Contents

The Open Letter

Dear Governor Gavin C. Newsom and All Members of the California State Legislature:

In 2019, California Assembly Bill 5 was passed to regulate the use of independent contractors in a variety of activities.

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.

We, the undersigned Ph.D. economists and political scientists, call for the immediate suspension of AB-5.

Background

The current situation of voluntary (and mandatory) self-isolation has created an immediate need for flexible and low-cost ways of delivering goods to customers. Other essential needs could also be served by enabling independent contractors currently hindered by AB-5.

Hiring laws, especially for firms with more than 50 employees, mean that companies are unwilling to make long-term commitments to traditional jobs. We aren’t sure what our economic needs and capacities are going to be even two months from now. But hiring someone in a traditional job, with hours and benefit requirements, is too expensive to contemplate given that employers do not know whether they will be able to fill any permanent jobs at all and, if so, when.

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. It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.

AB-5 unintentionally 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.

Our Proposal

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.

Blocking work that is needed and impoverishing workers laid-off from other jobs are not the intentions of AB-5, but the law is having these unintended consequences and needs to be suspended.

We propose that the California State Legislature and Governor Gavin Newsom suspend AB-5.

Signatories

Michael Akemann, Managing Director, Berkeley Research Group, LLC

Shireen Al-Azzawi, Lecturer in Economics, Santa Clara University

Annelise G. Anderson, Senior Research Fellow Emerita, Hoover Institution

John Greyson Anderson, Professor of Political Science, Napa Valley College

Steven Eric Anderson, Professor of Management and Economics, La Sierra University

William L. Ascher, Donald C. McKenna Professor of Government and Economics, Claremont McKenna College

Jared Ashworth, Assistant Professor of Economics, Pepperdine University

George B. N. Ayittey, Senior Fellow, Independent Institute

Charles W. Baird, Professor of Economics Emeritus, California State University, East Bay

David Baqaee, Assistant Professor of Economics, University of California, Los Angeles

David R. Baron, William R. Kimball Professor Emeritus of Business, Economics, and Environment, Stanford University

Bruce L. Benson, Senior Fellow, Independent Institute

Luisa R. Blanco, Associate Professor of Economics, Pepperdine University

Michael J. Boskin, Tully M. Friedman Professor of Economics, Stanford University

David W. Brady, Bowen H. and Janice Arthur McCoy Professor of Political Science, Stanford University

Jan K. Brueckner, Distinguished Professor of Economics, University of California, Irvine

Andrew E. Busch, Crown Professor of Government and George R. Roberts Fellow, Claremont McKenna College

Patricia J. Cameron-Loyd, Lecturer in Economics, Santa Clara University

Angelo A. Camillo, Assistant Professor of Management, Wine Supply Chain Management, Hospitality Management, Sonoma State University

C. Monica Capra, Professor of Economic Sciences, Claremont Graduate University

Kristine L. Chase, Professor of Economics Emerita, Saint Mary’s College of California

Lanhee J. Chen, David and Diane Steffy Fellow in American Public Policy Studies, Hoover Institution

Anna Choi, James Q. Wilson Visiting Professor of Public Policy, Pepperdine University

Mark T. Clark, Professor of Political Science, California State University, San Bernardino

Jeffrey P. Clemens, Associate Professor of Economics, University of California, San Diego

Thomas F. Cooley, Visiting Scholar, University of California, Santa Barbara

Dora L. Costa, Professor of Economics, University of California, Los Angeles

Christopher J. Coyne, Senior Fellow, Independent Institute

Julie Berry Cullen, Professor of Economics, University of California, San Diego

Carl R. Danner, Managing Director, Berkeley Research Group, LLC

Steven J. Davis, Senior Fellow, Hoover Institution

Arthur S. De Vany, Professor Emeritus of Economics, University of California, Irvine

Magali A. Delmas, Professor of Management, University of California, Los Angeles

Darwyyn Deyo, Assistant Professor of Economics, San Jose State University

Kai Ding, Assistant Professor of Economics, California State University, East Bay

Daron O. Djerdjian, Associate Professor of Economics, Occidental College

Lynne Pierson Doti, Professor Emeritus of Economics, Chapman University

John Duffy, Professor of Economics, University of California, Irvine

Richard V. Eastin, Professor Emeritus of Finance and Business Economics, University of Southern California

John C. Eckalbar, Professor Emeritus of Economics, California State University, Chico

Andrea Lynn Eisfeldt, Laurence D. and Lori W. Fink Endowed Chair in Finance, University of California, Los Angeles

Alain C. Enthoven, Marriner S. Eccles Professor of Public and Private Management, Emeritus, Stanford Graduate School of Business

Richard A. Epstein, Peter and Kirsten Bedford Senior Fellow, Hoover Institution

Fulya Y. Ersoy, Assistant Professor of Economics, Loyola Marymount University

Williamson M. Evers, Senior Felllow, Independent Institute

Frank Falero, Jr., Professor Emeritus of Economics, California State University, Bakersfield

Mira Farka, Associate Professor of Economics, California State University, Fullerton

Roger E. Farmer, Emeritus Distinguished Professor, University of California, Los Angeles

Paul J. Feldstein, Professor Emeritus of Economics and Public Policy, University of California, Irvine

Matthew Fienup, Executive Director, Center for Economic Research and Forecasting, California Lutheran University

Morris Paul Fiorina, Wendt Family Professor of Political Science, Stanford University

Hartmut Fischer, Professor Emeritus of Economics, University of San Francisco

Marjorie Flavin, Professor Emeritus of Economics, University of California, San Diego

Fred E. Foldvary, Lecturer in Economics, San Jose State University

Roger Scott Frantz, Professor Emeritus of Economics, San Diego State University

Harry E. Frech, Professor of Economics and Technology Management, University of California, Santa Barbara

Gary M. Galles, Professor of Economics, Pepperdine University

Rodney J. Garratt, Maxwell C. and Mary Pellish Chair in Economics, University of California, Santa Barbara

Richard S. Gearhart III, Assistant Professor of Economics, California State University, Bakersfield

Adam Gifford, Jr., Emeritus Professor of Economics, California State University, Northridge

Peter Gordon, Professor Emeritus of Public Policy, University of Southern California

Shoshana Grossbard, Professor of Economics Emerita, San Diego State University

Stephen H. Haber, A.A. and Jeanne Welch Milligan Professor of Political Science, Stanford University

Dennis A. Halcoussis, Professor of Economics, California State University, Northridge

Bronwyn H. Hall, Professor Emerita of Economics, University of California, Berkeley

James D. Hamilton, Robert F. Engle Professor of Economics, University of California, San Diego

Gary D. Hansen, Professor of Economics, University of California, Los Angeles

Eric A. Hanushek, Paul and Jean Hanna Senior Fellow, Hoover Institution

Jorgen M. Harris, Assistant Professor of Economics, Occidental College

Steven F. Hayward, Senior Resident Scholar, Institute of Governmental Studies, University of California, Berkeley

H. Robert Heller, former Member, Board of Governors of the Federal Reserve System

David R. Henderson, Research Fellow, Hoover Institution

Matthew Hill, Professor of Economics, Loyola Marymount University

Hugo Hopenhayn, Professor of Economics, University of California, Los Angeles

Jeffrey Rogers Hummel, Professor of Economics, San Jose State University

Cenap Ilter, Professor of Accounting, California State University, Dominguez Hills

Ayse Imrohoroglu, Professor of Finance and Business Economics, University of Southern California

William P. Jennings, Dean and Professor of Finance, Emeriti, California State University, Northridge

Douglas H. Joines, Professor Emeritus of Finance and Business Economics, University of Southern California

Matthew E. Kahn, Professor of Economics, University of California, Los Angeles

Marek Kaminski, Associate Professor of Political Science, University of California, Irvine

Jerry Lynn Kirkpatrick, Professor Emeritus of International Business and Marketing, California State Polytechnic University, Pomona

Melvyn Barry Krauss, William L. Clayton Senior Fellow Emeritus, Hoover Institution

Robert C. Krol, Emeritus Professor of Economics, California State University, Northridge

David Lagakos, Associate Professor of Economics, University of California, San Diego

Man-Lui Lau, Associate Professor of Economics, University of San Francisco

Stephen F. LeRoy, Professor of Economics Emeritus, University of California, Santa Barbara

Tom K. Lieser, Senior Economist Emeritus, University of California, Los Angeles

Ethan A. Ligon, Associate Professor of Agricultural and Resource Economics, University of California, Berkeley

Ted Loch-Temzelides, Visiting Researcher, Institute of the Environment & Sustainability, University of California, Los Angeles

Peter Lorentzen, Associate Professor of Economics, University of San Francisco

Christiano Manfrè, Professor of Finance, Pepperdine University

Anthony M. Marino, Professor of Finance, University of Southern California

Michael L. Marlow, Professor of Economics, California Polytechnic State University, San Luis Obispo

John G. Matsusaka, Charles F. Sexton Chair in American Enterprise, University of Southern California

Lawrence J. McQuillan, Senior Fellow, Independent Institute

Tom Means, Professor of Economics, San Jose State University

Moritz Meyer-ter-Vehn, Associate Professor of Economics, University of California, Los Angeles

Thomas Gale Moore, Senior Fellow Emeritus, Hoover Institution

Robert J. Michaels, Daniel P. Hann Distinguished Scholar in Law and Economics, California State University, Fullerton

Paul R. Milgrom, Shirley and Leonard Ely Professor of Humanities and Sciences, Stanford University

Velma K. Montoya, University of California Regent Emerita, University of California

Marc-Andreas Muendler, Professor of Economics, University of California, San Diego

Michael Curtis Munger, Senior Fellow, Independent Institute

Thuy Lan Nguyen, Assistant Professor in Economics, Santa Clara University

Julia R. Norgaard, Assistant Professor of Economics, Pepperdine University

Lee E. Ohanian, Professor of Economics, University of California, Los Angeles

Sule Ozler, Associate Professor of Economics, University of California, Los Angeles

John K. Paglia, Senior Associate Dean of Academic Affairs and Professor of Finance, Pepperdine University

Damian B. Park, Lecturer in Economics, Santa Clara University

Jeffrey M. Perloff, Professor of Agricultural and Resource Economics, University of California, Berkeley

Rodrigo Pinto, Assistant Professor of Economics, University of California, Los Angeles

Benjamin W. Powell, Senior Fellow, Independent Institute

James E. Prieger, Professor of Public Policy, Pepperdine University

Valerie Ann Ramey, Professor of Economics, University of California, San Diego

Stephen J. Rassenti, Director, The Economic Science Institute, Chapman University

Joshua D. Rauh, Ormond Family Professor of Finance, Stanford Graduate School of Business

Gordon Rausser, Robert Gordon Sproul Distinguished Professor Emeritus, University of California, Berkeley

Justin Rietz, Assistant Professor of Economics, San Jose State University

Peter Rupert, Professor of Economics, University of California, Santa Barbara

Mark Schniepp, Director, The California Economic Forecast

Abbylin Hyun Sellers, Associate Professor of American Politics, Azusa Pacific University

Robert L. Sexton, Distinguished Professor of Economics, Pepperdine University

Kathryn Lee Shaw, Ernest C. Arbuckle Professor of Economics, Stanford University

Robert P. Sherman, Professor of Economics and Statistics, California Institute of Technology

Stephen Shmanske, Emeritus Professor of Economics, California State University, East Bay

William Franklin Shughart II, Research Director and Senior Fellow, Independent Institute

Randy T Simmons, Senior Fellow, Independent Institute

Brian P. Simpson, Professor and Chair of Accounting, Finance and Economics, National University

Mark A. Skousen, Presidential Fellow in Business, Chapman University

Vernon L. Smith, Nobel Laureate in Economic Sciences, Chapman University

Pablo T. Spiller, Jeffrey A. Jacobs Distinguished Professor of Business and Technology, University of California, Berkeley

Emily Stoper, Professor Emerita of Political Science, California State University, East Bay

Stuart C. Strother, Professor of Economics, Azusa Pacific University

Woody Studenmund, Laurence de Rycke Professor of Economics, Occidental College

Daniel A. Sumner, Distinguished Professor of Agricultural and Resource Economics, University of California, Davis

Yixiao Sun, Professor of Economics, University of California, San Diego

Shirley V. Svorny, Professor Emerita of Economics, California State University, Northridge

John B. Taylor, Mary and Robert Raymond Professor of Economics, Stanford University

Robert S. Taylor, Professor of Political Science, University of California, Davis

David John Teece, Thomas T. Tusher Professor of Global Business, University of California, Berkeley

Alexis Akira Toda, Associate Professor of Economics, University of California, San Diego

Aaron Tornell, Professor of Economics, University of California, Los Angeles

Theofanis Tsoulouhas, Professor of Management, University of California, Merced

Richard K. Vedder, Senior Fellow, Independent Institute

Graham H. Walker, Executive Director, Independent Institute

James R. Wallace, Associate Professor of Department of Business and Management, Azusa Pacific University

Gary M. Walton, Professor Emeritus of Economics, University of California, Davis

Leonard Waverman, Managing Director, Berkeley Research Group, LLC

Jeremy West, Assistant Professor of Economics, University of California, Santa Cruz

Robert M. Whaples, Senior Fellow, Independent Institute

Bruce Wydick, Professor of Economics, University of San Francisco

Paul J. Zak, Professor of Economics, Claremont Graduate University

Videos




News Coverage

“Assembly Bill 5 Undercuts the Ability of Workers to Work” Sr. Fellow Williamson Evers, director of Independent’s Open Letter to CA Gov. Newsom to Suspend AB5, Op-Ed in The Orange County Register and other Southern California News Group newspapers 7/7/2020

“California Accelerates Pressure on Uber, Lyft Drivers Becoming Employees” Independent Institute Executive Director Graham Walker appears on The Ken and John Show on KFI AM 640 Radio in Los Angeles, CA 6/26/2020

“AB5—The CA ‘Gig’ Law’s Status” Senior Fellow Bill Evers appears on the Phil Cowan Show on AM 1380 “The Answer” KTKZ Radio in Sacramento, CA 6/26/2020

“How California’s AB5 Law Threatens Entrepreneurship: From Uber drivers to freelance writers, AB5 will upend countless lives,” by Luka Ladan (Catalyst) 6/20/2020

“California’s AB5 Law Harms Workers During Pandemic” Independent Institute Executive Director Graham Walker appears on the Trevor Carey show on KALZ FM “Power Talk” Radio 6/17/2020

“Suspend AB5 to Save Jobs in California” Independent Institute Executive Director Graham Walker appears on the Jen and Don show on KTIE radio 6/15/2020

“AB5 and the California Economy” Executive Director Graham Walker appears on the Larry O’Connor radio show 6/11/2020

“Will California’s Destructive Restrictions on Freelance Workers Go National?” by K. Lloyd Billingsley in The Beacon 6/8/2020

“Critics of California’s AB5 Law Argue Gig Work Could Help Economy Recover” Independent Institute Executive Director Graham Walker interviewed on KTVU-TV (Oakland, CA) and KCBA (Monterey) and KRXI (Reno) 5/29/2020

“Biden Backs Democrat Declaration against Independence” Policy Fellow Lloyd Billingsley Op-Ed in Front Page Mag mentioning Independent’s Open Letter to Suspend AB5 5/29/2020

News Release “Wiley Files Ninth Circuit Amicus Brief in California Assembly Bill Case Supports First Amendment Rights and Economic Liberties of Independent Contractors” at the U.S. Court of Appeals for the Ninth Circuit in the American Society of Journalists and Authors, Inc., et al. v. Xavier Becerra case seeking to rescind AB-5 5/27/2020

News Release “Independent Institute Files Vital Amicus Brief in AB-5 Case” at the U.S. Court of Appeals for the Ninth Circuit in the American Society of Journalists and Authors, Inc., et al. v. Xavier Becerra case seeking to rescind AB-5 5/27/2020

“Killing Us Softly” Sr. Fellow Williamson Evers, director of Independent’s Open Letter to CA Gov. Newsom appears on National Review’s Radio Free California podcast 5/22/2020

“Suspend CA AB-5 Now to Hire Gig Workers During Pandemic” Independent’s Open Letter to Suspend AB5 cited on Fallbrook Bonsall Village News 5/15/2020

Sr. Fellow Williamson Evers and Independent Institute’s Open Letter to Suspend California’s AB5 mentioned on National Review’s Radio Free California Podcast 5/14/2020

“A Few Lawmakers Try to Restore Work for Californians” by Lee Ohanian cites the Independent Institute’s Open Letter to CA Gov. Gavin Newsom to Suspend AB5 in Hoover Institution’s California on Your Mind 5/13/2020

“The Question Raisers” Independent Institute Founder, President and Chief Executive Officer David Theroux, Sr. Vice President Mary L. G. Theroux, Sr. Fellow William Shughart II, Sr. Fellow Williamson Evers, Love Gov, California Golden Fleece Awards, and Independent’s Open Letter to Gov. Newsom featured in The East Bay Express 5/13/2020

Notice and recommendation of the “Open Letter to Suspend California AB-5” in the weekly e-newsletter of the Fountain Valley Chamber of Commerce 5/11/2020

Notice and recommendation of the “Open Letter to Suspend California AB-5” in weekly e-newsletter of the Beverly Hills Chamber of Commerce 5/7/2020

“California’s AB5 Law Should be Suspended” Sr. Fellow Williamson Evers is interviewed on “The Ray Appleton Show” at KMJ-AM Radio 5/5/2020

Notice and recommendation of the “Open Letter to Suspend California AB-5” in The Pioneer (e-newsletter of the American Nurses Association/California) 5/4/2020

“Adopt the Bill Suspended by AB5” endorses the Independent Institute’s Open Letter to CA Gov. Gavin Newsom to Suspend AB-5 in editorial (Bulletin Mail) 5/3/2020

“In Our Opinion: Pass the Bill Suspending AB5” endorses the Independent Institute’s Open Letter to CA Gov. Gavin Newsom in editorial in the Ukiah Daily Journal 5/3/2020

“California Gov. Newsom Numb to Workers’ Pain” Policy Fellow Lloyd Billingsley Op-Ed in American Thinker 5/2/2020

“Senate Bill 990 a sensible bill to halt the damage of AB5” Independent Institute’s Open Letter to CA Gov. Gavin Newsom cited in editorial in the Orange County Register, Los Angeles Daily News and nine other newspapers in the Southern California News Group 4/30/2020

“Suspend California AB-5” Independent Institute Founder and President David Theroux, Executive Director Graham Walker, and Sr. Fellow Williamson Evers discuss the Independent Institute’s Open Letter to CA. Gov. Gavin Newsom appear on Thinkspot 4/30/2020

“Suspend AB5, Governor Newsom” Sr. Fellow Williamson Evers appears on the John Phillips show on KABC radio (Los Angeles) 4/30/2020

“Repeal AB5 Virtual Town Hall” Independent Institute’s Open Letter to CA Gov. Gavin Newsom cited in Carl DeMaio’s YouTube Channel 4/29/2020

“More than 100 economists statewide call for AB 5 suspension” article in The Coast News 4/22/2020 4/22/2020

“COVID-19 intensifies pressure on AB5... is now the time to hit ‘pause?’” article in TalentWave Blog 4/22/2020

“Suspend CA AB5 Now” Sr. Fellow Williamson Evers appears on the Phil Cowan Show on KTKZ radio 4/21/2020

“California Law Limiting Independent Contractors is Hindering Coronavirus Response, Experts Say” Open Letter to CA Gov. Newsom and CA Legislature is cited in The Washington Free Beacon 4/20/2020

“Some Musicians to Get Relief from California ‘Gig Economy’ Bill” Independent Institute’s Open Letter to CA. Gov. Gavin Newsom cited in EastCountyToday.net 4/20/2020

“Calif. economists urge Newsom to suspend law restricting gig workers amid coronavirus crisis” Independent Institute’s Open Letter to CA. Gov. Gavin Newsom cited in The College Fix 4/20/2020

“Gov.’s Task Force: Opening Business & Jobs or Changing the Business World?” by Joel Fox cites the Independent Institute’s Open Letter to Suspend California AB-5 (Fox and Hounds Daily) 4/20/2020

WATCH: Executive Director Graham Walker Interviews Senior Fellow Williamson Evers and President David J. Theroux on the Open Letter to Suspend AB-5 4/19/2020

“Open Letter to Gov. Newsom Reignites Debate over Controversial AB5 Law” Sr. Fellow Williamson Evers quoted in The Epoch Times 4/17/2020

“California’s Anti-gig Law, AB5, Inhibits Independent Contractors” Sr. Fellow Williamson Evers appears on the John Batchelor Radio Show 4/17/2020

“Suspend CA AB5” Sr. Fellow Williamson Evers appears on the Andy Caldwell radio show 4/17/2020

“Over 150 Ph.D. Economists and Political Scientists Call for Governor to Suspend AB 5” Independent Institute’s Open Letter to CA. Gov. Gavin Newsom cited in the East County Today 4/17/2020

“150 Economists, Political Scientists Call for AB 5 Suspension” Independent Institute’s Open Letter to CA. Gov. Gavin Newsom cited in StaffingIndustry.com 4/17/2020

“Open Letter to Gov. Newsom Reignites Debate Over Controversial AB5 Law” discusses Open Letter to Suspend California AB-5 (Focus News EU) 4/17/2020

“More Than 150 Ph.D. Economists and Political Scientists Call for Gov. Newsom to Suspend AB 5 and Re-Open the Economy” Independent Institute’s Open Letter to CA. Gov. Gavin Newsom cited in the California Globe 4/16/2020

“Open Letter to CA Gov. Newsom—Suspend California AB5” Sr. Fellow Williamson Evers appears on the Lars Larson radio show 4/16/2020

“Open Letter from 151 Scholars to CA Governor: Suspend AB-5 to Hire Gig Workers During Pandemic” Independent Institute Sr. Fellow Bill Evers and President David Theroux speak with Executive Director Graham Walker on Independent’s YouTube channel 4/15/2020

“California Lawmakers Unwittingly Make Surgery Much More Dangerous” Lee E. Ohanian Op-Ed in Hoover Institution’s California on Your Mind 4/7/2020

“What Happens When Someone Dies While Health Care Workers Sit at Home, Prohibited from Working?” Lee E. Ohanian Op-Ed in Hoover Institution’s California on Your Mind 4/2/2020

“How California’s AB-5 Hinders Coronavirus Response” by K. Lloyd Billingsley in The Beacon 4/1/2020