California Assembly Bill 5 would kill 158,000 jobs from Uber, has already killed 200 jobs from Vox and could result in another 900,000 layoffs in the state. In a time where unemployment is at its highest since the Great Depression because of a pandemic, we must not be imposing more job-killing regulations.
AB5 requires companies in California to identify previously independent contractors or “gig workers” as employees, meaning they’re entitled to a minimum wage, expense reimbursements, rest breaks and other benefits with little exemption.
This also means that these “employees” are forced to work a certain number of hours within a specific time frame, pushing away those initially attracted by flexibility.
Jobs in Uber and Lyft aren’t the only ones being crushed. Other professions including comedians, magicians, freelance journalists, hairstylists have been denied work that they would have gotten before AB5 was implemented in 2020.
Actors, dancers and singers who don’t regularly have coordinated work schedules and gain low profits also suffer from job losses and business closures. The Los Angeles Times received over 120 responses from people working in industries that AB5 impacted the most who were overwhelmingly against the bill.
One featured guest in the Los Angeles Times, Numi Opera founder and executive director Gail Gordon, shared how AB5 hurt his business.
“I have no idea at this point whether I can… afford to continue. Our small company, as with most California small companies, will die,” Gordon wrote. “AB5 will annihilate these small opera companies.”
Sadly, Gordon’s case applies to 2 million workers, and the bill meant to hold large corporations accountable actually hurts small businesses the most.
Small employers are the ones who heavily rely on contractors, with businesses of four or fewer employees hiring an average of 6.7 contractors. AB5 requires these contractors to now become full-time employees, and many small business owners are now unable to pay the required employee benefits. Small businesses can’t keep up with more regulations and costs, especially now that 60% of business closures due to coronavirus are permanent, according to Yelp data.
Many California residents are outraged over this bill, pressuring Democratic state officials.
Many local Republican officials have used this opportunity as leverage for their campaigns. The Republican Chair of Orange County Supervisors Michelle Steel made opposing AB5 a large part of her Congressional race. Republican Congressman Mark Garcia was able to unseat his Democratic opponent with newfound support from freelance workers against AB5 in California’s 25th Congressional district.
Silicon Valley is protesting in outrage alongside small businesses, and Uber, Lyft, Postmates, Doordash and Instacart have joined forces in sponsoring $110 million for lawyers and other legal services fighting for exemptions.
All this poses many concerns about the bill. Doesn’t AB5 protect these workers from being exploited? Why wouldn’t workers want all of these included benefits? If all employees receive health insurance from their employer, why should independent contractors be any different?
Despite these concerns, surveys show a four to one margin that app-based drivers prefer to be independent contractors because they have more control over their schedules.
An astounding 80% of app-based drivers only work part-time and already have a full-time job. AB5 restricts these workers from working both their full-time job and an independent part-time job that helps them make cash on the side. Holding industries that rely on independent workers to an unreasonable standard inevitably causes more job losses.
We have to remember that many of the people who rely on independent contracting jobs are parents who work while their kids are in school, elderly retirees and college students who aren’t able to work a fixed schedule. AB5 restricts the flexibility and independence that appealed to this demographic of gig workers in the first place.
Here are some things you can do to oppose AB5.
- Encourage people you know to vote Yes On Proposition 22. Proposition 22 brings the best of both worlds by allowing app-based drivers to choose independent work, while also providing new benefits and protections.
- Call your Assembly or State Senate representative and pressure them to vote against AB5.
- The most important choice you can make is to vote. Call your friends, family, teachers and more. It’s likely you know someone who is an independent contractor, whether they’re a dancer, artist, singer or app-based driver. Ask them about how AB5 has affected their life, and what would happen to their livelihoods if the companies resisting AB5 lost their court case.
With coronavirus rampaging our economy and Republicans and Democrats in Congress unable to compromise on the next stimulus relief package, the first thing that can keep small businesses afloat in California is repealing AB5.