Tag: independent contractors

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First Amendment rights general freedom judiciary

High Court Too Busy

California, gig, contractor, speech, censorship

What is the U.S. SupremeCourt thinking by refusing even to listen to arguments about the effects of California’s AB5 law, which effectively outlaws certain kinds of freelancing and gig work, on the right to speak out and petition in California?

The case is Mobilize the Message, LLC v. Bona. Plaintiffs were challenging the constitutionality of AB5 because it bans independent contractors from doing door-​to-​door canvassing for candidates or initiative campaigns yet allows independent contractors to do the same kind of work if they’re doing it as newspaper carriers or salesmen.

Of course, if AB5 were completely consistent in its assault on independent contractors, that wouldn’t make it any less injurious to political work and freedom of speech. But the separate and unequal provisions of the act do mean that political workers are being forced to abide by different rules than certain nonpolitical contractors.

That’s not right, not just.

As the Institute for Free Speech puts it, “The only distinguishing feature separating the two [kinds of contractors] is the content of the speech they are paid to promote, a distinction that is presumptively unconstitutional under the First Amendment.”

Lead counsel for the plaintiffs, Alan Gura, says that the Court’s decision will “price political speech beyond the reach of many citizens.”

What’s the deal, are the justices too busy? 

We’re all busy. 

On the other hand, they have a job. A lot of folks in California could use one, too.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

The Biden’s War on Independents 

California, contractors, independent, legislature

They know. They aren’t complete idiots. When enemies of the market routinely try to stop people from earning a living through restrictions like minimum wage laws and arbitrary licensing to thwart such dangerous activities as hair-​braiding, few are ignorant of the disastrous consequences.

Case in point? 

The Biden administration is on the verge of using a federal version of California’s AB5 law to mass-​slaughter the opportunities of millions of gig workers and freelancers. The administration hasn’t managed to do it legislatively. So it’s trying to inflict the damage with a Department of Labor regulation.

The idea is to stop companies from classifying independent contractors as independent contractors. Passed in California a few years ago, AB5 prohibited companies and many contractors from working with each other unless companies took them on as regular employees.

To avoid the costs of doing that, many companies instead simply ended their relationships with hundreds of thousands of gig workers. For example, Rev, a transcription service, stopped working with all freelancers residing in California.

California lawmakers knew how destructive AB5 would be when they passed it — proof-​positive being the many exceptions for politically connected groups that were stipulated as part of the law. AB5 has now been repealed and replaced by AB2257, which increases the varieties of worker exempt from the new requirements. But it still leaves many other people, like California-​based truckers, in legal limbo.  

It’s okay though, because all truckers do is deliver the stuff that all the rest of us need to survive.

This madness should not be imposed on everybody throughout the country.

And certainly not by back-​room bureaucratic machinations.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Attacking Wage Employment

I don’t know what the optimum ratio of employees to independent contractors would be. No one does. But we can be pretty certain that the current skewing of the economy towards less wage employment and more independent contracting by Obamacare is not a good thing.

You see, “one consequence” of the health reform package, writes economist David Henderson on EconLog, “is an increase in contracting out to avoid the 50-​person threshold.”

Now, if there were a general shift towards part-​time employment and professional contracting as a result of businesspeople and workers appraising their advantages on the open market, we’d just note this with interest or a shrug and say, “whatever the market decides.”

After all, people might substitute wage contracts for performance contracts (or vice versa) for reasons given by Nobel Laureate R.H. Coase, who figured out why firms exist at all: contracting out isn’t costless. It takes time to negotiate each deal, each task, etc. My friend Dr. Henderson will correct me, I hope, if I’m wrong, but employing labor full-​time — by bundling numerous tasks together — is usually easier and cheaper than seeking out specialists and consultants for each task you want done.

In recent years we’ve seen a rise in consulting professionals, in part because the Internet has reduced the costs associated with working from a distance. But today’s switch to independent contractors (as well as to part-​time employment) is a result of Obamacare raising the cost of keeping full-​time employees. Of course businesses will seek to … economize.

And we know such substitution is suboptimal because people are doing it under duress, the threat of force behind Obamacare.

This is Common Sense. I’m Paul Jacob.