Crime will be fresh on the minds of voters during November’s midterm elections. But there is no greater robbery than that being planned by the Biden administration. What it’s proposing is a government-backed mugging.
In essence, the White House wants to outlaw gig work in America. No, it’s not saying so outright. The Biden Labor Department obscures that harsh reality with words meant to deceive. Labor Secretary Marty Walsh says the department’s proposal is needed to safeguard “our nation’s most vulnerable workers,” and ensure they are not deprived “of their federal labor protections.”
Left out is the part that, should the proposal become policy, millions of Americans will be stripped of their jobs and income. Under its rule, the Labor Department would be free to “determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act.” And it will determine in every case that the worker in question must be a hired employee, no longer free to continue his or her job as an independent contractor.
How can we be so sure as to say “every case”? There’s precedent. Almost three years ago Assembly Bill 5, passed and signed in 2019, went into effect in California. The standard it put in place to determine if workers could remain independent contractors is so high that it is virtually impossible to reach. Everyone has to be a hired employee or their job is lost.
But couldn’t businesses simply hire gig workers? Sure, some could. But many companies, especially growing companies, rely on independent contracting because the steep costs of employment that are mandated by government make hiring unaffordable.
While some in California escaped the death sentence of AB5 by going to the expense of setting up limited-liability corporations for themselves, a bit of outrage saved a few others. Under pressure, lawmakers eventually granted a handful of exemptions. But the law still stands, the hurdle too much for many to clear.
Don’t dream that the Biden Labor Department will play the game, which is entirely for the benefit of labor union bosses who want to organize the gig workers who have to be hired, any differently than California did. It will put forth its best effort to ensure that every worker will be classified as an employee and cannot work unless formally hired.
While the Labor Department solicits comments before it puts its cruel plan to work, we’ll do our part by presenting a few facts that show just how reprehensible the proposal is:
- It’s a flagrant violation of the cooperative agreements made between gig workers and the businesses and organizations they perform work for. Under the Biden plan, the rights of workers to be free agents in the labor market, and of companies and organizations to set up the operational models that best fit them, would be snuffed out.
- There was no grassroots movement demanding that California outlaw independent contracting. Assembly Bill 5 was instigated by labor leaders who wanted to force rideshare drivers into their unions, and a former state lawmaker, Lorena Gonzalez, who resigned from the Assembly to be the top boss at the California Labor Federation. She demonstrated just what she thought of workers when she publicly dismissed bill opponents and even insulted them, sometimes with foul language.
- Gig workers are happy with the way they set up their lives. According to the Bureau of Labor Statistics, independent contractors “overwhelmingly” favor their “alternative employment arrangement (79%) to a traditional one (9%).” Almost nine in 10 (86%) “of freelancers think that the best days for freelancers are yet to come.”
- Independent contractors have a flexibility most hired employees don’t. They are free to make their own hours and their own schedules.
- Gig jobs allow hired workers to earn part-time money to pay for financial emergencies, down payments for large purchases, even Christmas gifts for the kids. Freelance work can keep the income flowing between full-time jobs as well as stabilize personal finances during economic downturns.
- Independent contractors can work for multiple businesses at once, leave a job when they please, choose work that interests them, and accommodate family and school schedules.
- “More than one third (36%) of U.S. workers are in the gig economy,” reports Forbes, “which works out to a very large number of approximately 57 million people.” Within five years, the number is expected to grow to 86.5 million.
- California’s independent truckers, 70,000 of them, are still waiting, after years of court battles, for clarification of their status. Imagine, then, an entire nation of independent truckers barred from their work. The supply chain problems we’ve seen up to now would become the good ol’ days by comparison.
- The gig economy is an economic growth machine. Its global value is expected to reach $455 billion next year, roughly 2.5 times larger than it was just for years ago ($204 billion).
It is impossible to overstate how vicious and cold-hearted the proposed federal rule is. Everyone involved should be ashamed and publicly apologize for even considering a policy that will harm so many. But then we’re dealing with a class of bandits that has no conscience, no principles outside of consolidating their political power. We don’t expect anyone to say they’re sorry.
— Written by the I&I Editorial Board