So, there’s a new bill in California, Assembly Bill 5, that’s doing immense harm to freelancers across the state and throughout the country. The bill was intended to prevent tech companies from taking advantage of their employees by branding them as freelancers. But the thing took too wild a swing, and a lot of people have gotten hit by it.
We’re going to talk about how and why, but let’s get one thing straight, right off the bat:
We absolutely need something to help workers in this country. When we talk about why AB5 doesn’t work, I want to be very clear that I’m not turning my nose up at the idea of something like it. Rather, it’s this specific law that’s hurting a lot of people.
Let’s take a quick review at the environment that gave rise to Assembly Bill 5:
We live in an incredibly rough economy for most people. The stock market is doing phenomenally! But the stock market isn’t the same thing as the economy. The economy is made of people who are barely getting by, propping up a class of billionaires who are hording an amount of wealth that is increasing at a mind-boggling pace, instead of “trickling down”.
Productivity and wages used to rise together, but they got divorced in the 70s, and productivity’s been doing a lot for herself while wages have just sort of lazed around on the sofa, getting drunk. Productivity has grown 6 times more than pay since 1979. In the last ten years, the costs of education, housing, and medical care have ballooned, while the minimum wage has held steady at $7.25/hour. Not only is this financial climate hard for the average American, it’s going to be hard for a LOT of people, when the purchasing power of the middle class dwindles away to nothing and the bottom drops out of the whole contraption.
And there’s plenty of room for it to keep dropping! Because it turns out that a LOT of tech’s “innovation” just means “circumventing labor laws in ways that nobody’s made illegal yet”. Sometimes the tech world finds cools ways to get money and opportunities to people. Think of crowdfunding, or subscription services like Patreon that let middle-class artists do their thing sustainably.
But often, you instead wind up with companies like Uber, Lyft, and Favor. Rideshare apps view their drivers several different ways. They tell the government that they’re independent contractors. Drivers often claim that they’re running a small business, with the rideshare app’s help. Internally, (and to the SEC) they think of their drivers as the customers. The people who call for rides aren’t the customers—they’re the product that the app delivers to their customer, the driver.
What all of this means is that rideshare companies don’t have to pay minimum wage. They don’t have to offer benefits, like time off or healthcare. If the people who work for you are your customers, instead of your employees, you don’t have to take care of them the same way. (Funny how that works out, right?)
And in some ways, I can see the temptation to do things this way. Insurance is expensive, and it’s kind of wild that we make employers pay for it. Somehow saddling small businesses with that expense is considered the “conservative” option; I’ll never understand how that’s supposed to be good for the market. We’re the wealthiest nation in the world, and yet we’re just about the only country that puts the burden of healthcare on business owners instead of the government.
But here’s the thing: That’s how health care works in this country! It’s what we have. We have a public option, technically. But it’s been systematically gutted to the point of uselessness, intentionally, by people who resent it being passed in the first place. So until we get some kind of national healthcare system, it’s on business owners to make sure that their employees don’t die because they can’t afford medical care. That’s the law, and that’s the ethical thing to do in our current situation.
And tech companies tend not to like that. So we get situations like Uber, where people who are clearly employees are being framed as literally anything else. Because the companies hiring them would rather burn millions trying to render their employees obsolete than spend that money keeping them alive. (Fun side note: Remember when one of those self-driving cars killed a woman because Uber forgot to tell their AI that humans can exist outside of crosswalks?)
And just like I understand why companies would try to dodge those costs (even if it’s clearly wrong), I also understand what AB5 was trying to do. They’re trying to close that loophole. They’re trying to stop companies from BSing about who is an employee and who isn’t. That makes sense.
So the bill defines freelancers with help from a court case, Dynamex Operations West, Inc. v. Superior Court (2018). The main features are
1. Is the worker free from the control and direction of the hiring entity. Is the person who hired them telling them where, how, or when to do the work?
2. Is the work being performed outside of the normal course of business for the hiring entity?
3. Is this work that the worker normally does, independently of this one business relationship? Do they genuinely have their own business in this field? Or is this “freelancing” something they’re just doing for one company?
You can immediately see some huge questions raised here. Among them:
– How strict do you define “telling someone how to do their work?” Because I’ve never had a creative assignment that didn’t come with some sort of deadline, right?
– How do you define “the normal course of business?” The normal course of business for a magazine involves hiring dozens of writers to write hundreds of pieces. Does that stable of writers suddenly get smaller if you can’t afford to give them all benefits?
And we’re already seeing fallout from this. Large multimedia platforms, from Vox to CollegeHumor, are laying off huge swaths of their staffs. Under the new law, writers aren’t allowed to submit more than 35 pieces in a year and still be considered freelancers. That means that these outlets were going to have to either cast a much wider net for their bullpens, or cut their staff and focus on a core group of (presumably grotesquely-overworked) people. Unsurprisingly, they chose the latter pretty universally.
And it’s not just writers. Musicians are getting hit, too. A petition to secure an exemption is nearing 50,000 signatures on change.org. Any creative endeavor other than “a day job with a desk at Disney” is going to involve a network of people floating in and out as projects start and end. There’s a lot of room for exploitation, and there’s a lot of room for quashing that exploitation. But right now, this bill is mostly just putting people out of work.
And just like California’s (much-needed, fantastic) privacy protection laws are having an impact across the country, (because you never know if the data you’re collecting is on a Californian!) so too is their (terrible) freelancing law rippling out. Because work doesn’t happen in offices anymore. It happens everywhere. I recently released a song with musicians from six countries performing on it. That wasn’t even something I was trying to do. That’s just where my friends were!
Now, my piece was just me getting together with some friends to have fun. But professional recordings happen that way, too, all the time. And right now, if the person on either the hiring or performing side of that equation is in California, that relationship is in jeopardy.
And of course, the really fun thing is, that a lot of the industries that were intended as targets of the bill are sidestepping it with court challenges. And many industries lobbied for exemptions, meaning that real estate agents, CPAs, lawyers, surgeons, referral agencies, and lots of others were exempt from the get-go.
So what we’re left with is a law that’s meant to protect people. But many of the people it should’ve protected aren’t covered by it. And many legitimate freelancers are getting screwed out of business relationships that they used to rely on. The big publications that they used as cash cows to pay their bills are either capping them at 35 articles, or letting them go altogether. It’s not hard to see that this is wildly misguided, and that it’s causing more harm than help. We’ve got to pump the brakes on AB5 and try to figure something else out.
The House Judiciary antitrust investigation holds big techs’ feet to the fire
(POLITICS) CEOs of Alphabet, Facebook, Apple, and Amazon set to testify in House Judiciary Committee antitrust investigation hearing today.
The House Judiciary Committee is closing in on the end of a year-long investigation into tech giants Google, Facebook, Apple, and Amazon, to evaluate possible antitrust abuses. CEOs from all four companies were set to testify on Monday, July 27, 2020. The hearing has been pushed back to Wednesday, July 29, to allow members of Congress to pay respects to civil rights leader Representative John Lewis (D-GA) who died of pancreatic cancer on July 17.
Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Alphabet (Google’s parent company) have all agreed to testify. This will be Bezos’ first time in front of Congress, whereas all the others have testified before on different matters. Twitter CEO Jack Dorsey was invited to testify by Representative Jim Jordan (R-OH), but is expected to not attend.
The Antitrust Subcommittee began the investigation in June 2019. Each business has been the subject of scrutiny for their roles in dominating their respective industries and playing an outsized role in market competition for smaller businesses. The Committee is interested in evaluating current antitrust laws and whether they apply to, or should be updated for, these mega corporations. They have already heard testimonies from smaller companies like Sonos and Tile about these companies’ alleged monopolistic practices.
The focus of the investigation for Apple is on the App Store, and whether it has implemented policies that are harmful for app developers. Google has a tight hold on the online advertising market. Amazon – which during a five-week period early in the pandemic saw an increase in value equivalent to the total value of Walmart, the world’s largest firm – has been criticized for its treatment of brands that sell on its e-commerce platform. Facebook is being investigated for its acquisition practices, cornering the social media market with purchases like Instagram.
Amazon is expected to face additional scrutiny for its treatment of warehouse workers during the pandemic. Facebook and YouTube (a subsidiary of Google) have been the subject of regular criticism about monitoring hate speech on their platforms, and their treatment of the workers responsible for doing so (Facebook in particular).
The hearing is set to occur virtually in order to adhere to social distancing guidelines. Watch the hearing live at 12:00 p.m. EST Wednesday, July 29 on the House Judiciary Committee’s YouTube channel. Please do note the hilarious irony of streaming a Congressional antitrust hearing on YouTube, which is owned by Google, which is owned by Alphabet, which is testifying at said hearing. God Bless America.
Additional unemployment benefits outside of the CARES Act
(POLITICS) Unemployment is at an all time high in the United States and individuals need to be aware of reapplying for additional benefits.
June saw some additional jobs in the US and unemployment fell as of early July, but CNBC advised pausing on any celebration just yet, saying that “The employment crisis is still worse than any time since the Great Depression, the country’s worst economic downturn in its industrial history.”
The unemployment statistics in our country right now are really scary – especially for individuals and families that see a looming deadline of July 31 for the supplemental $600/week provided by the Federal Government through the CARES Act put in place in March. There are discussions on extending these benefits as many families have not been able to replace their incomes or find new employment opportunities, but it doesn’t seem like anything has been finalized there yet. Congress is in the middle of a variety of options:
- Discontinue the additional $600/week but allow those on unemployment to continue to file and receive their state benefits (usually up to 26 weeks or possibly extended up to 39 weeks by The CARES act)
- Send out additional stimulus checks (Congress is currently exploring a $X Trillion stimulus package)
- Extend the additional funding (on top of the weekly amount allotted by state) but cut it from $600 to $200
- It’s also been put on the table in the House of Representatives “The Heroes Act” to extend the additional $600/week until January 2021 ($3 trillion).
There are some additional benefits that are available (different than the funds by the CARES Act), but you may have to reapply for them. So, make sure to check your state’s unemployment pages and your filing status. Some states do not require you to reapply and you can continue on with extended benefits.
According to CNBC, “The additional aid expires after the end of the year. (This is a different program than the one paying an extra $600 a week through July 31.) For some reason, the [Department of Labor] has taken the position that people have to file for the additional PEUC benefits,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.”
No doubt that this can cause additional stress and uncertainty especially when you have questions about your filing and are unable to get through to someone on the phone. With the way that the unemployment cycle is setup, technically July 25 is considered the last date for that cycle (and July 26 for New York), so be sure to check and see what the next steps are for you if you are currently filing.
How will pausing the reopening of states impact the recovery of the economy?
(POLITICS) The resurgence of COVID-19 has left Americans with a lot of questions about our nation’s economic future. That ambiguity is seemingly a feature, not a bug.
The rest of the world watched as the United States dramatically reopened “the economy” last month. Now, it seems we’ve changed our minds about that.
The White House has repeatedly said that it will be up to individual states to form their own pandemic response plans moving forward. But letting local governments devise their own solutions has produced large gaps in their preparedness, as well as profound confusion around the best practices for balancing the country’s public and economic health.
California, which represents the largest economy in the US and the fifth largest in the world, was one of the first states to put serious quarantine restrictions in place. The decision to relax those orders only came after anti-lockdown protestors demanded that Governor Gavin Newsom reopen the state’s beaches, businesses and churches. Newsom may now regret this capitulation as California just called for a second round of statewide lockdowns.
Other state legislators are slowly following their lead, as the threat is becoming very dire in some places. Florida, for instance, is now a global hotspot for COVID-19 and Miami is being called “the new Wuhan”. The state is also currently struggling against another wave of unemployment, partly because their economy is heavily dependent on summer tourism (which has persisted despite the spike in cases, but not nearly at pre-pandemic levels).
Florida, California and Texas are altogether responsible for 20 percent of all new COVID-19 cases globally.
Every state is fighting two battles here. Coronavirus relief efforts in the US are still seriously underfunded, and most health organizations here lack the resources to effectively test and treat their communities. But the problems that have emerged for workers and small business owners, like evictions and layoffs, have also been devastating in their own right.
In essence, the United States reopened in an effort to curb the nation’s financial freefall and ballooning unemployment. Economists predicted at the beginning of July that reopening would allow the US to avoid a recession, and all would go smoothly. These projections likely did not account for a spike in cases that would halt this economic rebound.
That’s not to say the circumstances here haven’t improved at all over the past months; currently there is no acute shortage of ventilators, and doctors have had some time to refine their strategies for treating the virus. Overall, the national unemployment rate is slightly declining, while working from home is going so well for companies like Twitter and Facebook that they will be permanently switching much of their staff to remote work.
By comparison, though, New Zealand took the pandemic much more seriously than the US did, and they are objectively in a better position now in all respects. Prime Minister Jacinda Ardern cracked down hard and early, closing the country’s borders completely, and instituting rent freezes nationwide. As a result they have virtually eradicated COVID-19 within their borders. A report from S&P Global also expects New Zealand’s economy to recover quickly compared to the rest of the world.
While this tradeoff seems like a zero sum game – as if we have to pick either our health, or our wealth – it is not. In fact, we could very well end up with neither if our lawmakers don’t proceed with caution.
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