Issues & Insights

Defund AB5 Enforcement

Editor’s note: This has been excerpted with permission from the Pacific Research Institute. To read the entire report, click here.

One of the several responses to the death of George Floyd has been activists’ demand to defund police departments. Los Angeles Mayor Eric Garcetti was one of the first mayors to surrender to the mob and pledge that he would move a portion of funding from law enforcement “to youth jobs, health initiatives and ‘peace centers’ to heal trauma,” says the Los Angeles Times.

Defunding police departments is on its face a lousy idea, especially when there are so many other government spheres that should be stripped of financial resources. A good start would be the $17.5 million that has been dedicated to enforcing Assembly Bill 5. Defund that expenditure.

AB5 might be the worst piece of legislation to be passed and signed in California not just in recent memory but going much further back than that. It’s anti-worker, anti-job, anti-entrepreneur, and anti-freedom. The bill outlaws freelance and independent contract work for many of the 2 million Californians who rely on those jobs for primary and secondary income, and occupational flexibility. There are some exceptions, but AB5 generally requires workers to be hired employees rather than self-employed through contracts and less-formal agreements. The compliance costs for businesses could reach $6.5 billion a year.

There’s been no shortage of criticism of AB5, all of it warranted. One of the most interesting observations we’re just now seeing is from Gene Wunderlich, the mayor of Murrieta, who called it ”nothing more than an experiment gone wrong” which “must be eliminated.”

Gone monstrously wrong, we’d say. AB5 almost seems vindictive, as if Sacramento is punishing businesses for merely having the audacity to be businesses. How else to explain why it will be applied retroactively? This means, as Wunderlich says, “that if at any point during the four years leading up to when the law took effect an employer ‘misclassified’ an employee as an independent contractor, they can be sued for failing to comply with AB5.”

So, lawmakers expected California companies to have had knowledge years in advance of the bill’s content and passage? Sounds like a plot line from a dystopian novel. And, in fact, it is. Ayn Rand, a novelist who made note of government persecution of business in a much earlier era, anticipated this sort of malicious legislating more than 60 years ago.

“There’s no way to rule innocent men,” said Dr. Floyd Ferris, a bureaucrat and one of the “looters” in Rand’s “Atlas Shrugged.” “The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.”

While AB5 is a devourer of businesses and workers, it’s a pot of gold for lawyers.

To continue reading, click here.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

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1 comment

  • AB5 was also a grab for more tax dollars through payroll taxes and a boon for unions since the “employees” were to be unionized. The quote from Atlas Shrugged was very spot on.

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