Miriam Pawel, You Call It the Gig Economy. California Calls It ‘Feudalism.' The New York Times, September 12, 2019.
Labor leaders cheered in the balcony and lawmakers embraced on the floor of the California Senate on Tuesday as it passed a landmark measure that defines employees, a move that could increase wages and benefits for hundreds of thousands of struggling workers.But the bill is as much a starting point as an endgame: It will drive a national debate over how to reshape labor laws fashioned in the industrial era of the 1930s to fit a 21st-century service and knowledge economy.With the measure, which Gov. Gavin Newsom says he will sign, California will lead in a shift that will likely redefine the roles of governments, unions and worker organizations. Just as federal labor laws were promulgated to help the country recover from the Depression, the imperative to extend basic guarantees like a minimum wage stems from the staggering income inequality in California, the state with the highest poverty rate in the country.The new paradigms will need to fit not the relatively stable industrial work force of the last century but a gig economy in which workers are increasingly likely to hold multiple jobs or report to no workplace at all. California lawmakers took a major step in constructing the foundation of such a model with the new measure, which presumes workers are employees, entitled to all concomitant protections and benefits, unless they meet strict criteria as truly independent contractors.
Who controls the workers' life?
The bill was actually incited by a 14-year-old case in which Los Angeles delivery drivers sued their employer for lost wages after they were abruptly reclassified as independent contractors. Last year, the state’s highest court issued a broad ruling that sought to clarify what had long been a murky legal standard. The decision said workers are presumed to be employees unless a business can meet the “ABC test” — an independent contractor must be free from the control of the hiring entity, perform work outside the normal scope of the hiring entity and be an independent established practitioner of the trade performed. With exceptions for specific professions, the new measure adopts that definition.
Accurate data is scarce, but a recent estimate suggests about 8.5 percent of people in the California work force in 2016 relied on independent contract work as their primary income. Of those, maybe one in 12 works for app-based companies, while an unknown number supplement their income with part-time gig work. Though they employ about 220,000 drivers in California, the ubiquitous presence of Uber and Lyft and the dissonance between their founders’ extreme wealth and their drivers’ poverty have come to symbolize the crisis of income inequality.The “new economy, the gig economy, the innovation economy” is “feudalism all over again,” said the Assembly speaker, Anthony Rendon, a Los Angeles Democrat.