Right now in New Jersey (Bills A5936/S4204) and California a battle is raging over the right to be an independent contractor. That is… to get paid without withholding and all the rules that go along with traditional employment – i.e., to be an individual making your own decisions and negotiating and contracting freely with other businesses and individuals. The Independents are fighting gallantly, but they are divided group – and that means they are probably going to fail.
Why are they divided? Because many of them fail to understand the politics of power and what the laws are really meant to achieve.
Unions are a big part of this. You see, Union leaders like power. And the people who are in the unions like having a thug on their side. People contracting freely are a BIG threat to unions. A priori they will always outcompete them. You see, nobody really wants to work with a thug.
So when Uber (or any one else) says, “we’ll contract with you – you can set your own hours and drive your own car” – lots of people see an opportunity and they sign up. This drives the cost of transportation down – for everybody. Now the union drivers aren’t getting jobs anymore – they cost too much. The unions want protection. So they get the lawmakers to draft up a law that says “we want to protect independent contractors.” If they’re crafty they might even call the bill “Protection for Independent Contractors.” – i.e., precisely the opposite of what it really is.
So, what are the independent contractors doing wrong in their fight against this bill? Too many of them agree with the ostensible reason for the bill – protection for independent contractors. “We understand that Uber drivers need protection,” they say. “We just want to change the wording of the bill so it doesn’t include US.”
The hypocrisy of this is apparently lost on them.
Uber drivers don’t need protection from Uber! They are not slaves. No one is forcing them to go out in their own cars using the Uber app and picking up strangers. They are CHOOSING to do this. This law is not meant to protect Uber drivers – it’s meant to protect UNION drivers from Uber competition – PERIOD.
The same is true for ANY independent contractor whose work threatens a union job. That means YOU independent writers, truckers, graphic designers, waiters, musicians, photographers… ALL OF YOU. This is a war ON YOU.
So stop AGREEING with any part of this bill at all. You are playing with the cards they’ve dealt you. You are falling into their trap. And because of that, you WILL fail to stop this bill. Don’t do it.
8 Comments
Mike
9 Mar 2020 - 7:48 amWhile I can totally sympathize with the concern that AB5 plays into the hands of unions trying to exert power, could there be another side to AB5 and what it is trying to accomplish? Is it just possible that independent contractors are being used by large corporations to shirk their social responsibility, plunder local community resources and wipe out small businesses which are the fabric of our society?
If so, how to you distinguish between a small business owner and a contractor being used by a global corporation to wipe out local competition?
One option is to look at their client list. Perhaps this is what AB5 is trying to do?
Lisa
9 Mar 2020 - 10:45 amSorry, no one is going to look at my client list. It’s not their business. No one has a right to a job, to a certain level of income, to health care or anything else that must be provided by someone else. When people are FORCED to work for others it’s called slavery. Offering a service to customers at a lower price is not “plunder” and nobody has any “social responsibility” to anyone else save to recognize their actual rights and avoid trampling all over them. Whether someone is a “small business” or an “independent contractor” really depends on how they want to define themselves and is only up to them. This law does nothing but infringe deeply on individual rights and therefore it is HARMING SMALL BUSINESS. If you want to see how small businesses feel about it you can go over to Twitter and take a look at what’s coming directly from their mouths, especially over in California.
Mike
9 Mar 2020 - 4:20 pmThe definition of employee as opposed to independent contractor is the question at issue. The proposal is that if one essentially only works for one client, you are an employee and if multiple clients an independent contractor. There are 3 parties involved in this relationship, the provider of the service, the client, and the community. It cannot be up to only one party to arbitrarily decide what the nature of this relationship should be.
Lisa
10 Mar 2020 - 3:32 pm“It cannot be up to only one party to arbitrarily decide what the nature of this relationship should be.” Except that’s exactly what you get when you involve the “community” in the decision – an arbitrary decision.
Mike
11 Mar 2020 - 7:08 amWhat fight do you want to champion? The right of independent contractors to determine their own future as distinct from employees, or the rights of employees to be reclassified as independent contractors (which implies that independent contractors can interchangeably be classified as employees)?
Lisa
12 Mar 2020 - 11:21 amAgain. This is a decision that should be made between the worker and the employer – or client – they are who decide what compensation is going to be. Third parties are the problem. By trying to enforce “social obligations” they distort the marketplace.
Erol
13 Apr 2020 - 3:44 amSorry for the late response.
Lisa does a good job of defending her excellent article.
The most fundamental error I see in Mike’s reasoning is his 4:20 comment , as pointed out by Lisa. It is actually Mike’s position that is the arbitrary one. Once he interjects his concept of ‘community’ into the voluntary interaction of two parties, you have transformed a situation from one that can be shown to be efficient, just and judged ex ante by both participants to be beneficial to them – to one that is arbitrary, essentially the one-size-fits-all Mike/community answer. By imposing his (or his mobs) will on innocent people trying to better themselves, he makes them worse off in their eyes. Much as someone’s paternalistic instincts might misguide them to think otherwise, you can’t make people better off by increasing their costs and taking away from them legitimate choices desired by them.