In 1999, the Director of the Department of Industrial Relations, Steve Smith, apparently sat with the employer negotiators to formulate policy during the middle of the negotiations. So far, Governor Davis has sided totally with employers on this issue. In another significant slap at labor, Governor Davis vetoed a bill to increase unemployment benefits. California's robust economic prosperity is continuing, and California is experiencing its lowest unemployment rate in decades, he said in his veto message. At a cost of 3 billion phased in over three years, the bill by State Senator Hilda Solis, D-La Puente, would have been the first increase in the payments since 1989.
Unemployment insurance is paid to workers who lose their job through no fault of their own.
Davis also said the bill would have put the unemployment insurance fund solvency at risk. His arguments mirror ones that business interests had used to argue against the bill. Thus, as the end of the legislative session of 2000 came, the governor vetoed two key bills sponsored by labor.