There’s an old saying that as California goes, so goes the nation. It comes from the late 20th century when California led the nation in social and economic reform, with many of those laws going on to influence national law. But this coming election will give that old phrase new weight for the future of labor rights across the nation, as Californians cast their votes on Proposition 22 to determine the future of gig workers.
If you’ve ever hailed an Uber, ordered food on Postmates, or had an Instacart shopper deliver your groceries, you’ve participated in the gig economy. Unlike most jobs where you’re paid regardless of whether or not you’re actively working, gig economy employees are only paid for completing a route or driving to pick up a customer. That’s the equivalent of only paying a cashier for the time spent ringing up groceries, rather than their whole shift.
Since its inception, gig companies have classified their employees as “independent contractors” in order to skirt labor regulations and save a couple bucks. But in 2019, California attempted to expand labor protections by passing a bill that forced app-based companies to recognize their workers as the employees they are. In response, Uber, Lyft, and a coalition of other app-based companies, spent millions of dollars to qualify for the ballot in order to exempt their industries from this law under a sneaky initiative called Proposition 22.
Under Proposition 22, this ridiculous payment-upon-completion system would stay. Although proponents say drivers would be making 120% of the minimum wage, on closer inspection, they’re receiving a raw deal. Studies have shown that the average driver spends 35% of their time waiting for the next ride, and because that waiting time is uncompensated, drivers are expected to make only $5.64 an hour, far below the state minimum wage of $13 dollars. That criminally low wage is eroded further when you factor in the cost of car payments, gasoline, insurance, and the numerous repairs that come with constant driving.
Further, because Prop 22 would allow gig-economy companies to keep their employees’ as independent contractors, these companies would not have to provide the basic benefits that the Fair Labor Standards Act guarantees all employees. There would be no overtime, no paid sick leave, no discrimination protection, no unemployment insurance, no workers compensation, and no right to collective bargaining. The only workplace benefit that the legislation would guarantee is a vague and undefined ‘healthcare subsidy’ and accident insurance. On top of all of that, one of the most pernicious aspects of Proposition 22 is the requirement for a 7/8ths majority vote to amend details in the California legislature, making it an all but permanent law.
So far, the Yes on 22 coalition has spent over $220 million dollars, making this proposition campaign not only the most expensive in state history, but also the entire nation. This is a blatant attempt by a collection of Silicon Valley companies to abuse California’s proposition system with their vast sums of money in order to ghostwrite their own regulations.
At its core, Proposition 22 is attempting to carve out an exemption in our labor laws for app-based companies to continue exploiting labor simply because it’s essential to those companies’ business model. With an estimated 55 million gig economy employees, the number of affected workers has undoubtedly grown during the pandemic, as more people turn to app-based work to fill in for rolled back hours and lost employment. Even before COVID-19, these jobs were increasingly becoming a necessity to the growing number of low-income Americans, but we cannot degrade our hard fought labor laws to patch a problem created by the larger, widespread issue of low wages.
If this proposition passes, the consequences will ripple far beyond California. The subemployment framework currently used by app-based companies would be all but legalized, and signal to businesses that our labor laws are up for sale. However, a victory would be a monumental rebuttal to the growing power of app-based companies. Despite threats from the Yes coalition that their ventures will leave the state and pull their apps from the market if this passes, California is simply too big to ignore, and companies would lose far more money leaving the state than staying and conforming to labor laws.
Many of the rights that we enjoy today were created by brave individuals who put their lives on the line to create them, and our labor laws are no exception. Our rapidly changing economy has exposed the critical gaps in labor laws written nearly a century ago. It takes constant vigilance to defend them against monied interests that would see them cast aside for a larger profit margin.