In a direct shot at the injustices inherent in America's growing "gig" economy, California lawmakers have passed legislation to make it more difficult for companies like Uber and Lyft, among many others, to classify their workers as contractors. To make such a classification, a company would have to show not only that those people truly work autonomously, but that the work they do isn't the company's core business — what most people understand "contractor" to mean, in other words.
This is nothing more or less than the reassertion of labor rights that this nation long ago agreed were necessary, and that too many businesses are now circumventing with creative reclassification of employees. California's reform deserves consideration in setting national standards.
The gig economy offers advantages to millions of Americans — from Uber drivers to truckers and janitors — most notably in the flexibility to set their own schedules. But that perk comes at a steep price. Because such workers are classified as contractors rather than employees, they generally get no insurance or benefits, no minimum-wage protections, no paid leave, no bargaining rights and no employer payments into their Social Security or Medicare.
In short, the biggest beneficiaries generally aren't the gig workers themselves but the companies that use them. By classifying people who spend the bulk of their workday answering to a single company as if they're all private business owners, those companies have hit upon an arrangement that neatly sidesteps many of the most important labor reforms of the past century. They can rake in cheap labor with no strings attached, all while championing how much "freedom" those workers have. No wonder so many companies have traded in the traditional employee model for one that ultimately treats workers like disposable cogs.
The California legislation, which Gov. Gavin Newsom is expected to sign, would force companies to drop the semantic games and extend labor rights to those workers. The companies, of course, are balking. Uber, which has a long history of entering markets in blatant violation of local regulations (as it did in St. Louis in 2015), says it plans to ignore the new law on grounds that the law's provisions don't apply to it.
Among the arguments made by opponents of the coming law is that it would drive up prices for Uber and Lyft riders — which is almost certainly true. Abusing the rights of workers has always been an effective way to keep prices artificially low, which, again, is ultimately to the benefit of the companies.
This country decided long ago, with the advent of minimum wages and other labor protections, that such worker abuse is not an acceptable business strategy. If Uber and Lyft can't survive in a market that includes those labor protections, then they should find another business model.
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