California's Anti-Self-Employment Law Is Already Crushing Freelancers
In 1971, Isaac Asimov wrote an extraordinary novel, The Gods Themselves, about a machine that generates unlimited energy for free, defying the fundamental economic principle known as scarcity. It is later learned that the Electron Pump is originating from a hole in space that connects parallel universes. Doomsday is nigh as it is discovered that galaxies will soon be destroyed and that the sun will metastasize into a supernova. The crux of the story is comparable to what is transpiring in California.
State lawmakers possess an infinite source of good intentions, using the eternal supply to pave roads to hell. Wielding the power of this limitless benevolence and munificence, politicians are regulating the lives of citizens while eviscerating their existence in the process. If this is goodwill, then we can only imagine what the state is capable of when it desires to ruin you or your business.
The Gig Is Up
In September, California’s Democratic governor Gavin Newsom signed into law AB-5, which requires most companies to reclassify freelancers and contingent workers as full-time employees. Doing this means such individuals would be eligible for a guaranteed $12–$13 state minimum wage, benefits, and protections under California’s immense code of employment laws. It went into effect on January 1.
“As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow,” said Assemblywoman Lorena Gonzalez (D), the author of the bill, in a statement.
AB-5 was lauded by organized labor, but it turns out that laborers are not enthusiastic about it.
The law impacts about two-thirds of the state’s two million independent contractors; it does exempt many white-collar professionals, including architects, attorneys, doctors, and realtors. But childcare specialists, nurses, writers, and janitors are not afforded the same luxury. Truck drivers received a last-minute exemption after weeks of contentious battles, but they reportedly fled the state before the country bellowed "Auld Lang Syne." As for the truckers who stayed behind, the California Trucking Association claims it is receiving calls from individuals who are leaving the state.
Freelance writers may be the next ones to wave goodbye to California. Moving forward, freelancers are limited to thirty-five submissions annually per client. As any writer will attest, it can be easy to reach this quota when you are submitting content to media firms, leaving you on a never-ending hunt for more companies that will accept your prose on the existential crisis in the age of deconstruction.
Decline in Clients and Projects
Just weeks after AB-5 became law, Vox Media announced that hundreds of freelance writers, primarily sports contributors for its SBNation.com website, would be given the pink slip. The irony behind this corporate decision is that Vox endorsed the bill and celebrated its passing. Now Vox is replacing them with twenty new full- and part-time staff members.
When Gonzalez was confronted with this on Twitter, she tweeted:
These were never good jobs. No one has ever suggested that, even freelancers. We will continue to work on this next year.
She further dismissed complaints, urging everyone to “educate” themselves on the benefits of AB-5.
One Twitter user summarized the thoughts of the many affected by this law: “Wow, you really suck at this.”
CNBC spoke with Jeremiah LaBrash, who earns half of his annual income from freelancing. Based in Los Angeles, the freelance cartoonist noticed the decline in potential clients and projects. When LaBrash submitted proposals to media companies, these employers turned him down when they learned he is from California. He told the business news network:
I’ve had them hire me and then come back and say they’re no longer interested. All of a sudden, someone I’ve never talked to says, “We’ve decided not to move forward.” I’ve never had that happen before this year.
My savings are stagnant. I really can’t look into buying a house. The housing market here is hard already.
Once again, the paternalistic central planners strive to make the decisions for adults. They failed to comprehend that a lot of freelancers enjoy being independent professionals, setting their own hours, and opting for freedom rather than a nine-to-five structure. The bill is marketed as a safety net, but the question is: what good is a safety net if you do not have any work?
Leave California or Bust!
When first reporting on the bill, Kelli Ballard at Liberty Nation wrote that the historic motto had been “California or bust!.” After years of big government encroachment, Ballard posits that it is now “Leave California or bust!.” It may not be that simple. The biggest concern is that other blue states will eventually adopt similar legislation to combat the $1 trillion national gig economy, proving that there is no escaping bad economics.