo Chávez, who enjoyed an oil bonanza when prices were high but starved the industry of investment and maintenance funds.

Read More [[link removed]] Greenies Help Bring Gangrene To California's Economy Via Inflexible Renewable Mandates

Back in the good old days — pre-Aug. 15, 2020 — when all we worried about were possible planned power outages during the wildfire season, more than a few environmentalists were hammering away at a PG&E plan to deploy emergency diesel generators to power stations to keep electricity flowing.

The PG&E plan — approved by the California Public Utilities Commission June 11 to avoid cutting off 2 million people for days at a time as happened during the 2019 wildfire season — was to deploy portable truck-trailer generators to areas they were needed to keep the lights on that could produce 430 megawatts of electricity.

The greenies weren’t happy.

They insisted solar power in some form would be as reliable awhile being more green.

Then the heat wave hit along with 11,000 plus lightning strikes. The end result was to expose the green folly for what it was.

The heat wave got the ball rolling.

Read More [[link removed]] California To Allow Four Gas-Fired Plants To Stay Open

California has decided to allow keep four natural gas-fired power plants operating beyond year-end 2020, deciding the plants are needed to provide reliable electricity even though they contribute to climate change, Kallanish Energy reports.

The four plants had been scheduled to shut down by Dec. 31, 2020, under a state rule requiring coastal power plants to stop using ocean water for cooling.

The decision by the California Water Resources Control Board impacts privately owned power plants in Huntington Beach, Long Beach, Oxnard and Redondo Beach.

The first three plants were granted three-year extensions. The Redondo Beach plant got a one-year reprieve.

The extensions were granted as California struggled with a severe heat wave that resulted in electricity shortages and blackouts on Aug. 14-15 across the state.

Read More [[link removed]] EPA To Focus On Clean-Ups, Economic Growth

Environmental Protection Agency chief Andrew Wheeler on Thursday defended the Trump administration’s record on protecting the nation’s air and water and said a second term would bring a greater focus on pollution cleanups in disadvantaged communities and less emphasis on climate change.

In a speech commemorating the 50th anniversary of the EPA’s founding, Mr. Wheeler said the agency was moving back toward an approach that had long promoted economic growth as well as a healthy environment and drawn bipartisan support.

“Unfortunately, in the past decade or so, some members of former administrations and progressives in Congress have elevated single issue advocacy – in many cases focused just on climate change – to virtue-signal to foreign capitals, over the interests of communities within their own country,” he said.

Read More [[link removed]] Clean Energy Jobs Are Coming. Here's How To Make Sure They're Good Jobs

Joe Biden said at the Democratic National Convention that America should “lead the world in clean energy and create millions of new good-paying jobs.” Similar thinking underlies the Green New Deal, which declares a goal of “guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.”

So how do we actually create those kinds of family-supporting jobs, and give people the skills to fill them?

That’s the subject of a report released today by UC Berkeley’s Center for Labor Research and Education. It was commissioned by the California Legislature, and at 636 pages it’s an extremely thorough guidebook for policies the state might employ.

Read More [[link removed]] Workforce Development How One Southern California Desert Town Has Reopened Its Classrooms To Hundreds Of Elementary School Students

Inside classrooms, sneeze guards are set up at each desk and many students wear masks. On the playground at recess, students must stick to their designated play area in groups of up to 12. In the cafeteria, tables that could normally seat 16 students are now limited to four.

At Lucerne Valley Elementary in Southern California’s high desert, hundreds of students have returned to in-person learning and a dramatically different school day. The school was one of the first public schools in the state to receive a waiver to reopen for in-person instruction under regulations issued by Gov. Gavin Newsom in July. The new realities at Lucerne Valley offer a glimpse into what’s called a hybrid learning model and what lies ahead for other schools across the state that await their own chance to reopen.

“The challenge with distance learning in the desert is a big one. The best internet we have out here isn’t good,” said Peter Livingston, superintendent of Lucerne Valley Unified, northeast of San Bernardino. “Having kids in with their teachers is what we needed.”

Read More [[link removed]] Behind The 'Wild West' Of School Reopenings

An academic year in which public education will intersect with public health has created back-to-school shopping lists unlike any other for California’s schools as they attempt to transition toward in-person instruction once they have the state’s blessing.

Bakersfield’s Panama-Buena Vista Union School District plans to hire a manager to handle contact tracing for a system of 19,000 students and 4,000 employees.

Anaheim Union High School District spent more than $500,000 this summer on additional band instruments so students won’t have to share clarinets, saxophones and flutes to reduce risk of spreading the coronavirus.

Among the few California schools to physically reopen, Yreka Union High School District near the Oregon border is spending about 10% more than it would in any given year to hire more maintenance staff to support exhaustive cleaning efforts.

Read More [[link removed]] California Issues Rules For Opening Schools To High-Needs Students

The California Department of Public Health on Tuesday published rules for opening school campuses to small numbers of students with disabilities and other students who need in-person support and services that can’t be met through distance learning.

Gov. Gavin Newsom and Linda Darling-Hammond, president of the State Board of Education, announced two weeks ago the policy for opening up schools to students with “acute” needs, even in counties where all districts are closed because of high incidences of the coronavirus. Districts had been waiting for state guidance on how the policy would work.

One question the rules won’t answer is whether there will be enough teachers and staff members willing to go back to school amid continuing safety concerns over the pandemic. The rules make no mention of whether districts will need the express permission of employee unions to bring back some teachers and what would happen if unions discourage teachers from returning. The Newsom administration is letting local unions and districts decide those issues. It is unclear whether the guidance will simply enable districts to ask teachers to return to the classroom or create an expectation for them to do so.

Read More [[link removed]] On Or Off? California Schools Weigh Webcam Concerns During Distance Learning

As school districts across California move forward with distance learning, many are navigating the complicated realities of this year’s essential back-to-school item: webcams.

California state law requires students to interact with their peers and teachers every day during distance learning. Fostering those connections can be difficult without seeing faces, teachers and administrators say, but requiring cameras to stay on during class can be difficult for students who lack a stable internet connection or feel anxious on screen.

Some districts, like Lakeside Union in San Diego County, require students to keep their video on during class. In a distance learning environment where teachers and students can’t be in the same location, maintaining face-to-face contact is critical to keeping students connected to their teachers and other students, said Superintendent Andy Johnsen.

Read More [[link removed]] Lawmakers Fail To Pass Bills Reducing Number Of Tests For Teachers By Legislative Deadline

The end of the legislative session Monday meant the demise of three bills that would have allowed teachers to take fewer tests to prove they are ready to teach. But the Legislature also approved a trailer bill that will allow more teachers to take advantage of an executive order postponing tests.

Assembly Bill 1982 would have temporarily given teacher candidates the option to use university coursework to replace the required California Basic Educational Skills Test. Assembly Bill 2485 would have offered the same option in place of the California Subject Examinations for Teachers. Senate Bill 614 would have eliminated the Reading Instruction Competence Assessment and replaced it with a basic writing skills test on Teacher Performance Assessments.

The trailer bill extends a temporary reprieve Gov. Gavin Newsom gave to teacher candidates in May. It allowed those who couldn’t take required tests between March 19 and Aug. 31 of this year, because of testing center closures, to enter teacher preparation programs without passing the California Basic Educational Skills Test. It also allowed teacher candidates to enter internship programs without passing required tests in the California Subject Examinations for Teachers and to earn preliminary credentials without passing the Reading Instruction Competence Assessment. The trailer bill passed Monday extends the eligibility period to Aug. 31, 2021.

Read More [[link removed]] Infrastructure and Housing California Eviction Moratorium Is A 'Real Nightmare' For Renters To Understand--Here's What You Need To Know

After California passed a last-minute bill to suspend evictions just before this month’s rent checks came due, the federal government announced a moratorium on evictions just a day later, leaving tenants and landlords in the Golden State wondering how to make sense of it all.

“This whole area… can make your head spin,” Gov. Gavin Newsom acknowledged Wednesday after signing California’s new law on Monday, helping to avert potential evictions of an estimated 5.4 million renters.

Experts largely say that California’s legislation supersedes an order from the Centers for Disease Control and Prevention, and will be the dominant law in the state. It bans any evictions for back rent owed so far and forces landlords to civil court to collect debts, but requires renters to pay at least 25% of rent moving forward.

Renters are not automatically protected, however, and must take steps to get there.

Read More [[link removed]] Rental Eviction Bans May Topple Homebuying's Recovery

“The stability of the entire rental housing sector is thrown into question.”

Those are not my words, but I concur.

Doug Bibby, president of the National Multifamily Housing Council, wonders how his industry will survive after a week that saw California and President Donald Trump temporarily ban evictions, pushing off a landlord’s ability to toss out non-paying tenants until next year.

The coronavirus has made the landlord business difficult in numerous ways — and it’s getting worse with no simple solutions to fixing it. The big risk is that a collapsing rental industry could take down the recovering homebuying business, too.

It all starts with the pandemic, which devastated employment prospects for the renter class. Paying the rent became especially difficult after a weekly $600 jobless stipend evaporated.

Nobody seems to have a sensible and durable solution on how to save renters from being tossed to the streets or forced to cram in with pals or loved ones. Neither option is a good choice in the social-distancing era.

Read More [[link removed]] Failed Housing Legislation Couldn't Overcome Familiar Obstacles

Most everyone agrees California has a severe lack of affordable housing, yet a package of legislative measures aimed at doing something about it largely failed this year.

By one count, three of 15 major housing-production bills passed to the governor by the time the Legislature wrapped up its session for the year late Monday night.

Many of the bills succumbed to similar dynamics that felled other big pro-development efforts in the Capitol in recent years. One of the most prominent measures, carried by Senate President Pro Tem Toni Atkins of San Diego, had received majority votes in both houses of the Legislature, but still didn’t get passed because the clock literally ran out.

But that bit of procedural mystery — and hints of skulduggery — aside, the bills encountered tough opposition, maybe even more so than in the past.

Read More [[link removed]] Taco Bell Should Not Be California’s Solution For Student Broadband Access

In a time of ecological, political and social crises, it isn’t easy to command attention. Yet, occasionally, a simple image can cut through the noise. Last week, a photo of two children outside a Taco Bell captured this disgraceful moment in California history.

The students, seated on the sidewalk and hunched over a pair of laptops, weren’t deciding between a seven-layer burrito and a nacho supreme. Instead, they were trying to latch onto Taco Bell’s wireless network so they could get an education.

This is nobody’s idea of effective or equitable distance learning, but this is what we’ve been reduced to. In a state that is home to the fifth-largest economy in the world and the epicenter of the global technology industry, our students huddle outside of fast food restaurants for the tools they need to learn.

Opinion logoMore than 95% of California students began the 2020–21 school year in distance learning mode. It might be months before most kids make their way back into classrooms. For now, and the foreseeable future, most students will receive their education online — but where does that leave the 20% of California families that don’t have home internet access?

Read More [[link removed]] Editorial and Opinion Trump’s Housing Seizure

Governments during the pandemic have arrogated to themselves vast emergency powers, but the rule of law still matters. The Centers for Disease Control and Prevention’s sweeping ban on evictions this week tests the legal limits of emergency powers and sets a bad precedent.

The CDC order that takes effect Friday bans landlords from evicting tenants who claim they can’t afford to pay rent due to the pandemic. Congress in March banned evictions in federally subsidized housing through the end of July. But the CDC order encompasses all housing and extends through the end of this year.

Tenants who expect to earn less than $99,000 ($198,000 for couples) this year must merely sign an attestation that they lost income, have sought all available federal rental assistance, and would be homeless or forced to move in with someone if evicted. Landlords who want to remove nonpaying tenants would have to prove tenants are lying. Good luck.

Read More [[link removed]] To Prevent Blackouts, California Needs More Clean Energy--And A Bigger, Better Run Grid

California has been hit hard by record wildfires and abnormal heat, while a global pandemic silently persists, and for a few hours in August, rolling blackouts.

The blackouts prompted finger-pointing among state agencies, but after initial sensationalist headlines and social media speculation, we’re learning what caused them and how to avoid them in the future.

Despite claims from fossil fuel proponents and misinformed journalists, we can definitively say renewable energy or California’s path to 100% net zero carbon emissions did not cause the blackouts. California’s three energy agencies confirmed this, saying “renewable energy did not cause the rotating outages … clean energy and reliable energy are not contradictory.”

Read More [[link removed]] Steps California Can Take Now To Reimagine An Equitable Recovery

During the COVID-induced economic crisis, a great deal of attention has been focused on the provision of unemployment benefits and eviction moratoriums. But as important as these lifelines have been, they are not mechanisms for redressing economic inequality and structural racism.

To address structural issues, you have to focus on the actual structures. This is why radically new ways of funding infrastructure investment must be a central part of any agenda for an equitable economic recovery.

How do we actually get this done and do it in a way that these projects benefit rather than bulldoze disadvantaged communities? As detailed in our action plan “The Need for Equitable Economic Revitalization,” there are steps the state can take now to reimagine the Golden State’s recovery.

First, Sacramento should take the lead in creating a portfolio of “shovel-ready” projects statewide, helping private investors identify attractive investment opportunities matched with tangible community benefits. By then capturing economic growth arising from these projects as new revenue streams, state leaders can reinvest in communities and workers through dedicated infrastructure and workforce investments.

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