Congress: Don’t Allow Julie Su to Fail Upward

Julie Su’s time in California public office was defined by failure and incompetence

Deputy Secretary of Labor Julie A. Su. (Photo: dol.gov)

This Thursday, Congress will hold a hearing for President Biden’s nominee for U.S. Secretary of Labor, Julie Su. This controversial candidate has Washington in an uproar as her record serving as the top labor official in California was concerning, at best.

The defining mark of Su’s time as California Labor Secretary was overseeing the largest unemployment fraud in the state’s history.

During her tenure, the Employment Development Department paid nearly $40 billion – yes, Billion with a B – in fraudulent claims. As a cherry on top, over $1 billion of those fraudulent claims were sent to prison inmates. That’s a thousand-dollar bill for every person in California left for taxpayers to cover. And to make matters worse, this disaster even led to the personal information of hundreds of thousands of Californians, including social security numbers, being sent to the wrong addresses.

During the COVID-19 pandemic, unemployment insurance was a critical lifeline for millions of Californians forced out of work. But Su’s failure in leadership left over 6 million hardworking Californians without unemployment insurance when they needed it most.

This is hardly a good record, but even more damning is her handling of the fiasco. Shortly after her appointment in California, a state auditor warned her department of serious shortcomings and security risks in their mailing system that needed to be addressed. The audit even went on to say “EDD had no comprehensive plan for how it would respond if California experienced a recession and UI claims increased correspondingly.”

When the pandemic – and the surge of unemployment – hit, her office had not done anything to mitigate the problem, serving California taxpayers a $40 billion bill.

When confronted with this reality, Su tried to pass the buck, saying that California didn’t have enough security measures in place to keep criminals from taking advantage, rather than acknowledging that her office ignored serious warnings about this exact scenario.

Perhaps, however, Californians should consider themselves grateful for Su’s incompetence. The initiatives and policies that Su supported would have been crippling for California workers and business owners.

Su was a vocal proponent of Caliifornia’s Assembly Bill 5 (AB 5), which would put shackles on the flexibility of California’s gig workers and contractors. The legislation has generated serious backlash across the state from gig workers and contractors, but Su didn’t care. Instead, she called it a “model for the country.”

Su also failed to address one of California’s most complex and harmful laws: the Private Attorneys General Act (PAGA). PAGA allows businesses to be unfairly targeted by lawsuits for any violation – no matter how small – of California’s labor code. These lawsuits line the pockets of unprincipled attorneys who take advantage of the system, and instead of addressing it as the head of California’s labor department, Su turned a blind eye.

Julie Su’s time in California public office was defined by failure and incompetence. She shouldn’t be allowed to fail upwards. Let’s hope Congress rejects her for America’s top labor job, instead of giving her a promotion.

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Tom Manzo: Tom Manzo is the founder of the California Business and Industrial Alliance (CABIA).

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