At least 40 million Americans filed for unemployment benefits since the start of the pandemic.
You’d expect politicians who champion workers’ rights — including former Vice President Joe Biden — to oppose measures that would limit Americans’ opportunities to support themselves and their families.
You’d be wrong. Biden has aligned with his labor union backers in support of a new California law that is robbing countless individuals from earning a middle-class income. Americans historically have had the opportunity to either work for a company as an employee, or to be their own boss as an independent contractor. California’s Assembly Bill 5 (AB5) took effect January 1st and effectively shut the door on independent contracting across the Golden State.
Businesses responded swiftly to the stiff penalties in AB5 by curbing their use of contractors in the state. Hundreds of news stories chronicled California freelancers who saw their income dry up overnight; the New York Times reported on a copy editor in Oakland, whose medical condition made the flexibility of freelancing a logical choice, that lost contracts for this year totaling $120,000. Karen Anderson, a freelancer in California hurt by the law, collected countless personal stories of contractors’ lives upended by the law.
The backlash was swift, and bipartisan: Markos Moulitsas, founder of the liberal blog Daily Kos, savaged the state’s politicians: “AB5 is destroying livelihoods and removing people’s ability to choose their style of work. Let freelancers who want to be freelancers, freelance.” Former California Senator Barbara Boxer wrote in the San Francisco Chronicle that limiting work to “an employee model will mean far fewer opportunities” for individuals to earn an income.
Biden got a taste of the bipartisan furor this past week when he tweeted that Californians should vote no on a ballot measure this fall challenging AB5. “I’m a registered Dem in CA that can no longer work as a freelancer [because] of #ab5,” tweeted one affected contractor. “Because of #AB5 I will vote Republican for state seats for the first time,” said another. “#AB5 is hitting us in the paycheck. We will take care of our families first.” An independent artist in California summarized it this way: “AB5 has destroyed the livelihood of hundreds of thousands of Independent Contractors. It protects a very few and hurts over 300 occupations that work on contract.”
With such opposition, how could such a bad piece of legislation become law? Labor unions have long despised businesses’ use of contractors, preferring the 1940s-era employee-only formula that facilitates workplace organizing. California unions were particularly interested in organizing gig economy companies—think Lyft or Shipt—whose drivers and shoppers are contractors rather than employees.
California Assemblywoman Lorena Gonzalez, a former union organizer and still a card-carrying member of the Teamsters, was lead sponsor on AB5, and worked closely with the state’s unions on drafting its provisions. Gonzalez described her goal this way: “[W]e get AB5 – and then we organize workers into a union.”Gig workers can’t join a union if they don’t have a gig, and that’s what California’s approach promises.
In an economic analysis issued this past week, one gig company’s economist estimated a “76% decrease in the number of drivers finding work” should the company be forced to classify drivers as employees.
A study from the Berkeley Research Group, a consultancy that received support from the gig companies, found an 80-90 percent drop in gig work opportunities statewide.
Biden may have decided his AB5 endorsement is necessary to remain in labor’s good graces in an election year. But you can’t be a defender of the middle class if you endorse a policy that kicks workers out of it.
Michael Lotito is a labor lawyer based in San Francisco and Washington, DC. Michael Saltsman is Managing Director at the Employment Policies Institute.