California AB-5 takes effect in 2020 after passage by the California state Senate in September. The bill targets the very business model that has grown companies like Uber, Lyft, and DoorDash into a booming gig economy.
The bill requires these companies to reclassify much of their freelance workforce as employees, and provide benefits like minimum wage, paid time off, and health insurance. But it’s already cutting off hard-working freelancers from flexible work opportunities.
Rideshare giants like Uber and Lyft opposed AB-5. But their workers aren’t the only ones affected by the new law. Online freelancers working to boost their income are the first casualties of California’s new gig economy bill.
They used to be able to work flexible hours writing about something they love. Now they can’t. Vox Media’s sports blogging network, SB Nation, is laying off hundreds of California freelance sports bloggers:
This shift is part of a business and staffing strategy that we have been exploring over the past two years, but one that is also necessary in light of California’s new independent contractor law, which goes into effect January 1, 2020.
Vox says the new law makes it impossible for the digital media company to keep paying part-time bloggers. It restricts contractors from producing more than 35 articles a year. Vox has cut out hundreds of flex positions, to be replaced with just 12 full-time jobs.
Left-leaning Vox has long been supportive of AB-5.
In July, Vox chastised Democratic presidential candidates for not boosting AB-5 from the national debate stage. As the bill neared a final vote, Vox’s Recode vertical listed off the pros, with no mention of the cons.
After its passage, Vox hailed AB-5 as “a victory for workers everywhere.” But within a month of AB-5’s passage, LA area Uber drivers reported a drastic plunge in surge bonuses. Rideshare drivers are also worried that they’ll soon be confined to working approved shifts instead of flexible work schedules, a major draw for residents looking to boost their incomes.
Sen. Elizabeth Warren also penned an op-ed backing the bill:
All Democrats need to stand up and say, without hedging, that we support AB 5 and back full employee status for gig workers.
But the immediate fallout from AB-5 shows the hazard in the labor movement’s approach to helping workers. Over the weekend, Warren called out JPMorgan CEO Jamie Dimon for advocating that corporations take voluntary steps to be socially responsible:
They’ll say they’re going to do it on their own, they may make some adjustments. But understand this: There’s a reason you put laws in place. Because the one who doesn’t follow voluntarily is the one who then gets a little short-term comparative advantage, gets to boost the share price just a little bit.
Elizabeth Warren and the labor movement don’t seem to understand that this same cutthroat competition takes effect when laws are in place too. Any law that disadvantages a corporation pressures it to squeeze the difference out of its workers.
Progressives don’t believe profits “trickle down.” Why is it so hard for them to believe that costs do?
Last modified: January 22, 2020 11:40 PM UTC