Gavin Newsom says Democrats nationally need to ‘wake up’ on income inequality
Gov. Gavin Newsom reiterated on Tuesday his recent remarks that income inequality is driving the U.S. towards authoritarianism as Democrats look to capitalize on affordability issues to try and win back Congress in November.
Newsom and U.S. Sen. Alex Padilla, D-Calif., spoke in Los Angeles at the National Association of Latino Elected and Appointed Officials’ annual conference. The two tied the hollowing out of the middle class to inflation and the accelerated concentration of wealth by a select few billionaires, including the newly minted trillionaire Elon Musk.
That inequity is now reflected in national policies, as “wealth is creating power, locking in rules and regulations, locking everybody else out,” Newsom said, referring to business moguls who have profiteered from their connections to the White House. “At the same time, we have 20 states still paying $7.25 (minimum wage) an hour.”
He said the “old bargain” that hard work would guarantee one access to a home, a well-paying job and the ability to support a family was “dead.”
“The old bargain is dead, and AI is going to finish it off,” Newsom said, referring to fears the emerging technology will automate jobs out of existence. “And we need to wake up to that foundational reality.”
Last month, he called on Congress to consider a national wealth tax, while opposing a state version that will appear on the ballot in November. Newsom also called to reinstate corporate tax rates to pre-2017 levels, when President Donald Trump signed a major tax code overhaul into law during his first term.
Neither policy is likely to pass a Republican-controlled Congress.
Democrats ran a similar version of that message in 2024 when they framed Trump’s victory as an existential threat for democracy.
Since Trump’s return to the White House, Congress and a series of Supreme Court rulings in his favor have allowed him to “abuse his power and constantly overreach,” Padilla said, referring to the president’s attempts to end birthright citizenship via executive order and his expansion of executive power over the federal government.
“We’ve got political work to do for the next 112 days, to at least restore a check and balance in Congress,” Padilla said. He went on to say that Democrats would spend the next election cycle “organizing, mobilizing, and getting out the vote.”
Nationally, Democrats are “bullish” about their chances of flipping the Senate as voters have turned against Trump due to the ongoing war in Iran and the economy, according to the Washington Post. In addition, leftists and progressives have urged candidates to embrace more populist positions after democratic socialists won a handful of primaries in Colorado and New York.
Newsom, who is eyeing a run for president in 2028, sidestepped that ideological conflict: “Certainly, nostalgia is not working. I would argue socialism not going to work, but capitalism as we know it doesn’t work either.”
The governor, who was a business-friendly moderate when he served as San Francisco mayor, said the U.S. needed to “fundamentally understand” the social contract was “broken.”
“We cannot play in the margins any longer. And we can talk about those prescriptions as perhaps another conversation,” he said. “But I think foundationally, folks now get it. We can no longer argue again to fail more efficiently. It’s time for order of magnitude change in terms of how we approach the American dream, how we approach here in California, the California dream.”
