Stormwater leaves town of Planada community unemployed, and businesses at a loss for revenue
In January, when stormwater breached a levee and forced an evacuation of the entire unincorporated community of Planada in Merced County, most of the community’s agricultural worker population was displaced and unable to work. It was a similar scene a couple of months later in the unincorporated and also largely Latino immigrant farming community of Pajaro in Monterey County, where thousands of residents were evacuated and unable to work after storms caused a nearby levee to breach. In both cases, despite working in some of California’s most vital jobs and contributing to state and local tax revenues, many of the workers were not able to access unemployment benefits.
Why? Because they’re undocumented.
It’s no secret that California’s economy — the fourth largest in the world — is powered by a large population of immigrant, noncitizen and often undocumented workers. According to our estimates, over 6% of California workers are undocumented. These workers fill 1 in 16 jobs in the state and generate $3.7 billion in state and local tax revenues. And every year, the employers of undocumented workers pay an estimated $302 million in tax contributions into California’s unemployment insurance system on their behalf. Yet, because of their status, undocumented workers are not eligible for unemployment benefits.
That’s a problem for the workers, their employers and the economy.
Having unemployment benefits improves the overall health and well-being of workers and our research suggests that would hold true for undocumented workers as well. From 2020 to 2022, we co-led the largest academic survey of farmworker health through the UC Merced Community and Labor Center. In our study, more than half of agricultural workers were undocumented and 36% were unwilling to report employer violations, mostly due to fear of retaliation such as job loss or deportation. We also found that those who lacked access to unemployment benefits were more likely to fear retaliation, indicating that increasing access to these benefits could improve job quality and security. For employers, there are significant benefits when their workers have an economic safety net — namely, stronger assurance that an “act of God,” like the recent floods, for example, won’t permanently displace what could be their only workforce.
For the communities in which undocumented workers live, a lack of unemployment benefits translates into a loss of economic investment. After the floods in Planada this year, we conducted a community needs assessment and found that 87% (667 of 766) of two-worker households missed work at a median of 21 days. Yet 57% (383 of 766) of those households did not have a single worker who was eligible for unemployment insurance benefits, potentially depriving local businesses of over $800,000 in revenue during the first weeks following the disaster — and deepening a local economic downturn that could have been partly avoided.
Simply put, having unemployment benefits would have allowed unemployed workers to continue contributing to their local economy.
As a country, we didn’t always deny undocumented workers access to unemployment benefits. Our national unemployment insurance system was created in 1935 as part of the New Deal in response to mass unemployment wrought by the Great Depression — back when immigrants largely hailed from Europe. For nearly four decades, the unemployment insurance system treated undocumented immigrant workers the same as all other workers; they paid into and benefited from the system just like any other worker. But in the 1970s, following the shifting national origins of U.S. immigrants from Europe to Latin America and Asia, and rising nativism against immigrant communities of color, U.S. lawmakers introduced the first federal laws prohibiting undocumented immigrants from accessing unemployment insurance, Social Security, Medicaid and benefits for families with children. The last undocumented workers to have access to unemployment insurance, before it was made ineligible to them in 1976, have nearly all reached retirement age — marking an entire generation of workers who toiled without an economic safety net due to racist backlash against immigrants of color.
Fortunately, lawmakers are moving to address the problem. The California Legislature is considering SB227, which would create a state-funded unemployment insurance system for undocumented workers. Last year, a similar bill easily passed through the Legislature but was vetoed by Gov. Gavin Newsom. This year, the governor has an opportunity to make things right.
California’s undocumented immigrant workers are responsible for sustaining the nation’s largest agricultural industry. They keep the food supply chain moving through work in food processing, transportation, grocery, retail, restaurants and food services. They work jobs in the logistics sector that has boomed with online retail, from warehouses to transportation jobs across the state. Understanding that undocumented immigrants have helped modernize our state, our state’s leaders should modernize their investment in them.
States are the source of innovation and leadership in the face of federal gridlock and national crises. During the Great Depression, Wisconsin created the first publicly funded unemployment system in the nation three years before the New Deal created unemployment insurance. This past year, Colorado became the first state to create a permanent unemployment benefits system for undocumented workers. Ideas once thought of as radical turn out to be rational, moral and sound policy. It is now California’s turn to lead.
Ana Maria Padilla is executive director of the UC Merced Community and Labor Center, and Edward Orozco Flores is an associate professor of sociology at UC Merced.
