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Does Prop 22 Do Justice to the Gig Economy? No!
In 1959, despite graduating at top of her law class at Columbia, Ruth Bader Ginsberg had a hard time finding jobs because she was a mother. She, later on, went on to work on gender equality laws over the next decades. As a result, today any reference to an employee’s sex in the workplace decisions irrespective of their capabilities will land employers in a world of legal trouble. At its core AB5 is about economic inequality in the workplace.
Just like gender equality laws from the 70s, AB5 can appear burdensome to employers. On the other hand, Proposition 22 at its core is about Uber, Lyft, Doordash, and other gig economy companies trying to get away with an awful business model of counting their employees as a variable cost. The ads for Prop 22 mischaracterize the drivers as only part-time workers who already have a full-time job.
Based on my personal experience on multiple Uber rides this is completely untrue. These Drivers depend on UBER for a substantial if not all of their income. And based on my conversations with them they barely earn a minimum wage and have no allowance for the depreciation of their cars. Never mind health coverage. Uber makes it a policy to lobby and pressure lawmakers in every city to support their flawed business model.
Despite this, their stock is down 20% from IPO in May 2019 and have a 1.6B loss against revenue of just 2.6B. I imagine other rideshare companies are probably in similar shape. Further with self-driving cars fast approaching its only a matter of time before Uber goes driverless making this move a short-term gimmick to support their flagging stock price. A favorite argument of conservatives is why have worker regulations at all why not let everyone work for “themselves”. This is euphemistically called the right to work in many states especially the southern states. In 2008, a detailed study of the RTW states was done by the National Education Council and the findings of the study are very damning. The RTW states have: a higher poverty rate of 14.4% versus the 12% in others, lower per capita income of 38K versus 44K, and a higher rate of uninsured people. The uninsured rate differential is probably even higher today because many of these very states rejected Obamacare Medicaid expansion. Sustainable economic activity is created as a result of entrepreneurship coupled with good regulation. The choice should not be between no job and a bad job.
Having said that AB5 is far from perfect. The issue with Prop 22 is that it is a proposition. We have bi-annual elections and representative democracy – the proposition process just circumvents the legislative process. So I recommend a no vote on 22.
Mani Subramani is a veteran of the semiconductor equipment industry. He enjoys following politics and economics.
Does Prop 22 Do Justice to the Gig Economy? Yes!
In these times of rampant unemployment, gig jobs at Uber, Lyft, Doordash, etc. are providing a lifeline to over a million Californians. Prop 22 will eliminate these jobs as the businesses cannot afford to treat these workers as employees and pay for benefits. Prop 22 preserves the right of these drivers to be independent contractors, something that is supported 4:1 by these drivers. The CA Chamber of Commerce and Silicon Valley Group are among others urging a Yes vote on Prop 22. Gig employment offers flexibility and freedom for workers to set their own hours and also work part-time.
Gig employment is going to be the main employment engine of the future. Governor Newsom should immediately campaign for a Yes vote on Prop 22 and ensure its passage. The livelihood of more than a million Californians depends on it.
Please vote YES on Prop 22.
Rameysh Ramdas is a resident of the SF Bay Area and has a keen interest in Politics and Current Events.
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