WEBVTT - The Gig is Up 0:00:15.356 --> 0:00:22.916 Pushkin from Pushkin Industries. This is Deep Background, the show 0:00:22.956 --> 0:00:25.956 where we explore the stories behind the stories in the news. 0:00:26.356 --> 0:00:31.756 I'm Noah Feldman. It's almost a cliche to say that 0:00:31.796 --> 0:00:36.796 the future of work lies in gig work. That might 0:00:36.876 --> 0:00:40.316 not even be true, at least not if California gets 0:00:40.316 --> 0:00:43.916 its way. The governor there, Gavin Newsom, recently signed a 0:00:43.996 --> 0:00:46.116 law that will have a huge impact on the way 0:00:46.156 --> 0:00:49.716 the gig economy works in the state. The law, referred 0:00:49.756 --> 0:00:52.276 to as a B five, is supposed to make it 0:00:52.396 --> 0:00:55.956 harder for app based platforms like Uber and Lyft to 0:00:55.996 --> 0:01:00.516 classify their drivers as independent contractors rather than as full 0:01:00.556 --> 0:01:05.036 time employees. The law codifies and expands a twenty eighteen 0:01:05.156 --> 0:01:10.036 California Supreme Court decision known as the Dynamics Case. Today, 0:01:10.036 --> 0:01:12.116 on Deep Background, we're gonna do something a little different 0:01:12.116 --> 0:01:14.876 than we usually do. Instead of having just one long 0:01:14.956 --> 0:01:17.316 conversation about a topic, We're going to talk to two 0:01:17.436 --> 0:01:20.716 different people, one at a time, with very different perspectives 0:01:20.716 --> 0:01:24.476 on AB five. The first is Lorina Gonzalez. She's the 0:01:24.556 --> 0:01:28.996 California assemblywoman who actually sponsored the bill. I talked to 0:01:28.996 --> 0:01:31.716 her about why she believes in it and how exactly 0:01:31.756 --> 0:01:34.876 it will work when it goes into effect in January. 0:01:35.756 --> 0:01:38.916 Thank you so much for joining me. Let's start by 0:01:38.956 --> 0:01:42.876 talking about this important and interesting bill that you've introduced 0:01:42.876 --> 0:01:47.276 into the California legislature called AB five. That's the shorthand, 0:01:47.636 --> 0:01:49.996 I guess AB is Assembly Bill AM I right. Yes. 0:01:52.236 --> 0:01:55.436 AB five is connected to a decision that the California 0:01:55.436 --> 0:01:57.796 State Supreme Court made a couple of years ago, and 0:01:57.796 --> 0:01:59.596 it has to do with the essence of the gig 0:01:59.636 --> 0:02:02.956 economy and how employees should be treated under the law. 0:02:03.076 --> 0:02:05.556 Tell us what we need to know about this law. 0:02:05.996 --> 0:02:09.196 It basically says, look, in order to be in a 0:02:09.316 --> 0:02:13.676 pennant contractor, you have to actually do that type of 0:02:13.716 --> 0:02:18.476 business separately than this organization. You can't be doing the 0:02:18.516 --> 0:02:22.116 business of the company itself. So you know, if the 0:02:22.156 --> 0:02:25.876 company is a delivery company and you're a delivery driver, 0:02:26.916 --> 0:02:29.436 you probably work for the company. And so it's a 0:02:29.436 --> 0:02:33.316 pretty straightforward test. We often describe it as this, if 0:02:33.356 --> 0:02:35.956 you do the work of the company, you probably work 0:02:35.996 --> 0:02:39.196 for them. So that's the essence of the idea. And 0:02:39.236 --> 0:02:41.716 this is why from the standpoint of Uber or Lift 0:02:41.796 --> 0:02:44.636 or any of the other gig economy companies it's a 0:02:44.676 --> 0:02:47.476 disastrous decision for their business plan because it basically says 0:02:47.476 --> 0:02:49.476 that if they're in the business of driving people around, 0:02:50.036 --> 0:02:54.556 then a driver is an employee, is not an independent contractor, right, 0:02:55.196 --> 0:02:57.196 And of course now Uber says they're not in the 0:02:57.236 --> 0:02:59.596 business of driving people around, so this is going to 0:02:59.596 --> 0:03:01.916 be They say they're in the business of connecting people 0:03:01.956 --> 0:03:03.796 to the people who will drive them around, and that 0:03:03.836 --> 0:03:06.316 they're doing the connection. But that's a hard case to 0:03:06.356 --> 0:03:09.076 make out, at least under this test. The core issue 0:03:09.236 --> 0:03:14.196 classification cases is is a given person an employee and 0:03:14.236 --> 0:03:18.196 therefore entitled to the protections of state law for employees, 0:03:18.876 --> 0:03:23.116 or is the person an independent contractor not restricted in 0:03:23.276 --> 0:03:26.756 what he or she can do, but also simultaneously not 0:03:26.916 --> 0:03:30.716 entitled to the protections that state law gives employees. Correct? Correct. 0:03:31.036 --> 0:03:34.836 If you're an employee, you have a number of rights, 0:03:35.396 --> 0:03:37.956 including the right to minimum wage and over time, the 0:03:38.036 --> 0:03:41.836 right to workers compensation and employment insurance. The employer has 0:03:41.836 --> 0:03:44.596 to put in their their required seven point five percent 0:03:44.676 --> 0:03:49.276 to Social Security and to Medicare their contribution. You have 0:03:49.356 --> 0:03:51.636 the right in California to paid sick days and paid 0:03:51.636 --> 0:03:55.036 family leave. You have the right to, of course join 0:03:55.076 --> 0:03:59.916 a union, so there are a number of individual rights. Uh, 0:04:00.276 --> 0:04:06.876 there's there's protections against sexual harassment, there's protections against discrimination 0:04:07.156 --> 0:04:10.836 that employees are are awarded. So that's all the good 0:04:10.836 --> 0:04:13.916 stuff that employees get if they're classified as employees. Why 0:04:13.996 --> 0:04:18.396 do some people want to be classified sometimes as independent contractors. Well, 0:04:18.996 --> 0:04:22.076 some independent contractors really are small businesses and people want 0:04:22.076 --> 0:04:25.396 to operate in that way their tax benefits. Sometimes for 0:04:25.756 --> 0:04:29.836 an individual who has multiple clients, who is writing off 0:04:29.876 --> 0:04:34.156 you know, a home office and gas and expenses where 0:04:34.156 --> 0:04:37.436 they can service multiple clients but with the same sort 0:04:37.476 --> 0:04:40.836 of needs and in which case they really are often 0:04:41.116 --> 0:04:45.196 acting as a small business that a lot of Unfortunately, 0:04:45.436 --> 0:04:48.636 some employees think it's better to be independent contractor because 0:04:48.796 --> 0:04:52.436 they assume they don't need to pay as much in taxes. 0:04:52.476 --> 0:04:56.236 That's often because they don't realize their tax implications and 0:04:56.396 --> 0:05:00.476 aren't paying them. And there's so many small independent contractors 0:05:00.516 --> 0:05:02.236 or have been in California that there hasn't been a 0:05:02.236 --> 0:05:04.276 ton of enforcements, so we know we've lost a lot 0:05:04.276 --> 0:05:08.556 of payroll taxes and taxes that are become the responsibility 0:05:08.676 --> 0:05:12.356 of the contractor when the employer isn't pay for them. 0:05:12.356 --> 0:05:16.876 But that, of course is unfortunate for the small business 0:05:17.116 --> 0:05:20.476 person who doesn't realize they owe these taxes. Often, big 0:05:20.476 --> 0:05:23.156 companies like Uber and Lyft or door Dash and many 0:05:23.196 --> 0:05:26.236 many others, they say, we want to be disruptors. And 0:05:26.716 --> 0:05:28.956 what they mean by disruption is they're not going to 0:05:29.036 --> 0:05:31.716 have to treat the people who work for them as employees. 0:05:32.356 --> 0:05:34.756 And they have a whole theory about why that's a 0:05:34.756 --> 0:05:37.876 good thing, and others have a view about why it's 0:05:37.876 --> 0:05:39.716 a bad thing. But the point is it's a change, 0:05:40.356 --> 0:05:43.596 and the State Supreme Court, I guess, in the Dynamics decision, 0:05:43.836 --> 0:05:46.956 had to set down a rule to help clarify whether 0:05:46.996 --> 0:05:50.436 someone counts as an employee or an independent contractor when 0:05:50.516 --> 0:05:54.476 working for something like one of the gig economy businesses. 0:05:54.716 --> 0:05:56.716 And what's the basic rule? I think there are three parts, 0:05:56.756 --> 0:05:58.916 aren't there? There are three parts? But I want to 0:05:58.916 --> 0:06:00.676 step back for a minute, because a lot of people 0:06:00.836 --> 0:06:05.156 do identify this as a kind of a knee jerk 0:06:05.156 --> 0:06:08.716 to the gig economy, when in fact, the Dynamics decision 0:06:08.876 --> 0:06:10.836 had been going through the courts for ten years. It's 0:06:10.876 --> 0:06:14.556 really not what we think of as the Ubernlift Postmates 0:06:14.596 --> 0:06:18.356 since Dart kind of economy. These were delivery drivers that 0:06:18.556 --> 0:06:21.876 that predated a lot of the gig economy work. And 0:06:22.036 --> 0:06:25.556 so although it does affect the gig economy and that 0:06:25.716 --> 0:06:29.396 has been the largest abuses we have seen, it was 0:06:29.596 --> 0:06:33.716 never a decision or a bill that simply was targeted 0:06:33.716 --> 0:06:35.436 at ubern lift. And I think that's important because a 0:06:35.476 --> 0:06:37.436 lot of folks who have been caught up in this 0:06:37.556 --> 0:06:40.356 bill said, well, why are you targeting us? It was 0:06:40.356 --> 0:06:43.596 supposed to be towards ubernlift. No, it's about misclassification in general. 0:06:43.636 --> 0:06:45.476 And if you look at a state like California, where 0:06:45.516 --> 0:06:48.716 misclassification cost about seven billion dollars a year to our 0:06:48.796 --> 0:06:51.676 state and thus to our taxpayers, this is a larger 0:06:51.796 --> 0:06:55.276 decision and a larger issue that affects many more people 0:06:55.356 --> 0:06:58.036 than those in the gig economy. How are you measuring 0:06:58.156 --> 0:07:00.556 the cost to the California's economy when you say seven 0:07:00.556 --> 0:07:02.636 a billion dollars? What's that? What is that number? What 0:07:02.676 --> 0:07:05.276 are you measuring? That comes from? Of course the state 0:07:05.756 --> 0:07:11.276 Labor Commissioner's office, but it includes everything payroll taxes, of course, 0:07:11.436 --> 0:07:16.676 it to workers compensation claims that aren't paid for when 0:07:16.996 --> 0:07:20.316 somebody doesn't have workers compensation. Often doesn't have healthcare either, 0:07:20.396 --> 0:07:21.996 and so when they're hurt on the job, it's we 0:07:22.116 --> 0:07:24.196 as taxpayers pick it up at the emergency room, so 0:07:24.636 --> 0:07:27.836 indigent care. When somebody loses their job, they no longer 0:07:27.876 --> 0:07:30.636 have a job, they don't have unemployment insurance, So we 0:07:30.756 --> 0:07:33.556 often have to pick those types of costs up. When 0:07:34.036 --> 0:07:37.196 somebody isn't being paid enough, obviously we have to pay 0:07:37.236 --> 0:07:41.196 in terms of food stamp, subsidize housing, and subsidize free 0:07:41.276 --> 0:07:43.516 lunch program. So there's a number of ways that we 0:07:43.596 --> 0:07:47.596 subsidize companies who must classify their workers, and it provides 0:07:47.596 --> 0:07:51.396 a cost, of course to the state. As you describe 0:07:51.556 --> 0:07:54.476 a B five, it sort of sounds like no reasonable 0:07:54.556 --> 0:07:57.316 person could disagree with it, and I'm sure that as 0:07:57.356 --> 0:08:01.196 a sponsor of the bill, that's exactly what you believe. Nevertheless, 0:08:01.316 --> 0:08:03.796 in the real world, there are people, including even some 0:08:04.396 --> 0:08:07.716 uber or lift drivers, who are nervous about the possibility 0:08:07.756 --> 0:08:10.196 that they will lose the flexible ability that they value, 0:08:10.476 --> 0:08:13.676 and perhaps are also nervous about thinking of themselves as 0:08:13.716 --> 0:08:16.556 employees when they haven't considered themselves as employees. They've thought 0:08:16.556 --> 0:08:21.156 of themselves to a great extent as independent contractors. What 0:08:21.476 --> 0:08:26.356 would you say to people who have those fears or concerns. 0:08:27.356 --> 0:08:28.956 I take it the part of your job as a 0:08:29.036 --> 0:08:30.596 legislators get the law pass. A part of it is 0:08:30.596 --> 0:08:32.516 also convincing the people who will be affected by the 0:08:32.636 --> 0:08:34.956 law that it will make their lives better and will 0:08:34.956 --> 0:08:37.236 not make it worse. So what would you say? And 0:08:37.396 --> 0:08:39.916 that's true. And I kind of have a unique perspective 0:08:39.956 --> 0:08:41.756 on this because I came out of organized labor. I 0:08:41.836 --> 0:08:44.356 was a labor leader when I was elected to the 0:08:44.476 --> 0:08:47.636 State Assembly, and so I am used to dealing with 0:08:47.796 --> 0:08:51.636 workers who operate out of fear. Often in organizing drives, 0:08:51.676 --> 0:08:56.076 you see it a lot. In contract negotiations, you see it. 0:08:56.436 --> 0:09:00.636 And so I understand and am very empathetic to workers 0:09:00.716 --> 0:09:06.156 being afraid, being ill convinced of things by bosses who 0:09:06.916 --> 0:09:09.276 often lie or mislead those workers. And that's what we've 0:09:09.276 --> 0:09:12.196 seen here, and we try to be very obvious these companies, 0:09:12.236 --> 0:09:16.356 whether it's Uberlift or Postmates, Instacart, whoever it is, they're 0:09:16.396 --> 0:09:19.356 controlling the schedules of these workers. Now, so this so 0:09:19.516 --> 0:09:23.156 called flexibility is an interesting argument, and sometimes you have 0:09:23.196 --> 0:09:25.196 to break it down and have the individual discussions with 0:09:25.316 --> 0:09:29.556 the drivers. They often know, you know Instacart, for example, 0:09:29.676 --> 0:09:32.396 we had a people complaining that if you try to 0:09:32.556 --> 0:09:34.476 not take a job, they won't pass you on to 0:09:34.556 --> 0:09:37.396 the next job. Right you can't reject the job. So 0:09:38.116 --> 0:09:41.836 that's not quite the flexibility they say that they have, 0:09:42.156 --> 0:09:44.956 or that they convince their drivers they have. You can't 0:09:45.036 --> 0:09:48.156 just wake up at two in the morning in an 0:09:48.196 --> 0:09:51.156 industrial area where there are no rides and say you're 0:09:51.316 --> 0:09:55.076 a lift driver and be carting somebody, because if it's 0:09:55.116 --> 0:09:58.156 not available, it's not available. We've seen in New York City, 0:09:58.356 --> 0:10:01.676 even with workers being independent contractors, that uber and lift 0:10:01.756 --> 0:10:05.116 or are now controlling which parts of the city that 0:10:05.196 --> 0:10:08.316 they can give rides in. We know now with the 0:10:08.356 --> 0:10:11.756 way they INCENTI yes, certain areas and ensure that people 0:10:11.956 --> 0:10:17.076 can actually make some money. They push people to certain 0:10:17.116 --> 0:10:19.396 areas of the city during certain times. So there is 0:10:19.436 --> 0:10:21.476 a level of control being operated now, and you often 0:10:21.556 --> 0:10:23.076 have to break it down for the drivers and have 0:10:23.196 --> 0:10:25.276 that discussion. That all makes perfect sense to me. I 0:10:25.316 --> 0:10:27.996 think there's not the dedependence that people necessarily imagine that 0:10:28.076 --> 0:10:30.356 there is. But what about the argument that there will 0:10:30.356 --> 0:10:33.436 be even less independence if the companies now, for example, 0:10:33.556 --> 0:10:36.236 know they have to pay minimum wage for an hour 0:10:36.356 --> 0:10:38.996 that the driver has worked, and then the driver wants 0:10:39.036 --> 0:10:42.076 to say I'm available at a time when statistically it's 0:10:42.116 --> 0:10:45.396 improbable that there will be enough jobs there. I would 0:10:45.396 --> 0:10:46.996 imagine that what I would do if I were the company, 0:10:46.996 --> 0:10:48.596 as I would just say, well, you can't, you can't 0:10:48.636 --> 0:10:50.876 work this hour because we just don't think you're going 0:10:50.956 --> 0:10:53.036 to make enough to get past the minimum wage. And 0:10:53.956 --> 0:10:55.796 so it might be that there's you know that there 0:10:55.876 --> 0:10:57.916 is a limitation to freedom now, but wouldn't there be 0:10:57.996 --> 0:11:02.676 even more limitations once they are a categorization of drivers 0:11:02.756 --> 0:11:06.036 as employees. Well, you know, that's ultimately up to the company, 0:11:06.276 --> 0:11:09.036 and that type of flexibility, whether you're an independent contractor 0:11:09.196 --> 0:11:12.036 or an employees always up to the company. And so 0:11:12.276 --> 0:11:14.436 I think that that's a red herring because I think 0:11:14.596 --> 0:11:18.796 it's happening now, and so M yes, there there are 0:11:18.916 --> 0:11:22.476 people who will say, but you know, what if I 0:11:22.596 --> 0:11:25.396 want to drive for five dollars an hour? We have 0:11:25.516 --> 0:11:27.916 laws in this country. You know, we've heard it plenty 0:11:27.956 --> 0:11:31.196 of times. What if my thirteen year old one wants 0:11:31.276 --> 0:11:34.276 to work, you know, we don't allow that to happen. 0:11:34.436 --> 0:11:36.276 What if they want to work in a factory and 0:11:36.636 --> 0:11:39.356 make subminimum wage. You know, we have laws for a 0:11:39.436 --> 0:11:41.956 reason so that there's an even playing field. And we 0:11:42.076 --> 0:11:46.956 know that the so called decisions by some workers to 0:11:47.116 --> 0:11:50.716 want to undercut basic labor laws hurt all workers. And 0:11:50.876 --> 0:11:53.676 so you know, the vast majority I think of drivers 0:11:53.716 --> 0:11:56.316 that we talked to want to make above minimum wage. 0:11:56.356 --> 0:12:00.116 Of course they want to have the benefits of employment. Well, 0:12:00.156 --> 0:12:02.676 with that, you have to require rules. And one of 0:12:02.716 --> 0:12:04.956 the things I hear most often, not just from drivers, 0:12:05.036 --> 0:12:08.076 but you know freelancers in general, is if I want 0:12:08.116 --> 0:12:11.076 to be an independent contractor, why can't I just do that? Well, 0:12:11.116 --> 0:12:13.676 you can go start your own business, right, nothing prevents 0:12:13.716 --> 0:12:17.276 you from going in starting your own car business, for example, 0:12:17.356 --> 0:12:19.436 where you can shuttle people back and forth, but there 0:12:19.476 --> 0:12:22.756 are rules that you have to abide by. You can't decide. 0:12:22.796 --> 0:12:24.876 We live in a society where you can't decide I'm 0:12:24.876 --> 0:12:28.196 going to undercut basic labor laws which affect and hurt 0:12:28.276 --> 0:12:31.396 other people because I want to. I mean, you can 0:12:31.676 --> 0:12:34.076 do that. The worker themselves aren't going to be held liable, 0:12:34.116 --> 0:12:37.596 but the companies can't hire people in that kind of situation. 0:12:38.316 --> 0:12:41.116 I know that journalists are not the main constituency that 0:12:41.156 --> 0:12:43.756 you're setting out to protect here. But I'm a journalist 0:12:44.116 --> 0:12:46.036 and so it's on my mind, and I don't think 0:12:46.036 --> 0:12:47.756 I'm alone in this respect. One of the things that 0:12:47.876 --> 0:12:50.876 AB five does is, if I'm not mistaken, it says 0:12:50.956 --> 0:12:53.676 that if you're a freelance writer and you write more 0:12:53.716 --> 0:12:56.756 than thirty five articles in a year for a given publication, 0:12:57.196 --> 0:12:59.316 then you have to be treated as an employee of 0:12:59.396 --> 0:13:02.156 that publication. So I, for example, write a column a 0:13:02.156 --> 0:13:04.316 couple times a week for Bloomberg. If I lived in 0:13:04.356 --> 0:13:06.756 California and Bloomberg was in California, they would have to 0:13:06.796 --> 0:13:08.316 make me an employee. They couldn't treat me as an 0:13:08.356 --> 0:13:11.076 independent contractor as they presently do, right, And I think 0:13:11.436 --> 0:13:14.316 some journalists are worried about this. I mean it strikes me, 0:13:14.436 --> 0:13:17.556 as you know, I actually do feel genuinely like an 0:13:17.556 --> 0:13:20.596 independent contractor sitting in my office. I have a real 0:13:20.716 --> 0:13:23.116 job for a university, and then I also write in 0:13:23.116 --> 0:13:24.836 my column, so I don't feel like I'm an employee 0:13:24.876 --> 0:13:28.996 of the of the entity that publishes my articles. What's 0:13:29.036 --> 0:13:30.916 the what's your response to that? To that number, and 0:13:30.996 --> 0:13:33.996 why did you why not an't make an exemption for journalists. Well, 0:13:34.036 --> 0:13:37.316 I didn't make an exemption for journalists because we worked 0:13:37.396 --> 0:13:41.916 with actual staff journalists. We worked with the unions that 0:13:42.076 --> 0:13:46.116 represent journalists and the publications themselves. And there has been 0:13:46.236 --> 0:13:50.756 a massive abuse of the use of permalancers or freelancers, 0:13:51.076 --> 0:13:54.556 independent contractors in journalism, and most journalists will tell you 0:13:54.676 --> 0:13:57.236 that that that abuse exists. So if you provide a 0:13:57.316 --> 0:13:59.996 full exemption, especially in a time when you kind of 0:13:59.996 --> 0:14:03.116 see this resurgence of unions in the newsroom, you're really 0:14:03.196 --> 0:14:07.796 going to put those efforts at jeopardy. Journalism has changed, 0:14:08.316 --> 0:14:13.396 But that's not a reason to basically get the career 0:14:13.916 --> 0:14:16.556 of journalism. Let me ask you what is really a 0:14:16.596 --> 0:14:18.836 philosophical question. And you know, I understand that you come 0:14:18.876 --> 0:14:21.196 out of labor, so I get I have some inkling 0:14:21.236 --> 0:14:24.236 of where you'll answer me from. But the philosophic question 0:14:24.356 --> 0:14:28.116 is sort of this. To me, there's very little doubt 0:14:28.196 --> 0:14:32.556 that there are lots of industries where unionization is absolutely 0:14:32.756 --> 0:14:37.916 necessary in order that management not exploit workers. And then 0:14:37.916 --> 0:14:40.556 there are some industries where the workers actually have either 0:14:40.596 --> 0:14:44.756 a reasonable amount of bargaining power or significant independence in 0:14:44.796 --> 0:14:47.556 the kinds of judgments and decisions they make, where you know, 0:14:47.596 --> 0:14:49.596 it makes sense if people want to be independent contractors, 0:14:49.636 --> 0:14:52.316 they should be able to. And then in between there's 0:14:52.316 --> 0:14:56.436 the very complicated, messy world in which we actually live, 0:14:56.516 --> 0:14:59.076 where you have to go deep into the weeds when 0:14:59.116 --> 0:15:01.996 it comes to those really hard choices. As I understand it, 0:15:02.076 --> 0:15:05.476 a B five for the most part, sets the presumption 0:15:05.636 --> 0:15:08.476 in favor of a person being an employee, and it's 0:15:08.516 --> 0:15:12.196 pretty hard to get out of that. I'm wondering why, 0:15:12.716 --> 0:15:16.356 in the margin where it's genuinely hard, where it's tricky, 0:15:17.036 --> 0:15:20.556 why not set the default the other way. Why not say, 0:15:20.996 --> 0:15:24.316 let's experiment, let's try new sorts of things out, and 0:15:24.436 --> 0:15:26.476 then over time, if it's not working, we can switch 0:15:26.516 --> 0:15:29.516 it back the other way. Why isn't that sort of 0:15:29.916 --> 0:15:33.636 spur to possible innovation, even though granted we might go 0:15:33.716 --> 0:15:36.476 too far in some instances. So I hate to called 0:15:36.516 --> 0:15:39.716 exemptions because there's no pure exemption. You still have requirements 0:15:40.156 --> 0:15:43.556 to ensure somebody's an independent contractor. But in terms of 0:15:44.356 --> 0:15:48.196 who should be considered that, we think a lot about 0:15:48.596 --> 0:15:52.156 barriers to entry into that profession. So the higher barrier 0:15:52.476 --> 0:15:55.956 into the entry of that profession, the more comfortable we 0:15:56.076 --> 0:15:59.876 are saying this person has individual bargaining power. So for example, 0:15:59.916 --> 0:16:02.756 if you're a doctor, a lawyer, you know, if there 0:16:03.076 --> 0:16:08.716 is a many years of school, specialized schooling, testing, there's licensing, 0:16:09.276 --> 0:16:11.196 you know, we feel a little more comfortable like that 0:16:11.276 --> 0:16:14.356 individual can make these decisions for themselves and are actually 0:16:14.436 --> 0:16:18.676 making these decisions and not just subject to an employer 0:16:18.876 --> 0:16:22.196 saying this is what we're going to do, right, And 0:16:22.276 --> 0:16:25.316 everybody has to then aqueous to that because there's so 0:16:25.396 --> 0:16:28.556 many other of these type of employees out there who 0:16:28.596 --> 0:16:31.476 are willing to work for less. That's basically how we 0:16:31.636 --> 0:16:33.516 end up with a race to the bottom. And does 0:16:33.556 --> 0:16:34.996 that not worry you as being I mean, it's a 0:16:35.036 --> 0:16:37.476 fascinating line that you're drawing. I'm deeply fascinated by this 0:16:37.556 --> 0:16:39.836 idea that you know, the more education you have, the 0:16:39.956 --> 0:16:41.756 higher the barrier to entry, them more confident we are 0:16:41.796 --> 0:16:43.956 that you have bargaining power. It sounds great, not just 0:16:44.436 --> 0:16:48.996 not just education though, because fine artists are also exempted 0:16:49.556 --> 0:16:52.716 through this process, and fine arts art necessary to become 0:16:52.716 --> 0:16:55.876 an artist. You mean, well, there's a specialize I think 0:16:56.236 --> 0:16:58.676 talent that you have that allows you to have more 0:16:58.876 --> 0:17:01.076 bargaining power. And you ask another question, and I want 0:17:01.116 --> 0:17:02.956 to get to that, why not air on the side 0:17:03.116 --> 0:17:06.396 of and I will put it in my ideological stance, 0:17:06.476 --> 0:17:09.956 why not air on the side of the company instead 0:17:09.996 --> 0:17:14.156 of the worker, so and allow innovation because we're going 0:17:14.196 --> 0:17:17.196 to allow these exemptions and see where it goes from there. 0:17:17.556 --> 0:17:19.596 And I'd say, the reason I haven't done that, and 0:17:19.676 --> 0:17:22.796 I've been very judicious. I feel like in trying to 0:17:22.836 --> 0:17:24.996 write a law that makes the most amount of sense 0:17:25.076 --> 0:17:28.156 for workers is being in the legislature for the past, 0:17:28.676 --> 0:17:31.636 I guess six years now. I know that it is 0:17:31.716 --> 0:17:35.356 always hard to undo an imbalance of power that's in 0:17:35.436 --> 0:17:39.276 favor of corporations and of companies and that hurt workers, 0:17:39.436 --> 0:17:43.196 that it would be much easier to correct things in 0:17:43.316 --> 0:17:47.276 the other way. And so I was protective of workers, 0:17:47.436 --> 0:17:52.796 and that was I think a very intentional decision in 0:17:52.996 --> 0:17:55.436 order to say, yes, we might have to in the 0:17:55.516 --> 0:17:59.356 future and for innovative purposes if you will, or new 0:18:00.116 --> 0:18:03.036 kind of I guess professions that will come up. We 0:18:03.556 --> 0:18:06.076 may need to re examine some of this, but it's 0:18:06.156 --> 0:18:08.556 much easier to say this is the broad labor law 0:18:09.156 --> 0:18:12.596 and deal with it, and that way the power is 0:18:12.756 --> 0:18:14.476 in the hands of the workers. That's a kind of 0:18:14.476 --> 0:18:16.436 structural reform we need in this country in order to 0:18:16.516 --> 0:18:19.516 rebalance kind of the large problems we have with income 0:18:19.516 --> 0:18:22.916 inequality and with workers being exploited at work. And I 0:18:22.956 --> 0:18:26.436 guess the other side would say, unless that scares away business, right, 0:18:26.516 --> 0:18:28.836 because we all want people to have jobs. And then 0:18:28.916 --> 0:18:30.756 the question is, might it be the case that too 0:18:30.836 --> 0:18:35.476 much regulation would create a disincentive for businesses to experiment 0:18:35.596 --> 0:18:38.996 and to do new things. No one, even the companies, 0:18:38.996 --> 0:18:41.156 don't admit that their interest is primarily in promoting the 0:18:41.156 --> 0:18:42.996 interests of the companies. They would say, well, if our 0:18:43.036 --> 0:18:45.036 company does well, we'll create new jobs and that will 0:18:45.076 --> 0:18:51.636 make everybody better off. Yes, where at times of record employment, 0:18:51.716 --> 0:18:56.756 if you will, record low unemployment, and yet at staggering 0:18:56.876 --> 0:19:00.516 rates of income inequality and underemployment, And so it seems 0:19:00.556 --> 0:19:03.156 like the perfect time to say, if you're going to 0:19:03.436 --> 0:19:06.036 offer a job, it should be a real job, a 0:19:06.116 --> 0:19:10.476 sustainable job where somebody can actually live off of having 0:19:10.676 --> 0:19:14.036 just one job. And so I think the timing for 0:19:14.156 --> 0:19:16.476 this is perfect. We also have and this is kind 0:19:16.476 --> 0:19:20.356 of interesting to me. California is a large state. It 0:19:20.396 --> 0:19:22.916 could be, you know, a country in its own However, 0:19:23.116 --> 0:19:25.676 we also have a number of states who number one, 0:19:25.716 --> 0:19:29.276 already had something like an ABC test on the books Massachusetts, 0:19:29.276 --> 0:19:32.596 for example. We see New Jersey enforcing their ABC test 0:19:32.676 --> 0:19:37.076 for unemployment insurance against ubern left their states who already 0:19:37.116 --> 0:19:39.636 have had this but haven't really enforced it as much. 0:19:39.956 --> 0:19:41.756 And then we have states who are going towards it. 0:19:42.276 --> 0:19:44.676 We have the states like New York holding hearings on 0:19:45.156 --> 0:19:49.116 what independent contractor misclassification law would look like if it 0:19:49.156 --> 0:19:52.156 would be the ABC test. So although California is leading 0:19:52.236 --> 0:19:56.636 the way, I anticipate a number of especially left leaning 0:19:56.756 --> 0:19:59.196 states to be going in that direction. And of course 0:19:59.276 --> 0:20:02.596 we have a situation where almost every presidential candidate on 0:20:02.716 --> 0:20:07.196 the Democratic side has endorsed this approach and came out 0:20:07.276 --> 0:20:12.116 supportive of California's AB five of reclassifying workers as employees 0:20:12.556 --> 0:20:15.756 with the right to organize and with really re empowering 0:20:15.956 --> 0:20:19.516 unions to research in the United States. So I think 0:20:19.556 --> 0:20:22.436 the timing on this is perfect because a company can 0:20:22.556 --> 0:20:25.476 try to avoid a California law for so long, but 0:20:26.276 --> 0:20:28.596 operating on a level plane field is important. And the 0:20:28.676 --> 0:20:30.316 last thing I'd say about this, and I think this 0:20:30.476 --> 0:20:32.196 is really important. We heard from a lot of businesses 0:20:32.236 --> 0:20:34.796 who are actually grateful for us doing this. And that's 0:20:34.836 --> 0:20:37.236 because when you are a business that's operating by the 0:20:37.356 --> 0:20:40.276 rules and by the rules that seem very obvious, and 0:20:40.356 --> 0:20:42.516 you're undercut by a company that comes in and says, 0:20:42.596 --> 0:20:44.596 I'm just going to be innovative, I'm going to hire 0:20:44.676 --> 0:20:46.436 you by app and so I no longer have the 0:20:46.516 --> 0:20:49.916 same cost as you do. Well, that's a competitive disadvantage 0:20:49.956 --> 0:20:53.196 that hurts society, it hurts the state, it hurts the worker, 0:20:53.236 --> 0:20:55.476 and it hurts the business that was planed by the rules. 0:20:55.876 --> 0:20:59.316 And so it is time to treat everybody the same 0:20:59.396 --> 0:21:02.916 and fairly. And I think that AB five helps us 0:21:02.956 --> 0:21:05.876 do that. From over here on the other coast, we'll 0:21:05.916 --> 0:21:09.676 watch your bill and your career with great interest and excitement. 0:21:09.716 --> 0:21:11.836 So thank you very much for joining in. Good luck 0:21:11.876 --> 0:21:21.036 with everything that you're doing. Thank you. Of course, not 0:21:21.276 --> 0:21:24.396 everyone thinks that AB five is fair or that it's 0:21:24.396 --> 0:21:28.156 a smart economic move. Uber Lyft and DoorDash have launched 0:21:28.236 --> 0:21:31.596 a ninety million dollar campaign in support of a ballot 0:21:31.636 --> 0:21:35.876 initiative that would ask California voters essentially to allow them 0:21:36.116 --> 0:21:38.756 not to be covered by the law in exchange for 0:21:38.876 --> 0:21:43.276 providing some improved conditions for their drivers. As part of 0:21:43.316 --> 0:21:46.396 this measure, the companies are promising to provide lots of 0:21:46.476 --> 0:21:50.076 their drivers with benefits they don't currently have, like minimum 0:21:50.116 --> 0:21:54.676 wage standards and some healthcare stipends, without officially turning them 0:21:54.716 --> 0:21:59.196 into employees. I spoke to Adrian Durban, a spokesperson for Lyft, 0:21:59.436 --> 0:22:01.916 about what it would be like if all lift drivers 0:22:02.036 --> 0:22:05.836 suddenly became employees rather than contractors, and why the companies 0:22:05.876 --> 0:22:09.716 are so reluctant to let that happen. Adrian, I'm so 0:22:09.876 --> 0:22:12.796 pleased that you were able to join us. Describe from 0:22:12.996 --> 0:22:18.036