An Optimistic Take on the AB-5 Contracting Ban

Kerry Jackson of the Pacific Research Institute offers an update (PDF, via Issues and Insights) on California's new law that essentially bans gig work (and threatens other industries, as well as the franchise business model).

After briefly noting the disastrous impacts this law has had in barely over a month, Jackson speculates on whether this power grab by the Democrats and the labor unions might backfire:

Image by Victor Xok, ">via Unsplash, license.

Like so many other laws passed in California during the Blue State Era, AB5 was a solution in search of a problem that has introduced some nasty consequences. It might well be the worst law on what has become a long list of injurious policies. Its effects are so baleful and widespread that it's tempting to wonder if Democrats made a mistake with AB5 that will break their stranglehold on state politics. And it might break their dominance in states such as New Jersey and New York, which are pursuing their own efforts at "cracking down hard on the gig economy."

California Democrats will try to mollify some of the anger with more exemptions. But will that be enough? We're seeing a restlessness in California that hasn't been present in some time. We might look back at 2020 being a political turning point in the state, with Assembly Bill 5 the force that changed the direction.

I don't expect the Democrats to change, and I'm not sanguine about the possibility that the people who have kept them in power for so long will, either. (The state has long been recognized as a "judicial hellhole" for businesses.)

But we can hope. Jackson does note that some Californians are openly questioning their party affiliation. Having said that, I think that the best outcome we have a realistic chance of seeing is a repeal of AB-5 by referendum. Sadly, this is not what Uber and Lyft are working on, which I think is both a tactical and strategic mistake.

AB-5 should be repealed completely. Full stop.

-- CAV