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Comment by ak217 | Hacker News Reader

AB5 has not achieved its intended effect and has had a number of unintended consequences, including collateral damage in industries such as freelance journalism and other contract jobs where "full-time" employment results in the employer going bankrupt. Being familiar with some of these industries, I estimate that AB5 has led to a net loss of jobs, economic activity, and civic engagement in CA, again without achieving its stated aims. As an example, AB5 further stresses small local newspapers/news sites, which are a key vehicle for public accountability and civic engagement.

A likely outcome now is that Uber/Lyft will carve out an exemption for taxi drivers (like a few other industries with effective lobbying operations have already done) while distressed small employers continue to suffer from AB5's effects.

I think it's quite fair to call AB5 a bad law.

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This is akin to saying the Fair Labor Standards Act was a "bad law" because it ended child labor, which I'm sure also caused a temporary "net loss of jobs, economic activity, and civic engagement"

A better example is probably the minimum wage, which also imposes government-mandated conditions on employment, applies to adults, and is countered by very similar arguments: it harms economic activity, and interferes with the ability of adult citizens to enter into whatever employment agreement they desire.

Whether the minimum wage actually harms economic activity does not have a clear answer; you can find studies all over the place in terms of conclusions.

And the supporting argument--that businesses should be regulated because they have asymmetrical power when hiring--is also used to justify other policies that HN folks tend to like, such as the California prohibition on non-compete agreements.

Not at all. Children are not able to make many legal decisions for themselves. As a society we make this distinction repeatedly from contract law to sexual intercourse. And we’ve decided that whatever economic inefficiencies arise are worth the social gains.

This however is very different. Adults (in the US) are allowed to willfully enter into mostly any sort of agreement with another consenting party. In areas where that’s not the case, there is usually some other greater fundamental social protection that we seek to prioritize (i.e. you cannot legally permit someone to murder you). This law however continues to encroach on the things that free individuals can do. If I want to work for Uber under the terms that apparently many millions of others also want to, then that is my right. The government is effectively seeking to make this illegal...for my own protection.

The issue here is that 99% of HN commentators, politicians, etc have no experience in the gig economy yet project their own ideology onto the situation. Would it be better for workers if Uber provided more benefits? Sure. But Uber loses billions every quarter. So who pays for this? If Uber doesn’t pass on the costs to consumers, it goes bust. If Uber does, there’s a good chance that consumers spend less, or use alternatives. Either way it is likely to harm drivers.

The beauty of a free market is that if Uber was legitimately a bad deal for drivers, they would have never had a business in the first place.

Except these are adults of sound mind willingly entering into the agreement. I absolutely loathe these types of arguments first because its false equivalence and secondly, because why do you know better than the Freelance Journalists who were hurt by this? Stop nannying.

This argument has been made against every single expansion of worker rights in American history.

When the dust settles, business carries on just fine while we get to enjoy things like a 40-hour week with overtime pay if the employer needs more, safety regulations, sick leave, etc.

> overtime pay

I'm going to guess most of us here on HN aren't getting any overtime pay

That's because we make over $41/hour (the legal threshold for exemption from overtime pay for salaried employees, where the "hours" are determined by average working hours per week). At that rate, we're not exactly suffering.

I don't think that's quite true - so long as one is salaried, one generally doesn't get paid overtime. I had a $70k/yr salaried job once with no overtime pay.

Adults of sound mind enter into all sorts of highly regulated agreements, starting from employment, to tenancy, to gym memberships, to even things like marriages [1].

The reason for why all those agreements are highly regulated isn't because they adults entering them are not of sound mind. The reason for it is that there is often a large imbalance of power between the two parties in the contract.

This kind of regulation has been the foundation of common law for nearly a millennium, and has been present in other legal systems for far longer than that.

[1] (As it turns out, you can't [2] marry someone with the stipulation that they can't divorce you, or with a fly-by-night, grossly inequitable pre-nup.

[2] Well, you can, but the judges will laugh your contract out of the room when you try to enforce it.

Economic regulation of this order has not been around > 300 years in fact it's only been really been a question of what is the right balance since post industrialization. And the fact we're having this discussion at all means there are arguments to be had in either direction for worker regulation of this nature. I personally believe over regulation is harmful and we're currently seeing that harm play out to independent workers in multiple industries in California.

That's a pretty generic argument. We all know the government creates regulations.

Why are you defending AB5 specifically? Why is this specific regulation good? Keep in mind that it has had a lot of negative, unintended side effects already.

Not really. AB5 hurts a lot of small businesses that weren't doing anything wrong. It's a classic case of unintended consequences.

I mean, technically those small businesses using child labor weren't "doing anything wrong" before the law was passed either.

No, that's not true. They were doing something wrong, because children are generally recognized as not being fit to give consent for all sorts of things. The laws against child labor merely recognized this.

The case for AB5, a law against consensual adult labour is murkier.

Is the existence of a unionized workforce against consensual adult labor? The expanded use of for contract work has largely been a tool to walk around legislation to improve labor standards.

In jobs where it is virtually impossible to organize others doing a similar task such as was the case with most of the jobs impacted by AB5, its totally reasonable for these folks to lobby the government to fight for their interests.

It is murkier, but in many cases there's a strong argument that employment is exploitative whilst still consensual.

Given that there's broad agreement on what consent is and very little agreement on what exploitation is, that's always going to be contentious.

Maybe with a labour monopsyny? I guess we don't want the big mining company in the small town to run down it's workers. Whenever I think of the best argument for unions, I think of small towns subjugated by mining companies or mills. But a ride-share company with competition in a big city?

It’s not akin to that at all, because child labor laws concern minors and this law concerns adults.

Unless your argument is that there’s nothing an adult should be able to do that a child shouldn’t be able to do?

I have mixed feelings about gig work generally, but then I'm not at all sure a lot of part-time employment in retail isn't even worse given the way scheduling is done. And, clearly, AB5 has been, as you say, damaging to freelance journalism and other white-collar fields where, in practice, a freelancer does a lot of their work for one or two clients.

Ending child labour, having a minimum wage, and having the barest minimum of employment safety standards also has a negative impact on economic activity, and bankrupts some employers. [1]

Hell, If our goal was maximizing economic activity at all costs, we'd be rounding up idlers, and putting them to work, involuntarily.

[1] Ones whose business model relies on one of the following:

* Exploitation of children.

* Providing labour-intensive products for less then the cost of keeping a labourer alive, housed, and fed.

* Running machine shops where workers have to juggle chainsaws, while breathing in asbestos dust, and licking radium-coated postage stamps.

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