Terry McLaughlin: New California law, AB 5, hurts those it seeks to protect
It often appears that legislators whose lives are absorbed in efforts to replace existing rules and laws with ones that are “fairer” or more equitable, are often not really interested in whether their efforts will truly make things better for actual individuals.
California Assembly Bill 5 is just one of the latest examples of misguided legislation hurting the very people it was aimed to “protect”.
Introduced by Assemblywoman Lorena Gonzalez (D-San Diego), AB 5 was approved by the State Senate on a party-line vote 29-11, by the State Assembly 56-15, signed by Gov. Gavin Newsom in September and went into effect on Jan. 1.
Proponents of this bill said it would protect workers in the “gig economy,” who do various jobs on their own time but don’t receive benefits such as minimum wage, overtime, sick leave, unemployment and other long-term employment guarantees of more traditional, full-time jobs. The bill puts severe restrictions on who is qualified to be considered an independent contractor or a freelancer, and limits how much work freelancers can do for any individual business before being considered a full-time worker and qualifying for benefits.
A number of exemptions were written into the bill including those for direct salespeople, travel agents, grant writers, construction truck drivers, commercial fishermen, doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, accountants, engineers, licensed barbers and cosmetologists, and real estate agents.
The problem, for those occupations not fortunate or powerful enough to earn an exemption, is that instead of aiming to hire more workers, many companies are simply getting rid of freelancers and independent contractors in favor of a smaller number of full-time employees. The new law strikes at the heart of the business model for ride-sharing services such as Uber and Lyft, who have already filed a legal challenge alleging AB 5 violates individuals’ constitutional rights, stating “Rather than embrace how the on-demand economy has empowered workers, benefited consumers, and fueled economic growth, some California legislators have irrationally attacked it.”
AB 5 is having a huge impact on independent contractors such as freelance journalists and photojournalists who, under the new law, are limited to 35 contributions to a single company in any given year. Billy Binion, in “Reason,” points out that “the 35-piece per publication limit comes out to less than one per week. Anyone who writes a weekly column, for instance, is likely out of a job if their publisher cannot hire them as an employee.” Smaller newspapers and websites will likely not have the resources to convert freelancers to staff members. Newspaper delivery workers are also affected, and will be required to come into compliance on Jan. 1, 2021.
Ironically, Vox Media, which supported the new law, announced on Dec. 16 that it would end contracts with hundreds of freelance writers and editors in California who provide sports content for SB Nation, in order to comply with the law.
“If I’m a publisher from out of state,” San Diego writer David Swanson told the Los Angeles Times, “and I have a choice of hiring a writer from California to do a job, or somebody from Colorado or Texas or Canada or India, where I’d have no chance of being sued, who do you think I’m going to hire? AB 5 simply makes it unattractive to hire writers from California.”
For many people, the flexibility of independent contract work is highly appealing, and while it might not be the best arrangement for everyone, California lawmakers should not be needlessly killing thousands of jobs.
Another clear example of government overreach occurred in October 2019. Despite California voters decisively rejecting Proposition 10 at the ballot box in 2018, a measure to expand rent control, Gov. Newsom signed a law in October making California only the second state in the nation to cap residential rent increases statewide; Oregon being the first. Advocates for rent control in Oregon and California promoted it as a solution to the affordable housing crisis in both states.
California voters, however, clearly understood the negative impacts rent control would have on the availability of affordable housing when they rejected Proposition 10. There is evidence that rent control policies can actually lead to a reduction in rental housing. A study of rent control in San Francisco found that while it gave protection to longtime tenants, it resulted in a reduced rental housing supply because landlords were incentivized to convert apartments into condominiums. Other research suggested that rent control policies may contribute to a deterioration in the quality of rental housing and could limit the construction of new rental housing.
“The most effective way to fix California’s housing crisis is by building more housing across a range of price points,” said Doug Bibby, president of the National Multifamily Housing Council in September 2019, adding that rent control “will discourage investment, shrink the availability of affordable housing that already exists, and squeeze even more people struggling in the housing market.”
California is one of the wealthiest states in the union, but, by their actions, California’s elected officials are perfecting the art of encouraging homelessness and putting people out of work. Perhaps California’s leaders ought to reexamine their ideology and motivations before implementing laws and regulations that actually harm the people they claim to want to protect.
The ideal of “helping the public” should not take precedence over the individual people themselves and the real world in which they live.
Terry McLaughlin, who lives in Grass Valley, writes a twice monthly column for The Union. Write to her at email@example.com.
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