Newsletter: California Inc.: A shadow workforce of contract labor keeps Google humming

Google’s contract workers serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams.

Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.

I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.

As expected, Friday saw the release of data showing the economy surged this spring to grow at a robust 4.1% annual pace for its best quarterly performance since 2014. But with trade tensions still strong between the United States and some key trading partners, particularly China, analysts expect the April-through-June growth will be the high-water mark for the economy this year.



#MeToo bombshell: The CBS Corp. board is scheduled to meet on a teleconference call Monday and Item No.1 on the agenda will be how to handle an explosive report in the New Yorker accusing Chief Executive Leslie Moonves of sexually harassing six women decades ago. Two of the women believe their careers suffered after they rebuffed his advances. The Wall Street Journal said it is possible Moonves will be asked to take a leave of absence while an investigation is conducted.

Standing pat: Federal Reserve policymakers are expected to conclude a meeting Wednesday by holding their key interest rate steady. No hike was forecast even before President Trump publicly criticized the recent rate increases last week. Investors expect another small increase at the Fed’s next meeting September.

CBS earnings: CBS Corp., which is locked in a tense legal battle with controlling shareholder Shari Redstone, releases its second-quarter earnings after the markets close Thursday. Analysts will be looking for an update on advertising trends and the company’s efforts to exploit digital distribution channels. The allegations against Moonves are almost sure to come up.

Fox watch: Fox Broadcasting and the FX cable channel will meet Thursday and Friday with television writers at the Television Critics Assn. conference, which has been taking place at the Beverly Hilton in Beverly Hills. Fox executives are expected to shed some light on how the company will handle the transition to Walt Disney Co. and how they plan to program the Fox broadcast network in the meantime.

Right stuff: NASA will announce Friday which astronauts will ride in which capsules for the first crewed test flights of what’s known as the commercial crew program. SpaceX and Boeing each built one of the capsules, which are scheduled to launch for the first time without crew next month, though industry analysts say that date will be pushed back.

Oh bother: Disney’s “Christopher Robin,” the studio’s latest live-action franchise revival, is expected to collect the biggest pot of honey at the box office this weekend with a projected $35-million opening. The movie stars Ewan McGregor as the title character, mixing it up with a computer-graphic bear, which sounds a bit like a certain other movie. Also opening are the Mila Kunis-Kate McKinnon comedy “The Spy Who Dumped Me” and Fox’s YA Thriller “The Darkest Minds.”


Monday’s Business section peeks at Google’s shadow workforce of contract laborers. These workers serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams — a sea of skilled freelancers who fuel the $795-billion company but reap few of the benefits and opportunities available to direct employees.


Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:

Unfriending Facebook: The social media giant’s stock plunged 19% after Facebook warned that its sizzling growth is slowing amid the user-privacy concerns and other controversies that have rocked the company. The loss was the largest daily dollar decline for a publicly held U.S. company in history, topping a $91-billion plunge in Intel Corp.’s stock in September 2000.

Happy place: Unions representing nearly 10,000 Disneyland Resort overwhelmingly approved a three-year contract that raises the lowest hourly wages by as much as 20% immediately and an additional 13% in January. Candy makers, custodians, retail workers, attraction operators and other low-wage workers are guaranteed a $15-an-hour minimum starting January. Higher-paid workers will get a more modest increase.

Strategic cuts: Mattel Inc. is slashing more than 2,200 jobs — about 22% of its global non-manufacturing workforce — and selling two Mexico factories. The El Segundo maker of the iconic Barbie doll has struggled in recent years as kids play has moved digital. CEO Ynon Kreiz said the layoffs are part of a $650-million cost-cutting plan intended to direct more money into developing new toys.

Housing slowdown: The Southern California median home price reached a new all-time high of $536,250 in June, jumping 7.3% from a year earlier. However, sales plunged 12% over the same time period, signaling people are increasingly being priced out of the market or simply unwilling to pay current prices. Real estate professionals said many clients are worried the market has peaked.


And some recent stories from other publications that caught our eye:

No bueno: There’s trouble at Univision, says the Wall Street Journal. “Discord and drama have engulfed Univision, the nation’s largest Spanish-language broadcasting outlet. Like most media companies, it is facing fundamental challenges brought on by entertainment’s shift to the internet, including a steep decline in cable TV subscribers.”

Mixed bag: The Orange County Register checks out the latest Orange County Community Indicators Report, which shows that the county “is a place where child poverty is rising, students are failing, opioid addiction is epidemic, rents are sky-high and businesses pay workers less than they did a decade ago.”

Past imperfect: From the Atlantic, a look at how tariffs could tear the GOP apart — again. “The rural voters who turned out so heavily for Trump will begin to see what their forebears once knew: Tariffs are rigged against them. The fury of such voters splintered the Republicans a century ago and condemned the party to decades of political exile.”

Mad money: The New Yorker tackles the burning issue of Millennial financial resentment, as seen in a series of recent articles about wealthy young women. “What this all added up to was a grim vision of our current situation, in which popular narratives around wealth acquisition have become so convoluted and self-delusional that Elon Musk recently tweeted that the word ‘billionaire’ has turned into a derogatory term.”

Smart license plates: The New York Times says the days of dumb old license plates may be numbered. A new era of digital plates is coming. “This is not about a license plate,” says one Silicon Valley exec. “It’s about connection. With a digital plate, you can be all connected in just one place.”


Ever wonder what those peering eyes in space can see? There’s the urban myth that military satellites can distinguish the bacon from the eggs on your plate. We don’t know if that’s true, but here’s a fact: Today’s satellites are smaller, cheaper and more abundant than ever. Bloomberg takes us on a tour, showing what some companies, governments and even NGOs are doing with all that high-tech wizardry.

For the latest money news, go to

Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.

Until next time, I’ll see you in the Business section.