As movement on President BidenJoe BidenFord to bolster electric vehicle production in multi-billion dollar push Protesters demonstrate outside Manchin's houseboat over opposition to reconciliation package Alabama eyes using pandemic relief funds on prison system MORE’s massive infrastructure package inches along, reports continue to focus on congressional negotiations and price tags. And while there is broad agreement that improving roads and infrastructure projects is a worthy goal, there remain critical provisions that would handcuff the American economy and destroy the ability of millions of workers to pursue the American Dream.
Chief among these is the Protecting the Right to Organize (PRO) Act, a bill included in Biden’s infrastructure plan that would make drastic changes to U.S. labor law and have a devastating impact on workers’ freedom and job opportunities.
The PRO Act has garnered substantial backing from the left, including many Big Labor union bosses. Yet there is an equally important force that disapproves of this legislation: independent contractors. This broad network includes freelance workers in various industries, construction, and some in the medical, financial and gig economy spaces.
“Build back better with unions” and “worker rights are civil rights” are catchy slogans used by proponents of the bill. Yet these platitudes cannot change the truth that the PRO Act’s dramatic changes to labor law would unravel large segments of the American economy — a conclusion bolstered by the findings of two former members of the National Labor Relations Board in a recently released memo.
Not only would passage of the PRO Act lead to large-scale increases in unemployment, but it also would force some small businesses to shutter, generating tremendous economic uncertainty and limiting work opportunities.
The fundamental purpose of the PRO Act is to redefine what it means to be an independent contractor — making it much harder for American workers to identify as such. The law would reclassify many of these individuals as employees, limiting their freedom to work as they choose and adding a massive financial burden to employers. PRO Act proponents contend that these changes somehow would strengthen the American economy and bolster worker rights. But this notion is clearly false, thanks to a crucial element of the PRO Act: the so-called “ABC Test.”
The ABC Test is a narrow, three-part definition of what it means to be an independent contractor that would prevent millions of Americans from maintaining their current jobs and prevent millions more from securing gainful employment. Indeed, the intentionally strict new labor standard would destroy the business models of countless companies, resulting in layoffs and economic turmoil. This regulatory change wouldn’t just impact independent contractors, either — its consequences would ripple throughout the business landscape, affecting temporary employees, freelancers and even the self-employed.
In California, legislation known as A.B. 5 implemented its own version of the ABC Test — and ultimately proved unworkable, causing widespread economic turmoil. Under pressure, California legislators later sought to mitigate the law’s impact and “adopted at least 48 industry and occupation exemptions to it, because it caused so many broad economic effects,” as the previously mentioned memo states.
Even with the half-hearted changes, the core of A.B. 5 is hurting workers across industries, and that includes workers who purposefully choose to perform independent contracting work to make a better living for themselves and their families. That includes underserved communities such as Latinos, who represent an outsized share of America’s independent contractors, meaning that they would be disproportionately harmed by the PRO Act’s passage.
The huge failure of California’s A.B. 5 bill has not slowed down PRO Act supporters. Spurred on by President Biden’s recent decision to repeal the Department of Labor’s independent contractor rule, ABC Test proponents have been seemingly emboldened to push forward their reforms on a national scale.
Empty rhetoric and misleading slogans cannot change the real-world damage that the PRO Act will inflict on American workers, families and the overall economy. Amid an already-tenuous economic recovery, limiting worker opportunity to artificially bolster the power of union bosses is a recipe for disaster. The only sensible move is for Congress to unceremoniously reject the PRO Act and the harmful approach to worker classification in its ABC Test.
Mario H. Lopez is the president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all Americans. Follow him on Twitter @MarioHLopez.