Economy

COLLATERAL DAMAGE: Liberal Lawmakers Aren’t ‘Fixing’ California’s Gig Economy, They’re Killing It

At the urging of unions and progressives, California lawmakers passed AB 5 earlier this year to clamp down on employers ‘misclassifying’ workers. Predictably, the “landmark legislation” is not fixing the gig economy, it’s starting to kill it.


A few months ago, after much debate, California legislators passed a bill called AB 5.

Signed into law in September by California’s governor, Gavin Newsom, AB 5 drastically rewrites how employers classify California’s independent contractors—making many of them employees and, therefore, eligible for overtime, benefits and other “worker protections.”

“Authored by Assemblywoman Lorena Gonzalez, a former labor union leader, AB 5, which was written by the AFL-CIO, was drafted ‘to stop the misclassification of nearly a million misclassified California workers so they are provided a minimum wage, benefits and workplace rights,'” reports California watchdog writer Katy Grimes.

Although it won’t go into effect until 2020, AB 5 is already starting to have an effect on so-called “gig workers”—except it may not be having the desired effect its proponents wanted.

Gig workers’ win in California is a victory for workers everywhere,” gushed a headling from the left-wing website Vox a mere three months ago.

Be careful what you wish for…

Now, however, Vox Media finds itself cutting its ties with hundreds of California-based freelance writers.

“Most of the changes at Vox will be at SB Nation, which has writers all over the country covering professional and college sports,” reported CNBC earlier this week, but will also touch other sites like Curbed and Eater, according to a person familiar with the matter.”

In an open letter on its website, Vox-owned sports website SB Nation‘s John Ness, Executive Director of team sites, notified readers that the site is getting rid of its California-based writers, stating:

In 2020, we will move California’s team blogs from our established system with hundreds of contractors to a new one run by a team of new SB Nation employees. In the early weeks and months of 2020, we will end our contracts with most contractors at California brands. This shift is part of a business and staffing strategy that we have been exploring over the past two years, but one that is also necessary in light of California’s new independent contractor law, which goes into effect January 1, 2020. That new law makes it impossible for us to continue with our current California team site structure because it restricts contractors from producing more than 35 written content “submissions” per year.

While SB Nation’s Ness states the site is offering employment to some writers, “[w]e know many of our California contractors already have other full-time jobs and may not have the bandwidth to apply,” the sie explains.

Vox Media isn’t the only publication cutting ties with California writers.

Shortly following the signing of AB 5 into law, the Hollywood Reporter gave a few examples of freelance writers whose jobs were being scaled back.

Asked how he plans to handle the implementation of AB 5 next year, San Diego Union-Tribune publisher and editor-in-chief Jeff Light says, “We’re in the process of sorting through the implications right now. Unfortunately, I suspect a number of freelancers will end up with less work from us as a result of the 35-piece limit. I don’t have anything more detailed than that at this point.”

Of the freelancer exemption, San Francisco Chronicle publisher Bill Nagel says, “This was a poorly considered part of the law, likely based on a fundamental misunderstanding of why companies use freelancers. There are situations in which we cannot make a freelancer an employee, which inhibits our First Amendment rights as a publication. It also seems odd and problematic that broadcast freelancers are treated differently than their colleagues in print media. Unfortunately, AB 5 will limit opportunities for some freelancers and silence a number of voices in the market. We will, of course, comply with the law.”

Collateral Damage: Writers aren’t the only ones seeing their livelihoods destroyed…

In November, musician and Ari Herstand wrote how California’s music economy is about to crash due to AB 5.

How the law is written, if you want to hire a bass player to play your gig for $100 you have to put that bassist on payroll, pay unemployment taxes, provide benefits, follow labor laws, get workers compensation insurance, deduct taxes, work with a payroll company, W-2 that bassist as they now legally will be designated your employee. FOR ONE FUCKING GIG.

Want to hire a violinist to play one song on your record for $150? She’s now your employee. FOR ONE FUCKING GIG.

Oh and by the way, every venue in California can’t just cut solo artists a check anymore. You play a 45 minute set at the Bootleg and make $800? Well, you’re now technically an employee of the Bootleg, they must deduct taxes, put you (and the hundreds of artists who play their venue each year) on payroll. FOR ONE FUCKING GIG.

As a follow-up to his November post, earlier this week, Ari Herstand met with Lorena Gonzalez–the former union organizer-turned California-assembly-woman who drafted AB 5.

According to Herstand, Gonzalez told him that the California assembly will begin work on a “repair” bill in January (after AB 5 goes into effect) and suggested that, even though musicians could be violating the law, a new “fix” (which would not go into effect until 2021) could be retroactive.

The problems with this line of logic is, of course:

  1. Which industries might get the “fix” (and which ones won’t)?
  2. How many “gigs” will be lost to writers, musicians and others in 2020? and…
  3. What happens if the legislation does not change or, if it does, it is not retroactive for those industries lawmakers exempt?

Unfortunately, liberal politicians (at the behest of unions vying for new members) have helped to fundamentally transform California’s gig economy—and it is the gig workers who are beginning to suffer the consequences.

As the saying goes: No good deed goes unpunished.

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