Handcuffing freelancers is bad for the economy and small businesses


Solving the persistent problem of inflation requires pro-growth fiscal and regulatory policies, in addition to concerted tightening by the Federal Reserve. Unfortunately, President Biden’s plan to fight inflation, as described in his recent Wall Street Journal op-ed, would implement the exact opposite.

Instead of empowering entrepreneurs to accelerate growth and improve prosperity, President Biden’s plan calls for government-led growth that imposes more regulations and increased government spending on an already volatile economy. The increase in federal spending is simply unsustainable and one way or another will burden the economy with an unaffordable increase in the tax burden.

The results of anti-entrepreneur economic policies, exemplified in states like California, demonstrate the folly of President Biden’s approach. These states handcuff their risk takers by enacting policies that make it harder for entrepreneurs to succeed. Their policies impose high taxes, burdensome regulations and make it difficult to obtain professional licenses and business permits.

In fact, when President Biden champions the PRO Act, he’s pushing legislation that’s already in effect in California, Assembly Bill 5. Under AB 5, freelancers, especially those working in the gig economy, have been reclassified in a way that makes it difficult for most of them to work as independent contractors. It is anti-worker, anti-employment, anti-entrepreneur and anti-freedom.

The benefits of the gig economy accrue not only to independent contractors who want to be a sole proprietorship, but also to owners of local shops and businesses who have found locating the right workers to be one of their biggest problems. urgent. With versatile workers free to work on a wide range of projects by moving seamlessly from one company to another, small business owners can more easily find workers with the skills they need, allowing them better manage their operations.

California passed the anti-entrepreneurial AB 5 in 2019, but job losses and missed opportunities started piling up before the bill even became law. Reflecting these costs, it is current and potential gig workers who have been most outraged by the implementation of AB 5. Surveys show that gig workers don’t want to work traditional, 9-to-5 , waiting for the whistle to sound, unionized jobs.

Freelancers in many fields have harshly criticized state lawmakers for denying them the freedom and flexibility of gig work, holding rallies at the state Capitol and across the state. Opposition to AB 5 led to widespread support for Prop. 22, which essentially exempted drivers and delivery people from the AB 5 regulations. The PRO law would cause similar damage nationally.

Unlike California, Texas takes a leaner tax and regulatory approach, which pays economic dividends. According to WalletHub, Texas is the best state to start a new business. The Motley Fool ranks Texas fourth for startups. Every day, more than 400 Texans start a new business, and just over half (50.9%) of those are expected to last five years. Robert Allen, president and CEO of the Texas Economic Development Corporation, says entrepreneurship is a “Texas mindset.”

But economic dynamism is only part of the story. Entrepreneurship also creates significant economic benefits for minority communities.

Only Hawaii, at 54.7%, has a higher percentage of minority-owned small businesses than Texas, which logs in at 39.3%. According to research from FitSmallBusiness.com and YouGov, Texas is second — Georgia is first — on a list of top states for black entrepreneurship. Minority entrepreneurship is key to empowering people economically, lifting the poorest out of poverty and improving social mobility. Entrepreneurship, according to the Hamilton Project, “can also help close the gender wealth gap.”

Dealing with growing economic uncertainty, rising inflation and falling consumer confidence requires a pro-growth economic response from Washington DC.


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