AB5 is the code name for legislation passed in California a few years ago to kill freelance work.
Ex-freelancers hate AB5; employers who can’t afford to convert contractors into regular employees hate AB5.
Unions, on the other hand, love AB5; lawmakers also love AB5.
A California citizen initiative partly reversed it. Then the Ninth Circuit at least temporarily reversed the reversal.
Though Democrats have made several attempts to bring it to the federal level, Congress has not passed a federal version of AB5. But now the Department of Labor is acting to impose a rule to challenge the status of many independent contractors, scheduled to take effect March 11. This AB5-like rule enunciates six criteria determining whether contract work may still be called contract work.
This affects what I do. One of my dozen jobs is citizen-initiative work. Various state governments have done all they can apart from comprehensive AB5-like rules to impede my ability to collaborate with petitioners to get citizen initiatives on the ballot. It is most efficient to pay these contractors per thing they do instead of earning a fixed salary or getting paid an hourly wage.
Politicians and bureaucrats know this.
If the Labor Department’s new rule takes effect, will contractors working with me pass the test? Or will we all be thrown into chaos and confusion?
It is being challenged in court.
Many voters — who are, after all, wage-earners or salaried employees — may not care very much; it may seem irrelevant to them. But it is time for them to inquire why some politicians and union bosses want to destroy the ability of freelancers to freely work for outfits short of becoming full-time employees.
For the ramifications will reach far beyond my niche “industry.”
This is Common Sense. I’m Paul Jacob.
Illustration created with PicFinder and Firefly
—
See all recent commentary
(simplified and organized)
4 replies on “The AB5 Agenda”
We may reasonably expect exceptions to be carved-out to AB5 and to like measures, but not for these measures to be reversed entirely.
I find it fascinating how the typical person sees the buyer — the party who brings money to the market — as the party on whose behalf the state should intervene, just so long as that typical person can fantasize that she is that buyer, but not when she instead imagines herself as the seller — the party who potentially accepts money.
In the case of free-lancers, the typical voter imagines herself as the seller, but does so incompetently. That incompetence is not merely an artefact of the typical voter not having experience as a free-lancer. The reporters for Vice were free-lancers who incompetently imagined themselves becoming regular employees, and instead found their jobs lost.
The real incompetence is in not seeing the application of a few propositions, found from everyday experience, to an understanding of how labor markets work. Perhaps foremost amongst these propositions is that rational people do not employ an option to a point at which its expected marginal cost will exceed its expected marginal benefit. When an employer is told that he has to bear additional costs in employing workers, he doesn’t simply snarl or weep and open his wallet; he changes his decisions on how many people to employ in the present and in the future.
We are not helped that so many conservatives and Republicans are amongst those who do not see the application, but instead merely speak and write of how the prices of commodities will rise in the face of increased labor costs. Voters often see such increases as an acceptable cost of bettering the lot of employees. Voters need to see that employees who are made under-employed or unemployed by these measures have not had their lot made better.
It is an insult and violation of basic human freedom that persons are not able to provide services to others on terms acceptable to the contracting parties.
That some interest groups, unions and governments, see a benefit to themselves in making that difficult or impossible does not mean that such restrictions are for the general societal good.
Any reduction in human freedom to follow their own self-interest, hopefully enlightened, to sell their services (personal productivity) is by definition counter-productive on its face. Worse yet, the burden will fall almost exclusively on the segments of society which can least afford to have the cost of this prohibition visited upon it.
That this foolishness will complicate and make more expensive citizen initiatives is unanticipated icing on the cake.
The notion that government can make my life better by criminalizing something I might otherwise voluntarily undertake, is anathema to me. And, I need hardly add, it is the antithesis of a free country.
How anyone can sing the last lines of the Star-Spangled Banner today with a straight face is a mystery to me.
The Star Spangled Banner ends only partway through The Siege of Fort McHenry; and, as it happens, at that point an appropriate question is asked and not answered.
The answer is “No.”