Asm. Adam Gray, right, receiving FBA award from legislative advocate Dennis Albiani at FBA’s Annual Meeting of Members
The Family Business Association of California, the only organization advocating exclusively for California’s thousands of family businesses, has awarded its first Outstanding Legislator Award to Assembly Member Adam C. Gray, D-Merced, for his record on legislation crucial to family businesses during the recently concluded session.
The award was presented at FBA’s Annual Meeting of Members this month in Sacramento.
“Gray is a member of the influential New Democrats caucus – lawmakers who are committed to a pragmatic approach that promotes the interests of hard-working Californians alienated by the extreme partisanship of both the left and the right,” said FBA Executive Director Robert Rivinius.
“He had a 100 percent voting record on FBA’s key bills this session and played an influential role in advancing business-friendly bills and amending or blocking bills that would have harmed family businesses. That’s not surprising since he comes from a family business background.”
Gray’s grandfather, Ernest Denault, established Merced Dairy Supply to serve the Central Valley’s growing dairy industry and the company continued to thrive under Gray’s father, Robert. In fact, Adam Gray’s first job was washing storage barrels and loading feed bags for the family business.
After graduating from UC Santa Barbara, Gray went to work for then-Assembly Member Dennis Cardoza, focusing on agricultural issues and later owned a small public affairs and communications firm while also serving as a lecturer at UC Merced. He was elected to the Assembly in November 2012.
As the final votes are tallied in California, more races get called for the Democrat challengers taking down the few moderate Republicans that remained in California. The tight race for California Senate District 34 took a shift on Monday when Democrat Tom Umberg pulled ahead of Republican incumbent, state Sen. Janet Nguyen.
Umberg, a retired U.S. Army colonel and previous assemblyman, was leading for the first time since Election Day with 50.09 percent of the votes to Nguyen’s 49.91 percent, according to data released Monday by voting officials. Umberg had 126,824 votes and Nguyen had 126,386 votes, reversing a lead held by Nguyen since the Nov. 6 election.
It’s unclear how many ballots are left to be counted in the district. There are a total of 91,338 ballots left to be tallied in Orange County and an estimated 422,600 left in Los Angeles County.
“What’s interesting is how much it shifted from a safe Nguyen victory to a potential Umberg win,” Mitchell said. If Nguyen loses, “she could be a casualty of national reaction to Trump,” Mitchell added. “She has an ‘R’ next to her name, and that could (make the) difference.”
Another Orange County incumbent trailing in his bid for re-election was Assemblyman Matthew Harper, a Republican from Huntington Beach. Democrat Cottie Petrie-Norris was leading late Monday with 96,238 votes, or 52.5 percent of the ballots counted, to Harper’s 87,082 votes, or 47.5 percent.
The state Senate 34th District includes Little Saigon and parts or all of Seal Beach, Huntington Beach and other north Orange County communities, as well as a portion of Long Beach. Nguyen, 42, is viewed as a moderate Republican. She has served on the Garden Grove City Council, the Orange County Board of Supervisors and more recently the state Senate, where in 2014 she became the first Vietnamese-American elected to the office and the country’s first Vietnamese-American woman state legislator.
In the Bay Area, the last remaining Republican office holder, Assembly Member Catherine Baker, conceded her race to Democrat Rebecca Bauer-Kahan. Bauer-Kahan is an environmental attorney and community activist. Baker’s defeat means the Bay Area no longer has any Republican representatives in the state Legislature.
A victory for Bauer-Kahan had been considered a longshot, because Baker is a moderate Republican and had won the endorsements of the region’s daily newspapers. But Bauer-Kahan, a progressive, benefited from the Democratic blue wave this election cycle — and from strong voter turnout in the East Bay.
The sprawling 16th District runs from Lafayette and Orinda to Livermore. As of Nov. 16, Bauer-Kahan was leading Baker by about 2,500 votes, 50.6 percent to 49.4 percent.
Governor-Elect Newsom announces ‘ambassadors’ for “All In California” transition
Governor-Elect Newsom announced an inclusive “All In California” transition program intended to provide opportunities for all Californians to participate in state government. Part of that program is to enlist “ambassadors” from diverse backgrounds and locations to assist identify qualified candidates from across California wanting to serve. Upon announcing the list of appointees, Newsom said, “These respected leaders will help me as I search for innovative ideas and talent across this state.”
Newsom said his goal in creating the advisory group is to “create an inclusive, people-powered transition that reflects the diversity and values” of California.
According to a November 16 release from the Governor-elect, leaders who have agreed to be “All in California” ambassadors include:
San Francisco Mayor London Breed
San Francisco Mayor Willie Brown (Ret.)
State Senate President pro Tempore John Burton (Ret.)
Laphonza Butler, President, Service Employees International Union (SEIU)
California State Treasurer John Chiang
California State Superintendent of Public Instruction Delaine Eastin (Ret.)
California State Controller Betty Yee
Los Angeles Mayor Eric Garcetti
Long Beach Mayor Robert Garcia
Alice Huffman, California NAACP President
State Senator Christine Kehoe (Ret.)
Monica Lozano, former chair, U.S. Hispanic Media, Inc.
Congressman George Miller (Ret.)
California Secretary of State Alex Padilla
Incoming House Speaker Nancy Pelosi
Art Pulaski, Executive Secretary-Treasurer and CEO, California Labor Federation
Los Angeles County Supervisor Mark Ridley-Thomas
Oakland Mayor Libby Schaaf
Sacramento Mayor Darrell Steinberg
Los Angeles County Supervisor Hilda Solis
Environmental activist Tom Steyer
Fresno Mayor Ashley Swearengin (Ret.)
Stockton Mayor Michael Tubbs
Los Angeles Mayor Antonio Villaraigosa (Ret.)
CalChamber President Allan Zaremberg
Governor-elect Newsom will be sworn in on Monday, January 7.
The U.S. unemployment rate recently fell to 3.7%, a rate last seen in 1969. This very low rate is giving the Fed and many other market watchers reasons to worry that the labor market, and thus the overall economy, may be overheating. While it is true we are late in a business cycle, labor market indicators suggest that we are not as late as we may think. To be precise, job growth remains too high, wage growth remains too low, and the employment rate still has room to rise before we run out of workers and hit full employment.
Elliot Eisenberg
Over the past year, the U.S. working-age population has grown by about 225,000 a month. Given that 60.4% of that population works, that means the US economy needs to create 136,000 jobs/month to keep the unemployment rate stable. However, over the past three months, job growth has averaged 218,000/month, and over the past year 211,000/month. As a result, the economy is creating more jobs than required to simply absorb new labor market entrants. This alone suggests that the economy is not at full employment. When we reach full employment, net new job growth will settle at or about 136,000 jobs/month.
Another sign that we are not on the verge of an overheated labor market is that wage growth remains quite subdued. When an economy is short of workers, employers compete for scarce labor, and in the process push up wages, causing inflation to rise. But we see none of that. Over the past year labor productivity growth has been 1.3%, and if you add to that the Fed’s 2% inflation target, you get 3.3%. Wage growth below 3.3% will not cause inflation to increase. And, sure enough, wage growth over the past year has been just 3.1%. If the economy really was overheating, wages would be growing at a much faster rate.
Another clue that the labor market will not seize up anytime soon is that the percentage of working Americans at 60.4% remains well below its pre-recession peak of 63.4%. While a return to 63.4% is unlikely, due to an aging population, more persons going to college, and a few other factors, the rate has been steadily rising since hitting a cyclical low of 58.2% in July 2011. Moreover, the percentage of 25 to 54-year-old persons (those of prime working age) that are working has been rising for almost eight straight years but is still full one percentage point below its pre-recession peak of 80.3%. As a result, I suspect that the percentage will rise at least a bit higher before it tops out.
Lastly, the unemployment rate is no longer as good a measure of labor force slack as it was in the past. Here is one example why: Until recently, finding part-time work that still allowed one to go on job interviews was virtually impossible. Thus, many who looked for a job were out of necessity unemployed. Today, with platforms such as Uber, TaskRabbit, Fiverr and others, one can be employed while actively looking for a more suitable full-time job. As a result, comparing the low unemployment rate of today to similar rates in the past will lead one to conclude that the labor market is tighter than it really is.
Despite a near 50-year low in the unemployment rate, because of technological changes and a careful reading of demographics and data, it seems that the labor market still has some room to vigorously expand before monthly employment growth must slow. As a result, the Fed need not worry that the 3.7% unemployment rate is indicative of an economy that is about to overheat due to a worker shortage – yet.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70-word economics and policy blog can be seen at www.econ70.com. You can subscribe and have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.
Late in the evening on Sunday September 30, stakeholders, advocates, and constituents received the last email notification from Governor Jerry Brown providing a legislative update on the final bills to be signed or vetoed. In his four-term tenure as governor, he has signed over 20,000 bills into law, including 1,016 this year. This year he also vetoed 16.5 percent of bills that made it to his desk, which is consistent with similar percentages in the 15 other signing periods. Final outcomes for several bills that were a high priority for the Family Business Association at the end of this session are outlined below.
In the final days of session Senator Galgiani introduced SCA 24, which would have limited the tax exclusion for the purchase or transfer of a principal residence from parents or grandparents to their children and would require the property to continue as a principal residence of the transferee. The measure would also have deleted the exemption on the first $1 million of the full cash value of all other real property (often a family business or farm), thereby requiring these properties to be reassessed upon a purchase or transfer.
Families would have been forced to dissolve companies, lay off employees, or sell land in order to pay the substantial tax obligation under required by this bill, supplanting working capital to create jobs and allow business expansion. FBA immediately met with the senator, submitted our oppose letter and alerted the coalition we led last year on the estate tax. While FBA advocates were successful in holding this measure, we expect related efforts to continue next year under the new administration.
Employers also escaped a few burdensome bills due to the Governor’s veto pen. Brown vetoed AB 1870 (Reyes) that would have extended the statute of limitations from one year to three years for all discrimination, harassment, and retaliation claims filed with the Department of Fair Employment and Housing. Brown also vetoed AB 3080 (Gonzalez-Fletcher), which would have prohibited arbitration and settlement agreements for labor and employment claims, creating significant litigation exposure and expense for employers and significantly delaying the resolution of disputes for employees. Both authors have vowed to reintroduce these efforts after the next administration take office.
Of the bills signed into law, employers should be particularly aware of two.
SB 1300 (Jackson) bans nondisclosure agreements in sexual harassment and assault disputes, a practice that was publicly scrutinized as tools of predator filmmaker Harvey Weinstein. And SB 1343 (Mitchell) reduces the sexual harassment training requirement threshold from employers with 50 or more employees to employers with just five or more employees, includes non-supervisorial employees in the training, and requires that the Department of Fair Employment and Housing develop an online training course and make it available on the Department’s Web site. The bill requires that all employers must provide training by January 1, 2020.
In his 50-year career in politics, employers have come to know what to expect from Governor Brown, from the good (stabilizing the budget and workers compensation rates), to the bad (increasing labor and energy costs). We wish Jerry well as he rides off into the Colusa sunset — it’s truly the end of an era. Here’s hoping the next administration will be a golden era for California and not an error. In either instance, FBA will remain at the Capitol to serve you. Thank you for your membership.
Over the past few decades, the term “gentrification,” i.e. high-income persons and households moving into poor minority neighborhoods, who, in doing so, push out significantly poorer lifelong residents, has become one of the most negatively loaded words in urban circles. Almost everyone has heard about a formerly inexpensive community that over a decade became very pricy and celebrated its recovery with the arrival of a Whole Foods selling overpriced kombucha and GMO-free produce.
Elliot Eisenberg
As appealing and as plausible as this story may be, it’s an urban myth. The best empirical analyses conducted by urban economists have failed to detect a rise in displacements within gentrifying neighborhoods. This finding goes so much against conventional wisdom it seems impossible, but it’s true. As a matter of fact, researchers find that poor residents are more likely to stay put as their neighborhood improves. Moreover, the benefits of gentrification, in terms of reduced crime and better amenities, more employment opportunities, and reduced commutes are rarely, if ever, considered by naysayers.
There are three primary reasons why many believe that the poor suffer when wealthier residents move in. The first is that while all Americans move quite a bit, on average about 11.5 times during their lifetime, not everyone moves an equal amount. For example, from 2012 to 2013, 28 million Americans over age 15 moved: 11% of the population. Among households with incomes over $100,000, the percentage that moved was just 7%, compared to 13% for those with incomes below $5,000 excluding government benefits. As a result, merely observing that there are fewer poor in a neighborhood in no way suggests that gentrification is to blame.
A second explanation is that poor neighborhoods have had so little investment for so long, there is considerable slack in both their residential and commercial property markets. In most middle- and upper-class neighborhoods, virtually all housing units, store fronts, and office spaces are occupied. So, the arrival of a new household or business means the departure of another. But in poorer neighborhoods there are many vacant storefronts and apartments, so much so that relatively large numbers of wealthier households can move in and not push out existing residents or businesses. One study calculated that a low-income New York City neighborhood could go from a population that is 30% poor to 12% poor over a decade without displacing anyone.
Another reason the poor are not as adversely impacted as one would expect is that local governments often promote affordable housing programs such as rent control, inclusionary zoning, or other rent stabilization programs in neighborhoods that experience rapidly rising rents. Moreover, in neighborhoods experiencing rapid price appreciation, some market rate units are also built. Because of this increase in supply, rents rise less quickly.
Separately, but closely related to the above, many persons who bemoan gentrification simultaneously lament racial segregation and the lack of investment in non-white neighborhoods. The introduction of wealthier residents lessens the percentage of poor persons, and that has been shown to reduce teen pregnancy and incarceration rates and other such negative outcomes. Moreover, in these communities these improved social outcomes happen through market forces and frequently absent governmental intervention. To argue against gentrification is to encourage the status quo and insist that poor neighborhoods remain poor and segregated, and needlessly cut off from opportunity.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70-word economics and policy blog can be seen at www.econ70.com. You can subscribe and have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.
When Leonard Shubert rolled into Chico in 1938 and decided it would be a great place to start an ice cream business, some of the locals were skeptical.
“People said, ‘You’re going to sell five-cent ice cream cones? Good luck with that,’” recalled Kasey Pulliam-Reynolds, Shubert’s great-niece and the co-owner of Shubert’s Ice Cream & Candy, which is celebrating its 80thanniversary this year.
Kasey Pulliam-Reynolds and Nathan Reynolds of Shubert’s Ice Cream & Candy.
Indeed, Shubert’s is a North State icon, with lines regularly wrapped around the block on summer evenings to enjoy one of its 30-odd varieties of ice cream and 30 more kinds of hand-made candy. In fact, 10 years ago, it was recognized by ABC’s Good Morning Americaas one of the nation’s two best ice cream stores.
Still housed in its original downtown location, the Pulliam family this year finally opened a second location in the city’s major shopping mall to meet the demand.
Reynolds said the secret to Shubert’s continuing popularity is the family’s commitment to quality.
“Everything is made on site and only family members and one other person make our products,” said Reynolds, who handles the marketing and business end of the business while her brother, Nathan Pulliam, is in charge of production.
All the candy and ice cream are still handmade using many local ingredients, including butter, cream, honey and nuts. Even the seasonal treats, such as boysenberry sundaes in the spring, watermelon sherbet in the summer, and pumpkin ice cream in the fall, contain locally grown produce to give them that distinctive homemade taste.
Family members have been deeply involved since the beginning. After a Depression-era insurance business in Montana failed, Shubert purchased an ice cream machine and headed west to find a location. When he drove into Chico, with its tree-lined Esplanade, he knew it was where he wanted to build his business.
(Reynolds notes the original ice cream machine is still in use and is a secret to the business’ success as it makes a different product than more recent machines.)
As business grew in the late ‘30s and early ‘40s, Shubert brought family members out from Missouri to help out, including a nephew, Charles Pulliam, who eventually bought the business. Pulliam’s son, Chuck, took over from his dad and now the fourth generation is in charge.
While Nathan had been working at the store since high school, Reynolds spent some time in Corporate America, noting that having five family members working together was enough (grandpa, grandma, mom, dad, and brother all worked at the shop). She worked for large companies for several years until her mother died suddenly.
Because Reynolds was the only family member who had been taught how to hand-dip chocolates, she came back home. In fact, the candy side of the operation – almost a separate business – has been an important part of Shubert’s success over the years, as it keeps the customers coming in over the holidays and at Valentine’s Day when ice cream sales are low.
And that blend of ice cream and candy came together nicely in perhaps Shubert’s signature product – Chico mint ice cream, a reversal of most mint-chip ice creams because it’s chocolate ice cream with chips from the company’s handmade mint candy.
As with most family businesses, there are advantages and disadvantages to owning your business.
“There’s a lot of hard work and there are times the kids have to sacrifice and maybe not go on vacation when their friends do, but next Thursday I get to be a field trip driver when other parents don’t have that kind of flexibility,” she said
She joined FBA because she believes small businesses need a bigger voice.
“I used to do a lot of advocacy, but now that the business has grown and I don’t have time to fight for small business, I thought it would be important to join an organization that is acting as my eyes and ears about what is going on in Sacramento while I’m running my own business,” she said.
Reynolds is still directly involved in advocacy, however. She’s running for a seat on the Chico City Council this fall and while distressed about some recent vandalism around the store by people opposed to her right-of-center views, she is feeling good about her campaign and hopes to be able to bring diverse groups together if elected.
