The gig economy is a crucial part of our nation’s economy. Independent contract workers benefit many sectors of our economy, from healthcare to the arts to Uber and Lyft.
That’s why people balked when Gavin Newsom’s AB5 passed. It crippled the gig economy, It turned out to be even worse than they thought.
The opposition was bipartisan, and it was the brainchild of Julie Su; even Democrats didn’t want to confirm her. She failed in California, but Biden pressured Democrats to vote for her.
Su was formerly in charge of California’s labor department and was detested for her advocacy of the anti-freelance AB5 law. She was also grossly negligent in overseeing the EDD, which lost $40 billion to fraud during the pandemic. Biden pushed Democrats to approve her nomination.
Mitt Romney tried to derail her nomination.
Julie Su not only lacks the experience and competency to serve as Secretary of Labor, but she carries a record of gross mismanagement of taxpayer dollars. Under her watch, California sent out $31 billion in fraudulent unemployment benefits! Her nomination makes no sense at all. pic.twitter.com/VszUcrWC63
— Senator Mitt Romney (@SenatorRomney) April 20, 2023
IT SERIOUSLY HARMED THE ALREADY HURTING TRUCKING INDUSTRY
Journalist Daniel Greenfield wrote: “2019 was described as a “bloodbath” for the trucking industry with 640 trucking companies across the country filing for bankruptcy in just the first half of the year. Thousands of truck drivers were left unemployed. Many went into the expanding last-mile delivery business, some as contractors for Amazon. But California truckers and businesses had their own special woes.”
The law also crushed industries like journalism. No sector of the economy went unaffected.
The law basically made it illegal to hire gig workers for anything more than occasional work.
Out of loyalty to union donors, Biden decided to put the law into effect nationwide.
The new rule just issued by the Biden Administration will essentially ban independent contractor status for gig workers under the Fair Labor Standards Act. It will threaten a crucial source of livelihood for millions by putting these jobs at risk. For example, a recent study projected that this sort of policy would result in more than 73,000 lost app-based jobs in Massachusetts alone.
After wage negotiations by the United Auto Workers and other unions, the Biden Administration thinks these workers would be better off if they are converted to full-time employees who join unions and get employee benefits. It will destroy the flexibility and independence of these workers.
The workers in the gig economy need and want the freedom to set their own schedules and decide when and where they work.
The Bureau of Labor Statistics found that 79% of independent workers prefer their current arrangements over traditional employment, which can take away their flexibility.
WHAT TO EXPECT
The Hill Op-Ed Excerpt
Many businesses and nonprofit enterprises that relied on independent contractors stopped using those workers. Workers didn’t want to trade the freedom of freelance work for false employment benefits. Also, many companies couldn’t afford to make them full-time.
Countless self-employed Californians suddenly lost work opportunities and faced steeply declining incomes. Making matters worse, AB5 took effect in January 2020, mere weeks before Newsom locked down the state in response to COVID-19. Just when Californians most needed the freedom and flexibility that independent contracting afforded them, they were frozen out of the labor market.
AB5’s opponents — an array of workers and groups who crossed partisan and ideological boundaries — begged the legislature to reconsider upending California’s freelance economy. Lawmakers handed out exemptions to the politically connected; union leaders were put in charge of deciding which professions got an exemption. Mostly, lawmakers ignored workers’ concerns.
It’s so corrupt, and with the exemptions, it’s the Swiss cheese law.
The AB5 bill is still wreaking havoc, but they won’t change it. The unions want it. Imagine how it will wreak havoc when it’s nationwide.