California A.B. 5: Dream-Killer Law Chokes State Economy

California’s Democrat super-majority continues to kill the dreams of its citizens, members of the middle class will continue to run from the State, causing an increase in the gap they call “income inequality”

By Douglas V. Gibbs

The once Golden State of California, because the politicians bow to the wishes of the labor unions, has decided to kill the dreams, aspirations, and opportunities of a large number of her citizens.  As of January 1, 2020, a new law (AB-5) goes into effect that limits independent contractors.  While there is a list of exemptions, to be considered independent from the law you must meet all of the provisions on the exemptions list, which is nearly a statistical impossibility for most contractors.

Goodbye, California.  I am not looking back

As a writer, with a few of the local outlets, if I am getting paid for my work.  That means I can no longer write for local outlets once per week.  I am getting ready to begin hosting a small weekly television program on a local independent station.  That endeavor has now been threatened by the new law.  God only knows what this does to my speaking engagements and constitution classes.  California’s new law is basically telling me that I can’t do what I do for a living anymore.  If I continue to try to feed myself with what I do, I will be a criminal in California.  If I stop doing what I do, I will eventually be homeless; unless, of course, I do the obvious … and leave the State.  Most people in the lower end of the middle-class negatively influenced by this law can’t afford to leave the State.  But, they also can’t afford to stay in business because of the law.  Despite the claim of the Democrats that this law protects the middle-class, what it does is force many of the folks who are considered middle-class into poverty, and ultimately, into government dependence.

I am figuring that if I live outside the State, the law does not apply to me.  Therefore, once I depart, as a resident of another State, if I Skype into the television studio from the other State, if I Skype into the radio station I am on from another State, and if I write to the outlets and transmit my articles by email from another State, then I will be technically legal.  Of course, then they will probably try to find another way to tax me with their higher rate, or force me to quit doing business in their State.  Is that what they really wish for?  To eliminate anything I do in California?

Goodbye, California.  I am not looking back.

If the politicians are trying to make the State a better place to live, is their new law a wise thing to do?  With A.B.-5 they are literally making otherwise legal independent contractors criminals, and they are driving them to either homelessness, or out of the State of California.  Yet, they can’t understand why California’s economy sucks compared to the rest of the country (and they keep stupidly blaming Trump for their failings).

California A.B. 5: Dream-Killer Law Chokes State Economy

Economy-choking law in California

The Democrats who run California—like all Democrats—claim they are for the little guy, and that the big bad Republicans favor the rich powerful corporations.  They have convinced their entire constituency of this lie.  If that is the case, then why pass a law that kills the efforts of the little guy?  A.B.-5 literally, in the long run, does the opposite of what they claim.

There are two reasons behind this economy-choking law in California.  From the point of view of the legislators, it allegedly ensures everyone receives the benefits associated with being an employee while stopping the big corporations from cheating the system by disallowing their contractors from being employees (and in the long run, union members).  From my point of view, the two reasons are because the labor unions are demanding it so as to generate more union members through the force of law (and the Democrats are bending to the labor unions’ demands because a very large chunk of their political campaign monies come from the unions), and because as Marxists they hate the private free market and the kind of independence enjoyed by contractors from employment in a company which  must be stamped out in whatever way they can.  The average person is not supposed to be an independent business-owner in the eyes of the Democrats.  We are all supposed to simply be mindless workers who, eventually, once they eliminate private ownership completely, are only supposed to serve the State.  By allowing people to be independent contractors, that encourages individualism and economic hope, and the Democrats just can’t allow such a thing in a society where they are trying to create full equality where nobody should be allowed to have any hopes of doing better than anyone else.

The greatest impact of the new law will be on small companies who can’t afford to hire their workers as employees, or are structured in such a way that it is economically better if their workers are independent contractors.  The majority of those contractors would prefer to remain a contractor, as well.  It creates more freedom to choose jobs outside one’s main source of business, or serve multiple customers.  Some business models are naturally set up to use independent contractors, such as barber shops, trucking, the entertainment industry, translators, and ride-sharing companies like Uber or Lyft.

I had a Class A license for fifteen years, and the laws by the Democrats, even before this one, were killing my ability to make a living driving a big rig.  First, they passed a law disallowing “employees” to be paid by the load.  When the company was forced by law to change from paying us by the load to paying by the hour (I drove a sand and gravel truck at the time), my income dropped dramatically, as did the overall production of the drivers I worked with (therefore, reducing the quantity of the product being moved, thus reducing the supply, and for anyone who understands the basic economic principle of supply and demand, that means as the supply drops and the transportation costs increase, prices for the finished product will go up, directly impacting the consumers who purchase that product with higher prices).  While being paid by the load, the incentive of making more money if we could squeeze an extra load in by the end of the day encouraged drivers to work harder, faster, and more efficiently.

As a result, most of us were exceeding the number of loads we would likely deliver otherwise, and it reflected in our pay. Once the new California law forced us into a “paid-by-the-hour” structure, we no longer pushed ourselves to get that extra load.  Being paid by the hour would result in the same pay for the day, whether we pushed ourselves, or not, so why work so hard if we didn’t have to?  Besides, for the new pay we were getting, it wasn’t worth working so hard.  I began making, once it was by the hour, the pay I would have been making before if I had been delivering two less loads.  And the company, who didn’t mind if we went beyond eight hours back when they were paying us by the load, was now in a situation where they didn’t wish to pay the additional dollars of overtime pay, so our days dropped to eight hours.

The law that claimed to be designed to protect the workers killed incentive, and reduced the overall production of the company’s employees (thus, increasing the cost of doing business because to achieve the production they had before the law existed they would need more drivers … smaller companies unable to afford the increase in employees lost the work), while also reducing how much money we had in our paychecks.  Some truckers, unable to survive on the lower pay, left the industry, or in many cases, left the State.

AB-5, the new gig-law

Then, in 2011, California passed a new emissions standard for the trucking industry.  Smaller companies could not afford the twenty-five thousand dollars per truck upgrade, and they closed their doors.  The larger corporations gobbled up the new customers suddenly searching for a new trucking service, since theirs had gone out of business because of the new law.  Many “owner-operators,” the independent contractors of the trucking industry, also went out of business, also because they could not afford the cost of the upgrade.  Some of them went to the larger corporations as driver-employees (a tough endeavor since suddenly the market was flooded with unemployed drivers seeking employment as a result of the law), while the rest of the negatively influenced drivers either retired, changed professions more often than not to something that made them less money, or took their small trucking business to another State. Meanwhile, the larger corporations absorbed the new work available, and padded their pocketbooks with more money since there were now less smaller companies to compete with.  Meanwhile, for those of us who survived the onslaught of the Democrat emissions law-making madness, we came under strict scrutiny by the bureaucrats in Sacramento who know nothing about the industry. At one time, because he kept setting off the emissions alarm on his truck (something that was added to big rigs as a result of the new law), a friend of mine was chastised by an “inspector” from Sacramento for driving uphill so much to make his deliveries, because uphill driving while fully loaded increases the truck’s emission of pollutants, and that would not be tolerated.

If we can’t drive uphill, how were we to make some of our deliveries?

Now, we have AB-5, the new gig-law, which is designed to “reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.”

Sounds good, until you realize the consequences force into play a situation that falls way short of what the legislators claim.

Exodus of truckers from the State has been in full swing

One of the dreams we have as Americans is to own our own businesses.  The new A.B.-5 Gig Law kills that for a number of “owner-operators” in the trucking industry, forcing them to either be employees for large corporations, or to go out of business.  As for the smaller companies who have a few employee drivers, now the workload they dished out to owner-operators will become unattended.  The smaller companies will then lose the revenue because they can’t afford to hire the owner-operators, but their employees are unable to handle the workload.  So, the smaller companies are losing that revenue (which will, in most cases, drive them out of business), freeing that work up for the larger corporations to take (the same group the Democrats claim to be against).  Meanwhile, owner-operators, if hired as employees, lose work because they can no longer offer their services to the highest bidder, and even work simultaineously for a number of companies who are typically competitors (not because of the language of the law, per se, but because once you are an employee the option to work for the competition at the same time is naturally eliminated).  Now that all of the work is only coming from one source (the “employer”), the amount of work available will be more limited in the long run.  In short, their work will now be limited to that of which the employer will be willing, or able, to give them.  The two types of trucking companies most heavily affected will be sand and gravel, and port trucking, but really any trucking service that moves products will be affected.  This not only hurts the industry, but it also reduces the movement of product, while increasing the cost of transporting those products, which in the long run influences the average citizen who is stuck with the resulting increase of prices.

As today’s effective date approached, despite a judge ruling a temporary halt to the law’s provisions against truckers, the exodus of truckers from the State has been in full swing.

While the Democrats claim they are “protecting” workers, in the long run they are killing the liberty associated with being a “contractor,” and they are putting a large portion of workers out of business and into a position where they have no choice but to either become homeless, or leave the State.

When it comes to the entertainment industry, a part of working your way into the industry involves independent work with smaller producers or channels.  In my case, I wouldn’t mind eventually getting to the point of having a show on Fox News or One America News.  But, I must prove myself by cutting my teeth in journalism, and/or smaller televisions channels who are too small to be able to afford hiring me as an employee.  So, as agreed with my upcoming television program, I am an independent contractor receiving a $100 per episode stipend.  The show will be weekly, with the hopes of increasing it to a daily show.  However, the new law now makes my endeavor illegal.  I am limited and/or eliminated if the station can’t afford to pick me up as an employee.  As a result, the audience loses an entertainment option, the station loses programming, and I lose income and the much needed opportunity to move up into a larger outlet.  In short, the new law kills a much needed opportunity I need in my journey to seek a better life for myself.

AB-5 ought to be renamed.  It ought to be called the “Dream-Kller Law.”

After all of the dust clears the real loser will be the State of California.  As a result of A.B.-5, California will lose product movement, product supply, and a large segment of the tax-paying population who will be forced into poverty, or into abandoning the State they otherwise loved.  And, many of those people are married, so their spouses who may hold jobs in California will also leave, as well, doubling the damage to workforce numbers.  Without enough workers, and with the increase in the cost of doing business, along with those departing independent contractors,  a number of companies will move out of California, too.  Why would they remain in a State set on eliminating their preferred method of doing business with independent contractors, or shooing away the population of employees?

The Golden State’s population growth rate is already at an alarming rate of .35 percent, the lowest since 1900.  As California’s Democrat super-majority continues to kill the dreams of its citizens, members of the middle class will continue to run from the State, causing an increase in the gap they call “income inequality”.  With the middle class gone, eventually California will be left with the super-wealthy, and those who live in poverty, and there will be nobody remaining in the middle.

 

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