To paraphrase Ronald Reagan, “Democrats’ view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Democrats in California can’t control the entrepreneurial spirit so they seek to dampen it by taxing it. The state legislature passed a law, A.B. 5, that radically alters the definition of an “employee” so that independent Uber and Lyft drivers, as well as others who work in the gig economy, are brought to heel by limiting the amount of independent contract work a company can claim.
Under AB 5, which will take effect Jan. 1, Californians will be considered to be employees of a business unless an employer can show the work they perform meets a detailed set of criteria established by a California Supreme Court ruling last year. Under those criteria, a worker is an employee if his or her job forms part of a company’s core business, if the bosses direct the way the work is done or if the worker has not established an independent trade or business.
The ruling and new state law raise the bar for companies that otherwise might rely on freelance or contract work. California’s bill is arguably the strongest of its kind in the nation, giving the state and cities the right to file suit against companies over misclassification, overriding the arbitration agreements that many businesses use to shield themselves from worker complaints. The new law’s supporters point to audits conducted by state employment officials that found almost 500,000 workers were wrongly treated as independent contractors. Much of the early legislative debate on the bill centered on low-wage sectors of the California economy.
Certainly there have been abuses of the independent contractor designation, but why use a howitzer to kill a fly? The bill has nothing to do with “workers’ rights” and everything to do with kowtowing to organized labor, which can’t stand the notion that people might actually want to make it without a union looking over their shoulder. Besides, it’s much more difficult to unionize independent contractors than traditional workers.
But in addition destroying the livelihoods of Uber and Lyft drivers, the law will apparently make the freelance writing industry obsolete.
Amy Lamare, who writes for money site Celebritynetworth.com and YourTango.com, adds, “Everyone’s freaking out, like my anxiety is going through the damn roof.”
To keep their lifestyles under AB 5, all of these writers will have to develop a much broader base of editor contacts and likely experience more competition as a result.
That’s because the state will place a limit of 35 submissions on a writer trying to make it independently. As an independent contractor myself, who writes nearly 30 submissions a week, I’d probably have to go back to being a telemarketer.
The assemblyman who sponsored the original bill defends it, saying the goal is “to create new good jobs and a livable, sustainable wage job.”
The overall goal of AB 5, Gonzalez says, is “to protect and preserve good jobs. We’re trying to create new good jobs and a livable, sustainable wage job.” Indeed, freelancers typically do not enjoy employee benefits like paid leave, sick days, health care and retirement benefits, nor are they covered by workplace civil rights laws that prohibit discrimination, and they have less recourse if laws are broken or fees aren’t paid on time (the latter a frequent complaint of freelance journalists). Gonzalez, who previously worked as a labor organizer and says she spoke to “dozens” of freelance journalists while writing the bill and moving it through the lawmaking process, adds that freelancers can be used to break newsroom unions like the ones formed last year at The Los Angeles Times and this year at The Ringer.
Sorry, but any freelance writer who’s excited about this bill should check himself into a mental health facility. I suspect the freelancers who support this bill aren’t very successful or don’t do it to make a living. Otherwise, this is a catastrophe.
What this bill does is guarantee the death of most independent journalism in California. And given the animosity toward capitalism and freedom among national Democrats, we might see similar legislation moving through Congress soon.