It is an old, old story.
When you push water down into the bathtub, some of it inevitably seeps out and wets the washroom floor.
In the same way, raising taxes to inordinate levels means rich people inevitably leave. The actor Gerard Depardieu moved from France to Belgium. The tennis player Bjorn Borg emigrated from Sweden to Monaco. Thousands of 1 percenters have left California for Idaho and Nevada; many more have departed from New York or Taxachusetts for the more favorable tax climes of Texas and Florida.
What is the reaction of the revenooers whose states are emptying? They raise penalties for non-compliance and impose exit taxes, making the victims even more inclined to seek greener pastures.
The same is true with onerous rent controls (a redundancy). When imposed, landlords try to avoid them: they don’t make repairs unless they are forced to do so, they build fewer new building units, and strive mightily to convert their holdings to condominiums, office buildings, factories, storage facilities, or any other kind of real estate not subject to these controls.
But the rent control bureaucrat is not without a response. He can compel repairs with the threat of jail; he can outright forbid conversions of residential real estate to anything else, all of which further reduces the erection of new housing units. Hence the felt need for public housing projects, which have very serious problems of their own.
The domestic businessman does not relish foreign competition. He prevails upon the government to implement tariffs and impose import quotas. The rejoinder? Smuggling. The reaction to that? The Coast Guard and harsh penalties.
The latest chapter in this long running back and forth saga between government predator and free market prey is “gigging.” What’s that?
Gigging is a practice well-established in the music industry. An instrumentalist or singer would play for a night club one evening, for a wedding the next day, and give a paid concert in the park on the third. The musician is not working for any one employer on an extended basis. Rather, like the butterfly or bee, he is flitting from one source of employment to another.
‘Tis the same for freelance writers. Today they publish an op-ed in a newspaper, tomorrow their work appears in a magazine, all while they are busy beavering on their next book and playing ghost writer for a politician or business executive. It’s as if the gigster has no fixed address. It is difficult to corral him.
Other giggers include independent contractors, online platform workers, contract firm workers, those who are on-call and temporary workers. Photographers, artists, carpenters, gardeners, lawn mowers, consultants, handymen, computer nerds, testers, programmers, doctors, truck, Uber, and Lyft drivers, the list goes on and on. There are even websites (Fiverr, Graphite, Freelancer) that connect people looking for temporary work with those who need their services. Estimates are that some 57 million people – one third of the entire labor force – are members of this sector of the economy.
At the outset, gigging seems rather non-offensive. Why then is ultra “progressive” California trying to ban this method of earning a living with its new Assembly Bill 5? Who is escaping from whom in this situation and who is trying to prevent them from doing so?
Here’s a hint: it is difficult if not impossible for labor unions to organize gigsters. Hence the drive to prevent gigsters from establishing themselves in the first place. Instead of the musician playing here, there, and everywhere else with no rhyme or reason, compel him to work for a firm that hires dozens or hundreds of such talented people. Complain that the new employer is unfair, exploiting these new employees, and then go out on strike.
However, organized labor is not without power in the Democratic Party and amongst “progressives” in states such as California. Gigs are a way of escaping stultifying unionism. How better to boost membership in the rank and file than to place as many roadblocks against the gig economy as possible?
Of course, the anti-gigsters may not fully succeed in their evil plan. There has been opposition from many quarters, and exceptions have had to be made. For example, the new law mandates that all freelance writers must now be considered employees if they publish 35 articles per year or more, but legislators are considering removing this restriction. Free speech lawsuits will test that provision in court. The judges, too, will have to rule on whether or not a state has jurisdiction over some 70,000 independent truckers who are engaged in interstate commerce. In like manner, Uber, Lyft and Postmates are refusing to cooperate; this, too, will have to be settled by the judiciary. However, it pays not to be too optimistic on this score. The taxman has prevailed, as have the rent controller and the tariff imposer. It may well be that these court cases will take the wind out of California’s Assembly Bill 5’s sails, but don’t bet the farm on such an outcome.
Will this old, old story continue, in which organized labor attacks gig workers and their temporary employers, and they fight back? Hold onto your seats for a wild ride.
Walter Block is an economics professor at Loyola University and a Mises Institute senior fellow. He is author of several classic books on libertarian ethics, including Defending the Undefendable (1976), and was named one of the 100 most influential philosophers in the world by AcademicInfluence.com.