Perhaps the most controversial bill of this year’s legislative session is legislation responding to last year’s state Supreme Court ruling that has the potential to disrupt how millions of people work in California.
In the Dynamex ruling, the Court established a new three-prong test to determine who is an employee and who is an independent contractor. As PRI’s Kerry Jackson wrote about the decision, “the test (set by the Court) sets an unreasonably high bar for workers to be classified as independent contractors.”
Tens of thousands of independent contractors and innovative start-ups have urged the Legislature to pass reforms allowing the freedom of Californians to work as they choose to continue.
Unfortunately, the Legislature is poised to go the opposite direction with AB 5, which would codify much of the Court’s new high bar into law. Though the bill has been amended to exempt those contracting at hair salons and real estate and other industries from its requirements, these exemptions are part of the legislative “sausage making” to try and assuage enough opposition to pass the bill.
Consider this bill the opening salvo in the debate over the future of work. If enacted, AB 5 will still make it harder for Californians to be their own boss, work as they choose, or create the next California innovation.
Naturally, guardians of the old ways of doing things use the Legislature to try and block change by promoting bills like AB 5. At a recent noisy Capitol rally, Assembly Speaker Anthony Rendon made clear the proponents’ agenda – unionizing more workers and requiring just about every California worker to work as an employee.
Using profanity, Rendon evoked the traditional class warfare rhetoric one might imagine Bernie Sanders using at a rally in the 1970s at Union Square in New York.
“People keep acting like they’ve invented new things. It’s the same old thing. It’s about corporations trying to oppress workers. When you hear folks talking about the new economy, the gig economy, the innovation economy, it’s (expletive) feudalism all over again.”
Only it’s not feudalism. It’s how our economy is evolving. In many ways, this new way of working is about Californians adapting to the growing automation that is displacing jobs performed by humans.
Whether Rendon likes it or not, the economy is transitioning from the traditional one job over the course of a career, 40-hour work week job to individuals working for themselves and contracting with multiple clients or contracting part-time for a few different firms. Most who have adapted this work model like the freedom of working at home, as their own boss, on their own schedule.
The history of Silicon Valley and the start of tech giants like Hewlett Packard and Apple Computer and the infamous garage shows that innovation comes from individuals starting small and risking it all on their one big idea. As Sen. Mike Morrell told the Sacramento Bee, “I don’t know how new businesses are going to get started” if AB 5’s restrictions on worker freedom become law. He’s right.
Thinking of the debate, I was reminded of a recent conversation I had with Anthony, an African American Uber driver on my drive home from the airport. He had recently retired from a career in the Army, and was now driving for Uber part-time, while also putting his landscaping and gardening skills to work through Thumbtack. He said he was busier than ever before, loved the freedom of working as much as he wanted to in retirement, and liked the money he was making, too.
If Rendon and his allies have their way, these opportunities for Anthony and others like him would disappear. Unfortunately, that’s the inevitable result when government intervenes to “protect workers.”
Tim Anaya is the Pacific Research Institute’s Communications Director.
