Future of Work Commission and the Shadow of AB 5

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Gov. Gavin Newsom created a crystal ball commission to look into the future of how the nature of work will change in California. There will be agendas at work on the commission, with union organizations heavily represented.  Can the commission fairly focus on how the future of work will develop and should develop, or will it be held back by old ideas? All this as the legislature moves toward passing AB 5, a law codifying the California Supreme Court’s Dynamex decision to determine if workers are employees or independent contractors. 

The new commission is made up of 14 Democrats, 6 No Party Preference voters, and 1 Republican. Not exactly a fair representation of the California electorate.

One member of the newly named commission, Art Pulaski, chief officer of the California Labor Federation, made clear in a CALmatters op-ed that a 20th century model should be revitalized in the 21st century. “In these uncertain times, more and more people are recognizing that labor unions aren’t a thing of the past. In fact, we have a critical role to play in the future.”  

That attitude propelled the advancement in the legislature of AB 5 last week to classify workers in such a way to open opportunities for labor unions to organize workers in the “gig” economy.

Issues raised in the debate are whether workers in the new economy will lose their independent status and flexibility of work hours or if these workers should be protected with full benefits guaranteed by the state, such as minimum wage, worker’s compensation and other benefits. A number of workers feel their lose of independence will mean lost work and lost wages, while some businesses complain that they cannot handle the extra fiscal burdens under state requirements for full-time workers. Other workers want the benefits of full time employees and the right to organize with labor unions. 

The measure moved ahead as more types of jobs such as travel agents, editors, podiatrists, commercial fisherman and more earned exemptions from the classification mandates incorporated under the bill to determine employee or outside contracting status. These jobs were added to a list of jobs like doctors, lawyers, insurance agents and realtors that already were granted exemptions under the law. 

If AB 5 becomes law, the battle for exemptions is sure to continue with the introduction of future bills and lobbying efforts by different types of workers. In a July column, I suggested that multiple exemptions and the quest for even more exemptions to the proposed employee test standards could undermine and make unworkable the classification effort while slowing the economy’s natural growth in a changing era. 

Dan Walters synopsis of the AB 5 battle in his CALmatters commentary got to the heart of what the new Future of Work Commission must consider: “On one level, AB 5 is a philosophical conflict over whether the employment model that emerged in the 20th Century – workers paid salaries or hourly wages with employer-supplied medical care, pensions and other benefits – should prevail, or give way to the more flexible and potentially lucrative, but much less certain, gig model that has contributed to 21st Century California’s explosion of entrepreneurial output.”

Advocates for AB 5 say checks are needed for an unfettered gig economy, which take workers back to a state of feudalism. I have another view. Efforts to restrict workers from flexible, independent situations and applying old work restrictions to an ever-changing economy are truly taking us backwards. 

Weighing and measuring the future accurately has always been a near impossible business. History is strewn with failures to see how things would develop. Although the clear and dramatic changes in the work world over just the past few decades—the fastest change of work in history—justifies the attempt the governor puts forward with his new commission. 

One worries, however, that going into the commission with set ideas and applying the rules of the past will hobble the effort. A commission in the early years of the 20th Century on transportation’s future heavily populated by blacksmiths would point toward the horse as the main method in the future of getting around.

 

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