Is this the End of the Entrepreneur?
by Rosemary Becchi
People in New Jersey work hard, most with the dream of building a better life for their families.
Those with enough determination and grit supplement day jobs by working as independent contractors, putting their special skills to use after hours and on weekends. Others do it full-time because they like the flexibility of working for themselves, and others do it because they can’t leave their homes for traditional jobs.
Many just hope to build their own company one day. It’s a classic tale of the American Dream, one being pursued by more than 10 million people, according to the federal Bureau of Labor Statistics.
So why on earth are the people representing us in Trenton and Washington D.C. trying to destroy that?
Our state Legislature has recklessly fast-tracked a law that could effectively kill any chance of people working in New Jersey as an independent contractor. Similar efforts are afoot in the U.S. Senate and in Congress, and California industries are already in turmoil over a similar law slated to go into effect in January.
We are looking at the very real possibility of killing the business of every real estate broker, designer, hairdresser, freelance writer, photographer, and truck driver who chooses to work as an independent contractor. Imperiled as well are many unseen professionals, from on-line teachers to aids for the special needs community.
Ironically, the law in New Jersey is largely being pushed by legislators who also support Governor Murphy’s plan to build what he calls an “innovation economy” — a plan he says will be realized by encouraging more entrepreneurs.
So why is this happening? Why now?
Paternalistic advocates in D.C. and New Jersey claim they want to protect the workers — although fewer than one in 10 independent contractors nationwide report that they prefer a traditional job over their entrepreneur effort.
What stirred the pot was car-ride companies like Lyft and Uber. New Jersey, like other states, fined Uber $649 million recently, accusing the car service of violating state labor regulations by treating its drivers as independent contractors when, the state claims, they should be treated as company employees.
“Misclassifying” workers, as it is known, is traditionally a problem in the construction industry. Some unscrupulous builders try to avoid paying FICA, unemployment insurance and other taxes on their workers by classifying them as independent contractors instead of company employees. The companies also try to avoid paying traditional benefits to the employees.
It’s wrong when it happens, and labor officials on the state and national level have always prosecuted errant companies. In fact, New Jersey’s Department of Labor and Workforce Development regularly publicizes the cases it prosecutes.
But anti-Capitalism activists and the reckless career politicians vying for their support have used the clamor over Uber and Lyft to create a false sense of urgency. They are now doing what they always do — creating panic and conjuring a nuclear-weapon solution to obliterate the perceived problem, along with everything else around it.
Any sense of responsibility to the American public is being blown away, along with all appreciation for independent contractors and the advances enjoyed by everyone in America because some entrepreneurs walked away from traditional employment.
These workers want to continue America’s traditional independent contractor model: to hone their valued skill, knowledge or talent; freely sell their services; set their own schedules; invest in themselves, and take ownership of their work in a way that is often impossible in a traditional working arrangement.
Stunned by this surprise attack on their livelihoods, independent contractors are now reaching out to legislators. But they are discovering we are leaderless in both Trenton and Washington.
The career politicians are fixated on moving sweeping laws instead of rethinking the effort. In New Jersey, we have mild appeasement. Politicians say they are crafting a list of independent contractor classifications to exempt from the new law.
But it seems insincere given these same politicians lacked the vision in the first place to realize the adverse impact their ham-fisted efforts will have on entrepreneurs. It is stunning they did not sit down with the business community before launching this folly.
We need to stop this job-killing juggernaut. We need real leadership on this issue, and all other issues in both Trenton and Washington. We need thoughtful people who will take reasoned approaches to solve problems, without creating new problems.
New Jersey, and the rest of America, deserves better than this.
Rosemary Becchi is Strategic Advisor and Counsel at Brownstein Hyatt Farber Schreck and Founder and President of Jersey First, an advocacy organization dedicated to advocating for lower taxes and less spending in New Jersey.
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