The Power of Independent Thinking

Open Letter from 151 Scholars to CA Governor: Suspend AB-5 to Hire Gig Workers During Pandemic
Posted: Sun. April 19, 2020, 7:59pm PT

An influential group of 151 economists and political scientists, are calling for the immediate suspension of California’s AB-5, a law that was passed in 2019 to regulate the use of independent contractors in a variety of activities. The “Open Letter to Suspend California AB-5” that is addressed to California Governor Gavin Newsom and all members of the California State Legislature, calls for the immediate suspension of the law, which prevents individuals from working part time in a variety of indispensable positions, especially during the coronavirus crisis. Each of the signatories is affiliated with one of forty colleges, universities, and think tanks in California.

This video features Independent Institute Executive Director Dr. Graham H. Walker interviewing Independent Senior Fellow Dr. Williamson M. Evers and Independent President David J. Theroux to discuss the Open Letter and the urgent need to suspend AB-5.

“By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas, AB-5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them,” said Dr. Evers, initiator of the Open Letter.

AB-5 has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals, those who would benefit most from flexibility to work around the restrictive policies, the Open Letter states.

Blocking work that is needed and impoverishing workers laid-off from other jobs may not be the intentions of AB-5, but the law is having these unintended consequences and needs to be suspended. The current situation of voluntary (and mandatory) self-isolation has created an immediate need for flexible and low-cost ways of delivering goods to people.

Hiring laws, especially for firms with more than 50 employees, mean that companies are unwilling to make long-term commitments to traditional jobs. Employment decisions hinge on the costs of distributing risk. While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency.

A mountain of work needs to be done, deliveries made, and people stranded at home helped to receive groceries and medications. Meanwhile, furloughed Californians stand on the verge of being wiped out financially because the law prevents them from working part time in a variety of indispensable positions.

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