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Americans for Prosperity Senior Policy Analyst Austen Bannan | Op-Ed for Business Insider
On Election Day, Californians soundly rejected the state’s recent efforts to restrict independent contracting, voting overwhelmingly to allow app-based drivers to continue setting their own hours and the freedom to be their own boss.
People have long turned to independent work — picking up jobs or building careers as tutors, fitness instructors, hair stylists, journalists, health care specialists, Uber and Lyft drivers, and hundreds of other fields — to provide for their families and pursue their dreams on their own schedule. 17 million Americans have quit their jobs to become independent contractors, with 60% of those now reporting they earn more in their new role.
Having failed to stem the tide of AB 5, Uber and Lyft were able to get themselves added to the list of companies with exemptions through Prop 22. In the bargain, they accepted wage and benefit mandates that perhaps they can afford, but many small businesses and start-ups can’t.
This is not a model other states should follow. Legislation allowing companies to provide benefits to independent contractors would be a welcome step, but forcing companies to provide these benefits, as Prop 22 does, would be detrimental to many independent contractors and businesses.
What it will actually do is sow more confusion, destroy the livelihoods of thousands of independent contractors, and leave many matters unresolved. For instance, labor unions are not only interested in forcing independent contractors to become employees that are easier to unionize, but are also exploring industry-wide bargaining that could be applied to independent contractors, including this new class of hybrid workers. This would not only lead to previously independent workers being under union control but also lead to loss of flexibility and employment opportunities in each impacted sector.
Regardless of what happens in Washington, several state legislatures are pondering similar laws.
The questions for state lawmakers come down to this: If California, with all its built-in biases toward progressive politics, could not fashion a workable overhaul of independent contracting without offering exemptions to a multitude of industries, why should it even bother? Why favor one industry over another? Why put millions more Americans’ livelihoods at risk?
Companies will continue to innovate, and you never know where the next Uber or Lyft might come from. Politically driven restrictions on independent contracting could kill some of that innovation before it has a chance to blossom. Exemptions only create a system rigged in favor of a few. Better instead to remove barriers and let everyone flourish in whatever way best suits their circumstances.
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