Back in early February, we looked at a story out of Long Beach, California where the City Council passed an ordinance requiring large, chain grocery stores to provide workers with an extra four dollars per hour as “hero pay” during the pandemic. That immediately resulted in two of the biggest Kroger stores in the area closing their doors permanently, putting hundreds of people out of work. At the time, I noted that a number of other large municipalities in the Golden State were either already drafting or considering similar legislation. But having seen what happened in Long Beach, they thankfully had sufficient warning not to make the same mistake.
Or so you would have thought. But as it turns out, you’d have been wrong. Los Angeles plunged ahead and passed the same type of law, only they upped the ante and made it five dollars per hour. Try not to faint from shock when I tell you that three more Kroger stores shut down in short order. If only someone could have somehow foreseen this and avoided all of these closures. (Washington Examiner)
In the 2020 election, 63% of California voters backed President Biden. On the same ballot, those voters essentially repealed a job-killing state law that Biden and Democrats now want to impose on a national level in the form of the PRO Act.
That California law, A.B. 5, attempted to force businesses that use contract and freelance workers into hiring them with employee benefits. Instead, it predictably caused freelance work to dry up throughout the state. News conglomerates cut loose their California-based freelancers. A variety of independent contractors, such as truck drivers, professional service providers, and interpreters, suddenly faced financial ruin.
Legislators were forced to carve out multiple exceptions to their ill-considered law in a last-ditch effort to save it, but even that wasn’t enough. In the end, Uber and Lyft, the iconic ride-share applications that the law had originally targeted, came within a hair’s breadth of shutting down all service in California. A judge stepped in and blocked the law just in time. Finally, voters approved a ballot proposition exempting almost everyone from A.B. 5, and although its ill effects linger on for some, this destructive experiment in regulating work appeared to be over.
Unfortunately, Democrats have failed to learn from this mistake. They now want to pass the PRO Act, which, among other things, would codify the same job- and income-destroying rules of A.B. 5 that even Californians couldn’t stand.
The driving force behind this attempt to turn back the clock on employment is Big Labor unions, which cling to this as one more measure designed to delay their total obsolescence. For one thing, they favor the PRO Act because it would eliminate 27 states’ right-to-work laws. This is obviously a nonstarter. Right-to-work laws leave it to workers whether they want to join and pay dues to a union, a choice that should be a fundamental right.
But there is even more at work here because the entire gig economy is at stake.