More Economic Freedom Under Attack

January 7, 2020

by Charlotte Whelan New Jersey may join California in endangering gig workers. California’s law, AB-5, has been under fire for its strict limitations on a variety of professions, most notably freelance writers and drivers for services like Lyft and Uber. As AB-5 has gone into effect in this new year, both Uber and Lyft are challenging it with lawsuits, hoping to retain their abilities to provide opportunities to work and make a living to their workers through the freedom of the gig economy. AB-5 makes it more difficult for companies to work with independent contractors and limits how much contractors can do, all in the name of “worker’s rights.” Despite the reality that many workers have chosen the flexibility that this kind of work affords, as evidenced by the ever-growing gig economy, California claims that it must act to protect its workers, to ensure they have the rights that employees are entitled to within companies.  Instead of protecting these workers, however, AB-5 is threatening their employment.  Companies have been forced to lay off contract workers in response to the new law. Freelance writers have been hit hard, as AB-5 limits writers to 35 submissions a year per publication.  That is hardly enough to earn a living. Worse yet, CNBC reports that Vox Media cut hundreds of these freelance jobs in December, in anticipation of AB-5 taking effect in the new year. In response to this major job cut, Vox posted 20 new part-time and full-time positions, a small number in comparison to those who are no longer able to make a living as freelance writers. Now New Jersey is working to pass a similar law, threatening the freedom of its own workers. But freelancers, contractors and groups of independent business owners aren’t taking the hit without a fight. They have already seen the damage done so quickly in California and they are tireless in their efforts to stop the bill.  While some seek exemptions from the bill, as was given to certain groups in California’s case, others work to prevent the bill altogether, recognizing that if it passes, they will lose their jobs. CNBC notes:
“Both experts and business owners say that the New Jersey companion bills have defined contractors so broadly it will make it harder to operate an independent business in the state—one widely known for a tax climate that is already challenging to business—and for businesses to employ contractors. Real estate agents, accountants and insurance brokers have been exempted but many other types of independent workers are worried they will be affected and lose work.”
As these states work to limit the freedom and ingenuity of their workers, let’s hope that other states do not follow in their misguided footsteps. Through the gig economy, many people have found flexible jobs which have allowed them to supplement their income, care for children and sick family members, and much more. We should celebrate the freedom that these opportunities have brought and fight against those that seek to take them away. Charlotte Whelan is a member of SI’s Emerging Leaders Advisory Council.

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