Deputy Secretary of Labor Nominee Julie Su: a Case Study in Mismanagement

As the job market recovers from the government-mandated shutdowns, President Biden is pushing Julie Su to be Deputy Secretary of Labor, second-in-command of the U.S. Department of Labor. Ms. Su, the current secretary of the failing State of California’s Labor and Workforce Development Agency and the former Labor Commissioner of California under Governor Jerry Brown, has a troubling record. Under her leadership, the agency has been rife with massive unemployment benefits, fraud, and mismanagement.

The Big Picture

With thousands fleeing from California to escape the massive tax hikes, radical left policies, and rampant homelessness, Julie Su has exacerbated the ongoing unemployment crisis in the so-called “Golden” state. California’s unemployment rate now stands at 7.9%, the third-highest in the country. During her time as secretary of California’s Labor and Workforce Development Agency, she implemented the radically anti-worker state law known as AB 5, as well as the Private Attorneys General Act. If confirmed as Deputy Labor Secretary, Julie Su would bring her radical California policies to the entire country, further hindering economic recovery.

The Details

Fraud and Mismanagement:

• From March 2020 to December 2020, more than $11 billion dollars in unemployment benefits were fraudulently obtained, totaling 10% of all benefits paid, while an additional 17% is still under investigation. When asked about her gross mismanagement of the Employment Development Department, Su responded that “There is no sugarcoating the reality, California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”
• Of the $11 billion dollars, estimates from prosecutors claim that at least $1 billion dollars went to individuals who were not in the state or even in the country, and hundreds of millions went to inmates. In Riverside County alone, District Attorney Mike Hestrin claims that 1,500 inmates have received Employment Development Department benefits.
• Even in her home state, Julie Su has not been immune from criticism. As a result of Su’s failed leadership of the Employment Development Department, she was subject to an audit from the Auditor of California that identified her work as posing a “high-risk issue” and “inefficient.”

AB 5 and the Private Attorneys General Act:

• Assembly Bill (AB) 5 relates to the classification of a worker as either an independent contractor or an employee. AB 5, a bill pioneered by Su, replaced the common law test with the “ABC” test, which narrowed the classification of an independent contractor. This caused such significant job loss within the state that it was forced to amend the law and exempt a long list of jobs from the law’s strictures.
• The Private Attorneys General Act allows an employee to sue their employer regarding minor or even unknown infractions of California’s incredibly complex and convoluted labor code. In its application, the Private Attorneys General Act leads to needless lawsuits that can bankrupt small businesses and cost thousands of jobs.

Why It Matters

The nomination of Julie Su as Deputy Labor Secretary represents a rebuke of the feigned campaign promises of “moderateness” from the Biden administration and instead embraces the radical Democratic agenda found only in the “great” State of California.

A strength of the U.S. system of government is the complex and balanced relationship between state governments and the federal government known as federalism. If a failing state such as California wants to enact radical policy and finds itself subject to rampant fraud and mismanagement under the leadership of individuals such as Julie Su, the detriment to the state does not impact the rest of the country. However, if Su is confirmed as Deputy Secretary of Labor–a position charged with managing the massive U.S. Department of Labor–no one should be surprised when her lack of management ability harms the entire country.