LOS ANGELES — Mike Garcia, a Navy veteran and new face to Republican politics, has defeated his Democratic opponent Christy Smith in the special election for the 25th Congressional District, thanks in no small part to the strong support he received from California’s freelancers and self-employed.
In the weeks leading up to the special election, Assemblywoman Smith doubled down on AB5, and as a result she lost support on both sides of the aisle. In an interview, Smith claimed that the self-employed do not pay taxes, accusing independent contractors and their hiring entities of tax evasion. In fact, freelancers pay the self-employment tax, a 15.3% tax that funds Social Security and Medicare, in addition to federal and state income taxes. In a subsequent interview, Smith ignored the urgings of her constituents and continued to insist that the self-employed “don’t play by the rules.”
Smith’s unfounded and inaccurate comments laid bare her disdain for the self-employed and played a major role in her defeat by Republican Mike Garcia. California’s freelancers, in turn, made their disdain for Smith known at the ballot box, handing Garcia a full twelve-point victory over Smith in a race that was expected to be close. Get the memo, Sacramento! There is a direct correlation between a legislator’s support of AB5 and bipartisan voter opposition, and this correlation is only growing stronger as more people become aware of the destructive effects of AB5.
We are The People v. AB5, a nonpartisan grassroots organization fighting for the freedom to freelance. We are freelancers, sole proprietors, self-employed individuals, professional service providers, and small business owners who are fighting for our livelihoods and our ability to make a living. Five months into 2020, AB5 continues to inflict pain upon our community. First, AB5 stopped 375+ professions dead in their tracks on January 1, 2020. Then, the COVID-19 crisis began, and thousands of freelancers who are following state and local guidelines by staying at home remain unable to use their time, skills and internet connections to generate income. Finally, the California Employment Development Department has continued to weaponize AB5 by issuing audit notices to small businesses throughout the COVID-19 crisis without so much as a flinch – notices which come with the threat of thousands of dollars in fines and associated legal fees. The effect is that many businesses are closing up shop and many professionals are considering leaving the state. The damage to families and livelihoods is irreparable.
Like Smith, Assemblymember Lorena Gonzalez, the sponsor of AB5, has repeatedly dismissed the concerns of freelancers and the self-employed, instructing them to go talk to their local union about the possibility of an exemption. And Governor Newsom, upon being asked in a news briefing about jobs killed by AB5, replied that he wasn’t sure that AB5 killed any jobs. Nor do the various “exemptions” offered by our lawmakers solve the problem; the recently-proposed musician exemption, for example, introduces at least a dozen new terms and definitions into the Labor Code, none of which have been interpreted by the EDD or the courts. The result across all industries is that more and more out-of-state companies are issuing notices that they will no longer contract with California freelancers out of fear of the expenses, fines, and litigation fees associated with AB5. Californians cannot and will not adapt to this new normal where the effect of needlessly complicated laws is to effectively outlaw virtually all independent contract relationships. There are over a million independent contractors spanning 375+ professions in California, and nearly all of them have had their ability to earn an income affected by AB5 in some way.
Mike Garcia’s victory is a victory for the independent contractors and freelancers everywhere.
Come November, California’s self-employed will not forget which politicians are responsible for AB5.
Read more at thepeoplevab5.com/blog and join the group The People v. AB5 on Facebook.
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Thank you Debra! AB5 is a devastating blow to small businesses and to those who choose to be self-employed. Not everyone wants or can work a 9-5 employee position. AB5 is masked as pro-worker but if you actually ask the workers you’ll find for most it is quite the opposite.
Thamk you for giving coverage to this bipartisan nightmare. The disdain shown to hard working tax paying CA citizens has been truly despicable. Lorena Gonzalez is not clueless about what AB5 has done to the self employed..she knows and simply does not care. Her twitter posts and responses show her disdain for anyone who dares to freelance as according to her they “arent real jobs anyway”. Well, we are real voters and many of us are now working towards the goal of ensuring her unemployment.
Then there’s Hannah-Beth Jackson’s comment that “Freelancers are just upset that AB5 took away their lollipop.” Such disdain for hard working people!
But they don’t pay taxes. Ignorance on top of disdain. When I did freelance consulting in addition to a regular job, my effective tax rate on that income was 47%! But I guess that wasn’t enough.
Thank you for this write up. Who the hell are these politicians to take away our right to be self employed? This is still the USA, right? I am a musician and I know they recently did a carve out for many musicians, but there are hundreds more professions devastated. #RepealAB5
Thank you so much for this article, we don’t have the financial needs to fight this bill on a large scale, and we appreciate the help… truly appreciate it.. this bill is or should be unconstitutional
Thank you VERY much for your story! I spent seven years in college, on two degrees, so I could work in the non-profit performing arts sector. I helped bring joy to thousands of folks and was able to supplement my two children’s special needs education. This would not have been possible in a 9to5 job.
Plus, it’s my choice, right? Thanks again.
Thank you to Debra Tash for letting people know!
What Lorena Gonzalez and Governor Newsom are doing is nothing less than “Restraint of Trade.”
As a professional Comedian and Magician, I have – so far – been unable to continue my 40+ year profession in California because of AB5. My biggest annual client instructed me that they could no longer book my under the law. Talent agents have told me the same. Prior to the pandemic shutdown this year, my only income came from out-of-state bookings. Ironically, it is NOT illegal for out-of-state performers to come in and perform, and then take the money back out of state. California gets no income tax from that, but they would have from us.
Politicians take note: After living in California all of my life, I should not have to move out of California simply to continue my career and earn a living.
Thank you for this write up!
As a business owner, AB5 prevents me from using Independent Contractors from my profession. Even for a one day project. This makes it impossible to be flexible and denies Independent Contractors of business. It’s a lose lose situation.