This is a severely under-reported detail in the platform of the Democrat candidate for president.
It is a sign of how imbalanced all of the national landscape has become. In past presidential campaigns, economic policy has been one of the forefront issues for candidates, but beyond some stray talk concerning their stances on taxes, there has been little spoken on the broader economic policies from President Trump and Joe Biden. This being a year where the word ”normal’’ and ”2020’’ rarely collide in the same sentence, there have been numerous issues eclipsing the financial plans. One Joe Biden plan in particular has disaster written all over it, and it is a topic Trump would be well-served in bringing up on the campaign trail.
By now, you should be familiar with what a fiasco the infamous California labor law AB-5 has become. Covered extensively by our team in the Golden State already, in case you are not versed in it, here is a synopsis.
The Assembly Bill-5 was instigated by organized labor, looking to address the growth in the ”gig economy’’ — freelance workers who operate as independent contractors. Specifically targeted were rideshare drivers who worked for Uber and Lyft. Caught up in the scheme were all the other jobs that are classified as freelance work. In the law of unintended consequences, thousands have been put out of work by a law said to benefit workers.
Joe Biden has an economic plan in place, where he would institute his own version of the AB-5 law as a national policy. Democrats are famous for creating solutions to problems which are usually more painful than the problem itself. AB-5 was worse — there was no problem to begin with, when the law passed. Independent contractors work in this fashion willingly. The freedom and flexibility of being your own boss not only delivers unseen benefits, but allows for creativity in the personal lives of the workers.
People who are independent contractors work for themselves and are completely untouchable by unions, so the intent was to force these jobs directly onto the payrolls of the companies, and then they would be in reach of union organizers. While the California politicians focused on Uber/Lyft jobs, they soon realized the legislation would affect countless other workers in numerous industries. Disaster was quick in arrival. Jobs were lost at the start of the year when the law took effect, a law many claimed would be a windfall for workers.
Just one example of the short-sighted praise for the new law came from Vox.com in October 2019. The outlet hailed AB-5 as being a tremendous opportunity for writers to benefit greatly from, once it was in place. Just two months later, in the days ahead of the law becoming enacted, Vox laid off hundreds of its writers from the differing outlets it owns, specifically the sports writers covering various teams at its SB Nation portal. The permanent positions that AB-5 was supposed to create, delivering a number of new benefits, went to less than two dozen of those writers. The rest were placed out of work.
The California legislators, despite being presented with blatant evidence of how horrid this law has become, have been obstinate in the call to repeal this fiasco. Instead, they have applied numerous fixes along the way to appease the unintentional afflicted industries. Another sign of how disastrous this law has become is that it required governor Gavin Newsom to sign a new law that would immediately be put into practice, AB-2257. This is meant to address many of those unplanned problems which arose.
Following the growing list of complaints from groups no one anticipated to be impacted, AB-5 has become Frankenstein’s Law. This latest fix from the governor alters the unforeseen impacts the law had on B2B relationships, referral agencies, independent professional services, and even performance artists. This law has seen repair work on it so extensive that, in less than one year, the list of exemptions which had to be written into the legislation now numbers 109 categories of workers. This is evidence of a disaster, and proof the law needs to be repealed, not repaired.
Yet, Joe Biden wants to take this evidence of economic sabotage and expand it into a federal program. His campaign website includes his economic proposals and, nestled in the body of this union-written, scarily statist screed is this section under his plan called The PRO-Act.
- Aggressively pursue employers who violate labor laws, participate in wage theft, or cheat on their taxes by intentionally misclassifying employees as independent contractors. As president, Biden will put a stop to employers intentionally misclassifying their employees as independent contractors. He will enact legislation that makes worker misclassification a substantive violation of law under all federal labor, employment, and tax laws with additional penalties beyond those imposed for other violations.
This is AB-5, relabeled. Note the draconian manner in which he says that a freelance worker/independent contractor is ”misclassified,’’ and the employers can incur penalties under numerous laws. This will lead to only one result, the one seen in California — business owners letting workers go.
When they can not only afford to pay the higher wages but also the required benefits, and the likelihood of union involvement, to go along with the risk of having numerous federal laws leveraged against them, business owners will take the path of safety and less expense. As usual, when Democrats claim to be delivering benefits it turns out workers end up paying — with their jobs.