Open Letter to Suspend California AB-5

The Open Letter

"Dear Governor Gavin C. Newsom and All Members of the California State Legislature:

In 2019, California Assembly Bill 5 was passed to regulate the use of independent contractors in a variety of activities.

By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas, AB-5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them.
We, the undersigned Ph.D. economists and political scientists, call for the immediate suspension of AB-5." More details.

Background

The current situation of voluntary (and mandatory) self-isolation has created an immediate need for flexible and low-cost ways of delivering goods to customers. Other essential needs could also be served by enabling independent contractors currently hindered by AB-5.

Hiring laws, especially for firms with more than 50 employees, mean that companies are unwilling to make long-term commitments to traditional jobs. We aren’t sure what our economic needs and capacities are going to be even two months from now. But hiring someone in a traditional job, with hours and benefit requirements, is too expensive to contemplate given that employers do not know whether they will be able to fill any permanent jobs at all and, if so, when.

Employment decisions hinge on the costs of distributing risk. While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency. It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.

AB-5 unintentionally has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals, those who would benefit most from flexibility to work around the restrictive policies.

Our ProposalA mountain of work needs to be done, deliveries made, and people stranded at home helped to receive groceries and medications. Meanwhile, furloughed Californians stand on the verge of being wiped out financially because the law prevents them from working part time in a variety of indispensable positions.

Blocking work that is needed and impoverishing workers laid-off from other jobs are not the intentions of AB-5, but the law is having these unintended consequences and needs to be suspended.

We propose that the California State Legislature and Governor Gavin Newsom suspend AB-5.

Signatories
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Michael Akemann, Managing Director, Berkeley Research Group, LLC
Shireen Al-Azzawi, Lecturer in Economics, Santa Clara University
Annelise G. Anderson, Senior Research Fellow Emerita, Hoover Institution
John Greyson Anderson, Professor of Political Science, Napa Valley College
Steven Eric Anderson, Professor of Management and Economics, La Sierra University
William L. Ascher, Donald C. McKenna Professor of Government and Economics, Claremont McKenna College
Jared Ashworth, Assistant Professor of Economics, Pepperdine University
George B. N. Ayittey, Senior Fellow, Independent Institute
Charles W. Baird, Professor of Economics Emeritus, California State University, East Bay
David Baqaee, Assistant Professor of Economics, University of California, Los Angeles
David R. Baron, William R. Kimball Professor Emeritus of Business, Economics, and Environment, Stanford University
Bruce L. Benson, Senior Fellow, Independent Institute
Luisa R. Blanco, Associate Professor of Economics, Pepperdine University
Michael J. Boskin, Tully M. Friedman Professor of Economics, Stanford University
David W. Brady, Bowen H. and Janice Arthur McCoy Professor of Political Science, Stanford University
Jan K. Brueckner, Distinguished Professor of Economics, University of California, Irvine
Andrew E. Busch, Crown Professor of Government and George R. Roberts Fellow, Claremont McKenna College
Patricia J. Cameron-Loyd, Lecturer in Economics, Santa Clara University
Angelo A. Camillo, Assistant Professor of Management, Wine Supply Chain Management, Hospitality Management, Sonoma State University
C. Monica Capra, Professor of Economic Sciences, Claremont Graduate University
Kristine L. Chase, Professor of Economics Emerita, Saint Mary’s College of California
Lanhee J. Chen, David and Diane Steffy Fellow in American Public Policy Studies, Hoover Institution
Anna Choi, James Q. Wilson Visiting Professor of Public Policy, Pepperdine University
Mark T. Clark, Professor of Political Science, California State University, San Bernardino
Jeffrey P. Clemens, Associate Professor of Economics, University of California, San Diego
Thomas F. Cooley, Visiting Scholar, University of California, Santa Barbara
Dora L. Costa, Professor of Economics, University of California, Los Angeles
Christopher J. Coyne, Senior Fellow, Independent Institute
Julie Berry Cullen, Professor of Economics, University of California, San Diego
Carl R. Danner, Managing Director, Berkeley Research Group, LLC
Steven J. Davis, Senior Fellow, Hoover Institution
Arthur S. De Vany, Professor Emeritus of Economics, University of California, Irvine
Magali A. Delmas, Professor of Management, University of California, Los Angeles
Darwyyn Deyo, Assistant Professor of Economics, San Jose State University
Kai Ding, Assistant Professor of Economics, California State University, East Bay
Daron O. Djerdjian, Associate Professor of Economics, Occidental College
Lynne Pierson Doti, Professor Emeritus of Economics, Chapman University
John Duffy, Professor of Economics, University of California, Irvine
Richard V. Eastin, Professor Emeritus of Finance and Business Economics, University of Southern California
John C. Eckalbar, Professor Emeritus of Economics, California State University, Chico
Andrea Lynn Eisfeldt, Laurence D. and Lori W. Fink Endowed Chair in Finance, University of California, Los Angeles
Alain C. Enthoven, Marriner S. Eccles Professor of Public and Private Management, Emeritus, Stanford Graduate School of Business
Fulya Y. Ersoy, Assistant Professor of Economics, Loyola Marymount University
Williamson M. Evers, Senior Felllow, Independent Institute
Frank Falero, Jr., Professor Emeritus of Economics, California State University, Bakersfield
Mira Farka, Associate Professor of Economics, California State University, Fullerton
Roger E. Farmer, Emeritus Distinguished Professor, University of California, Los Angeles
Paul J. Feldstein, Professor Emeritus of Economics and Public Policy, University of California, Irvine
Matthew Fienup, Executive Director, Center for Economic Research and Forecasting, California Lutheran University
Morris Paul Fiorina, Wendt Family Professor of Political Science, Stanford University
Hartmut Fischer, Professor Emeritus of Economics, University of San Francisco
Marjorie Flavin, Professor Emeritus of Economics, University of California, San Diego
Fred E. Foldvary, Lecturer in Economics, San Jose State University
Roger Scott Frantz, Professor Emeritus of Economics, San Diego State University
Harry E. Frech, Professor of Economics and Technology Management, University of California, Santa Barbara
Gary M. Galles, Professor of Economics, Pepperdine University
Rodney J. Garratt, Maxwell C. and Mary Pellish Chair in Economics, University of California, Santa Barbara
Richard S. Gearhart III, Assistant Professor of Economics, California State University, Bakersfield
Adam Gifford, Jr., Emeritus Professor of Economics, California State University, Northridge
Peter Gordon, Professor Emeritus of Public Policy, University of Southern California
Shoshana Grossbard, Professor of Economics Emerita, San Diego State University
Stephen H. Haber, A.A. and Jeanne Welch Milligan Professor of Political Science, Stanford University
Dennis A. Halcoussis, Professor of Economics, California State University, Northridge
Bronwyn H. Hall, Professor Emerita of Economics, University of California, Berkeley
James D. Hamilton, Robert F. Engle Professor of Economics, University of California, San Diego
Gary D. Hansen, Professor of Economics, University of California, Los Angeles
Eric A. Hanushek, Paul and Jean Hanna Senior Fellow, Hoover Institution
Jorgen M. Harris, Assistant Professor of Economics, Occidental College
Steven F. Hayward, Senior Resident Scholar, Institute of Governmental Studies, University of California, Berkeley
H. Robert Heller, former Member, Board of Governors of the Federal Reserve System
David R. Henderson, Research Fellow, Hoover Institution
Matthew Hill, Professor of Economics, Loyola Marymount University
Hugo Hopenhayn, Professor of Economics, University of California, Los Angeles
Cenap Ilter, Professor of Accounting, California State University, Dominguez Hills
Ayse Imrohoroglu, Professor of Finance and Business Economics, University of Southern California
William P. Jennings, Dean and Professor of Finance, Emeriti, California State University, Northridge
Douglas H. Joines, Professor Emeritus of Finance and Business Economics, University of Southern California
Matthew E. Kahn, Professor of Economics, University of California, Los Angeles
Marek Kaminski, Associate Professor of Political Science, University of California, Irvine
Jerry Lynn Kirkpatrick, Professor Emeritus of International Business and Marketing, California State Polytechnic University, Pomona
Melvyn Barry Krauss, William L. Clayton Senior Fellow Emeritus, Hoover Institution
Robert C. Krol, Emeritus Professor of Economics, California State University, Northridge
David Lagakos, Associate Professor of Economics, University of California, San Diego
Man-Lui Lau, Associate Professor of Economics, University of San Francisco
Stephen F. LeRoy, Professor of Economics Emeritus, University of California, Santa Barbara
Tom K. Lieser, Senior Economist Emeritus, University of California, Los Angeles
Ethan A. Ligon, Associate Professor of Agricultural and Resource Economics, University of California, Berkeley
Ted Loch-Temzelides, Visiting Researcher, Institute of the Environment & Sustainability, University of California, Los Angeles
Peter Lorentzen, Associate Professor of Economics, University of San Francisco
Christiano Manfrè, Professor of Finance, Pepperdine University
Anthony M. Marino, Professor of Finance, University of Southern California
Michael L. Marlow, Professor of Economics, California Polytechnic State University, San Luis Obispo
John G. Matsusaka, Charles F. Sexton Chair in American Enterprise, University of Southern California
Lawrence J. McQuillan, Senior Fellow, Independent Institute
Tom Means, Professor of Economics, San Jose State University
Moritz Meyer-ter-Vehn, Associate Professor of Economics, University of California, Los Angeles
Thomas Gale Moore, Senior Fellow Emeritus, Hoover Institution
Robert J. Michaels, Daniel P. Hann Distinguished Scholar in Law and Economics, California State University, Fullerton
Paul R. Milgrom, Shirley and Leonard Ely Professor of Humanities and Sciences, Stanford University
Velma K. Montoya, University of California Regent Emerita, University of California
Marc-Andreas Muendler, Professor of Economics, University of California, San Diego
Michael Curtis Munger, Senior Fellow, Independent Institute
Thuy Lan Nguyen, Assistant Professor in Economics, Santa Clara University
Julia R. Norgaard, Assistant Professor of Economics, Pepperdine University
Lee E. Ohanian, Professor of Economics, University of California, Los Angeles
Sule Ozler, Associate Professor of Economics, University of California, Los Angeles
John K. Paglia, Senior Associate Dean of Academic Affairs and Professor of Finance, Pepperdine University
Damian B. Park, Lecturer in Economics, Santa Clara University
Jeffrey M. Perloff, Professor of Agricultural and Resource Economics, University of California, Berkeley
Rodrigo Pinto, Assistant Professor of Economics, University of California, Los Angeles
Benjamin W. Powell, Senior Fellow, Independent Institute
James E. Prieger, Professor of Public Policy, Pepperdine University
Valerie Ann Ramey, Professor of Economics, University of California, San Diego
Stephen J. Rassenti, Director, The Economic Science Institute, Chapman University
Joshua D. Rauh, Ormond Family Professor of Finance, Stanford Graduate School of Business
Gordon Rausser, Robert Gordon Sproul Distinguished Professor Emeritus, University of California, Berkeley
Justin Rietz, Assistant Professor of Economics, San Jose State University
Peter Rupert, Professor of Economics, University of California, Santa Barbara
Mark Schniepp, Director, The California Economic Forecast
Abbylin Hyun Sellers, Associate Professor of American Politics, Azusa Pacific University
Robert L. Sexton, Distinguished Professor of Economics, Pepperdine University
Kathryn Lee Shaw, Ernest C. Arbuckle Professor of Economics, Stanford University
Robert P. Sherman, Professor of Economics and Statistics, California Institute of Technology
Stephen Shmanske, Emeritus Professor of Economics, California State University, East Bay
William Franklin Shughart II, Research Director and Senior Fellow, Independent Institute
Randy T Simmons, Senior Fellow, Independent Institute
Brian P. Simpson, Professor and Chair of Accounting, Finance and Economics, National University
Mark A. Skousen, Presidential Fellow in Business, Chapman University
Vernon L. Smith, Nobel Laureate in Economic Sciences, Chapman University
Pablo T. Spiller, Jeffrey A. Jacobs Distinguished Professor of Business and Technology, University of California, Berkeley
Emily Stoper, Professor Emerita of Political Science, California State University, East Bay
Stuart C. Strother, Professor of Economics, Azusa Pacific University
Woody Studenmund, Laurence de Rycke Professor of Economics, Occidental College
Daniel A. Sumner, Distinguished Professor of Agricultural and Resource Economics, University of California, Davis
Yixiao Sun, Professor of Economics, University of California, San Diego
Shirley V. Svorny, Professor Emerita of Economics, California State University, Northridge
John B. Taylor, Mary and Robert Raymond Professor of Economics, Stanford University
Robert S. Taylor, Professor of Political Science, University of California, Davis
David John Teece, Thomas T. Tusher Professor of Global Business, University of California, Berkeley
Alexis Akira Toda, Associate Professor of Economics, University of California, San Diego
Aaron Tornell, Professor of Economics, University of California, Los Angeles
Theofanis Tsoulouhas, Professor of Management, University of California, Merced
Richard K. Vedder, Senior Fellow, Independent Institute
Graham H. Walker, Executive Director, Independent Institute
James R. Wallace, Associate Professor of Department of Business and Management, Azusa Pacific University
Gary M. Walton, Professor Emeritus of Economics, University of California, Davis
Leonard Waverman, Managing Director, Berkeley Research Group, LLC
Jeremy West, Assistant Professor of Economics, University of California, Santa Cruz
Robert M. Whaples, Senior Fellow, Independent Institute
Bruce Wydick, Professor of Economics, University of San Francisco
Paul J. Zak, Professor of Economics, Claremont Graduate University