‘Proposition 22 Is a Backlash to Victories Workers Have Had’

Janine Jackson interviewed Rey Fuentes about California’s Proposition 22 for the November 6, 2020, episode of CounterSpin. This is a lightly edited transcript. 

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Election Focus 2020

Janine Jackson: Proposition 22, or the “Protect App-Based Drivers and Services Act,” passed in California on November 3, after what the New York Times glossed as a “really, really expensive battle over the future of work.” In reality, the spending was quite one-sided—companies, including Uber and Lyft, spent $205 million, the most costly ballot initiative campaign in US history—on something they obviously felt was worth it: a measure to allow them to keep flouting labor law and classifying their drivers as independent contractors rather than employees.

New York Times (11/4/20)

And a “battle over the future of work,” while it’s true, is a kind of antiseptic way to describe a plan that leaves actual workers—human beings—without basic benefits others have, like healthcare, sick leave, overtime or recourse against discrimination. Uber employees complained of being strong-armed into voicing support for the initiative, and even California Uber customers were forced to navigate through Prop 22 propaganda to use the app.

Why such aggression for a move the companies swear is good for everyone? Seems like a question for a critical press corps.

We’ll learn more now from Rey Fuentes; he’s a Skadden Fellow at the Partnership for Working Families and author, with Rebecca Smith and Brian Chen, of the report Rigging the Gig: How Uber, Lyft and Doordash’s Ballot Initiative Would Put Corporations Above the Law and Steal Wages, Benefits and Protections From California Workers. He joins us now by phone from Washington, DC. Welcome to CounterSpin, Ray Fuentes.

Rey Fuentes: Hi, it’s so wonderful to be here; thank you for having me.

JJ: There are a number of disheartening aspects here: what Prop 22 does, to whom, how it came about, what it could lead to. But I wonder if I could ask you, first, to address this core idea that undergirds so much of the conversation: that companies like Uber, Lyft and Doordash don’t have to behave like other employers, because their workers are happy to trade employment benefits for the flexibility of when or whether to work. What does that leave out or distort about the reality of these workers and this industry?

RF: Unfortunately, it is a corporate myth. It’s something designed by corporations as a way to win a public relations campaign with people who don’t work for their company. We have discussed throughout this campaign, up until including these votes being tallied on Proposition 22, really [tried] to reach out to California voters to describe what we know—just based on a plain reading of the proposition—will be the impacts on California workers.

The challenging part is that we know that these app-based workers are primarily immigrants, people of color and, for the people that we’ve worked most closely with,  subsistence wage earners. These are people who work full time on these applications, but struggle to survive in California’s economy.

And what has undergirded the protections for most workers in California are baseline rights—things like access to paid sick leave, unemployment insurance, when Covid-19 hits. These are things that have been absent to most of these gig workers since they started working for these companies.

And it’s only been this recent grappling in this country with our history of race, with the Covid-19 pandemic, that many workers started to realize that these protections are actually so vital to them, that they should begin organizing and working together to ensure that they are protected.

So Proposition 22 is clearly a backlash to these recent victories that workers have had. And the idea that these workers would prefer to not have access to paid sick leave, if they fall ill or need to care for a family member, or that they wouldn’t want the protections of unemployment insurance if they lose their job through no fault of their own, to me is quite galling.

JJ: Prop 22 is the response, if you will, as you’ve just indicated, to state labor law, which listeners might know about: AB 5, that would have required these companies to classify drivers as employees. But before they put together Prop 22, they just straight up refused to comply with the law, isn’t that right?

RF: Their really irresponsible behavior when it comes to California law has been embedded in the DNA of these companies since their founding, and since they started operating in California. They’ve flouted employment law that has been on the books since 2010, 2012.

Whenever each one of these companies started operating, they’ve decided that the workers were independent contractors, but under any conceivable state law test, these workers have been employees for the purposes of state law, which means they should be getting the things like basic minimum wage protections and overtime. And AB 5 just crystallized the conversation, and more important than anything else, AB 5 authorized public officials—like the attorney general, and city attorneys around California in large cities—to enforce these obligations.

The companies have designed a web of private arbitrations which prevent workers from going to court, and really fairly adjudicating what are the results of their employee classification, or what wages they’re owed. And so, because these companies have evaded enforcement in the past, the fact that AB 5 authorized public officials to enforce, and the fact that they started to bring lawsuits against these companies, is what created the urgency to pass Proposition 22, and to really spread so much misinformation about what the proposition actually contains.

NYT: Uber and Lyft Drivers in California Will Remain Contractors

New York Times (11/4/20)

JJ: This is what makes me so irritated with the way media can report these things. The New York Times on November 4 has this statement:

The passage of Prop 22 is a bitter loss for state and local officials, who have long seen the ride hailing companies as obstinate upstarts that shrugged off any effort to make them follow the rules.

So here you have a simple fact, that they’ve been flouting rules, but it’s presented as the sour grapes viewpoint of “losers.”

Just taking up the point that you’ve just introduced about AB 5 introducing a lever for legislators to use to intervene to protect workers: As bad as the lead-up to Prop 22 is—but wait, there’s more! The proposition also includes a provision that pretty much ties the hands, doesn’t it, of legislators who might want to change what it does?

RF: That’s what we think is the worst component of the ballot initiative; it’s really actually two things that have not received as much attention as possible. And, again, the quick efforts by these companies to spin the narrative as something about protecting employee freedom and independence, and protecting flexibility, have really provided the type of misdirection that has prevented people from realizing that, exactly as you described, the proposition contains a 7/8ths supermajority vote requirement. So if the legislature in the future wants to expand rights for these workers, or wants to ensure that some other protections are provided, they will be unable to do so unless they get a 7/8ths majority vote of the state legislature. And I heard somebody say something pretty funny, but horrible in this situation, that you couldn’t get a 7/8ths majority vote for a Happy Mother’s Day Proclamation from the state legislature. So it’s difficult to imagine important social legislation protecting workers passing by that threshold in our current legislature.

And the other thing that it does, that I also think was underreported, was the fact that it now preempts, or cancels, any local law that would protect workers, and regulate things like local wages, access to tips or insurance requirements for drivers: All the things that local governments are best suited to do in their jurisdiction, they now do not have the power to do it, because the ballot initiative preempts those laws.

So they’ve essentially knocked out any way to change the law from the top, or any way to improve it from localities on the ground. That’s why we’ve described it as an attempt to essentially deregulate these industries, and at least as of Tuesday, they were successful, but I don’t think the fight ends there.

Rigging the Gig

Partnership for Working Families/National Employment Law Project (7/20)

JJ: I’m going to bring you back to continuing the fight, but let me just ask you one point that the report deals with extensively, because to the extent that folks are going to read news accounts about this, they’re often going to include a line that says, “OK, but the companies are offering some limited benefits, some benefit concessions; they are offering workers something.” Rigging the Gig talks about that, if you could briefly tell us what’s going on there.

RF: Yeah, the companies have suggested—and I think hyperbolically, as we now understand—that the proposition contains historic new benefits: rights to some healthcare insurance-premium assistance, a wage guarantee, discrimination protections. But as we’ve described, these things are far less generous than current law. And so that’s what we were comparing it to when we wrote our report, because that’s what the law was, and these companies had decided they wouldn’t comply with it.

But more to the point, even the benefits that companies suggest are contained in the ballot proposition are really just not going to be sufficient for workers in their day-to-day lives. So, for example, the ballot initiative intends to offer healthcare premiums to workers, and it suggests you could get up to 100% of the average ACA contribution covered if you work over 25 hours in a week.

Unfortunately, they suggest that those are only 25 engaged hours. And we know many workers spend a third to half of their time waiting for a ride. So they actually have to end up working almost 40 hours or more to receive this healthcare insurance guarantee.

But it’s also tied to the lowest-cost healthcare plan on Covered California, and it’s not their actual premium expenses; it’s some average that hasn’t even been disclosed by Covered California.

So at the end of the day—and I know that was a complicated description of what was happening, but really, just to sum it all up: The company suggested they’re offering a new historic healthcare guarantee; when you read the fine print, very few workers will be able to access it, and those who do will access insurance that is not adequate to cover what they’ll be facing.

JJ: Finally, the New York Times had a chilling statement that Prop 22 “opens a path for the companies to remake labor laws throughout the country.” But it can, I’m hearing you say, still be fought, and will still be fought.

Rey Fuentes, Partnership for Working Families

Rey Fuentes: “We’ve seen the most explosive and energetic worker organizing on the ground that has ever been present in the gig community.”

RF: I think one of the things that is important to recognize is that this force by the company, their efforts to pass a ballot initiative like this, has not defeated workers, and in fact, has done quite the opposite: We’ve seen the most explosive and energetic worker organizing on the ground that has ever been present in the gig community, in workers who are working for Uber, Lyft, Instacart, Doordash, who now recognize very clearly what is at stake, and have started to very articulately cut through the company’s messaging. A lot of workers who had started working for these companies, when they were first founded, were earning a pretty good wage and sufficient earnings for themselves to maintain a living. But the companies flooded the market, they started cutting rates, and now workers understand very clearly that the companies were holding them, really, hostage on the job, and leaving them without many alternatives.

And so this Proposition 22 fight has actually energized organizing in a way that I’ve really never seen before. That’s what’s an exciting component about this, is that workers are more engaged, rather than less engaged. That’s one thing that is going to be absolutely critical in the fights ahead.

But the other component is just really testing the ballot initiatives, really ensuring that it is lawful, it is constitutional in California, that it has all the features that are necessary to really actually be California law. And so I think that’s an important conversation. It’s one—I don’t want to get ahead of the moment, I mean, we’re really only two days past the election—but I think it will be important to recognize that this fight and this conversation in California is not over.

JJ: We’ve been speaking with Rey Fuentes of the Partnership for Working Families. You can find their work online at ForWorkingFamilies.org. Ray Fuentes, thank you so much for joining us this week on CounterSpin.

RF: Thank you so much. It’s been a pleasure.

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