Assemblywoman Lorena Gonzalez, the San Diego Democrat who authored a landmark labor law (Assembly Bill 5), apparently is one of the most intelligent people in the state. Her colleagues who voted for that law, and the governor who signed it, have boundless knowledge, as well. The same holds true for the California Supreme Court justices who authored the decision that’s at the foundation of the law and for the regulators who will enforce it.
I used to believe that individuals knew the best way to pursue their professions and arrange their family schedules and lives. I might not be as bright as these policymakers, but I have found that working a full-time job and supplementing it with freelance writing is the most efficient use of my time and limited skills. My wife believes — based on 30 years of experience as a librarian — that assembling some part-time and contracting gigs works best for her. But what do we know?
By contrast, Gonzalez, despite her limited background as a union organizer and politician, seems better versed in journalism, librarianship, and even our personal family situation than we are. In fact, she has better insight than hundreds of thousands of other Californians — in professions including trucking, rabbinical work, exotic dancing, and delivery driving — about the complex and imperfect choices and tradeoffs that they all face in this world.
It’s amazing, really. As I’ve described for The American Spectator, AB 5 forbids many companies from hiring contractors even though such relationships are the result of voluntary arrangements. We’re all accustomed to paying higher taxes than other places, filling out more paperwork, and following more rules. But this new law outlaws the kind of work that more than 8 percent of the state’s workforce relies upon to pay their bills.
The measure codifies last year’s California Supreme Court decision in the Dynamex ruling. It involved a same-day delivery company that converted its drivers from permanent employees into independent contractors. The court sided with the plaintiffs and concocted — thanks to their supreme wisdom — an “ABC” test that companies must pass in order to use contractors instead of full- or part-time employees. The workers must not be under the company’s direction, nor can they be involved in the firm’s main business, and they must have made the conscious decision to go into business for themselves.
Most media reports focused on the impact on gig-economy economies such as Uber, Lyft, and DoorDash, which have created business models based entirely on using contractor labor. The typical ride-sharing driver only works four hours a week, given that such work serves mostly as a form of supplemental income for people who have other jobs or are pursuing other educational or business opportunities. These companies aren’t going to hire all of these drivers as permanent employees, so we’re watching a slow-motion wreck that imperils drivers’ income and flexible schedules.
But the ruling also potentially threw much of the service economy into a tailspin, as it imperiled the working arrangements of real-estate agents, insurance salespeople, doctors, lawyers, and you name it. As I noted, California lawmakers think they understand how all of us should live, down to the details of our working relationships, but they didn’t realize that the economy has changed so dramatically that fewer people are working in shifts or cubicles. They never considered that many of us prefer our newfound flexibility. So they littered the final bill with exemptions, which were granted mainly to industries with the most political influence.
Many industries, however, were not exempted. Freelance writers and photographers, for instance, are now panicking given that Gonzalez arbitrarily decided that they could only submit 35 pieces a year unless they were employed by the publication. That means that newspapers can no longer afford to publish, say, weekly columnists who don’t want to work for the newspaper but enjoy contributing to the community debate. I already have benefits, and assembling various other writing projects allows me to pay my many bills. Then again, how could I understand what works best for me?
Other old-line industries are in trouble, too. A new federal lawsuit filed by the California Trucking Association claims that AB 5 violates the U.S. Constitution by impeding the livelihoods of tractor-trailer drivers who don’t always limit their routes to within California. The Commerce Clause restricts the ability of states to impede interstate commerce. What better example of such commerce than interstate trucking? The lawsuit also alleges a violation of the Supremacy Clause, given that federal trucking laws trump state restrictions.
The main issue involves the choice of truck drivers and trucking firms to fashion work relationships that suit them, not to mention their customers and end consumers. The trucking group notes that many of its members “regularly contract with individual independent contractors who own and operate their own trucks … to provide interstate trucking services.” The law would make such relationships cost-prohibitive by forbidding these truckers from completing a run from, say, Utah or Nevada to California.
These truckers are entrepreneurial owner-operators. Not many of them would want to reduce their earnings and flexibility by becoming mere employees. “Independent truckers are typically experienced drivers who have previously worked as employees and have, by choice, struck out on their own,” said California Trucking Association CEO Shawn Yadon in a statement. “We should not deprive them of that choice.”
We’ll see if the lawsuit — as well as other actions to change the measure — helps save California workers from their would-be protectors. If it doesn’t, I’ll put in a call to Gonzalez’s office. I’m sure she knows how my wife and I are supposed to pay that college tuition.
Steven Greenhut is Western region director for the R Street Institute. Write to him at email@example.com.