It seems that when our elected representatives in Sacramento dream up new laws designed to “help the people,” they wind up hurting the people they want to help more than helping them.
Lately there has been considerable conversation concerning “supply chain issues.” The main issue is how to get shipping containers from ports or manufacturing/processing facilities to consumers. Tens of thousands of trucks are needed to deliver these products to distribution points, and even more trucks are needed to deliver them to the point of sale or end use.
The U.S. Department of Transportation reported that in 2012 more than 130 million trucks were used for private or commercial purposes. Millions of those same trucks enter and leave California carrying goods each year, and thousands enter and leave Lompoc and Santa Maria each month to move produce from the coolers to market.
A large majority of these trucks are owned and operated by independent truckers. In California they are estimated to number 70,000, and they are known as “gig workers”; that is, they work on their own schedule instead of being an employee of a large company.
Most California lawmakers are beholden to their elective success by labor unions in this state. As independent contractors, these so-called gig workers do not belong to unions; thus, they became an easy target for lawmakers. To “solve the problem” in 2019 the state Assembly passed Assembly Bill 5, later in 2020 the provisions of this bill were modified in AB 2257.
Freight Waves, an online resource that represents itself as “the world’s leading supply chain intelligence platform,” explains it this way: “AB 5 is a law that went into effect statewide at the start of 2020. It is viewed as significantly restricting the ability of a worker to be classified as an independent contractor and does so by utilizing the ABC test to define [independent contractor] status. A California Trucking Association lawsuit led to an injunction that kept AB 5 out of the state’s trucking sector since the start of 2020. An appellate court reversal of the injunction was upheld by the Supreme Court in late June, opening the door to AB 5 enforcement in trucking.”
But solving one problem has created another problem: Independent truck owner/operators may not be able to do business in California, thus most of the produce packed in our region may not make it to market. Another impact was moving products in containers from seaports in Long Beach and Oakland may be interrupted.
One small trucking firm’s owner recently said during an interview on several news outlets that about 90 percent of the trucks at the Port of Oakland are independently owned and operated. When asked, he said that since these trucks were independently owned, he couldn’t just bring the operators on as employees because the trucks they drove wouldn’t be company owned.
And the suppliers of these products, specifically those who have seasonal crops, can’t afford to start their own trucking operation, and the increased costs of hiring a company employing union drivers would raise consumer prices to cover the increased costs.
Another large sector impacted by this new law are those who perform “piece work” for a business. For example, a person who decorates cakes or delivers food on call for a restaurant must now be considered an employee rather than an independent contractor. This would increase the cost to small businesses and eventually the consumer.
The people who have been elected to represent us have no common sense or compassion for small business entrepreneurs, and they can’t see beyond the next sound-bite. This new law will put tens of thousands of independent contractors out of work and raise costs for businesses that already struggle to make ends meet.
California used to be the “Golden State”; now it’s just and old piece of bent and tattered tin.
Ron Fink writes to the Sun from Lompoc. Send a letter for publication to letters@santamariasun.com.
This article appears in Jul 28 – Aug 4, 2022.
