The Labor Department wants to decide how and when you work

Acting Secretary of Labor Julie Su has declared her intention to “help protect workers,” particularly those at risk of “exploitation.” Even though this sounds like an attempt to protect workers from overzealous employers, Su is talking about cracking down on independent contractors. In other words, Su seems to believe that independent contractors need protection from themselves.

As a result, the Department of Labor’s newly announced rule, to take effect in March, will force businesses to reclassify many independent contractors as employees, which will likely displease all parties involved besides Labor Department bureaucrats. The agency will foist its myopic (and pro-union) preferences on the gig economy, a fast-growing arena occupied by generally happy and successful workers.

First off, this rule will likely cost many people their jobs. It is a simple economic fact that businesses have finite funds available to pay workers. And when forced to begin providing erstwhile contractors with the benefits legally due to employees, employers will perforce downsize. 

This theory manifested itself painfully in California, which enacted the infamous anti-contractor law A.B. 5, which Su championed during her tenure as California’s labor secretary. For example, as Reason noted last year, “Following the passage of A.B. 5 … sports network SB Nation opted to terminate roughly 200 freelancers, reportedly to be replaced by just 20 full- and part-time staffers.” 

Once this rule goes into effect, those gig workers able to keep their jobs and reclassified forcibly as employees may lose the very benefit, schedule flexibility, for which many chose independent work. Su and her ideological ilk proselytize for traditional employment’s benefits, yet they seldom acknowledge its constraints. According to a Pew Research survey, freelancers cited “being able to control their own schedule” as a major draw of gig work. In fact, it was the most popular answer, excluding monetary concerns. Particularly for those whose families require extensive attention, such as the mother with young children or the adult child of a sick and aging parent, nontraditional job arrangements provide a unique income opportunity. Freelancers value this flexibility and gig work’s other unique benefits so highly that, according to one analysis, more than half say they would not return to traditional employment for any salary — no matter how high.

Many commentators reductively assume the gig community consists almost exclusively of low-income rideshare drivers and food deliverers. Not so: The roughly 73 million people who work therein have diverse occupations and wide-ranging technical abilities. The freelance landscape is complex and varied — as are people’s motivations to join it. Some seek full-time employment, others a side hustle. Some deliver groceries, while others earn six figures in distinctly blue-collar jobs.

As the Cato Institute’s Ilana Blumsack and Scott Lincicome noted in Empowering the New American Worker, “only about 8.6% of all independent workers are employed in [online-platform-based gig work] … and the most common occupations for independent workers are in marketing, communications, and computer programming.” What’s more, nearly three-fifths of full-time independent workers say they earn more in their current arrangement than they otherwise could, and a supermajority say they do not fear job insecurity.

Therein lies the Labor Department’s hubris and paternalism. It appears the agency cannot tolerate people making employment choices of which it disapproves. Su might not want to become a freelancer — a valid (though subjective) preference. Luckily for her, she has secured traditional employment, and she ought to let others perform their own cost-benefit analyses and build their careers accordingly.

The Labor Department’s rule will herd the worker further into the benevolent cattle car of state-approved employment, and the next stop is Union Town. Unions have long lobbied mightily for regulations that smother independent contracting, which they perceive (rightly) as a threat. Freelance arrangements promote pay and contract flexibility, individual agency, and innovative business models such as Uber. All are knives in the unionist Caesar’s back.

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The agency regulates as if, along with life and liberty, the laws of nature prescribed the 40-hour workweek and a Julie Su–approved benefits package. Quite the contrary. Each person’s pursuit of happiness requires freedom from regulators’ direction — freedom to experiment and to develop unorthodox answers to life’s difficult questions. 

There are more types of beneficial economic arrangements than are dreamt of in technocrats’ philosophy. These arrangements (the product not of some regulatory masterplan but of people’s adaptations to personal circumstances) ought to earn regulators’ respect, not their dismissal.

David B. McGarry is a policy analyst at the Taxpayers Protection Alliance.