Guest Column: AB5 is a Job-Killer

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Diane Dixon | special to the NB Indy

Councilwoman Diane Dixon.
— Photo by Sara Hall ©

If you want to see how badly things can go south in a one-party state, look no further than the new law known as AB5.

The law basically requires many businesses that use independent contractors to reclassify those workers as employees. Proposed and pushed by labor unions and waltzed through the Democratic-controlled legislature, the law was portrayed as a way to get big businesses to pony up a fair wage and benefits for all their workers.

However, the reality is that AB5 was drafted by a union organizer, and this bill was designed as a way to grow union membership. Independent contractors cannot unionize, but if you convert them into employees, you can try to make them union members.

And when the people you’re supposedly helping end up suing you, you’ve really messed it up. Organizations representing independent truckers and freelance writers and photographers have gone to court to get the law overturned, at least as it’s applied to them.

The truckers note that AB5 is unconstitutional because it will have an impact on interstate commerce, which is the purview of the federal government. Plus, it interferes with their right to form contracts with whomever they please.

“Independent truckers are typically experienced drivers who have previously worked as employees and have, by choice, struck out on their own,” explains the truckers association’s CEO Shawn Yadon, in a statement.

In other words, we don’t need AB5, thank you very much.

The freelancers have a different legal argument, but their motivation is that AB5 is going to cost many of them their livelihoods. Organizations that use freelancers are not going to bring them all in-house. They’ll either spread the work among existing employees, bring in a fraction of their freelancers and have them do it all, find out-of-state sources of content, or just do without.

This is the upshot for many independent contractors — from retirees who continue to work as consultants, to young parents who need flexible hours to raise their families, to construction workers, to nurses, physical therapists and many other healthcare workers — they’re not going to gain protections, they’re going to lose work and lose income.

AB5 was a message to the new app-based business sector, notably ridesharing services like Uber and Lyft.
— Photo by McKinsey / rawpixel.com

Of course, AB5 was also a message to the new and burgeoning app-based business sector (including most notably ridesharing services like Uber and Lyft) that Sacramento is the boss in this state and they’re looking at you, Silicon Valley.

Now, poking one of the state’s major industries in the eye — especially one that is eminently mobile — is a pretty bad idea. Poking several of the state’s major industries in the eye is just an awful idea. But guess what? AB5 is also disrupting the film and music industries. Some out-of-state companies doing business here have already said they’re going to suspend California operations, while many homegrown companies are eying the door. And who’s suffering? The film production workers, musicians and technicians, i.e. the workers Sacramento was sanctimoniously “protecting.”

So, drive away both the tech and entertainment sectors and guess what? California is back to selling oranges, folks.

AB5 is a job-killer, and it must be repealed. Truck drivers, journalists, translators, event planners, photographers, land surveyors, musicians, manicurists, and even rabbis are all being harmed.

This is no way to run a state.

We need more people with real-world business experience in our Legislature who understand how Sacramento is harming our economy. People with good, flexible jobs who could set their own hours are now losing the independence they wanted in their jobs or may even lose their jobs entirely.

As a person who spent decades in the leadership of a Fortune 300 company and has served as a councilmember and two-time mayor in local government, I know that things won’t get better until Sacramento gets some adults who can work with both businesses and workers, who are fiscally responsible and who are aware that their actions can have unintended and counterproductive consequences and exercise the proper caution and forethought.

Our legislature is filled with career public employees and union activists. We need more people with private sector experience who actually understand the implications of proposed laws. We need legislators who want to grow our economy, rather than abuse the legislative process to give gifts to their favorite special interest groups at the expense of everyone else.

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