Voters Rejected California’s Gig-Work Ban. Will Congressional Democrats Listen?
Democrats Should Improve Flexible Work, Not End It
All smart politicians respond to what’s trending. Call it political Darwinism.
So as a Democrat it’s somewhat baffling to me that the Democratic Congress is poised to approve an idea that was rejected by voters in one of the bluest states, California: a ban on freelancing and independent contractor “gig work” like rideshare and food delivery.
New Kinds of Work Demand New Approaches to Benefits
The smartphone economy has brought almost anything delivered to our doorstep — and helped create a new type of flexible work for the independent contractors who help power these services. Students, single parents, and caregivers — among others — have flocked to this flexible work.
Rideshare and delivery services have not only proven essential during the pandemic, but gig work has proven an important economic lifeline for drivers. DoorDash saw orders double while Instacart added 300,000 more shoppers and drivers to keep up with demand.
Flexibility is part of what drivers value; they like being able to choose when and where they work. A summer 2020 survey found that 69% of all app-based drivers prefer independent contractor status over being an employee, with 86% citing schedule flexibility as a driver of their decision to drive.
But as the nature of work changes, most people agree that we should update our employment system and social safety net to give benefits and protections to all workers, not just full-time employees. And according to a recent Bloomberg Businessweek story, three years ago a group of pragmatic union officials engaged rideshare companies in compromise conversations over worker benefits:
“Even if California deemed these workers employees, that wouldn’t give them unionization rights unless the federal government agreed […] That route would be “slow and difficult,” SEIU’s California chapter wrote in a memo in 2018, and the companies would resist fiercely, perhaps with a ballot measure. In 2019 the union mulled a potential compromise that would instead provide companies “flexible alternative standards” while ensuring workers minimum pay and a form of bargaining…”
Unfortunately, purists within organized labor and California’s Democratic legislature walked away from compromise when they saw an opportunity to pass AB5, which codified a legal test that effectively turned most freelancers and independent contractors into full time employees.
California’s Democratic Voters Forced Rollback and Ultimate Rejection of AB5
It was mere months before the California legislature realized AB5 went too far and acted to exempt more than 100 jobs from AB5’s mandate. That left app-based drivers and a few other categories subject to the law — until last November’s ballot Proposition 22 scaled back AB5 for app-based drivers, preserved their independent status, and provided them with important new benefits.
The Prop 22 results signified an epic voter rejection of the full-time-employee mandate of AB5. In one of the most progressive states in the country, Prop 22 was approved with 59% of the vote and a 17% margin:
- It won in all but seven California counties — despite Joe Biden winning California handily. In fact, Prop 22 won in more counties (51 out of 58) than Biden did (35 out of 58).
- Prop 22 won in Democratic stronghold counties including Los Angeles, Napa, and Sonoma counties as well as moderate-Democrat and swing counties (Contra Costa, Fresno, Orange, Sacramento, San Bernardino and San Diego). Opposition to Prop 22 was centered around the San Francisco Bay area.
- Prop 22 won by a large margin (60% yes, 40% no) in the home district of AB5’s main champion in the state legislature, State Sen. Lorena Gonzalez.
- In Los Angeles County alone, Prop 22 passed in 84 of 88 cities. The Los Angeles Times “found widespread support in neighborhoods with large Black and Latino communities and majority white suburban areas alike.”
- Exit polling by Public Opinion Strategies found that a majority of union households (56%) believed that drivers should remain independent contractors rather than employees.
Put simply, AB 5 was bad politics for Democrats in California.
But denial isn’t just a river in Egypt. In the wake of Prop 22’s victory, some in organized labor and sympathetic media have characterized its win as illegitimate given the $200 million spent by gig companies in support of the proposition.
That patronizing, sour grapes response fails to recognize the reality of mainstream voter sentiment or acknowledge app-based drivers’ own views of what’s best for them. Besides, Joe Biden raised more than $1 billion to get elected, and no Democrat or journalists have called his historic win tainted by money.
Put simply, AB 5 was bad politics for Democrats in California.
Some Democrats Recognize Prop 22 Vote as a Bellwether…
Democrats’ majority status in the California legislature — like their majority in the US House of Representatives — depends on winning and retaining purple suburban districts (of which there are several in Southern California).
In the late 1990s, I worked for “New Democrats” in Congress who won congressional seats in these swing districts by giving voice to suburban pragmatism. It was those pragmatic suburban voters who rejected AB5’s approach of banning flexible gig work — and without those voters, Democrats could lose their elected majorities.
To their credit, some leading Democrats look at the California experiment as a cautionary tale. Bloomberg reported that post Prop 22, progressive New York State Senator Jessica Ramos is “leery of copying California’s [approach] and would prefer a compromise to years of litigation.” And Democratic San Jose mayor Sam Liccardo said “we have to move beyond the rigid dichotomy of employer versus independent contractor.”
These Democrats recognize that being progressive means respecting drivers’ own desires — and modernizing an outdated employment framework.
…Yet the Democratic Congress Is Poised to Ignore the Lesson
Unfortunately, other elected Democrats haven’t yet acknowledged the shift in voter opinion signaled by Prop 22.
The PRO Act, which focuses primarily on labor’s right to organize, would also effectively make California’s AB5 a national standard. The bill already passed the House in February 2020, and House Democrats are poised to approve it again the week of March 8.
Democrats should recognize that adopting a labor proposal that plays great in San Francisco but terribly in the suburbs isn’t great politics.
On the one hand, It’s at the top of organized labor’s wish list, and the average House Democrat likely sees little upside in antagonizing labor. I’d be willing to bet that at least 20 House Democrats believe a federal ban on gig work is bad policy, but will hold their nose, vote yes, and comfort themselves with the bill’s inability to overcome a Senate filibuster.
On the other hand, something significant has occurred since the last vote: California voters’ rejection of the gig work ban. Democrats ignore this reality at their peril.
Instead, smart Democrats should recognize that adopting a labor proposal that plays great in San Francisco but terribly in the suburbs isn’t a great political look — especially if Democrats want to win back the swing House seats they lost in 2020.
What Democrats Should Do Instead
Rather than limiting gig work — which has proven a lifeline of supplemental income for thousands — elected Democrats should focus on improving gig work and providing a modern flexible benefit structure.
Several states are this year considering bills to require gig economy companies to establish benefit funds, establish occupational accident insurance, and establish new discrimination protections. Congress should assess these experiments before imposing a one-size-fits-all mandate.
Democrats should support proposals like the one from Senators Mark Warner and Steve Daines, to help states experiment with portable benefits funds that fit the needs of their constituents. The National Economic Council could also lead a multi-agency policy process to assess the benefits and needs of the app-based driver economy.
I hope my fellow Democrats follow the example of progressive leaders like Jessica Ramos, Mark Warner, and Sam Liccardo — and treat the Prop 22 vote as voters’ signal for course correction, rather than an anomaly.