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By Francis Horan
Automation is sweeping through the global economy, and every one of us can now envision a day when our own job might no longer exist. Automated truck driving, robotic delivery services, digital cashiers, AI customer service, automatically written news stories and computerized legal services are coming.
However, this sunset of traditional jobs has arisen at the same time as the “gig economy.” Internet access has given underemployed workers the economic mobility to easily pick up small part-time jobs, letting an increasingly redundant labor force flow rapidly into any area of the economy that still has the potential for growth. Yet, by escaping the traditional labor system, these “gig” workers have also slipped free of the protections that workers fought for centuries to obtain.
Services such as Uber and Lyft, along with many other new on-demand companies, benefit enormously from existing in this “contractor” loophole. The cheap prices they offer consumers are possible in a large part because the companies have pushed off many of the traditional industry costs and risks onto their contractors.
Independent contractors were never meant to be a corporation’s core labor force. But every gold rush comes to an end, and the slow wheel of legislation is now starting to grind toward these tech companies.
If passed, California AB 5, introduced by Assembly Member Lorena Gonzales (D–San Diego), would transform many of these independent contractors into employees. It would require that a worker be free from the company’s control, doing work that isn’t central to the company’s business, and have an independent business in that industry in order to be considered an independent contractor.
That would codify into law the recent California court ruling referred to as “Dynamex.” Numerous tech corporations are fighting AB 5, understandably, as in many cases it would slash their profitability or even eliminate their entire competitive edge. Organized labor is in favor of the bill, as it would allow workers in those industries to unionize and gain access to safety nets such as unemployment insurance.
Workers themselves seem to be split, some wanting to risk the lack of protections and safety net to retain the unprecedented flexibility of this app-enabled employment, whereas others feel they have been taken advantage of.
Statewide industry advocates have been scrambling to amend exemptions for particular job classes under the bill, including truck drivers, medical industry professionals and various cosmetology jobs with a long list still lobbying to be included.
A Fresno area “I’m Independent Coalition” meeting in July gathered opponents of the bill, where one speaker, James Hosey, voiced his concerns that these new regulations would prevent new companies from gaining ground in the profitable on-demand economy, particularly minority-owned companies that face higher barriers when it comes to securing initial investments.
Off in Sacramento, Governor Gavin Newsom has remained ambiguous on his opinion toward the bill, instead choosing to play the mediator between all the factions.
A newly created corner of the economy will need new regulation; the question is whether AB 5 is the right form of that regulation.
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