California’s AB-5 law severely limits the type of freelance work that people can do. Several other blue states, including New York and New Jersey, are considering some variation on this unintentionally harmful law. It would be nice if legislators aiming to help workers would recall the adage, “First, do no harm.”
Is schadenfreude, the phenomenon of happiness felt at others’ misery, ok? How can one have happy thoughts at another’s misery? And yet I am made in the image of God. You know, the God who, concerning nations, peoples, and kings who plot against him and his anointed, doesn’t suppress what seems to be more than a chuckle. “He who sits in the heavens laughs; the Lord has them in derision” (Psalm 2:4). He’s likely not laughing about their winning hand.
Today’s rules supposedly hold that, with regard to laughs, we are always supposed to “punch up” and not “down.” Considering that God, who is omnipotent and above all, can only punch down, and that the people who announce these rules never really follow them anyway, I’ve concluded that a bit of schadenfreude directed at those who act in evil ways is not so bad. The same would go for those who act foolishly out of pride at their pretended knowledge of what’s good for everybody else.
Whether or not you buy this argument, you would have to have an adamantine heart to refrain from giggles at the juxtaposition of a couple of articles in our recent past. The first was a September 11, 2019, headline at the left-wing “explainer” site Vox calling for readers’ hosannas that “Gig workers’ victory in California a victory for workers everywhere.”[1] This article heralded the passage of California’s AB-5, a law largely written by California unions that severely limited the type of freelance work that people can do without being made employees by the organization for which they are working. It was designed to hit Uber and Lyft, but it was written with a broad brush. Sure, there were a couple dozen exemptions given to people working as real estate agents, commercial fishermen, psychologists, lawyers, and various other jobs. But a whole swath of things that people did in the “gig” economy would effectively be wiped out or subject to severe restrictions. Many people would be required to create their own business entities and then follow a whole list of requirements that the bill set out, requiring thousands of dollars of outlay for each truly “independent contractor.” Workers would not be free, but they would be lanced.
The laughter-inducing second headline came from CNBC, dated December 16, 2019. It read, “Vox media to cut hundreds of jobs ahead of changes in California gig economy law.”[2] The Twitter feed for Alexia Campbell, the Vox author of the first article celebrating “the victory for workers everywhere,” now reads “Previously @voxdotcom.” You see, AB-5 required that writers who contributed thirty-five pieces in a given year would have to be hired. Thus, many people who were working their way up—including “workers’ rights investigative reporters” such as Alexia Campbell—now had to be let go.
Your exploitation at the hands of, er, Vox is ended!
There is a reasonable impulse behind a law like AB-5. That reasonable impulse is that it is good for people to have full-time work with employment benefits. The problem is that reasonable legislation requires more than impulses. Not everybody wants a “job”—even if it comes with benefits. Many people value freelancing for a variety of reasons, and among the most commonly cited is flexibility. One of the ironies of the opposition to the law, which took effect on January 1, is that women are taking the lead in this battle. A January 17 Forbes article detailed how women not only value the independence and flexibility of freelancing themselves, especially those who are mothers or are caring for family members, but many have figured out that they can also earn more money than in traditional staff positions. Not only that, but many are statistically overrepresented among business owners of “nonemployer” payrolls. They are often hiring other women to freelance for them, according to those women’s needs and the needs of the women business owners.[3] Take a look at the “Repeal AB-5” Twitter feed and notice the predominance of females contributing.[5]
Alas, it was a woman, California representative Lorena Gonzalez, who pushed this bill through. Her responses showed both tone-deafness as well as an inability to understand reality when she replied to a writer named Rebecca Lawson who lamented that along with hundreds of other colleagues, she would no longer be able to work for SB Nation, the sports-blogging site owned by (who else?) Vox Media. “First, this states the company had been contemplating the switch for 2 years. Second, it clearly states that those contracted jobs are being converted to full & part time jobs. I understand a contractor who doesn’t want a job being upset, but that’s certainly not all bad.”
The problem with Representative Gonzalez’s reply was not simply the complete lack of sympathy (and the rather lame excuse that Vox had thought about it for two years—but they only did it when forced, Representative!), but also the foolish view that everyone would be hired back as an employee. As Ms. Lawson responded to her, “They’re creating like 15 full time jobs for HUNDREDS of us who were let go just because California. That’s good? How???” To her credit, the representative then said she was sorry for the loss.[5] But the idea that everybody who freelances can get hired back is simply fallacious—even if every freelancer wanted such an outcome.
People from a variety of different fields are now requesting more exemptions from the law and seeking remedies in court. Not all of them are in majority female lines of work, either. Truckers got a permanent reprieve when, on January 13, a California Superior Court ruling gave a permanent exemption to truckers based on the 1994 Federal Aviation Administration Authorization Act.[6]
Several other blue states, including New York and New Jersey, are considering some variation on this law. Kira Davis of Redstate reported on H.R. 2474, a bill that was drafted in the U.S. House of Representatives in May 2019 that was designed to help unions but was amended this past fall by adding the content of AB-5 in a way “so awkwardly jammed into the text that it can be nothing other than a literal copy and paste.”[7] As the CNBC article announcing Vox’s layoffs cited above notes, there are 57 million Americans freelancing and contributing one trillion dollars to the economy every year. A federal law duplicating AB-5 would be a disaster not just for women, truckers, and journalists, but a whole host of people making decisions about how to spend their time and pay their bills.
Again, it is reasonable to want more full-time jobs for those who want them. As I have noted before in this journal, one does not need to hold to a faulty “stakeholder” model to think that business leaders have to treat laborers as something more than simply another expenditure. That means thinking about crafting jobs in such a way that not only is the dignity of workers affirmed, but their gifts are brought to bear in adding value to the business and they are paid in such a way as to reward this work.
That does not mean, however, that every job should be full-time or even part-time. The needs of businesses and workers are met by a variety of different kinds of employment and contract. For those who complain that many people are “trapped” in the gig economy, the answer is not to make it impossible for those who feel freed by it to thrive by putting companies in the position of letting their contracts go. It is to reduce the onerous burdens on employers that are ostensibly designed to protect workers but often make it more expensive to hire them. A further answer is to help these people gain the skills and experience needed to apply for other positions. Whether that last task is best pursued by government action is a topic for another column. In the meantime, it would be nice if legislators aiming to help workers would borrow a line from the popular summary of the Hippocratic Oath: First, do no harm.
In the end, even if a bit of schadenfreude at a naïve reporter’s temporary fate (Miss Campbell seems to be writing for another outfit) is justified, for the rest of the country it’s no laughing matter.
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Notes:
[1] Alexia Fernández Capbell, “Gig workers’ win in California is a victory for workers everywhere,” Vox, September 11, 2019.
[2] Ari Levy and Alex Sherman, “Vox Media to cut hundreds of freelance jobs ahead of changes in California gig economy laws,” CNBC, December 16, 2019.
[3] Elaine Pofeldt, “California’s AB5 Leaves Women Business Owners Reeling,” Forbes, January 19, 2020.
[4] Faces of AB5 (@Ab5Of), Twitter.
[5] Lorena Gonzalez (@LorenaSGonzalez), “First, this states the company had been contemplating the switch for 2 years. Second, it clearly states that those contracted jobs are being converted to full & part time jobs. I understand a contractor who doesn’t want a job being upset, but that’s certainly not all bad,” Twitter, December 16, 2019.
[6] Evan Symon, “California Court Rules That Truckers Are Exempt From Ab 5,” California Globe, January 13, 2020.
[7] Kyra Davis, “Warning: There is a Federal Version of California’s Gig Economy Killer Sitting in Congress Right Now,” Red State, January 17, 2020.
The featured image is “The Stonebreakers” (1849) by Gustave Courbet (1819-1877), courtesy of Wikimedia Commons.
I commend you for a well thought out article and you raise many good points. It is clear that the CA law was poorly crafted and the unintended consequences are numerous. The heart of the issue, in my opinion are companies that purposefully craft their employment practices to avoid designating their workers as employees. There are many people who work full time for UBER and who should be designated as such. This is the issue we need to solve. We need a well studied thoughtful approach that balances workers rights, company interests, and societal benefits. A top down legislative “solution” by amateur politicians will not likely do the trick.
Your line of thinking in your comment about Uber suffers from the same economic fallacy as the California law. If Uber were mandated to classify more workers in a way that required additional compensation or benefits they’d eliminate a number of those jobs. In the real world you can’t increase the cost of labor and assume that doesn’t change the demand for labor.
Very similar issue/topic as minimum wage laws. The government sets out to improve something,presumably with good intentions, but forgets about the economic realities that drive business decisions.