Tag: regulations

California’s Attack on Gig Work Predictably Drove Workers Out of Jobs

California’s attempt at forcing gig workers to become traditional employees backfired by driving many of those workers out of their jobs.

In the wake of a new law (Assembly Bill 5) that was intended to reclassify many independent contractors as regular employees, self-employment in California fell by 10.5 percent and overall employment tumbled by 4.4 percent, according to a study released Thursday by the Mercatus Center, a free market think tank housed at George Mason University. In professions where self-employment was more common, the effects were more dramatic, and in some fields employment declined by as much as 28 percent after A.B. 5’s implementation.

Meanwhile, researchers Liya Palagashvili, Paola A. Suarez, Christopher M. Kaiser, and Vitor Melo reported finding no increase in the number of employees classified as full employees. In professions where there was an uptick in traditional employees receiving W-2 wages and benefits, those increases were not large enough to cancel out the number of self-employed workers who left jobs.

“These results suggest that AB5 did not simply alter the composition of the workforce as intended by lawmakers,” the four researchers wrote. “Instead, our findings suggest that AB5 was associated with a significant decline in self-employment and overall employment in California.”

That could have significant implications for the Department of Labor’s (DOL) recently announced attempt at duplicating California’s policy across the rest of the country.

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Labor Department’s New Regs Aim To Rescue Gig Workers From Their Own Preferences

Most workers in the gig economy say they like their jobs and value the flexibility that comes with being an independent contractor.

The federal government, however, is coming to rescue them from their own choices.

The Department of Labor announced new rules this week that will limit the circumstances in which workers can be classified as independent contractors. Once implemented, those rules will force some workers currently operating as independent contractors to become full-fledged employees—thus triggering other federal mandates regarding pay and benefits.

“This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned,” acting Secretary of Labor Julie Su said in a statement.

In reality, the department is unleashing federal bureaucrats to micromanage the decisions that those workers have already made for themselves. When it is fully implemented in March, the new rule will impose a vague six-part test to determine whether a worker should count as an employee or a contractor. Determining factors whether the job is deemed to be permanent or temporary, as well as how much control bosses have over employees’ time, and how essential the employees are to the business’ overall activity.

Those determined to be employees will be forcibly reclassified even if they do not want to be.

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Elizabeth Warren’s Terrible Model for Tech Regulation

The Interstate Commerce Commission (ICC), which existed for about a century before being mercifully put out to pasture in 1995, is one of the best historical examples of how governmental attempts at regulating the economy can backfire.

Created with the stated goal of protecting consumers from the competitive interests of Gilded Age railroad barons, the ICC was quickly captured by the very special interests it sought to control, then helped entrench a railroad cartel. At the height of its powers, the ICC tried to limit the use of trucks for hauling freight (an effort that thankfully failed) and used its influence to have a critic of the railroad monopoly committed to an asylum.

Naturally, some senators see the ICC as the ideal model for a new agency aimed at regulating Big Tech. Bad ideas never seem to truly die in Washington.

While promoting their bipartisan bill to ramp up federal regulation of successful tech companies in The New York Times, Sens. Lindsey Graham (R–S.C.) and Elizabeth Warren (D–Mass.) pointed to the ICC as one model for what they aim to do. “It’s time to rein in Big Tech,” they argued, “and we can’t do it with a law that only nibbles around the edges of the problem.” Warren has also invoked the ICC in posts on X (formerly known as Twitter) and in public comments calling for tighter federal control over companies like Amazon and Facebook.

Indeed, their bill wouldn’t nibble. It would create a new federal commission to regulate online platforms. The Digital Consumer Protection Commission would have concurrent jurisdiction (which really means overlapping and duplicative mandates) with the Federal Communications Commission (FCC) and the Department of Justice. In the senators’ telling, this newfangled ICC would aim to “preserve innovation while minimizing harm presented by emerging industries.”

That’s far from the whole story of the original ICC.

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New Colorado Marijuana Hospitality Rules Take Effect As Regulators Tout Earlier ‘Successes’ Like Online Sales

Colorado marijuana regulators are promoting new rules for the industry that take effect on Monday—including increased sales limits for cannabis hospitality businesses that allow on-site use. They are also touting “successes” from the past year such as opening up online sales.

The state Marijuana Enforcement Division (MED) shared a list of rules that have been enacted under legislation passed by lawmakers and signed into law by Gov. Jared Polis (D) last year.

At the top of the list is the online sales development, which took effect last August. Customers must still physically pick up the marijuana products from retailers, but now they can browse and electronically purchase cannabis online ahead of visiting the store.

As of January 8, other key regulations are being implemented, too. That includes increasing the amount of cannabis that can be sold at licensed marijuana hospitality businesses to one ounce of flower and eight grams of concentrate.

The new rules will also require hospitality businesses to provide patrons with information about transportation options and establish standards to prevent overconsumption, while exempting them from certain requirements related to video surveillance at certain areas of spas.

Regulations that have already taken effect this past year that MED highlighted include new authorizations to seize and destroy regulated marijuana products that pose a threat to public health, a rule that allows new cannabis businesses to maintain and renew state licensure even if they’re rejected by local governments and empowering regulators to promulgate rules allowing or banning “chemical modification, conversion, or synthetic derivation of cannabinoids.”

“As we approach the new year, we are committed to leveraging the unique opportunity we have to reflect on our successes and lessons learned as one of the most mature adult-use cannabis markets in the nation,” Dominique Mendiola, senior director of MED, said in a press release. “We look forward to continuing our work together to demonstrate a model for responsible regulation as directed by the voters of Colorado and the General Assembly.”

The regulatory update comes days after Colorado’s governor, advocates and stakeholders celebrated the 10th anniversary of the first legal cannabis sales nationally and globally in the state.

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We Absolutely Do Not Need an FDA for AI

I don’t know whether artificial intelligence (AI) will give us a 4-hour workweek, write all of our code and emails, and drive our cars—or whether it will destroy our economy and our grasp on reality, fire our nukes, and then turn us all into gray goo. Possibly all of the above. But I’m supremely confident about one thing: No one else knows either.

November saw the public airing of some very dirty laundry at OpenAI, the artificial intelligence research organization that brought us ChatGPT, when the board abruptly announced the dismissal of CEO Sam Altman. What followed was a nerd game of thrones (assuming robots are nerdier than dragons, a debatable proposition) that consisted of a quick parade of three CEOs and ended with Altman back in charge. The shenanigans highlighted the many axes on which even the best-informed, most plugged-in AI experts disagree. Is AI a big deal, or the biggest deal? Do we owe it to future generations to pump the brakes or to smash the accelerator? Can the general public be trusted with this tech? And—the question that seems to have powered more of the recent upheaval than anything else—who the hell is in charge here?

OpenAI had a somewhat novel corporate structure, in which a nonprofit board tasked with keeping the best interests of humanity in mind sat on top of a for-profit entity with Microsoft as a significant investor. This is what happens when effective altruism and ESG do shrooms together while rolling around in a few billion dollars.

After the events of November, this particular setup doesn’t seem to have been the right approach. Altman and his new board say they’re working on the next iteration of governance alongside the next iteration of their AI chatbot. Meanwhile, OpenAI has numerous competitors—including Google’s Bard, Meta’s Llama, Anthropic’s Claude, and something Elon Musk built in his basement called Grok—several of which differentiate themselves by emphasizing different combinations of safety, profitability, and speed.

Labels for the factions proliferate. The e/acc crowd wants to “build the machine god.” Techno-optimist Marc Andreessen declared in a manifesto that “we believe intelligence is in an upward spiral—first, as more smart people around the world are recruited into the techno-capital machine; second, as people form symbiotic relationships with machines into new cybernetic systems such as companies and networks; third, as Artificial Intelligence ramps up the capabilities of our machines and ourselves.” Meanwhile Snoop Dogg is channeling AI pioneer-turned-doomer Geoffrey Hinton when he said on a recent podcast: “Then I heard the old dude that created AI saying, ‘This is not safe ’cause the AIs got their own mind and these motherfuckers gonna start doing their own shit.’ And I’m like, ‘Is we in a fucking movie right now or what?'” (Hinton told Wired, “Snoop gets it.”) And the safetyists just keep shouting the word guardrails. (Emmett Shear, who was briefly tapped for the OpenAI CEO spot, helpfully tweeted this faction compass for the uninitiated.)

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How Biden Hobbled His Own Infrastructure Push

With President Joe Biden’s poll numbers continuing to sag and most Americans still dour about the state of the economy, the White House is understandably trying to change both narratives by pointing to the supposedly transformational benefits of Biden’s 2021 infrastructure spending package.

There’s just one little problem with that plan: finding actual evidence.

Biden is frustrated about how long it is taking to turn that $1 trillion into new construction sites that would serve as convenient backdrops for reelection campaign press conferences, according to CNN. “There’s immense frustration” in the fact that it could be years before some communities see real benefits from the tranche of spending that Biden and Congress authorized two years ago, one unnamed White House official tells CNN.

“He wants this stuff now,” says another.

Impatient children have only another few days to wait for Christmas, but Biden will likely be waiting quite a bit longer to see any significant benefits from the infrastructure bill. Too long, perhaps, given that the clock is ticking rapidly toward the 2024 presidential election.

Some of the reasons are beyond the president’s control, of course. The government is simply not very efficient at doing much of anything, and major infrastructure projects take time to plan, organize, and execute. You can’t actually fix anything by simply dumping money on it, no matter how many times that approach is tried.

However, Biden does bear significant culpability for at least some of the delays that are now frustrating his White House and campaign teams. From the tightening of “Buy American” rules for federal procurement to mandates that limit the ability of nonunion construction shops to bid on these projects, the infrastructure bill Biden signed in November 2021 is loaded with provisions that were always going to slow its implementation and limit its effectiveness.

The outcome was predictable from the start. “Making waivers for Buy America provisions harder to obtain reveals the contradictory aims of Biden’s infrastructure policy,” Reason‘s Christian Britschgi wrote in April 2022. “The president wants to make ‘historic’ investments in infrastructure, but he’s also deeply committed to regulations that ensure those investments will buy as little infrastructure as possible.”

Rules requiring contractors to use American-made stuff in federally funded projects have been on the books for decades. That’s one of the reasons why American mass transit projects are much more expensive than similar projects built in other parts of the world. The infrastructure bill doubled down on those problems by expanding those requirements to cover even basic materials like copper wiring, drywall, and lumber.

“The quick implementation of Buy America requirements for such a broad range of materials will cause delays in project delivery while states, contractors, manufacturers, and suppliers continue working to determine how best to track and verify these materials,” Washington state Secretary of Transportation Roger Millar warned federal officials in a letter last year.

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Why Are California’s Animal Shelters Killing So Many Pets?

As I write this column, Marigold—my long-haired orange tabby who demands constant attention—is purring next to me. She’s a delightful creature that I adopted at a local shelter’s Five Dollar Fridays, where they adopt out vaccinated and spayed adult cats for that modest fee. I got her (and Fluffy) when my wife was out of town, so she’s now forbidden me from visiting a shelter alone.

I don’t blame my wife for setting some ground rules, given that I can’t wander through the aisles of forlorn animals and not bring at least one home. So I’ve been filled with disgust at California’s government-funded animal shelters, which claim to be models of compassion but really are killing fields that euthanize many healthy and adoptable animals.

In Orange County, critics complained that high euthanasia rates were the result of limited government resources. As a result, the county in 2018 opened a new $35-million Animal Care shelter in Tustin that includes all the cool features (dog runs, play areas) lacking at the decrepit former facility. One news report compared it to a five-star resort and noted that it had a paid staff of 140 plus 400 volunteers. That’s quite the operation.

Yet The Orange County Register‘s Teri Sforza reported on data analyzed by a former volunteer and found the “kill rate for adult dogs…has nearly doubled since 2018, and the amount of time they spend behind bars has jumped 60 percent.” During the pandemic, the shelter stopped walk-in visits and required appointments. That was understandable then, but even after the pandemic ended the shelter continued focusing on appointments and requiring accompanied visits.

Obviously, fewer people will fall in love with a purring or barking buddy if they can’t wander through the kennels and see which animal pulls at their heartstrings. You can no more pick out a pet based on a shelter’s photo than you can pick out a spouse solely on their dating website bio. Animal Care increased the number of walk-in visits amid criticism, but it’s still absurdly limited and I gave up trying to get info after a really long wait on its phone line.

The bureaucrats who run the facility—the largest municipal “animal-care” operation in the West—depict these customer-unfriendly, animal-harming policies as a means to protect the critters from stress and protect the public from animal bites. In reality, it’s just the latest instance of government putting the employees’ convenience above the public good—like the way public schools and teachers’ unions dragged their feet on school re-openings.

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The Abundance Agenda Promises Everything to Everyone All at Once

In summer 2023, American progressivism was spending big and riding high. Despite razor-thin majorities in Congress, Democrats had spent the last two years enacting hundreds of billions of dollars in new subsidies—for green energy, public transportation, domestic manufacturing, scientific research, and more. This progressive pork was now in the hands of Democratic President Joe Biden to distribute as his administration saw fit.

Yet when California Gov. Gavin Newsom looked upon the piles of fresh federal cash, all he could do was despair.

“We’re going to lose billions and billions of dollars in the status quo,” he complained to New York Times columnist Ezra Klein in June. “The beneficiaries of a lot of these dollars are red states that don’t give a damn about these issues, and they’re getting the projects.”

Newsom was right about the distribution of the funds: More than 80 percent of the new federal funding for clean energy and semiconductors was headed for GOP districts, according to the Financial Times. His outburst spoke to the anxiety of much of liberal America.

Despite a string of progressive policy victories at the federal level, a Democratic Party under the grip of progressives, and ironclad Democratic control over some of the country’s largest and wealthiest cities and states, blue America just wasn’t delivering what its boosters said the country needed.

“We need to build more homes, trains, clean energy, research centers, disease surveillance. And we need to do it faster and cheaper,” Klein himself had written a few weeks before his Newsom interview was published. Yet “in New York or California or Oregon…it is too slow and too costly to build even where Republicans are weak—perhaps especially where they are weak.”

The blue strongholds’ failure to build had added countervailing losses to all their wins.

These states aren’t just losing federal grants. They’re losing residents to states where housing construction is easier. They’re losing companies to places where the regulatory burden is lighter. They’re losing voters, tax dollars, congressional seats, and more to places that build the things people want. If the trend keeps up, the progressive vision for America may be lost as well.

This threat has provoked some surprising self-reflection from liberal wonks, writers, and officials.

America, and particularly blue America, has consciously wrapped itself in red tape, regulations, and special-interest carve-outs, to the point that it has become nearly impossible to convert either government subsidies or private capital into needed physical things.

As Newsom said to Klein, “We’re not getting the money because our rules are getting in the way.”

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Banning Criminal Background Checks Will Lead To More Housing Discrimination, Not Less

America needs more housing. Pressure for reform is only growing as available homes get less and less affordable. Unfortunately, rather than addressing the root cause of high housing prices—an epidemic of local overregulation that prevents enough homes from being built—some legislators continue to flirt with social experiments that can harm both landlords and renters.

For example, some states and localities have implemented well-meaning “fair chance” laws banning criminal history on background checks for prospective tenants. Progressive Reps. Ayanna Pressley (D–Mass.) and Rashida Tlaib (D–Mich.) recently introduced the idea as federal legislation. In a statement, Pressley said, “It’s time we remove the systemic obstacles that have exacerbated the prison-to-homelessness pipeline.”

We do indeed have an overcriminalization and overincarceration problem in this country, so on its face, this seems like a good idea. According to the Department of Justice, more than 650,0000 ex-offenders are released from prison every year, not counting the nearly 6.9 million people on probation, on parole, or still in jail or prison at any one time. Far too many face undeserved challenges when trying to re-acclimate into society and not reoffend.

That’s partly because relatively few landlords want to rent to people with criminal records. Landlords minimize the risk of delinquent or destructive tenants by selecting the best applicants on a given margin. From this perspective, avoiding people with criminal records seems like an easy choice, even though it means some potentially great tenants are rejected. The best reforms would correct the real problems of overcriminalization and overincarceration. That’s politically difficult and may take a long time. Equally important would be removing all artificial barriers to building more homes.

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