Become an employee with full paid benefits, or remain a mostly independent gig worker? That debate’s raging in California as November’s General Election approaches, and its outcome is likely to affect the entire country.
According to The Washington Post, “Uber, DoorDash and other gig economy companies are bombarding TV airwaves, social media and even their own apps with ads and marketing materials promoting a ballot initiative [Proposition 22] that they say would improve drivers’ financial situations and working conditions but that would also deny them the right to be classified as employees in California.”
Proposition 22 would give gig workers limited benefits and wage and worker protections, but establish them as an independent class of workers – and undo a 2019 California law, Assembly Bill 5 (AB5), that “would guarantee drivers access to the minimum wage, employer-provided health care and bargaining rights.”
I’ve long been self-employed, with the exception of some recent cybersecurity consulting contracts in which I was paid as a full-time employee with benefits, but that’s been my choice.
Being fully self-employed is not for the faint of heart. Besides cybersecurity consulting and writing a newspaper column, I have an apartment-rental business. I recently earned a real estate license and am selling properties, too.
I manage my own invoicing and taxes. I know to the penny – once my CPA explains it to me and I drop whatever mug of coffee I’m holding – how high my income taxes are. Few employees are aware of how much they pay in taxes or what their benefits cost their employers – which would be helpful to know before voting for new government policies that will increase both.
I manage my own health-care insurance, which has gotten plenty expensive in recent years for individuals who don’t qualify for subsidies, in part because of government attempts to expand health insurance to everyone.
But, again, I choose to be self-employed. I like the freedom it provides. But it also makes me keenly aware of the unintended consequences of government regulations and policies.
California’s 2019 AB5 law would require Uber, for instance, to hire drivers as full-time employees with health insurance, paid sick leave and other benefits. Benefits are wonderful, but they come at a price.
Uber claims that “if the company were forced to make all drivers across the country employees, for example, it could only support 260,000 full-time roles,” reports The Post. “That compares to 1.2 million active drivers the company was hosting on its app before the coronavirus pandemic.”
Uber also says fares would increase and drivers would be less available and timely – which means you might have to wait a while for your ride home to arrive after a night of enjoying the pub.
What it comes down to is that some politicians believe individuals shouldn’t have the freedom to exchange their skills and services for money from organizations, because organizations take advantage of those individuals. Joe Biden and Kamala Harris support AB5, not the watered-down Proposition 22.
Others think that in a free society, individuals should be able to offer their professional talents to anyone willing to pay for them, and government shouldn’t restrict the terms they negotiate. President Trump’s campaign supports that approach and is critical of AB5 (but has not, to my knowledge, supported Proposition 22).
That’s something else to think about when you vote in November’s election.