Arguing that corporate greed among Silicon Valley executives and an increasingly precarious labor market are among the biggest battles facing this generation of U.S. workers, Sen. Elizabeth Warren on Wednesday endorsed a bill making its way through the California state legislature aimed at protecting workers in the so-called "gig economy."
Ride service companies like Uber and Lyft have exploited workers and taken advantage of employee classification laws, the Massachusetts Democrat wrote in an op-ed in the Sacramento Bee. The laws have allowed the tech giants to treat the people who go to work for them as independent contactors, skirting minimum wage laws and denying them healthcare coverage, the right to unionize, and safety protections on the job.
" American history is full of shameful examples where powerful industries exploited workers in pursuit of greater profits. Their methods have changed over the years, but companies' drive to cut costs and boost profits at the expense of workers' well-being has not."
—Sen. Elizabeth Warren (D-Mass.)"From children working in coal mines to women locked inside dangerous factories to migrant farmworkers laboring under inhumane conditions, American history is full of shameful examples where powerful industries exploited workers in pursuit of greater profits," Warren, a 2020 Democratic presidential candidate, wrote. "Their methods have changed over the years, but companies' drive to cut costs and boost profits at the expense of workers' well-being has not."
Companies that operate within the gig economy have fought their workers' efforts to organize and fight for fairer pay and protections from sexual harassment and other abuses at work. Uber and Lyft claimed mandatory pay increases for drivers in New York City would hurt competition, and the companies have recruited workers using claims that they can "be [their] own boss" and "make a schedule that fits [their] life" while supporting themselves.
Meanwhile, according to the Federal Reserve, 58 percent of workers who are paid per "gig," task, or sale report that they can't afford a $400 emergency, compared with 38 percent of people who don't work in the gig economy.
"Their innovations are packaged with all the polish and gloss of the internet economy, but they fit right into a corporate tradition going back more than a century, in which big, powerful entities exploit labor laws to boost their bottom lines," wrote Warren, "never mind the consequences for the workers actually doing the work."
Warren called on California lawmakers to pass AB 5, a proposal sponsored by Democratic Assemblywoman Lorena Gonzalez, which would enshrine in state law a state Supreme Court ruling from last year.
The high court ruled that companies must apply a test to determine if a worker is truly an independent contractor. Under the "ABC test," a company would not have to give a worker the protections of an employee only if the worker:
A) is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
(B) performs work that is outside the usual course of the hiring entity’s business; and
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(C) is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
Professionals like lawyers and doctors would still be eligible for the independent contractor classification if AB 5 passes, Warren wrote, but with default "employee" status under the bill, millions of California workers would be given automatic labor protections.
"The experience of other states—including my home state of Massachusetts where a similar law has been in effect for many years—shows that a comprehensive approach is most effective," wrote the senator.
Gonzalez told Cal Matters that Warren's support for her proposal was "pretty damn cool," while the Mobile Workers Alliance—an organization of workers "behind the success of apps like Uber, Lyft, and Postmates" praised the senator for speaking out about the AB 5.
— Mobile Workers Alliance (@mobile_alliance) August 14, 2019
Warren warned that "armies of lawyers, lobbyists, and consultants" are working to weaken the bill with loopholes and exceptions or kill it all together, spreading misinformation about what AB 5 would do.
"These companies' approach would do little but sow confusion and uncertainty by adding other, still undefined, classes of workers whose rights are unclear—and perhaps unenforceable," Warren wrote.
"This is a crucial moment in the fight for workers in this country," she added. "It's a time for us to show whose side we're on. All Democrats need to stand up and say, without hedging, that we support AB 5 and back full employee status for gig workers."