Maybe I’m old fashioned, but I don’t see a role for government in determining how we work beyond some basic rules governing safety and non-discrimination. In a free society with a generally healthy economy, employers and employees can make their own deals. As long as force or coercion is not involved, it is not a concern of the legislature or the federal bureaucracy whether someone, for example, takes contract work or full-time employment.
I can’t remember a single time when a government rule has noticeably improved my life. It’s usually the opposite. After the Legislature passed Assembly Bill 5 — the “landmark” labor law that largely prohibited companies from using independent contractors — many Californians lost their freelance income, and many turned to expensive workarounds that involved a myriad of legal and accounting costs. Thanks so much for the “protections”.
AB 5 was an absolute disaster. This should be obvious to any politician in California and nationally. An old friend of mine had a saying that went, “even the worm learns.” He was referring to a scientific experiment that found that if you stimulate the dumbest creatures (worms) several thousand times, they will eventually learn not to wiggle in a particular direction. The Biden administration is full of Californians (Kamala Harris, Xavier Becerra, Julie Su), but they have somehow missed the necessary lesson. Apparently they need a lot more stimulation.
The Supreme Court of California remembered this in 2018 Dynamex The decision imposed a tough ABC test on companies that used contractors. The case involved a delivery service that shifted its workforce from permanent employees to contractors. The court ruled that contractors must be A) outside the control of the company; B) carry out activities unrelated to the main mission of the company; and C) work as contractors in general. The unions were stunned. The legislature codified the decision in AB 5.
California’s progressive Democrats, who seemingly spend little time talking to regular people, were shocked by the results. Instead of hiring contractors as full-time workers with 9-to-5 schedules and oodles of benefits, companies have downsized their workforces. Unions claimed they were fighting “wage theft”, but there is no theft when willing workers accept work from willing employers on agreed terms.
In the midst of the stay-at-home order, lawmakers received criticism from struggling Californians who were no longer free to pursue an income from home. Musical and artistic volunteer concerts have had to be closed due to these work bans. Lawmakers promised progress for workers, but instead made their lives miserable. The funniest outcome: A publication that supported the law fired its workers in California.
The Legislature ultimately exempted more than 100 industries from the law. Voters then approved an initiative (still pending in the courts) that exempted drivers from ride-sharing. Sure, lawmakers have legislative cars at their disposal, but those of us who take Uber and Lyft — and routinely talk to our drivers — realize that most of them don’t want to work full time for those companies. They like flexible schedules and substitute work while they pursue college or other careers.
The Biden administration apparently pays no attention to news events in California. Through it all, the President has doggedly pursued implementation of some variety of AB 5 through legislation and the federal Department of Labor. He recently implemented a new rule that echoes ABC testing standards. The new rule doesn’t have the authority of something passed by Congress or legislatures, but it makes it harder to classify workers as contractors and could upend many industries. It’s clearly an attempt to promote AB 5’s rules.
In a surprisingly biased article, the Los Angeles TimesNoah Bierman chastises some conservative publications for claiming the president is adopting California’s approach nationally, when in fact he is simply reinstating the Obama administration’s old approach to these issues. Yet Bierman admits that “Biden’s promise to replicate California’s law nationwide has fallen victim to congressional gridlock and industry clout.”
In other words, the president promised to replicate AB 5 nationwide, but he failed. I can only assume that the Los Angeles Times doesn’t even pay much attention to California news. As noted above, AB 5 is not the victim of Congress or industry, but of the massive and angry backlash from California freelancers, many of them Democrats, in multiple professions who did not appreciate the job loss. The story focused on San Francisco’s deal with a company that connects workers with hospitality jobs, so AB 5 is still causing chaos.
The most galling part of the Times article cites a study by the pro-union Economic Policy Institute that finds that “workers classified as contractors lose up to $16,700 a year compared to what they would have earned as regular employees.” .” Maybe it should show how much money these workers are losing when companies cut their jobs because of AB 5-style mandates. When it comes to the economy, labor think tanks, journalists, and the Biden administration are as smart as those proverbial worms.
This column was first published in The Orange County Register.