AB 2342 (Cervantes) — Assembly Committee on Jobs, Economic Development, and the Economy (April 26, 2022)
Summary
This is the Assembly Committee on Jobs, Economic Development, and the Economy analysis of AB 2342 (Cervantes), as introduced February 16, 2022, for a hearing on April 26, 2022, with Sabrina Cervantes as Chair. The subject is the Community Economic Resilience Fund Program. The analysis says the Legislature approved and the Governor signed legislation in 2021 to create the $600 million California Economic Resiliency Program (CERF). It says AB 2342 makes policy and technical changes to the CERF Program, including adding apprenticeship and pre-apprenticeship programs as eligible activities. It lists supporters such as the California Association of Local Conservation Corps and the National Small Business Advocacy Council, with no opposition on file.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“AB 2342 (Cervantes) — Assembly Committee on Jobs, Economic Development, and the Economy (April 26, 2022).”
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Date of Hearing: April 26, 2022
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY
Sabrina Cervantes, Chair
AB 2342 (Cervantes) – As Introduced February 16, 2022
SUBJECT: Community Economic Resilience Fund Program
POLICY FRAME: The individuals most impacted by the coronavirus emergency are also California’s
most economically vulnerable. As income disparities have grown, these individuals from historically
underinvested communities face even greater social-economic challenges. Research shows that the
inequality between the residents in low-income communities and those who reside in California’s most
affluent communities has dramatically increased in the past several decades. For example, the pretax
income among the highest 1% of California taxpayers increased from 9.82% in 1980 to 25.1% of total
income in 2013. During the last nine years, the pace of
these disparities has only increased.
California has responded to this growing crisis in
economic disparities through a range of programs
addressing unemployment, housing, homelessness,
health care deserts, inadequate infrastructure,
underperforming schools, underemployment, and other
issues related to low-incomes and underinvestment is
communities. The state has also advanced policies
with substantial funding to adapt and mitigate the
impacts of climate change.
In 2021, the Legislature approved and the Governor
signed legislation to create the $600 million California
Economic Resiliency Program (CERF) to build an
equitable and sustainable economic recovery from the
impacts of COVID-19 on California’s industries,
workers, and communities. [SB 162 (Budget), Chapter
X, Statutes of 2021] By strengthening the economy,
the program intends to help regions buffer the impacts
of the state’s transition to a carbon-neutral economy.
At the core of the program is the development of a regional plan, from which approximately $500+
million in implementation dollars will flow. The Governor’s proposed budget for 2022-23 aligns other
state actions to the program and the implementation of the regional plans specifically.
AB 2342 modifies the CERF Program to clarify certain implementation issues, as well as calling out
issues that need to be addressed in order to have an inclusive economic, community, and workforce
development grant program. Among the outstanding issues are the program impacts of the shift in
funding from federal America Rescue Plan Act dollars to General Fund and the Planning Phase Draft
Guidelines published the week of April 18, 2022.
The analysis includes information on the CERF Program, growing income disparities among Californian
regions and population groups, regional approaches to increasing economic security, and related
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legislation. There is no known opposition to this bill. Suggested amendments are included in Comment
9.
SUMMARY: Makes both policy and technical changes to the CERF Program. Specifically, this bill:
1) Specifies that the requirement that the grant funds be distributed to regional programs and strategies
that directly complement state and federal investments, means investments in infrastructure, business,
and workforce development.
2) Specifically adds state and federally recognized apprenticeship and pre-apprenticeship programs, and
other workforce programs that support career pathways to high road jobs as activities eligible for
funding.
3) Expands the group of community capacity-building programs with which the Regional Collaboratives
are required to engage to also include similar state-supported local and regional economic, workforce,
and community development programs and initiatives.
4) Requires the Regional Collaboratives to specifically identify and invite into the regional engagement
process other local and regional planning efforts whose missions are aligned with the purposes of
CERF.
5) Expands on the workforce development components of the regional economic recovery plans to
specifically include career pathways for individuals with less than a two-year degree and career
pathways to high road jobs. The current program could be interpreted as only serving those workers
who are already skilled to be in high jobs.
6) Requires a copy of the report to the Joint Budget Committee to be also be submitted through the Chief
Clerk’s Office and copies provided to related policy committees.
7) Requires a copy of the CERF annual report to be available for public review through the internet
websites of each agency of the Inter-Agency Leadership Team.
8) Makes other technical and organizational adjustments.
EXISTING LAW:
1) Program Formation: Establishes the Community Economic Resilience Fund Program, within the
Workforce Services Branch of the Employment Development Department, to build an equitable and
sustainable economic recovery from the impacts of COVID-19 on California’s industries, workers,
and communities, and to provide for the durability of that recovery by fostering long-term economic
resilience in the overall transition to a carbon-neutral economy.
2) Administration: Specifies that the program is to be jointly administered by an inter-agency
leadership team comprised of the Labor and Workforce Development Agency, the Office of Planning
and Research, and the Governor’s Office of Business and Economic Development. The Inter-Agency
Leadership Team is directed to jointly be responsible for planning, oversight, and decision-making,
including, but not limited to all of the following:
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a) Identifying the geographic boundaries of regions in a way that prioritizes economic recovery and
transition strategies and is consistent with other state definitions of regional economic and labor
markets.
b) Creating program guidelines and evaluation metrics that, at a minimum, support federal reporting.
c) Designing a competitive grant structure for CERF investments.
d) Developing technical assistance and evaluation infrastructure.
e) Tracking and reporting progress and deliverables.
3) Program Design: Expresses legislative intent that CERF be designed to build a more robust,
sustainable, and equitable recovery across all sectors of California’s economy.
4) Policies to Guide Implementation Grants: Requires the Inter-Agency Leadership Team to develop
policies to distribute grant funds to regional programs and economic development strategies that
directly complement state and federal investments in multiple sectors, including housing,
transportation, advanced energy, broadband, and natural resources, and connect, in each of those
sectors, to any existing or emerging high road training partnerships.
5) Role of the State CERF Office: Requires CERF to do all of the following:
a) Provide financial support to establish and support high road transition collaboratives in designing
region- and industry-specific economic recovery and transition strategies.
b) Focus on those regions and communities most affected by the economic impact of COVID-19, as
specified, and whose economic distress has been exacerbated by COVID-19 and compounded by
macroeconomic impacts, such as the global transition to carbon neutrality or the western US
state’s acute vulnerability to climate change impacts.
6) Role of the Regional Collaboratives: Requires each Regional Collaborative to:
a) Support a transparent and inclusive processes for shared problem solving to advance long-term
prosperity and equity.
b) Work directly with the community capacity-building programs initially established the regional
climate collaborative program to support active and equitable community engagement.
c) Have a balanced representation from labor, business, community, government, and other
stakeholders, including, but not limited to, economic development, philanthropy, education, and
workforce partners. The issue of balanced representation will be addressed more through program
guidelines.
7) Planning Grants: Requires the planning grants to be awarded on a competitive basis to areas of the
state disproportionately impacted by COVID-19 with at least one Regional Collaborative being
awarded in each of the state’s 13 regions.
a) State Planning Priorities: Requires the planning grant evaluation criteria to be consistent the
state planning priorities, which are intended to promote equity, strengthen the economy, protect
the environment, and promote public health and safety in the state, including in urban, suburban,
and rural communities, shall be as follows:
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i) To promote infill development and equity by rehabilitating, maintaining, and improving
existing infrastructure that supports infill development and appropriate reuse and
redevelopment of previously developed, underutilized land that is presently served by transit,
streets, water, sewer, and other essential services, particularly in underserved areas, and to
preserving cultural and historic resources.
ii) To protect environmental and agricultural resources by protecting, preserving, and enhancing
the state’s most valuable natural resources, including working landscapes such as farm, range,
and forest lands, natural lands such as wetlands, watersheds, wildlife habitats, and other
wildlands, recreation lands such as parks, trails, greenbelts, and other open space, and
landscapes with locally unique features and areas identified by the state as deserving special
protection.
iii) To encourage efficient development patterns by ensuring that any infrastructure associated
with development, other than infill development, supports new development that does all of
the following:
(1) Uses land efficiently.
(2) Is built adjacent to existing developed areas to the extent consistent with the priorities
specified pursuant to subdivision (b).
(3) Is located in an area appropriately planned for growth.
(4) Is served by adequate transportation and other essential utilities and services.
(5) Minimizes ongoing costs to taxpayers.
b) Federal Guidelines: Requires the evaluation criteria to be consistent with any applicable
guidelines set by the federal government, as specified.
c) State Guidelines: Requires the Inter-Agency Leadership Team to establish additional criteria and
detailed metrics in the program guidelines, consistent with the goals of the program, as specified,
including for the following core activities:
i) Identification of a skilled and impartial convener to build an inclusive planning table, as
specified, and facilitate and collaborate with each designated partner entity to develop
the transition plans; to solicit, consider, and respond to comments from collaborative
members; and to provide equitable public participation and input.
ii) Development of one or more regional and subregional economic recovery and transition plans
which meet all the following criteria:
(1) Address essential elements of a high road strategy, including economic diversification,
industry planning, workforce development, and the identification and integration of current
or supplemental safety net programs.
(2) Include industry cluster and labor market analysis, with actionable research and
consultation from the University of California or other expert institutions.
(3) Focus on economic recovery, growth, and resilience across multiple sectors.
(4) Prioritize the creation of high-quality jobs and equitable access to them, and emphasize,
where possible, the development of sustainable and resilient industries, such as renewable
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energy, energy efficiency, carbon removal, and zero-emission vehicles, advanced
manufacturing, agriculture and forestry, and climate restoration and resilience.
iii) Dissemination of the transition plans to all interested parties. The plan or plans provided by
each high road transition collaborative are required to be posted on the Labor and Workforce
Development Agency’s website.
8) Implementation Grants: Require implementation grants to be informed by the work of the Regional
Collaborative and awarded on a rolling and competitive basis. Implementation grants will provide for
a small initial tranche of funding to be awarded to economic diversification pilots in those regions
already engaged in economic recovery and transition planning.
d) Timelines: Sets the following funding deadlines for implementation grants:
i) A majority of the funding is to be used by June 30, 2024.
ii) Each grant recipient must provide a plan to fully spend or obligate funds by December 31,
2024 and shall pay all obligations by December 31, 2026.
e) Grant Criteria: Requires that implementation grants meet all of the following requirements:
i) Support work is prioritized through the high road transition collaborative planning process.
ii) Demonstrate support of the regional intermediary and alignment with the high road transition
collaborative plan.
iii) Support labor standards, where applicable, such as prevailing wage, project labor agreements,
or community workforce agreements.
iv) Address geographic equity, accounting for differences in urban, suburban, rural, and tribal
communities, and emphasize investment in underserved jurisdictions.
v) Organize strategies by industry or geography, or both, within and across regions, with the
potential to focus on region-wide strategies or on one or more specific priority projects within
a region.
vi) Include a range of activities related to economic diversification, including, but not limited to,
creating innovation hubs for key growth industries, expanding incubator or accelerator
programs that provide technical assistance for small business owners to connect to larger
industry clusters, and other projects and activities that advance a high road economy.
vii) Coordinate with, advance, and complement, without supplanting, state and federal
infrastructure investments.
viii) Align with regional workforce needs by linking directly to high road training partnerships
or partnerships, high road construction careers training programs, and other workforce training
initiatives that support career pathways to high road jobs, wherever such partnerships exist or
emerge in the region.
9) Defining the Grant Award Process: Requires the Labor and Workforce Development Agency,
working with the Office of Planning and Research (OPR), and the Governor’s Office of Business and
Economic Development (GO-Biz), to manage the design and operation of all program solicitation and
award processes, including the administration of and accountability for both the planning and
implementation grants.
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10) Role of the Workforce Services Branch: Requires the Workforce Services Branch of the Economic
Development Department (EDD) to manage funds and contracts under the direction of the Inter-
Agency Leadership Team. This includes, but is not limited to, all of the following:
a) Solicitation, management and execution of all grants and contracts, based on guidelines developed
by the Inter-Agency Leadership Team.
b) Oversight and monitoring for fiscal integrity.
c) If necessary and as applicable, federal reporting and compliance are consistent with the federal
American Rescue Plan Act of 2021 (Public Law 117-2) and Department of the United States
Treasury guidance and regulations.
d) Quarterly reporting to the Inter-Agency Leadership Team.
e) Annual reporting to the Legislature.
f) Procurement of a comprehensive third-party evaluation to be completed, with guidance and
oversight from the Inter-Agency Leadership Team, no less than six months after all available
outcome data is available.
11) State-Level Reporting: Requires annual reporting to the Legislature:
a) Commencing December 31, 2022, and annually thereafter, a report is to be submitted to the Joint
Legislative Budget Committee and the applicable Senate and Assembly budget subcommittees.
The report is to include:
i) A detailed summary of grants awarded;
ii) Fiscal and federal compliance; and
iii) Progress on individual program objectives and related high road metrics, including equity,
inclusivity, job quality, and sustainability, as designated in program guidelines and assessed by
inter-agency program staff.
b) Commencing June 31, 2023, and annually thereafter, a supplemental report is to be submitted to
the Legislature, which includes key findings on regional trends in sustainable economic recovery,
and common challenges in the development and implementation of high road transition strategies.
12) Grantee Reporting: Requires all CERF grantees to fulfill the CERF outcome and reporting
requirements, as specified. Copies of these reports are required to be posted on the website of each
member of the Inter-Agency Leadership Team. The reports are to include:
a) A detailed analysis of grantee challenges and achievements, whether relating to convening an
inclusive regional planning process, developing a comprehensive high road recovery plan, or
implementing a strategy to create high road jobs.
b) Reports on the grantees’ measurable progress toward target outcomes, including job creation,
increase in the number of jobs per region, average increases in hourly wages of entered employed
individuals placed in jobs, job retention, number of individuals impacted through services, such as
training, supportive services, or job placement, as specified.
c) A more general discussion of the challenges and opportunities of designing and implementing a
high road transition vision in a particular place or industry.
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d) At a minimum, grantees are required to report the number and types of stakeholders directly
involved in CERF planning or investing, the nature and extent of their participation, and related
efforts to build capacity among community, labor, local government, or other key stakeholder
groups.
13) Definitions: Defines the following terms:
a) “High road” means a set of economic and workforce development strategies to achieve economic
growth, economic equity, shared prosperity, and a clean environment. The strategies include, but
are not limited to, interventions that:
ix) Improve job quality and job access, including women and people from underserved and
underrepresented populations.
x) Meet the skill and profitability needs of employers.
xi) Meet the economic, social, and environmental needs of the community.
b) “High road construction careers” are high road training partnerships that invest in regional
training partnerships comprised of local building trades councils, workforce, community, and
education interests that connect to state-approved apprenticeship programs, that utilize the
standard Multi-Craft Core preapprenticeship training curriculum and provide a range of supportive
services and career placement assistance to women and people from underserved and
underrepresented populations.
c) “High road transition collaboratives” or “collaboratives” are broad-based regional groups
convened by a skilled and impartial intermediary to plan for economic recovery and transition to a
sustainable and equitable economic future. These collaboratives shall prioritize equity,
sustainability, and job quality, and advance a shared prosperity where workers and communities
across California’s diverse regions share equally in the benefits of a carbon-neutral future.
Minimum membership and representation shall be as described in subdivision (c).
d) “High road training partnerships” means an initiative or project that models strategies for
developing industry-based, worker-focused training partnerships, including labor-management
partnerships. High Road Training partnerships operate via regional, industry- or sector-based
training partnerships comprised of employers, workers, and their representatives, including
organized labor, community-based organizations, education, training, social services providers,
and labor market intermediaries. High Road Training partnerships demonstrate job quality
standards and employment practices that include, but are not limited to, the following:
i) Provision of comparatively good wages and benefits, relative to the industry, occupation, and
labor market in which participating workers are employed.
ii) Payment of workers at or above local or regional living wage standards as well as payment at
or above regional prevailing wage standards where such standards exist for the occupations in
question.
iii) A history of investment in employee training, growth, and development.
iv) Provision of opportunities for career advancement and wage growth.
v) Safe and healthy working conditions.
vi) Consistent compliance with workplace laws and regulations, including proactive efforts to
remedy past problems.
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vii) Adoption of mechanisms to include worker voice and agency in the workplace.
14) Exemptions from Administrative Review: Exempts all criteria, guidelines, and policies developed
for the administration of CERF to be exempt from the state’s standard rulemaking provisions.
15) Contingent Enactment: Specifies that activation of the CERF Program is dependent upon an
appropriation by the Legislature, as specified. Once activated, the Workforce Services Branch of
EDD is required to post notice of the appropriation on its home page and send notice of the
appropriation to the Legislative Counsel, as specified.
FISCAL EFFECT: Unknown
COMMENTS & CONTEXT:
1) CERF Examined: AB 2342 makes modifications to the California Economic Resiliency Program,
which was established in 2021 to build an equitable and sustainable economic recovery from the
impacts of COVID-19 on California’s industries, workers, and communities. In addition, the program
is intended to provide for the durability of that recovery by fostering long-term economic resilience in
the overall transition to a carbon-neutral economy.
These goals are achieved through a two-part competitive grant program. In phase one, 13 High Road
Transition Collaboratives (Collaboratives) are selected to develop region- and industry-specific
economic recovery and transition strategies (transition strategies). Each of the regions is provides
with a $5 million grant to financially support the establishment of inclusive planning tables within
which public and private sector stakeholders can address and resolve significant community
development issues. Tribal Governments will be awarded $20 million to support their planning
activities and they are also welcome and encouraged to participate in the work in 13 regional
Collabroatives.
In phase two, upwards of $500 million will be awarded to projects, including construction of
infrastructure and facilities, enhanced services, and other initiatives that flow from the transition
strategies. In order to qualify for implementation funding, the project has to be consistent with the
transition strategy.
CERF is intended to build on and help operationalize policies and actions related to GO-Biz “Regions
Rise Together Initiative;” California Workforce Development Board’s high road training partnerships
and transition work; OPR’s Climate Equity Program, including the Regional Climate Collaborative
Program; and the state’s overall work on achieving a net-zero energy transition.
Chart 1 - CERF Implementation Timelines
Month Program Progress
Release Planning Phase Draft Guideline for Round 2 of public input
April 2022 Host Guideline Workshops for Public Input
Release Evaluation/TA RFP for Phase 1 - Planning Phase Solicitation
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Incorporate comments from Round 2 Public Comment Period
Release Planning Phase Solicitation
May 2022
Host Bidders Conference
Announce Tribal Set-aside and Host Tribal Listening Session
Award Planning Phase Grants and Initiate Contracting Process
July 2022 Begin Drafting Phase 2 – Implementation Phase Guidelines
Begin Drafting Tribal Set-aside Guideline
Release Implementation Phase Draft Guidelines for Public Comment
Fall 2022 Incorporate Comments on Implementation Phase Guidelines
Host Phase 2 - Implementation Phase Guideline Workshops
Release Implementation Phase Solicitation
Winter 2023
Release Tribal Set-aside Solicitation
February 2024 Phase 1 - Planning Phase Encumbrance Deadline
September 2024 • Phase 1 - Planning Phase Expenditure Deadline
December 31, 2026 All Obligation Paid Deadline (from statute)
• Source: https://opr.ca.gov/economic-development/just-transition/docs/20220325-CERF_Timelines.pdf
With the draft planning phase guidelines released less than a week ago, there are many discussions as
to how the shift in funding and the state’s record breaking recovery from the economic impacts of
COVID-19 have impacted CERF’s focus and implementation requirements. Among other issues, the
committee should consider deeper engagement on CERF to ensure that committee priorities such as
small businesses and entrepreneurship will be addressed.
Further, while this economic transition to a carbon-neutral economy is driven by the need to address
climate change, it also represents an opportunity to redress historical inequities. Equal is not
equitable. If those that have historically been excluded are not placed front and center during this
regional economic transition planning exercise, the result of the expenditure of $600 million could be
to intensify current economic disparities and systemically place these Californians further back in the
line.
2) Growing Income Inequality: In the pre-coronavirus economy, California’s dominance in
innovation-based industries was unquestionable, however, even with 120 months of uninterrupted
economic growth, the divide between the middle and lower-income households and the top income
earners was accelerating. The coronavirus has only deepened California’s income inequality, with the
state’s most vulnerable being at the greatest risk for poor health outcomes, having the least amount of
savings to survive the economic impacts of the Stay-at-Home Order, and being most likely to work in
low-paid and least protected essential businesses.
According to April 2020 research by the McKinsey Institute, 57 million jobs are at risk in the US due
to the necessary, but extreme, steps that are taking place to stop the spread of the coronavirus. In
California, McKinsey estimates that certain sectors will be more severely impacted than others. As
examples of sectors with the highest vulnerability, in the accommodation and food service sector, an
estimated 1.6 million jobs are at risk (95% of all jobs in the sector), and, in the arts and entertainment
sector, 287,000 jobs (87% of all jobs) are at risk. The economic impacts are, however, much more
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widespread. The McKinsey Institute reports that 48% of jobs in the construction sector, 49% of jobs
in real estate, and 37% of jobs in manufacturing are at risk, to name only a few sectors identified as
having more than 30% of their jobs at risk.
In addition to losing their jobs, many of these impacted workers have little formal education beyond
high school and possibly a few additional years of higher education coursework and/or occupational
training. In the last recession, individuals without four-year degrees faced the greatest challenges in
becoming reemployed and remained unemployed for significantly longer time periods.
3) California’s Robust Economic Recovery: In March 2022, statewide unemployment is 4.9%, with a
labor participation rate of 61.8, based on a substantially similar employment base of 18.1 million.
Sector employment was up from the prior year in every industry sector. Governor Newsom released a
statement highlighting the following regarding the March 2022 employment data:
In March, California added 60,200 nonfarm payroll jobs to the economy. Fewer than one million
Californians are unemployed for the first time since February 2020.
California has now regained nearly 90 percent (2,463,400) of the 2,758,900 nonfarm jobs lost
during March and April of 2020 due to the COVID-19 pandemic.
Of the 431,000 nonfarm jobs the nation gained in March, California accounted for 14 percent of
those gains, surpassing the state’s 11.5 percent share of employment in the U.S.
California has enjoyed month-over-month gains in nonfarm jobs in 13 of the past 14 months
totaling a 1,380,100 job gain over that time period.
For the second month in a row, none of California’s 11 industry sectors lost jobs, and Leisure &
Hospitality (+14,800) once again posted the largest job increase, with Limited-Service Eating
Places being its main driver.
Four of California’s 11 industry sectors have now fully regained all jobs lost due to the COVID-19
Pandemic in March and April 2020: Education & Health Services, Professional & Business
Services, Trade, Transportation, and Utilities, and Construction.
More than 82% of workers were in full-time employment, with 776,000 (4.3%) individuals working
part time involuntarily. Involuntarily part-time employment is down 30.3% from March 2021. The
number of persons who are not in the labor force, but want a job decreased by 12.7% from the prior
year. Based on aggregate employment data, California is having a robust economic recovery, which
has consistently outpaced the rest of the US.
4) The Challenge of Income Inequality during COVID-19: While California’s dominance in
innovation-based industries is unquestionable, the divide between the middle- and lower-income
households and the top-income earners is accelerating. Even when California’s unemployment rate
was at historic lows pre-pandemic, unemployment within certain geographic regions and population
groups remained significantly higher, as did the number of people in the state who were not
participating within the core economy.
The coronavirus has deepened California’s income inequality, with the state’s most vulnerable being
at the greatest risk for poor health outcomes, having the least amount of savings to survive its
economic impacts, and being most likely to work in low-paid and least protected essential businesses.
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A closer look at disaggregated employment data reveals a bifurcated economic recovery. In March
2020, California reported an unemployment rate of 5.1% as compared to the US rate of 4.5%. From
the employment side, this represents 18.1 million people in California, with 82.5% being employed in
full-time work (based on a 12-month moving average). During this same period, three of California’s
58 counties had unemployment, below 3.0%, with San Mateo County reporting the lowest at 2.5%
(based on not seasonally adjusted data). Colusa County (21.4%) was reported as having the highest
unemployment rate among counties in March 2020.
Two years later (March 2022), statewide unemployment is 4.9%, just slightly lower than 5.1%
reported in March 2020. As noted in the prior comment, employment by industry sector is up in every
sector, and three of the 11 sectors having recovered all jobs. However, the disparities have grown.
Chart 1 – Selected Data on Unemployment shows geographic and demographic unemployment-
related information for the year the World Health Organization announced the that COVID-19 was a
global pandemic and the following two years.
Chart 1 - Selected Data on Unemployment (March 2020, 2021, and 2022)
Unemployment Rate (Not Seasonally Adjusted)
Unemployment Rate (Not Seasonally Adjusted)
(12 month moving average)
March March March March March March
2020 2021 2022 2020 2021 2022
California California
5.1% 8.2% 4.2% 4.1% 11.1% 6.3%
(comparable rate) (comparable rate)
Colusa County 21.4% 15.4% 12.5% Blacks 5.2% 13.9% 10.5%
Imperial County 20.4% 15.7% 12.3% Hispanics 4.7% 12.5% 6.9%
Los Angeles County 5.6% 10.9% 4.9% Whites 4.0% 10.8% 5.9%
Orange County 4.19% 7.0% 3.1% 16 to 19 years old 15.1% 24.5% 13.6%
Riverside County 4.7% 7.7% 4.3% 20 to 24 years old 7.6% 17.5% 10.1%
Sacramento County 4.3% 7.4% 4.0% 25 to 34 years old 4.1% 11.7% 6.1%
San Bernardino County 4.4% 7.8% 4.3%
San Luis Obispo County 3.5% 5.8% 2.8% *The Employment Development Department reports
a March 2021 (12-month moving average) Labor
San Mateo County 2.5% 5.0% 2.3% Participation Rate (LPR) of 61.8%. The LPR for
veterans is 43.2% vs nonveterans LPR of 64.6%.
Tulare County 13.2% 11.6% 8.4%
Source: www.edd.ca.gov
As illustrated in Chart 1, the disparities among population groups continued, and most cases increased
for certain areas of the state and individuals from certain demographics. For example, unemployment
among Blacks in March 2020 was at a historic low of 5.2%, which was still above the state average of
4.1%. One year into COVID-19 and the disparity between the rate of Black unemployment and the
statewide rate substantially increased (13.9% compared to 11.1%). Two years since the beginning of
the pandemic, the unemployment rate for Blacks is reported as 10.5% versus 6.3% for the workforce
as a whole. From the beginning of the pandemic to March 2022, the disparity between the
unemployment rate for Blacks has grown from 1.1% in March 2020 to 2.8% in March 2021 to 4.2% in
March 2022.
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The disparities shown in these charts are driven by and also influence a range of poor economic and
societal outcomes, including, but not limited to, limited educational attainment, economic insecurity,
poor health outcomes, negative engagements with law enforcement, and lack of a safety net for the
elderly and individuals with special needs. COVID-19 magnified these effects, further putting strains
on already struggling low-wage workers, particularly in the Black and Latinx communities.
The California Latino Economic Institute released a policy brief in December 2020, which provides
further data on the disparate and growing negative impact of COVID-19 on Latinos in California.
Among other findings, the briefing noted the following:
Latinos are overrepresented among California’s COVID-19 cases and deaths—59% of cases and
49% of the state’s deaths.
Latino overrepresentation in California’s cases has increased since April 2020.
Nearly 12% of California Latinos are currently uninsured—double the rate of other groups.
Latino unemployment rates are double those from the same time last year.
Nearly two-thirds of California Latinos report experiencing a loss of employment income since
March 2020.
Over 40% of Latinos currently report that it is somewhat or very difficult to pay their usual
household expenses in the last seven days.
Over three-quarters of California small business owners report that COVID-19 has had a moderate
to large effect on their businesses.
There are a number of reasons that contribute to the disparate health impacts of COVID-19, including
economic differences. During COVID, Latinos and Blacks have comprised a significant component
of the state’s essential workforce. While a majority of White workers have jobs that allow them to
work from home and decrease potential COVID-19 exposure, Latinos and Blacks, due to economic
circumstances, have jobs in high-risk environments.
This increased exposure to COVID-19, combined with the socio-economic impacts on underlying
health, resulted in a statistically higher number of cases and deaths compared to the group’s percent of
the population. Chart 2 provides information from the California Department of Public Health
relating to COVID-19 cases in California by race and ethnicity. Data is current as of April 21, 2022.
Chart 2 - COVID-19 Case Loads and Outcomes by Race and Ethnicity
Race/Ethnicity Percent Percent Percent CA
No. Deaths
Cases Deaths population
Latino 47.5% 38,156 43.7% 38.9%
White 24.5% 29,973 34.4% 36.6%
Asian 8.9% 9,523 10.9% 15.4%
African American 5.3% 6,049 6.9% 6.0%
Multi-Race 1.1% 1,302 1.5% 2.2%
American Indian or Alaska Native 0.5% 410 0.5% 0.5%
Native Hawaiian & other Pacific Islander 0.7% 546 0.6% 0.3%
Other 11.6% 1,293 1.5% ---
Total with data 100% 85,751 100% 100%
Source: California Department of Public Health, accessed April 21, 2022
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The chart above, All Cases and Deaths Associated with COVID-19 by Race and Ethnicity, represents
data from 8,566,404 total cases, with 19% of those cases missing race/ethnicity. There are a total of
89,255 deaths, with approximately 2% of those deaths missing race/ethnicity.
5) Helping Communities become Investment Ready: The geographic targeting of economic and
community development programs is based on the development principle that focusing significant
incentives and other resources to lower-income communities allows these communities to more
effectively compete for new businesses, retain existing businesses, and stop or slow the spiraling
effects of poverty and unemployment. Geographically targeted approaches to economic and
community development are designed to result in increased tax revenues, higher rates of private
investment, less reliance on public health and social services, and lower public safety costs.
A central component of the state/region partnership model is its potential to assist at-risk communities
in stopping the downward spiral of poverty and (re)build communities with economic and social
promise. In the last decade, there has been a renewed interest by institutional investors, among other
investors, in identifying communities that have turned the corner and now represent unique economic
opportunities. These communities are sometimes referred to by investors as emerging domestic
markets (EDMs).
EDMs are people, places, or business enterprises with growth potential that face capital constraints
due to systematic undervaluation as a result of imperfect market information. While not every low-
income neighborhood in California is ready for private sector investment, many neighborhoods can
become investment ready through effective partnerships between the nonprofit, private, and public
sectors.
The demographics of EDMs include minority- and women-owned firms, urban and rural
communities, companies that serve low-to-moderate-income populations, and other small and
medium-sized businesses. The increase in investor interest is driven, in part, by the recognition of the
changing demographics in the US, which are resulting in a significant increase in minority purchasing
power and business development by minority-owned firms.
Both the California Public Employees Retirement System (CalPERS) and the California State
Teachers Retirement System adopted EDM investment goals for their entire portfolios. Under its
California Initiative, which began in 2001 and focuses on historically underserved areas. The 2020
California investment report was prepared for CalPERS by Pacific Community Ventures, who is also
a small business lender that participates in programs provided through the Small Business Finance
Center. In 2020, CalPERS’ total investment in California was $43.6 billion or 11.0% of its $395.8
billion investment portfolio, as of June 30, 2020. Further, an estimated 168,086 jobs were supported
as a result of CalPERS’ private markets investments in California. CalPERS private equity invested
in 144 companies for approximately $800 million resulting in 38,314 new, retained, or otherwise
supported jobs.
California has no other similar program that could possibly outpace the volume of investments large
institutional investors can make. Experience shows that adopting policies and programs that support
investment by institutional investors is sound economic policy.
6) Examples of Regional Approaches to Upward Mobility: In February 2019, the Assembly
Committee on Jobs, Economic Development, and the Economy (JEDE) began a series of hearings
examining how public and private sector initiatives were being used or could be used to support
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upward mobility, reduce racial disparities, and address climate change. Three primary themes
emerged from these hearings, being the need to:
Upskill individuals to meet market challenges;
Establish integrated and accountable governance structures to better support businesses, program
and service providers, and individuals; and
Remove barriers for start-ups, entrepreneurs, and expanding businesses, including manufacturers.
In order to advance the JEDE Committee’s understanding of how sustainable and inclusive economic
strategies can actually be implemented in the real world, a field hearing was conducted outside of the
confines of the State Capitol, which highlighted regional initiatives in the Inland Empire. The keynote
presentation by Dr. Karthick Ramakrishnan, Chair of the Center for Social Innovation at the
University of California, Riverside, highlighted a number of regional initiatives being conducted
within the Inland Empire. Among other initiatives presented, Dr. Ramakrishnan discussed Inland
California Rising, an initiative he co-launched in February 2019 and which hosted summits in both of
its partner regions, the Inland Empire and the San Joaquin Valley. The following is a selection of
other initiatives discussed in the course of the hearing:
GenerationGO/Vision2Succed: An initiative of San Bernardino County using its local workforce
board as the facilitator. The purpose of GenerationGO is to connect K-12 schools, community
colleges, and businesses to create and enhance career pathways and provide hands-on training.
After several successful years, both the scope and geographic footprint are being expanded.
Consortium for Excellence in Logistics: The mission of this initiative, facilitated by the Inland
Empire Economic Partnership, is to leverage the region’s large number of warehouses and
strategic location to position the Inland Empire as a supply chain and logistics hub. By fully
embracing the leadership role, the consortium believes the Inland Empire can drive innovation
within the sector resulting in economic growth and better paying jobs while still providing
environmental and societal benefits.
Inland Economic Growth & Opportunity (IEGO): This initiative, supported by the Community
Foundation, is a network of business, government, educational, and nonprofit institutions, working
to better align workforce and economic development efforts. Their objective is to increase high-
paying quality jobs, increase opportunities for advanced manufacturing, and accelerate the growth
of promising emerging industries (such as IT, cybersecurity, and battery storage).
JEDE’s hearing aligned with Governor Newsom’s Region’s Rise Together, which was led by GO-Biz.
Core components of CERF grew from these increasingly more inclusive regional engagements and
initiatives.
7) Roadmap to Shared Prosperity: The CERF Program is the culmination of several interesting
initiatives, including COVID-19 economic recovery, a transition to a carbon-neutral economy, and the
regional work of the California Economic Summit. The California Economic Summit is a year-round
collaboration of over 750 public and private stakeholders who annually meet to share their work, be
inspired, and plan for the following year’s activities. The Work of the Economic Summit is facilitated
by California Forward and the Roadmap to Shared Prosperity. The 2021 Roadmap to Shared
Prosperity outlined the California Economic Summit’s plans for a comprehensive agenda to address
the state’s biggest challenges with a triple bottom line approach.
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Supporting the training and upskilling of workers within a strategic plan tied with the Commission
on the Future of Work and efforts to increase worker engagement and empowerment.
Creating the California Dream Index, a new scorecard for tracking the state’s progress toward
improving economic mobility.
Issuing recommendations to guide Community Development Financial Institutions, governments,
financial institutions, and other capital providers to help strengthen businesses by transforming
pathways to capital and addressing social, racial, and institutional systemic issues.
Advancing the implementation of a regional, scalable, data-driven prototype for employer
engagement with community colleges meant to address systemic barriers students face in
accessing work-based learning and job placement opportunities, while strengthening relationships
between colleges, employers, industry associations and regional business intermediaries like local
economic development corporations.
A key impediment to moving forward on these initiatives is the limited capacity of regional
collectives. While many policymakers call for emphasizing interconnectivity, collaboration, and
equity to help regions create economic recovery strategies in the wake of COVID-19 and growing
income inequality, few public programs support these activities. Under the CERF Program, each of
the 13 regions will receive $5 million for preparing inclusive planning efforts.
8) What would Inclusive Planning Look Like: In developing CERF Program guidelines, several
rounds of public comments were held and at least one more is planned. Among other organizations,
Assemblymember Cervantes, who chairs the JEDE Committee, submitted comments calling for:
Starter Kits with Basic Demographic Profiles: Each region should begin its engagement and
planning process with a state-provided Starter Kit, including a basic demographic profile. Regions
should be encouraged to supplement this data while also identifying its source and how the data
provides for a more inclusive and sustainable understanding of who comprises the region…The
mission of the Starter Kit is to lay the foundation for a regional transition plan that is inclusive of
all members of the community, including those participating in the formal and informal economy;
attending school, college, and workforce training; working from home; with a known disability; or
being served by a social service agency or nonprofit, among others. Much of this data is held by
or can most cost-effectively be accessed by state government entities.
Benchmark for Inclusion: The Starter Kits will provide regions with immediate data from which
they can prepare written outreach plans that also set benchmarks for tracking and evaluating
whether all community members have sufficient representation at the planning table…The success
of CERF is dependent on deep community engagement. People, especially those who have been
historically overlooked, will need to see concrete evidence that the project “sees” who they are and
the realities of their life. Collaboratively developed benchmarks are foundational to an inclusive
planning table.
Technology Supports Inclusion: In cases where broadband penetration is low or more
community input is desired, low cost and broadly available technologies can be loaded into tablets
and smartphones so community members can canvas door-to-door or at high traffic locations such
as parks.
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Building On-ramps to the High-road: A central tenant of the CERF Program is the creation of
quality jobs and the development of a high-road transition to a carbon-neutral economy.
Achieving this important goal will require specifically designed on-ramps for those individuals
who may not currently have the skills to participate in training for a high-road job today. With
20% of Californians having a high school diploma/GED or less formal education, building on-
ramps to viable career pathways is essential.
In addition to public comment opportunities, the Irvine Foundation has funded a series of regional
forums to help communities prepare for CERF. The Irvine Foundation has funded a partnership
between PolicyLink and California Forward so that they can jointly convene, share information, and
then document conversations within the regions. More information on these gatherings can be found
here. As of the publication of this analysis, convenings have been held in the San Joaquin Valley,
Eastern Sierra, Orange County, Inland Empire, and the Redwood Coast.
One of the reoccurring themes of these gatherings is how will this engagement process be different.
How will historically excluded voices get heard this time. Several groups have recommended that
inclusive planning tables can only be achieved if there are multiple ways in which people can directly
participate in meetings, discussions, and prioritization of projects. There must be benchmarks with
metrics so inclusion and participation can be respectfully tracked and evaluated to ensure diverse
representation and participation actually occur. If certain groups or geographic regions are found to
have lower levels of participation, specific additional steps should be required to encourage broader
participation. Even the best intentions can sometimes fail to bring everyone into the process.
Tracking and monitoring through set benchmarks will also alert the region when their selected
outcomes are not the result of an inclusive decision making process.
9) Proposed Amendments: Below is a list of amendments the committee members may wish to review
when considering the bill.
a) Require representation on the Collaboratives to reflect the people and economy or the region.
b) Require that part of the shared problem solving the Collaboritives will be undertaking to advance
long-term prosperity and equity include the needs of underserved geographic areas and
demographic groups.
c) Specifically include how small business development and entrepreneurship play a role in the
regional strategy.
d) Specifically require regions to propose and implement methods for backtesting issues and
priorities included in the regional plans.
e) Make other technical and changes.
10) Related Legislation: Below is a list of bills from the current and prior sessions.
a) AB 29 (John A. Pérez, Feuer, and V. Manuel Pérez) Office of Business and Economic
Development: This bill established GO-Biz to include the newly codified California Business
Services and the existing Office of the Small Business Advocate. Status: Signed by the
Governor, Chapter 475, Statutes of 2011.
b) AB 27 (Parra) California Partnership for the San Joaquin Valley: This bill would have codified
the establishment and operation of an up to 64-member California Partnership for the San Joaquin
Valley for the purpose of improving the economic, social, and environmental conditions of the
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San Joaquin Valley. Status: Held on the Suspense File of the Assembly Committee on
Appropriations, 2008.
c) AB 31 (Parra) California Partnership for the San Joaquin Valley: This bill would have created
a 24-member California Partnership for the San Joaquin Valley (SJV) for the purpose of
coordinating and improving state and federal efforts in the SJV, in concert with locally-led efforts
to improve the living standards and overall economic performance of the region. Status: Died on
the Senate Floor, August 2006.
d) AB 106 (Salas) Regions Rise Grant Program: This bill establishes the Regions Rise Grant
Program, administered by the Governor’s Office of Planning and Research for the purpose of
supporting inclusive, cross jurisdictional, and innovative processes that lead to inclusive strategies
to address barriers and challenges confronting communities in creating economic prosperity for
all. Status: Pending in the Senate Committee on Business, Professions, and Economic
Development.
e) AB 119 (Assembly Budget Committee) Elimination of State Economic Strategy: This bill
eliminated, commencing January 1, 2012, the responsibility of the Secretary of Labor and
Workforce Development Agency to lead the preparation of a biennial California Economic
Development Strategic Plan and to biennially convene an Economic Strategy Panel to provide
recommendations regarding the plan. Status: Signed by the Governor, Chapter 31, Statutes of
2011.
f) AB 358 (Greyson) Regional Economic Development Areas: This bill would have enacted the
Regional Economic Development Area Act for the purpose of certifying regional economic
development areas that include, but are not limited to, active and inactive military bases. Status:
Died without action in Assembly Committee on Jobs, Economic Development, and the Economy,
2018.
g) AB 742 (Cervantes) Office of Place-Based Strategies: This bill would have established the
Office of Place-Based Economic Strategies within GO-Biz for the purpose of supporting local and
regional economic development entities to access programs and implement place-based and other
community- and neighborhood-level strategies. Status: Held in the Assembly Appropriations
Committee, 2019.
h) AB 844 (Grayson) Contra Costs County Green Empowerment Zone: This bill establishes the
Green Empowerment Zone for the Northern Waterfront area of the Counties of Contra Costa and
Solano. Status: Pending in the Assembly Committee on Jobs, Economic Development, and the
Economy.
i) AB 906 (Cooley, Cervantes, Kiley) State Action Plan: This bill would have required the
Governor’s Office of Business and Economic Development to take the lead in preparing a
California Economic Development Strategy based on regional priorities. Status: Held in the
Assembly Committee on Appropriations, 2019.
j) AB 1171 (Arambula) California Partnership for the San Joaquin Valley: This bill establishes
the California Partnership for the San Joaquin Valley for the purpose of supporting regional
collaboration among individuals and public and private entities committed to improving the
quality of life in the San Joaquin Valley. Status: Pending in the Assembly Committee on Jobs,
Economic Development, and the Economy.
k) AB 1233 (V. Manuel Pérez) State Economic & Workforce Development Strategy: This bill
would have required GO-Biz to prepare a five-year Economic and Workforce Development
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Strategy. The blueprint will help the state set a strategic path forward by prioritizing and
coordinating state activities, supporting local and regional economic development activities, and
better leveraging private and public sector resources. Status: Held in the Assembly Committee on
Appropriations, 2012.
l) AB 1274 (Arambula and Salas) California Partnership for the San Joaquin Valley: This bill
establishes the California Partnership for the San Joaquin Valley for the purpose of supporting
regional collaboration among individuals and public and private entities committed to improving
the quality of life in the San Joaquin Valley. Status: Held in the Senate Committee on Business
Professions, and Economic Development, 2020.
m) AB 3205 (Salas) Regions Rise Grant Program: This bill establishes the Regions Rise Grant
Program, administered by the Governor’s Office of Business and Economic Development, for the
purpose of supporting inclusive, cross jurisdictional, and innovative processes that lead to
inclusive strategies to address barriers and challenges confronting communities in creating
economic prosperity for all. Status: Held in the Senate Committee on Appropriations, 2020.
n) AB 2596 (Cooley, Kiley, Quirk-Silva) State Action Plan: This bill would have required the
Governor’s Office of Business and Economic Development to take the lead in preparing a
California Economic Development Strategy based on regional priorities. Status: Vetoed by the
Governor. The veto message stated: “Since its inception, GO-Biz has expanded direct foreign
investment, created opportunities for small businesses, identified incentives for growth, and
helped resolve barriers for businesses navigating the government. These successes are due, in
part, to the ability of GO-Biz to nimbly respond to rapidly changing economic factors including
unpredictable federal decisions, natural disasters and more. I don’t believe an ongoing costly
study and report will provide any additional benefit to these efforts.”
o) SB 162 (Senate Budget) Community Economic Resilience Fund Program: This bill establishes
the Community Economic Resilience Fund Program within the Employment Development
Department to make competitive planning and implementation grants to build an equitable and
sustainable economic recovery from the impacts of COVID-19 on California’s industries, workers,
and communities, and to provide for the durability of that recovery by fostering long-term
economic resilience in the overall transition to a carbon-neutral economy. Status: Signed by the
Governor, Chapter 259, Statutes f 2022.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Local Conservation Corps
CAMEO - California Association for Micro Enterprise Opportunity
Coalition of Small and Disabled Veteran Businesses
Microenterprise Collaborative of Inland Southern California
National Small Business Advocacy Council
Riverside Community College District
San Gabriel Valley Economic Partnership
Opposition
None on File
Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090
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