• by August 11, 2020

The consequences of California's new gig-worker law are starting to sink in for local newspapers faced with a steep drop in ad revenue during the coronavirus pandemic. The law was a misguided effort to push ride-sharing companies like Uber and Lyft into hiring drivers, instead of treating them as independent contractors.

But it now threatens to hobble ailing community newspapers.

The California Legislature last year passed Assembly Bill 5 (AB 5) as a gift to labor unions that wanted to organize the legions of drivers that contracted their services to the unprofitable ride-hailing giants. The law also applied to most businesses — except for a few that were given sweetheart carve-outs, like law firms that benefit from labor disputes.

News publishers were given a one-year exemption from the law, permitting them to continue working with contractors who deliver newspapers instead of hiring them as full-timers. When the exemption expires at the end of December, newspapers will face a jump in labor costs that's likely to hasten their demise and cause "news deserts" to afflict more communities.

Newspapers in California next year may see an 85% jump in newspaper delivery costs, according to David Chavern, president and CEO of News Media Alliance, a trade group that represents more than 2,000 news organizations. That increase will squeeze publishers  faced with revenue declines of 30% to 50% because of the pandemic recession, increasing the likelihood that they'll shut down.

Ethnic communities will suffer the most when they lose access to the more than 300 news outlets that serve African American, Latino, Native American, Japanese and Chinese readers, an op-ed in the Los Angeles Times recently argued.

I agree that the extra distribution costs for printed newspapers will be difficult to pass on to readers, giving them another reason to cancel a subscription. The loss to publishers will be permanent if those readers don't have an alternate way of getting the news through the internet and connected devices like smartphones.

As I've argued in the past, AB 5 should be repealed because the law is completely out of step with today's more dynamic work force. The law has had a devastating effect on freelancers and photographers who haven't been allowed to contribute more than 35 items a year to a publication, undermining their ability to earn a livelihood in California.

The law obviously didn't anticipate the coronavirus pandemic that led to steep job cuts at news publishers, but it's also preventing journalists in the state from seeking freelance work to help sustain themselves. I predicted last year the law wouldn't compel publishers to create jobs, and instead would lead them to shift work to freelancers in other states. 

Editorial sports cartoonist Jim Thompson this week highlighted on Twitter how AB 5 has prevented him from contributing to the Los Angeles Times any longer this year, stifling his creative efforts and diminishing his ability to earn a living. I hope publishers in other states will give him assignments.

Lorena Gonzalez, the incompetent lawmaker from San Diego who authored AB 5 for her union cronies, said the submission cap will be lifted in a month. The California State Assembly in June passed AB 1850 to remove the cap, and presumably the state's upper house and Gov. Gavin Newsom will approve it.

That's little solace for the vast harm Gonzalez has caused to people who have lost desperately needed income during the pandemic depression. Instead of picking winners and losers in a California economy that will take another decade to recover its job losses, the legislature should repeal the law.

Even more worrisome is Democratic presidential candidate Joe Biden's support for the PRO Act passed by the U.S. House of Representatives, threatening the livelihoods of every freelancer in the country if he were to sign it into law. It's a rigid bill that doesn't recognize that many people choose freelance work because they like the flexibility and possibility to earn more money than they would while stuck in full-time jobs.

With the unemployment rate hovering above 10% and the skills of jobless workers deteriorating with each passing day, any impediment to letting people earn a living is a disastrous step backward.

It's also harmful to newspapers and the growing number of communities that will lose a press watchdog, practically inviting more corruption by public officials.