19 Legislators Name on Gov. Newsom to Cease AB 5 from Hurting Truckers & Provide Chain

Final week, we blogged about California’s Meeting Invoice 5, also referred to as AB 5 and the gig employee invoice. After the U.S. Supreme Court docket determined to not hear the California Trucking Affiliation’s case in opposition to the invoice, it’s now set to be applied and will take as many as 70,000 impartial truck owner-operators off the street and away from the ports in California.

Clearly, that might be devastating for the provision chain.

Virtually a rating of California’s legislators petitioned the person who signed AB 5 into legislation, Governor Gavin Newsom, to make use of his energy to delay the implementation of the invoice or exempt the trucking business from it.

I wouldn’t maintain my breath on California’s governor truly taking optimistic motion, though the invoice threatens the provision chain proper as we’re hitting stride in worldwide transport’s peak season, when imports improve in preparation for the again to highschool and vacation procuring seasons.

Legislators’ Arguments In opposition to AB 5

The 19 assemblymembers who signed the letter did a number of issues in it to induce Governor Newsom to take motion.

First, the legislators highlighted the significance of the trucking business to California’s economic system and the provision chain, emphasizing that “the impartial owner-operator trucker has lengthy been the spine” of that trucking business.

Second, the lawmakers emphasised how AB 5 will damage these whom Democrats like Newsom make an enormous deal out of claiming they care about: minorities. The legislators write:

Inside California, the motive force workforce is comprised of a majority-minority demographic, with over 50% Latino, and an amazing share of small-business corporations that function 5 or fewer vehicles inside their fleet (91.8%). Sadly, these are the people who stand to lose essentially the most as AB 5 takes impact throughout the state.

Lastly, the assemblymembers argue that if nothing is finished about AB 5, it should add to inflation in California.

Greatest Probability for AB 5 Not Damaging the Provide Chain

Whereas the legislators don’t speak about it, the uncontrolled inflation is a big issue that might have residents voting sitting politicians out of workplace later this 12 months and within the 2024 election. Newsom has proven that he has excessive political aspirations, together with his eyes seemingly on the White Home, as he not too long ago ran unwise assault advertisements on Florida’s governor, Ron DeSantis. Maybe seeing the political hazard he’s in if issues get even worse with AB 5 may very well be the very best likelihood of inflicting Newsom to take motion.

The perfect likelihood, nevertheless, of the gig employee invoice not deeply hurting the trucking business in California and the bigger provide chain isn’t from the potential of Newsom utilizing his gubernatorial powers: the very best likelihood of restricted injury from AB 5 comes from how will probably be applied.

There are questions over how the invoice shall be enforced. If the laws is enforced to its fullest, tens of 1000’s of truckers shall be stopped from working the best way they presently do. With the actual fact we’ve already been going through a trucker scarcity downside for a few years, the injury this could do may very well be intense.

However, if implementation and enforcement of the legislation aren’t as strict as they probably may very well be, the implications clearly wouldn’t be as dire. Nonetheless, that’s a reasonably large gamble, and thus far, playing on Democrat insurance policies hasn’t been figuring out very effectively in California nor across the nation.

Full Textual content of Letter to Governor

Right here’s the complete textual content of the letter the assemblymembers despatched to Governor Newsom:

California Legislature

July 5, 2022

Honorable Gavin Newsom
Governor of California
1021 O Road, Suite 9000
Sacramento, CA 95814

RE: Request For Government Motion – AB 5 Implementation

Pricey Governor Newsom,

We, the undersigned members, respectfully request that you simply make the most of your govt powers to help the trucking business in California as they put together for the approaching implementation of AB 5 (Chapter 296, Statutes of 2019). As a result of Supreme Court docket’s determination to not hear the California Trucking Affiliation’s petition of the Ninth Circuit U.S. Court docket of Enchantment’s ruling, the destiny of California’s trucking business is in query.

The significance of the trucking business to the economic system of California, not to mention the US as a complete, can’t be understated. California’s rating as a world economic system is due partly to its capability to maneuver greater than 40 p.c of the nation’s merchandise via its ports. Nonetheless, the historic ongoing congestion felt at our State’s ports uncovered the dire want for a stronger and extra dependable provide chain infrastructure. To this finish, the state has brazenly expressed the necessity for an elevated workforce, but the out there provide of drivers, “owner-operator” or in any other case, shall be drastically decreased given the approaching utility of AB 5 to the trucking business.

The impartial owner-operator trucker has lengthy been the spine of the trucking business. There are roughly 500,000 owner-operators nationwide, constituting about 15-20% of your complete driver workforce. Inside California, the motive force workforce is comprised of a majority-minority demographic, with over 50% Latino, and an amazing share of small-business corporations that function 5 or fewer vehicles inside their fleet (91.8%). Sadly, these are the people who stand to lose essentially the most as AB 5 takes impact throughout the state.

Given the vital position of our truck drivers in sustaining our provide chain, we implore you to take any means inside your authority to both delay the implementation of AB 5 or exempt the trucking business altogether from the ABC check. With out speedy motion, we are able to count on a devastating discount in our driver workforce, particularly amongst minority-operated companies.

Moreover, with out speedy aid, the price of merchandise in shops will rise on account of greater transport prices. This can gasoline inflation, since transport is a key element within the worth of merchandise. Californians are already struggling closely from inflation and shouldn’t be subjected to extra worth rises on account of AB 5. At this vital juncture, we ask that you simply make the most of all sources at your disposal to stop this looming catastrophe.

Sincerely,

Devon J. Mathis
Assemblymember, twenty sixth District

James Gallagher, Republican Chief
Assemblymember, third District

Randy Voepel
Assemblymember, 71st District

Heath Flora
Assemblymember, twelfth District

Thurston “Smitty” Smith
Assemblymember, thirty third District

Kelly Seyarto
Assemblymember, 67th District

Steven Choi, Ph.D.
Assemblymember, 68th District

James Patterson
Assemblymember, twenty third District

Frank Bigelow
Assemblymember, fifth District

Marie Waldron
Assemblymember, seventy fifth District

Vince Fong
Assemblymember, thirty fourth District

Laurie Davies
Assemblymember, 73rd District

Kevin Kiley
Assemblymember, sixth District

Philip Chen, Ph.D.
Assemblymember, fifty fifth District

Janet Nguyen
Assemblymember, 72nd District

Megan Dahle
Assemblymember, 1st District

Suzette Valladares
Assemblymember, thirty eighth District

Tom Lackey
Assemblymember, thirty sixth District

Jordan Cunningham
Assemblymember, thirty fifth District

CC:
The Honorable Anthony Rendon, Speaker of the Meeting
Stuart Thompson, Workplace of Legislative Affairs – Governor Newsom
Suzane Sutton, Meeting Republican Caucus
Paul Costume, Meeting Republican Caucus
Lauren Prichard, Meeting Republican Caucus