Despite the economic and health challenges of the COVID-19 virus, the gig economy — spearheaded by third party food-delivery companies — has kept parts of the country open for business. Tragically, Newton’s third law of motion where every action triggers a reaction is in play.
These new businesses and allied workers are under attack — this time from Massachusetts Sen. Elizabeth Warren and her allies in the labor movement.
Citing the economic vulnerability of workers amid the public health emergency, Ms. Warren penned a letter to gig economy companies encouraging the CEOs to reclassify drivers and shoppers as employees rather than independent contractors. Ms. Warren endorsed a similar approach in the PRO Act, a labor “wish list” that passed the House but hasn’t gone anywhere in the Senate. Ms. Warren’s intentions to normalize the concept during this crisis are obvious: As Clinton confidante and former Chicago Mayor Rahm Emanuel famously offered, “you should never let a crisis go to waste.”
But Ms. Warren’s ideas have a rocky track record in California, where the legislature put them to the test with the notorious Assembly Bill 5. The legislation, which took effect earlier this year, forces many companies in the state to reclassify independent contractors as employees. Thousands of workers who voluntarily built their lives and incomes around flexible independent-contracting opportunities were suddenly left empty-handed.
Proponents of the policy argue the new criteria reduces the “exploitation” of workers. If that’s the case, why has the state also provided policy exemptions to a wide range of professions, including real estate agents, hair stylists and construction contractors? Do these workers not warrant the law’s claimed “protection?” The existence of immunity reveals that supporters of the law are well aware of the disastrous consequences.
The real motivation behind AB5 and similar proposals is less high-minded. Labor unions looking for new dues-paying members would prefer to see contractors forced to become employees — even if it means that fewer people have a source of income. The biggest victims are the drivers, delivery people and shoppers who have voluntarily chosen to work outside of the traditional employer-employee relationship. (Your Uber driver is the most widely known example.)
As the government tightens the noose on gig economy companies, the employment situation for these workers will only become more uncertain.
An effort to unionize shoppers for the grocery delivery company Instacart is the latest example of unions experimenting with gig workers by encouraging a strike. The idea was reportedly a bust; the company reported a 40 percent uptick in workers on the app, and some shoppers took to Facebook to encourage others not to participate. Said one: “I hope potential customers don’t hear of this strike & we lose business …” She referenced having lost another job and that the gig opportunity was an income lifeline.
Most likely gig economy workers will be resistant to labor organizing. Union rules are exactly what many “gig” drivers and shoppers are trying to avoid. These workers value independence and flexibility, not backroom deals that decide where, when and how much they can earn or work.
Gig economy companies and the opportunities they provide to workers have blossomed in recent years. The public health emergency has made their existence even more essential. Gig workers like their “gig.” We should let them keep it.
• Richard Berman is the president of Berman and Co., a public relations firm in Washington, D.C.