To rebuild their economies, states should make it easier for Americans to find work

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In less than two months, there have been more than 30 million unemployment claims as a result of the COVID-19 pandemic. Millions of Americans saw their businesses shuttered, their paychecks put on indefinite hold. Now, as some states take steps towards reopening their economies, others are firmly slamming the door shut on workers—and opportunity.

Enter California, whose attorney general recently announced a lawsuit against Uber and Lyft over driver classification. The suit claims that the companies have denied workers benefits by classifying them as contractors rather than employees, and follows California’s AB5, a law that went into effect this year and requires gig economy companies to classify workers as employees.

This law, and following lawsuit, was problematic before COVID-19. But in the aftermath of COVID-19, it’s not just problematic—it’s asinine.

Despite the lawsuit singling out ride-sharing companies, contractors extend into nearly every corner of the economy. Writers, electricians, journalists, various health care professionals, event planners, and even community theater actors all often elect to contract with companies.

Workers who elect to be contractors do so for a variety of reasons, but the flexibility that contracting brings is often key, especially considering that 46 percent of freelancers say they cannot work for traditional employers due to personal circumstances. Contracting allows people to be entrepreneurs, to enjoy financial freedom without geographic constraints, and gives workers control over their schedules. That flexibility and resulting freedom have made contracting appealing to caregivers who often can’t work a standard 9-5 schedule, those with disabilities who are unable to work from an office, or those who find themselves facing a skills mix-match in their local community.

You should be noticing a theme here: This same job flexibility is one that millions are now searching for in the wake of COVID-19. And yet, with more than 30 million unemployed nationwide—and climbing—some states are making it more difficult for people to find work by forcing businesses to classify these workers as employees.  

And though California is actively going after companies, other states are limiting opportunity just as much by not changing their existing laws that clamp down on flexible work—including several states who are beginning to reopen their economies like Georgia, Indiana and West Virginia. In clamping down on this flexibility, these states and many others continue to restrict the opportunity workers have to get back to work and put food on the table.

Independent contractors will play an important role in rebuilding state economies in a post-coronavirus era. Before the spread of COVID-19, self-employed independent workers without employees accounted for 25 million small businesses. The total number of self-employed workers was much greater, with up to 35 percent of the American workforce freelancing for at least part of their income. Many of these individuals have lost these sources of income due to the COVID-19 pandemic and the closing of the economy.

But America was built on this form of work, and now more than ever, the flexibility that contracting provides is critical. Going forward, states should encourage entrepreneurship—not punish or restrict the use of the talents and creativity of the American workforce to get things moving again.

In mandating sweeping lockdowns, the government caused millions to lose their jobs. The least policymakers could do now is get out of the way of Americans finding new ones.

Greg George is a senior research fellow at the Foundation for Government Accountability.

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