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IN THIS ISSUE – “A Moment of Maximum Leverage for Progressives”
POLITICS
- Showdown Time for Democratic Party Factions
- Little-Known Republican Legislator Challenges Newsom: A “David v. Goliath” Governor’s Race
- Assembly GOP Picks New Leader
- Capitol Staffers Dish Dirt on Instagram
HOUSING
- California Home to 5 of 6 U.S. Cities With Highest Housing Prices
- State Spars with Cities Over Residential Zoning
GETTING DOWN TO BUSINESS
- Is Golden State Losing Global Tech Leadership? Tesla Exit Termed “Tip of the Iceberg”
- State Agency Sues Tesla
- Ports of LB & LA Call for 24-Hour Logistics Chain Operation
- Fast Food Innovator for the World…California
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique service.
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FOR THE WEEK ENDING FEB. 11, 2022
Showdown Time for Democratic Party Factions
Politico
We’ll soon see if the California Democratic Party’s left wing has the muscle to make good on its single-payer threat.
Progressives vowed to deny party endorsements to incumbent Democrats who didn’t support single-payer legislation. Assemblymember Ash Kalra never put the doomed bill up to a vote, foreclosing a public reckoning that would have forced members to go on the record. Undeterred and freshly infuriated, progressives and the California Nurses Association have vowed there will be consequences.
That set up the beginning of party votes on pre-endorsements this weekend. Incumbents are automatically on course to retain the party’s blessing — and the spigot of money and volunteers it brings — unless enough delegates can force a vote. Dissenters didn’t do so for the vast majority of Assembly incumbents seeking reelection, including quite a few moderates, some of whom publicly proclaimed their AB 1400 skepticism. But a few will face pre-endorsement votes and then, if needed, full endorsement votes further down the line. We’ll know the results mid-month. The outcome will have consequences both for midterm elections and for progressives’ perceived power. Empty threats carry less weight.
Party politics tend to amplify the voices of the most committed and ideological members. That’s true on the right and the left. Tensions between the party’s progressive base and a leadership focused on winning elections are a recurring theme. We saw it last year as activists unsuccessfully moved to cut off contributions from utilities and law enforcement unions; the single-payer plan’s demise has likewise intensified calls to cut off medical interests that fund the party but still oppose a sweeping overhaul of the health care system.
You don’t win durable two-thirds-plus majorities without electing a range of Democrats. Campaign clashes between centrist and liberal Democrats have become commonplace in the top-two era. The stereotype of California as a far-left policy machine doesn’t always match the reality — an anti-evictions bill faltered on the same night as single-payer in a reminder of the real estate lobby’s clout, for instance. Now AB 1400’s collapse has the party’s progressive core facing difficult questions about its sway in the party and in Sacramento — with implications both for California politics and national policymaking.
“California, for as progressive as it is, there’s still a lot of purple here,” said Democratic consultant Roger Salazar, a Democratic consultant who works mainly on ballot initiatives and was once a spokesperson for former Gov. Gray Davis. “While the state has its liberal and progressive cores in San Francisco and Los Angeles, there’s a much more moderate swath.”
California Democrats have struggled for years to realize a health care ambition enshrined in the party platform. But those efforts have repeatedly died as formidable political opposition and the prospect of steep tax hikes proved too much to overcome.
“This was a moment of maximum leverage for progressives,” said one Democratic lawmaker who asked not to be named in order to speak candidly, “and their failure to even get a vote was a huge defeat.”
The debate has driven wider schisms between liberal and moderate Democrats and fomented campaign threats against incumbents unwilling to support the bill — a tactic that failed in the days before the vote and may have even backfired.
Assemblymember Ash Kalra, the bill’s author, had to weigh the merits of exposing fellow Democrats to political repercussions when he knew his legislation was doomed to fail.
This year was supposed to be different. In 2017, Assembly Speaker Anthony Rendon faced a ferocious backlash for shelving an unfunded single-payer bill. This time, Rendon worked with Kalra’s office for months to craft viable legislation, only to watch the bill shrivel in the Assembly without a floor vote.
Recriminations swiftly followed. Rendon appeared to blame Kalra for tabling his own bill. The California Nurses Association excoriated Kalra, and progressives unloaded on the lawmaker in a caustic video meeting Monday night for not forcing his colleagues to go on the record.
“We need to know who we need to replace and who we need to get rid of, and it seems like you are among them,” Ron Placone, one of the 300 some activists on the call, told Kalra. He accused the lawmaker of being “at best cowardly, and at worst deceptive.”
The San Jose Democrat told activists he had good reason to avoid a futile exercise that would have fallen short of the 41 necessary votes by double-digits.
“By putting them in that position, knowing that bill was not going to pass anyway, it would have further alienated them, and I think that would have made it harder to get them on board,” he said.
Kalra repeatedly urged the progressive activists to focus on electing lawmakers who will support single-payer and to come back next year to present a new bill before a more receptive Legislature.
Some Democrats believe the nurses and the party’s left flank overplayed their hands. Kevin Liao, a Democratic consultant who was formerly Rendon’s spokesperson, argued that calling a vote only to have it “go down in flames” could have had greater repercussions.
“(Kalra) did the homework, he put in a ton of work to get to that point, and for that to be rewarded by activists threatening to primary him really just shows you how the dialogue on this particular topic has really gotten out of hand,” Liao said, referring to some who want to back a harder-line challenger against the lawmaker in June.
State Sen. Scott Wiener, a single-payer supporter, came to Kalra’s defense and described the single-payer bill as “harder than anything I’ve ever done.”
“If a bill gets destroyed on the floor, that can make that bill toxic for years to come,” Wiener said.
Amar Shergill, the party’s progressive caucus chair, said the outcome underscores the need to elect progressive leaders, especially in Democratic strongholds.
“This is not an issue of forcing members in conservative districts to vote progressive,” he said. “We want Assembly members in progressive districts to vote progressive.”
The long-shot proposal hemmed Democrats in between powerful competing forces: progressives on one side and a formidable coalition of business and health care groups on the other. Republicans eager to make single-payer health care a campaign issue pummeled Democrats over a raft of proposed tax increases to fund the bill.
The issue is certain to continue animating Democratic campaigns in California. Jennifer Esteen, a nurse and vocal single-payer advocate who is seeking an open Assembly seat, said she hoped supporters could channel their disappointment into electing more single-payer Democrats.
“I want to see some bravery. I want to see some difference in movement in our Legislature,” Esteen said, “because if we don’t have the bravery and political will in the California Legislature, where we have our supermajority, where will we have it?”
Little-Known Republican Legislator Challenges Newsom:
A “David v. Goliath” Governor’s Race
Sacramento Bee
A little-known Republican legislator from rural, northern California announced an improbable campaign Tuesday to oust Democratic Gov. Gavin Newsom, just months after Newsom handily defeated a recall election that sought to remove him from office.
Sen. Brian Dahle, who represents a sprawling district that runs from Sacramento County to the Oregon border, faulted Newsom for an unchecked homelessness crisis, rising crime rates, hefty taxes and a decaying quality of life. But he also acknowledged the odds against him in the heavily Democratic state, calling it a “David versus Goliath” confrontation.
And in another nod to the challenges of running an underdog campaign against a nationally known incumbent, he pleaded with supporters to contribute as little as $1 a day to his effort.
“If you get four more years of this dictator, it will cost you a lot more,” he said, alluding to the governor. “It’s time for change.”
“I am not some smooth-talking wine salesman from San Francisco. I’m a farmer from Bieber. You might say I’m the underdog.”
Dahle stood before a crowd of supporters in Redding on Tuesday and said he wants to win back California from the “corruption” of one-party rule under Gov. Gavin Newsom. “I love California, this amazing, beautiful state that used to be the land of opportunity,” he said. “But its leadership is so poor that people are running for the state line…trust me, if you get four more years of this dictator, it will cost you a lot more.” To win the governorship, Dahle will have to oust a Democratic incumbent who is fresh off beating a recall attempt, has half the registered voters on his side and $25 million in his campaign account.
The governor faces criticism for the state’s homeless problem, rising crime rates, and unpopular COVID-19 mandates, but ultimately is still a formidable foe for a Republican who has never run a statewide race.
“It would be a stunning upset,” if Dahle won, said Republican political consultant Rob Stutzman. “It’s hard to imagine a scenario where (Newsom) doesn’t win reelection. At a minimum, the opponent would have to be very well-funded.”
By challenging Newsom, Dahle is taking a path other California Republicans have opted to avoid. Most notably, recall frontrunner Larry Elder, a longtime radio show host with widespread support among conservatives, declined to run against Newsom this year. Dahle, 56, served in the Assembly between 2012 and 2019 before winning a special election to the state Senate. Prior to serving in the Legislature, he was a Lassen County supervisor. He lives in Bieber and is a farmer and small business owner. Stutzman said Dahle is a “serious lawmaker,” unlike Elder, and is well-regarded as someone who understands the importance of policy-making. But it’s still too early to tell if he’ll earn the support of voters or the California Republican Party. Many are watching to see if former San Diego Mayor Kevin Faulconer, a moderate Republican who also ran in the recall, will launch a bid in 2022. Even if Dahle doesn’t win, a run at the governor’s office could boost his name recognition in California and around the country. The money and attention he earns from a gubernatorial campaign, even a failed one, could help in future races.
https://www.sacbee.com/news/politics-government/capitol-alert/article258171563.html#storylink=cpy
Associated Press
Republicans in the California Assembly have elected a vocal critic of the state’s Democratic governor as their new leader.
Assemblymember James Gallagher of Yuba City will replace Marie Waldron of Valley Center, the caucus announced Tuesday.
Republicans control 19 of the 80 seats in the state Assembly, making it impossible for them to slow down the Democratic majority. Waldron has been the Republican leader since 2018, but she has not been as visible as some of the party’s other members.
Gallagher, meanwhile, has been one of the most outspoken critics of Democratic Gov. Gavin Newsom’s administration. In 2020, Gallagher and fellow Republican Assemblymember Kevin Kiley sued Newsom over his executive orders during the pandemic — a lawsuit they eventually lost.
Term limits mean Waldron can run for re-election one more time in the fall before having to give up her seat. Gallagher won’t be termed out until 2026. The vote to replace Waldron was unanimous, according to a news release from the caucus. Waldron now has a new title: Republican leader emeritus.
“It has been an honor to have led our caucus since 2018,” she said.
In an interview with The Associated Press, Gallagher praised Waldron, saying she “kept us on track” as the party picked up one seat from Democrats during the 2020 election cycle during her time as Republican leader.
“We’re going to continue to do that,” Gallagher said.
But it will be difficult in a state where Republicans make up just over 24% of registered voters compared to 46% for Democrats. Republicans have no statewide elected officers. They haven’t had a majority in the state Legislature since Republicans briefly controlled the state Assembly in 1996.
Gallagher said his goal is to return Republicans to the majority by speaking “directly to Californians who, I think, have had enough of decades of Democrats’ super majority rule.”
“When they look around their neighborhoods they see it’s harder and harder to afford a house or to afford rent; they see crime on the rise and getting worse,” he said. “Look, we have better ideas and we think there is a better path forward.”
While Republicans don’t have the numbers to pass legislation, they have influenced some decisions. Last year, Republicans clamored for a pause in the state gas tax increases amid historic state budget surpluses. This year, Newsom has proposed to halt a scheduled gas tax increase in July — a proposal that has yet to be voted on by the Legislature.
Gallagher, an attorney who is married and has five children, says he sees one of the party’s roles is to hold the Democrats accountable for things like fraud in the state’s unemployment benefits department and combating and preventing wildfires. Gallagher represents a northern California district that includes the town of Paradise, which was mostly destroyed by a wildfire in 2018.
Gallagher’s first task will be to lead Republicans through the 2022 elections, which will include five special elections to fill vacancies from Democratic districts before all 80 seats are up for election in November.
Capitol Staffers Dish Dirt On Instagram
Capital Weekly
State Capitol employees have taken to social media with anonymous posts about bad bosses and a percolating desire for the same bargaining rights enjoyed by other state workers.
The Instagram account, “DearCaStaffers,” had about 2,700 followers by Thursday. That was 400 more than the day before.
Making use of the new platform, staff members call out their tormentors by name. They described stressful work with low pay and unrealistic expectations. And they did so in a surprisingly public way.
Shielded by anonymity, staff openly question legislative leadership in a way they probably wouldn’t if their names were known. Except for those that are screen-captured, the posts expire after a day – sooner if traffic is heavy, according to some who have posted on the feed.
Tales of California disgruntlement run the gamut from banal to lurid. Some deal with grief years old, and members or staff long gone from the Legislature.
“It’s like a high school mean-girl slam book,” said one veteran lawmaker. “It’s unfortunate. It devalues legitimate complaints. It’s full of political hits and rumors, but nobody is trying to solve real problems. They’re just pulling people down.”
Toward that end, stories poured forth, like that of the member who routinely stiffed staff for drink tabs. Or the public beratings. Or the private beratings. Or the labyrinth of pressures heaped on underpaid, inexperienced staff.
The posts range from indignant gripes about mileage reimbursement to the tawdry tale of a drunken male lawmaker who called a female staffer at 2 a.m., seeking a place for the night. There are plenty of instances, too, of lawmakers who made staffers feel uncomfortable during rides to the airport, at after-hours events or in the privacy of a Capitol office.
Despite legislative leadership’s vaunted reforms in response to #MeToo, legislative staff apparently still feel vulnerable to employer whims, and many say they wouldn’t risk lodging formal complaints, convinced they would be unsupported by the institution.
“This is why we turned to Instagram,” said one Senate staffer, who posted about persistent bullying and a senator who chose to look the other way. “This is why we lose talented people from this field.”
Modeled on “dear_white_staffers,” an 80,000-follower account operated by BIPOC (Black, Indigenous and people of color) congressional staff who are calling out inequities and rallying for union representation, the Sacramento account promises an anonymous platform to unload about workplaces where abuse is the norm.
“CA staffers,” the profile urged, “tell us what it’s really like working in the Legislature.”
California staffers promptly obliged with a litany of real and perceived abuses. They laid out streams of miserable moments with difficult members. They described drunken misconduct, verbal abuse, psychological exhaustion and a range of sexually inappropriate interactions.
Several posts called fresh attention to the kind of predatory power imbalance that fueled the #MeToo movement. Writers pointedly suggested that, despite claims of reform, little or nothing has changed since the toxic culture was exposed years ago.
Account operators, who remain anonymous themselves, have actively urged followers to spill dirt about certain members whose reputations have long been subject of whispered disapproval. Confirm what we already know, they seemed to say.
The central lament of at-will staff — the caprice and impunity of unaccountable office holders—is by no means unique to Sacramento. The notion that elected officials can clean up their act and treat employees with respect is, at least on social media, spreading from Congress to state houses around the country.
A rash of copycat dear-staffer accounts popped up recently. “dear_campaign_staffers,” drew just over 1,000 followers midweek with its promise “to bring transparency and accountability to campaign culture.”
More:
California Home to 5 of 6 U.S. Cities With Highest Housing Prices
CalMatters
Five of the nation’s six cities with the least amount of available affordable homes for middle-class residents — those making between $75,000 and $100,000 per year — are in California, according to a Monday report from the National Association of Realtors. Nationwide, the amount of available affordable homes for that salary range dropped by more than 400,000 from December 2019 to December 2021 as the pandemic helped spur record-high housing prices and record-low availability.
Here’s a closer look at the six metro areas with the least amount of homes for sale for those earning between $75,000 and $100,000:
- San Jose:1 home listing available for every 3,528 households.
- Oxnard-Thousand Oaks-Ventura:1 listing per 1,385 households.
- San Diego:1 listing per 1,138 households.
- Los Angeles:1 listing per 1,025 households.
- Seattle:1 listing per 830 households.
- San Francisco-Oakland:1 listing per 723 households.
State Spars with Cities Over Residential Zoning
CalMatters commentary from Dan Walters
The state enacts laws and regulations aimed at compelling cities to accept more affordable housing construction, particularly to serve low- and moderate-income families, and cities counter with local laws and regulations to evade their housing quotas.
Although the state might seem to have the upper hand as it seeks to close its yawning gap between supply and demand, one would have to say that the cities have been remarkably successful in evading their civic and legal responsibilities because construction falls way short of the state’s goals.
In theory, California should be building 185,000 units a year to keep up with current demand and chip away at the backlog, but it scarcely produces half of that number.
City officials, responding to their constituents’ aversion to high-density housing, employ all sorts of tactics to discourage development, such as imposing specific requirements that make projects economically infeasible or zoning undesirable land for housing.
As new anti-housing tactics are introduced, the state adjusts laws and regulations to thwart them, but the cities just find new ways to preserve the status quo.
One of the state’s newest pro-housing approaches, embodied in legislation enacted last year and going into effect last month, allows up to four units of housing to be built on land zoned for single-family homes. City officials denounced Senate Bill 9 as it was winding through the Capitol, arguing that it usurped their traditional land use authority and would change the character of their neighborhoods.
However, now that SB 9 is law, cities are trying to figure out how to blunt, or even cancel, its impact in true Spy vs. Spy fashion.
Just before the law took effect, for example, Pasadena enacted an “emergency ordinance” that imposes tight, and likely unworkable, rules on what can be built.
They include an 800-square-foot limit on new units, a one-story height limitation, a requirement for one parking spot for each new unit, landscaping standards and a ban on short-term rentals. Collectively, they could make development authorized under SB 9 economically prohibitive.
Woodside, a very wealthy enclave on the San Francisco Peninsula, takes the prize for the most creative way to thwart SB 9 — supporting a petition to have mountain lions declared a threatened species and declaring the entire town to be mountain lion habitat and therefore unsuitable for housing.
“Given that Woodside — in its entirety — is habitat for a candidate species, no parcel within Woodside is currently eligible for an SB 9 project,” a city memo declares.
The action has earned Woodside scorn from pro-housing advocates.
“This is so absurd,” said Laura Foote, executive director of YIMBY Action, a pro-housing group, told the San Francisco Chronicle. “It is an example of the extreme absurd lengths cities will come up with to evade state law.”
“You can build a McMansion and that somehow won’t hurt the mountain lion,” Foote added. “But if you build two units the lions will somehow fall over and die.”
That’s well said about the obvious hypocrisy of Woodside’s move.
https://calmatters.org/commentary/2022/02/cities-try-to-thwart-states-push-for-housing/
Is Golden State Losing Global Tech Leadership? Tesla Exit Termed “Tip of the Iceberg”
LA Times
For years, California has suffered a net out-migration of people to Texas. But the losses in population tended to be at the lower end of the socioeconomic scale and the state has grown steadily richer despite the large outflows of people.
What worries some economists and other analysts is that this favorable pattern may be starting to change.
When Tesla announced last fall that it was moving its corporate headquarters from California to Texas, officials in Sacramento seemed more surprised than concerned.
After all, Tesla was expanding its sprawling Fremont, Calif., assembly plant, which already employs thousands of people. It’s building a battery factory in the Northern California town of Lathrop.
And real estate brokers say the company is leasing more office space in Palo Alto, where its corporate headquarters had been located since 2009. Tesla was founded in nearby San Carlos in 2003.
Yet the decision by the electric vehicle pioneer’s chief executive, Elon Musk, to move Tesla’s headquarters to the Texas state capital of Austin may signal gathering clouds on the horizon of California’s economic future.
For the present, things are still looking bright for the state. Sacramento has been enjoying unprecedented growth in revenues, thanks in large part to high capital gains taxes paid by the superrich in Silicon Valley.
And in a measure of California’s present hold on the tech sector, the Golden State remains far and away the leader in raising venture capital.
Tesla was one of an accelerating number of California companies, including other big tech names such as Oracle and HP Enterprise, that have relocated headquarters to Texas.
“I believe this is just the tip of the iceberg,” said Dan Ives, who has been covering the tech sector for more than two decades, and is currently managing director at Los Angeles-based Wedbush Securities. He said 20% of the companies he follows are considering relocating or opening a second headquarters outside of California.
Stanford’s Hoover Institution tallied 74 such company moves out of the state in the first half of last year, more than all of 2020 and higher than the comparable period in each of the prior two years. Researchers cited a litany of factors for the change: the rising cost of living in California, a tax structure and labor policies that many corporate leaders see as unfriendly, and concerns that the quality of life is declining.
In the case of Tesla, which last month also started producing vehicles near Austin, the decidedly conservative views of its multibillionaire boss may have made Texas an appealing base. Musk personally moved there in 2020.
The state’s net population loss to Texas, the top destination for migrants, last year was about double the pace of the last decade, according to credit data analyzed by Moody’s Analytics. Some kept their California jobs, thanks to new remote work opportunities. Others started new businesses in Texas.
To be sure, the Bay Area has such a deep reservoir of tech talent, money and infrastructure, not to mention the climate and the ocean, that it won’t be easily knocked off its perch.
First-generation tech firms Apple, Cisco, Intel, Hewlett-Packard, among others, are still in the Bay Area, as are newer tech icons Facebook, Google and Netflix.
And Stanford and Berkeley are key generators of talent, research and new ideas for Silicon Valley’s ecosystem.
But California’s tech hub today seems to be facing what beset Hollywood years earlier, when Canada and states such as Georgia, where Marvel does much of its shooting nowadays, lured away film production from Los Angeles with numerous incentives.
“The Silicon Valley has lost its monopoly on opportunity, and now it has to compete,” said Patrick McKenna, founder of One America Works, which connects talent with new tech communities. “It has to compete with other locations to attract the talent that’s going to build the future.”
McKenna spent 15 years in the Bay Area as an entrepreneur and investor, but in 2019 moved to Austin. He saw opportunities in central Texas, but also rued the fact that many people in the Bay Area were getting left behind in the tech boom.
Of the state’s record budget surpluses, McKenna said: “California is flush right now because it’s harvesting an investment that happened 10 years ago.”
Increasingly he sees other states and nations cutting into California’s share of the technology industry.
Economic officials at California Gov. Gavin Newsom’s office say it’s natural that as companies such as Tesla grow to become world leaders, they will expand elsewhere to be closer to markets and supply chains and to extend their global footprint.
Businesses will continue to leave California just as they have for decades, these officials argue, but there are good reasons why firms were born and incubated in the state, and why more will come and start new ventures and take companies public, creating more wealth and more jobs.
“The idea that the California economy is imperiled is not borne out by the numbers,” said Dee Dee Myers, a former White House press secretary for President Clinton. She is now Newsom’s director of business and economic development.
It’s true that in tech, no city or state comes close to the Bay Area in the amount of new venture capital — $120 billion last year, a figure that until 2018 was more than the rest of the country combined, said Kyle Stanford, a senior analyst at PitchBook, a Seattle-based financial data and software firm that tracks private capital markets.
In terms of number of venture capital deals, despite growth elsewhere, the Bay Area’s share held firm last year — topping 20% as it has every year since at least 2006. That’s important because companies tend to start or set up fairly close to where the lead investor is based, which buys the Bay Area some time.
But, Stanford says, “there’s definitely a risk of losing major emerging companies when you have these large tech giants move out. You’re going to see engineers from Tesla probably create new companies in Austin, and those are companies that are going be lost in the Bay Area.”
Moreover, while in the popular imagination Texas remains a vast landscape of cowboys, oil and conservative politics, the reality is more complex: The state’s universities have built up stronger reputations in engineering and other specialties prized by corporations.
And Austin, whose unofficial motto is “Keep Austin weird,” demonstrates at least some parts of the state are becoming culturally compatible with Californians.
Nor can Silicon Valley count on people coming from overseas to make up the loss.
Foreign-born students, researchers and entrepreneurs have been a big part of California’s tech boom, but the unwelcoming immigration policies under former President Trump, plus lingering effects of the COVID-19 pandemic, and cold-war-like relations with China, have had chilling effects.
Then there’s California’s high cost of living, particularly housing.
In the Bay Area, the typical home now fetches a median price of $1.2 million, which is more than double the cost in Austin, despite the rapid rise in home values there. The cost of housing in Dallas is one-fourth the price in the Bay Area.
Brett Arnold, 35, an accountant and lifelong California resident, and his wife, Jamie, moved to a town about an hour north of Dallas last July, primarily because of the difference in the cost of living.
The couple had both worked in Orange County to keep up financially, but she wanted to stay at home with their 4-year-old. So last April, the Arnolds sold their Rancho Santa Margarita townhome for $730,000 and bought a much larger 2,800-square-foot house in Prosper, Texas, for $570,000.
“The quality of life has gone up,” Brett Arnold said.
For now at least, Austin’s share of the nation’s venture capital, tech startups and revenues pales next to the Bay Area. But it is rising, thanks in good part to Silicon Valley.
Meta, formerly Facebook, is leasing 33 floors in what will soon be the city’s tallest building. Oracle is estimated to have 2,500 employees currently at its campus near Lady Bird Lake, and local reports say it’s buying nine more acres nearby, enough to house well over 10,000 workers.
Amid the pandemic in 2020, as Oracle announced its headquarters move, the company said it would take “a modern approach to work that gives our employees more flexibility to choose where and how to work.”
No one knows how many from Tesla have moved with Musk, although some, including Valerie Workman, head of human resources and one of its highest-ranking Black employees, have since left the company.
Musk, in his characteristically flamboyant style, said its Texas operations could scale up to 20,000 employees. Its Austin-area factory has the potential to produce three times as many vehicles as the Fremont facility, said Ives of Wedbush.
Over the next 18 to 24 months, Ives said, Tesla is likely to move the R&D and design operations now in Palo Alto to Austin.
“They could find engineers 50% cheaper in Austin than in the Silicon Valley,” he said. And such a move would bring the company’s brain trust close to where Musk himself lives.
Plus, that’s what many employees may prefer, to settle in semi-remote places where they can enjoy a higher standard of living. It’s partly why Tesla’s Irvine-based rival, Rivian, is producing its vehicles in northern Illinois and outside Atlanta, analysts say.
Intel is building its new chip factory in Columbus, Ohio. Other tech firms are going to Nashville.
“California and the Valley always will have an allure geographically that can’t be matched,” Ives said, “but now you’re starting to see alternatives.”
Joel Kotkin, a fellow at Chapman University and longtime analyst of demographic, social and economic trends in California, worries especially about the state’s heavy dependence for tax dollars from tech IPOs and the super-wealthy to pay for progressive but expensive policies — such as for the environment and the social safety net.
In 2019, the top 1% of taxpayers in California paid about 45% of personal income taxes, which make up about two-thirds of the state’s entire general fund revenues.
In a report with colleague Marshall Toplansky, Kotkin wrote that the losses of company headquarters have eroded the state’s economic diversity and opportunities for upward mobility for the middle class.
“In the aggregate we could look good because Apple computer by itself makes you look good,” Kotkin said in an interview. “If we continue this gusher of tech money, we could just continue to subsidize the vast majority of the population and maybe won’t collapse,” he said.
But what happens if that cornucopia of tax money begins to shrink?
“We could either restore California’s promise as a land where people go and their lives are improved,” he said, “or we could become some sort of high-tech feudal state, which is where we’re headed.”
https://www.latimes.com/politics/story/2022-02-09/silicon-valleys-tech-monopoly-is-over
State Agency Sues Tesla
Wall Street Journal excerpt
A California regulatory agency said it filed a lawsuit against Tesla Inc., TSLA +0.80%alleging racial discrimination and harassment at the electric-vehicle maker.
The California Department of Fair Employment and Housing said it filed the complaint Wednesday in state court. The lawsuit targets alleged workplace issues at Tesla’s Fremont factory, the company’s principal U.S. car plant.
“After receiving hundreds of complaints from workers, DFEH found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion creating a hostile work environment,” Kevin Kish, the agency’s director, said in a statement.
Tesla didn’t immediately respond to a request for comment.
The company criticized the civil-rights agency’s investigation in a blog post that pre-empted the lawsuit. “Tesla strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints,” the company said Wednesday.
Tesla, in the blog post, also raised its status as a manufacturing employer in the state. “Tesla is also the last remaining automobile manufacturer in California. The Fremont factory has a majority-minority workforce and provides the best paying jobs in the automotive industry to over 30,000 Californians,” the company said, adding legal action was “unfair and counterproductive.” Tesla moved its headquarters to Texas from California last year, though it still makes a large portion of its cars in California.
Ports of LB & LA Call for 24-Hour Logistics Chain Operation
Associated Press
Southern California’s vital Port of Long Beach is still dealing with a backlog of waiting cargo vessels, its top official said Wednesday in renewing calls for transforming the supply chain into a 24-hour, seven-days-a-week operation.
In an annual state-of-the-port address, Executive Director Mario Cordero also outlined infrastructure and technology plans for improving movement of goods but said the issue goes beyond operation of the port.
About 40% of the container cargo entering the U.S. comes through the Port of Long Beach and the adjacent Port of Los Angeles, and both moved record volume last year. In October, President Joe Biden announced a plan for around-the-clock operations, but it hasn’t happened.
“There are 168 hours in a week and for the most part, our terminals are open less than half of those hours,” Cordero said in a video presentation. “Without expanding our terminals or building new facilities we could still handle more cargo by utilizing more of those hours. We’d also need truckers and warehouses to go 24/7.”
“In Asia, on the other side of the Pacific Ocean, our trading partners are already operating 24/7. We need to make it our goal as well. It has to be our next great transformation,” Cordero said.
Looking ahead, Cordero said the omicron variant continues to bring uncertainty about the economy.
“Here at the port of Long Beach we continue to work to clear backlogs of vessels offshore which assures that we’ll remain moderately busy into the spring. Still, given our historic volumes in the first half of 2021 we’ll be hard pressed to see more than slow gains until perhaps the fall,” he said.
Among initiatives, the port is working to maximize on-dock rail to accelerate cargo destined for Utah, Nevada, New Mexico and Arizona. That would free up equipment to support the Southern California market.
The port has also joined with a technology firm to create a “supply chain information highway,” a tool debuting this month that will allow cargo to be tracked across various modes of transportation.
“All of this will help,” he said. “Still, we need to recognize that the supply chain isn’t so elastic that it can easily handle historic jumps in volume.”
https://apnews.com/article/joe-biden-business-california-long-beach-e2c80f4b7ae8e645d1c4f38d0d20c580
Fast Food Innovator for the World…California
NY Times
In a quiet corner of the Glendale Galleria shopping mall, between a video game store and a pizza place, a red sign glows “Panda Express.” Here, according to my research, is the first ever Panda Express location, which opened in 1983. But neither outside the store nor inside, with its typical cafeteria-style counter and steel bins of hot food, are there any signs indicating as much. So as I paid for my chow mein and egg rolls there on a recent afternoon, I asked the cashier if we were in fact inside the original location of Panda Express. “That’s what they say,” she said, clearly disinterested in my line of questioning. This, for better or worse, sums up the state of California’s culinary history. The Golden State deserves credit for dozens of fast-food chains and dining trends that have taken off across the United States, but much of that legacy has been forgotten. Yes, the nation’s very first fast-food hamburger chain, White Castle, got its start in Kansas. But California has since given rise to a disproportionate share of America’s most popular fast-food restaurants: McDonald’s, Taco Bell, Carl’s Jr, Jack in the Box, Del Taco and, of course, Panda Express. The most common explanation is car culture: fast food was a response to highways and an increasingly on-the-go lifestyle, which California perfected. But the pattern extends beyond quick-service restaurants, suggesting California has a special kind of sway over the rest of the country. Many large chains that aren’t considered fast food also hail from California, including Marie Callender’s, the Cheesecake Factory, Denny’s and the Coffee Bean & Tea Leaf. “Everyone looks at California for trendsetting in a lot of ways,” George Geary, a chef and food writer in Southern California, told me. “If it makes it here, it’ll make it anywhere.” In 2021, Geary published “Made in California,” which compiles the history of 50 of the oldest California-born food establishments. The inspiration for the book came when Geary was driving on a highway in Indiana and spotted a sign listing restaurants at the next exit. Of the 24 named, 22 had begun in California. “I was like, ‘Wow. Do these people realize all the California stuff that comes here?’” Geary said. Even if a restaurant isn’t from California, the foods it is serving might be. A&W Restaurants, which started in Lodi in 1919, invented a concoction called root beer. The Brown Derby, a now-defunct Los Angeles chain, created the Cobb salad, according to Geary’s book. Baskin-Robbins, now the world’s largest chain of ice cream shops, first opened in Pasadena and pioneered the ice cream cake. But many of these histories have been lost to time. The companies usually don’t have historians, and the original buildings have often been razed or remodeled, and their pasts discarded. “When you go to Europe, you see plaques on buildings, and you read them and learn what happened there,” Geary said. “Here, we don’t know what happens anywhere.” On the same day that I visited the Panda Express in Glendale, I drove to the site of the first IHOP, which opened in Burbank in 1958 and has since expanded to more than 1,500 locations worldwide. I knew that the building that once housed the original restaurant was no longer an IHOP, but I assumed it would still be easy to spot. Instead, I walked in circles until I realized a Mendocino Farms I had passed repeatedly was in the former IHOP building. Of the 50 chains in Geary’s book, only 15 are still operating in their original locations. Some have been turned into medical buildings, animal groomers, post offices, hair salons or banks. And in classic California fashion, the first homes of several of our most well-known restaurants have been torn down and transformed into parking lots and freeways.