Assembly Bill 5

Speaker 1: 00:01 The impact of a controversial, transformative new California law that turns independent contractors into employees with benefits, mission valley, San Diego's most dense community plans to add a city of 50,000 residents plus businesses and Susan Davis is leading her 53rd congressional district seat causing a stampede of would be replacements. I'm mark Sauer and the KPBS roundtable starts now. Speaker 2: 00:32 [inaudible] Speaker 1: 00:36 welcome to our discussion of the week's top stories. I'm mark Sauer and joining me at the KPBS roundtable today. Reporter Jennifer van Grove, a covers growth and development for the San Diego Union Tribune. Chris Genuwine, editor and publisher of the Times the San Diego and Michael smollins columnists for the Union Tribune landmark legislation passed in Sacramento this week, promises to transform our entrenched gig economy. It could mean pay guarantees and new job benefits for hundreds of thousands of California workers. It will also impact any number of businesses, large and small, employing workers now classified as independent contract contractors. That is from Uber and Lyft to health and construction workers, truckers, janitor, strippers, manicurist, freelance journalists. The bill ab five affects contractors not covered by laws guaranteeing minimum wage overtime leave, unemployment and disability insurance, workers' compensation and various workplace protections and businesses enjoying independent contractors don't pay into social security or Medicare for such workers. Hurry. That's a mouthful because this bill Chris is a mouthful. Start with first of all, how controversial is, and we're going to note that today you're kind of wearing two hats. You're a journalist covering this and you also own a small business here and we'll get to your opinion on that in a bit. Speaker 3: 01:51 Right? It cuts very close to home in my case, and we'll probably talk about that later, but it's controversial first of all because it affects so many people by some estimates. 2 million Californians are independent contractors and many of them like being independent contractors, they're software developers and music producers. They're not, they don't feel exploited. Uh, they like this. Um, another element of the controversy is the seeming unfairness of which occupations are in and which are out. There are 40 occupations that you mentioned. Some of them that uh, apparently because of political power we're able to be excluded from this. There's a lot of carve outs there, a lot of corners. Speaker 1: 02:29 Uh, so the basis for this law, what's the main argument of it's uh, author and we should say that's assemblywoman Lorena Gonzales of San Diego. Of course, a strong Labor back background Speaker 3: 02:38 here in San Diego. Yeah, absolutely. Her background includes being a union organizer. Uh, what teams were really back behind this bill, uh, unions. This is the single most important legislative achievement, uh, uh, possible this year for the union movement. Now the reason we have assembly bill five is in 2018, the California supreme court ruled in a case involving dynamics, a Los Angeles trucking company, um, that the contract truck drivers the company was using are actually employees. And in fact, what they, what they, um, ruled in this case was that if you are doing work that is substantially the same as what the company's business is all about, then you have to be an employee. You can't be an independent contractor. So if your business is journalism, that a reporter is an employee, if your business is trucking, that a driver is an employee. With that in place, there had to be some kind of bill to soften the edges. Speaker 1: 03:34 And, uh, there's, there's no opt-out. I mean, as we get into this bill, we assume the governance is gonna support it. Uh, he has said he's supporting that sign. It, I should say, um, workers. You're either in or out, but there's a bunch of carve outs as you say. And again, guns, Alison and other supporters of Ab five say it's about fairness to to workers, but yet it's controversial. Speaker 3: 03:54 Well, it is. I mean, the, the idea behind the bill is very laudable that there are workers in our society who don't have the protections. The traditional labor law provides those productions, of course. Um, disability insurance, uh, unemployment insurance, uh, training programs, uh, uh, lunch breaks, paid sick days, all those things. The issue though is that many independent contractors are, are fine with that. Take Uber and Lyft, the ride share companies that were the targets. If you're a driver, you know, whenever you want to, you open the app, you've got a few hours, maybe you have a whole day, whatever it is, you start driving. When you're tired of driving, you stop. You don't have to punch a time clock. You don't have to work a specific shift. It's up to you. That flexibility a lot like, uh, maybe there's some, uh, there would like to drive the whole day and, and work on the shift basis, but benefits and guarantees and all that, but others are using it just as a way to make a little bit of a little bit of extra money. And um, uh, you know, the same is true for a lot of, uh, professional, independent contractors like software developers and music producers. They make good money, they value their independence. They don't want to be on someone's payroll or working a shift. Speaker 1: 04:59 Now let's talk a little bit about the businesses. A lot of businesses say the law will cost them heavily. You mentioned Uber and Lyft. They are among those who want to fight this continuing on. And even though it's going to become law, apparently the state themselves say they're estimating up to 7 billion annually. They're losing in, um, I guess payroll taxes and revenue coming through that way. Um, so there's your real clash. Speaker 3: 05:21 It's potentially a clash. I mean, another way to look at this, um, yes, businesses will be affected. Uh, I've heard numbers as high as 30%. My own business is probably closer to 10%. Um, but, um, the, the state is losing out on, uh, unemployment insurance, the taxes that pay for that, uh, disability insurance and um, uh, training insurance. But you know, independent contractors aren't eligible for those programs. So it's kind of a wash. Yeah. The state could bring in more money, but the state would have to pay out more money when people got laid off and so on. So I think that's kind of a wash from a budgetary point of view. It's about a fairness union, Oregon and union organizing. Speaker 1: 06:00 And what about something like Worker's compensation? A worker gets hurt, who's in a Gig job? A, what? Do they have private insurance or they're opa-locka Speaker 3: 06:08 yeah, they're out of luck. Where they have, where they have private and private insurance. Okay. Um, and you know, in many cases people have multiple jobs, so they might be an employee, but then be working on a, uh, on a Gig on the side. Um, now, uh, one of the biggest, uh, issues that come up, uh, toward the end of this bill has been the carve-outs for specific occupations. The, um, and there's a, there's an element of unfairness perceived certainly, uh, to that. The congress department defines nearly a thousand different occupations in the United States. This bill carves out about 40. Now it's clearly the ones that have political power. You are the ones you would expect. Doctors, uh, insurance agents, real estate agents, uh, stock brokers, they've got carve-outs. Also, hairstylists have a lot of caught their, they've got a carve out. Here's some licensed professionals, right? No, there are some bizarre carve-outs, uh, repo man, private investigators. Electrologists um, but, uh, it clearly that the legislature did not go through all thousand occupations in the United States and carefully decide the merits of each one. This was all based on politics. And that creates an element of, of real, uh, perceived unfairness and continued friction. Jennifer, Speaker 4: 07:19 what, what I thought was a little bit interesting too was even though Uber and Lyft appear to be the targets here, it sounds like at least in the initial days after, um, that Uber has no intention of classifying their workers as employees. Speaker 3: 07:33 Yeah. They're almost defiant in their technology company. They say [inaudible] they say that they are, they do not believe their drivers are covered by this. Um, and that they will challenge it in court. So you could see on day one, uh, hundreds and thousands of Uber drivers still driving as contractors, even while small businesses in California have to comply. Lyft, on the other hand, notably, it's sad we're gonna comply. It'll cost about 300,000 jobs. Speaker 1: 07:58 No. Let's talk a little bit about the personally as a small business owner, there is, there is a, some break was given to freelance journalists, uh, right up there, I think 35 articles a year, writing five articles. You've got a staff of, what, about five explained to your, you lay that out an editorial, how it affects you as a small business owner. Speaker 3: 08:13 Um, I have, um, it's gonna increase my costs about 10%. Now that may not seem like much, but as a small business, that's my profit. That's my livelihood. Uh, right now I have, uh, five contributing editors who work on contracts. They work at home, flexible hours, use their own equipment. Um, uh, I don't really supervise them. They post whatever they want. Um, and they have other journalism customers, uh, as well. They, they like the arrangement. But, um, what's gonna Happen to me? I'll have to cut back on the hours. Uh, perhaps for two to Slee, one of those editors just got a full time job actually at the Union Tribune, but I won't replace that position. Now take those several hours, I'm going to have to cut back, uh, take that position. I'm not going to fill and multiply that by a hundred thousand or so small businesses in California. And there's a big economic impact. Right? Speaker 1: 09:01 And we're going to see that going forward here. Well, we expect the governor will sign the bill, but we're about out of time. But it looks like some legal challenges and going forward. A lot of clashes on how this might actually work out on the ground. Speaker 3: 09:13 Uh, yes, he's indicated, he indicated in a m op-ed on Labor Day in the Sacramento Bee that he is going to sign it. But he also told the Wall Street Journal last week that he's still negotiating with Uber and Lyft. We could have an outcome where, um, uh, Lyft lays off people. Uh, Uber says we're going to take you to court. A lot of California small businesses apply, uh, are, are affected by this and have to comply. Um, you know, one of the big challenges with Ab five is, uh, it's seeking to enshrine into law labor laws, dating from the era of rotary telephones and vacuum tubes. And I, I think California really needs a 21st century, uh, employment law policy. Speaker 1: 09:50 Well, it's interesting too, a, at a New York Times and all sorts of publications around the country have weighed in on this. It's, it's so many things in California. It starts here, may or may not be a model for the rest of the country, but people are watching it nationally. Well we are gonna move on much more on that in the future. I'm sure a city of 50,000 residents and 7 million square feet of commercial development will emerge and mission valley between now and 2050. That's according to the newly approved community development plan for the community that is already San Diego's most densely populated. And so Jennifer's start with this plan approve this week by the city council. What does it foresee? What's the [inaudible]? Speaker 4: 10:25 So the mission valley community plan update, which is now just the mission valley community plan, it um, it creates a new framework for mission valley. So it's a 30 year land use and planning document and we should know that every community has these three. One has them that usually have a 30 year life span. They're supposed to be changed every so often. Um, it just so happens that mission valley's old community plan was adopted in 1985. It was very car centric. So planners, city planners really felt like it was time to revisit mission valley. They started that process in 2015. Here we are today and they really feel like mission valley can absorb, um, 28,000 residential units, um, possibly 20,000 new workers, which will shift, um, the population of mission valley to two thirds workers, one-third, um, residents today to roughly 50, 50 by 2050, which is the build out year. Speaker 1: 11:23 And, uh, that's, that's mixed juice. That's residential is as you say, uh, residential units, as you say, all sorts of things are going in there now. And as we noted in the outset Speaker 4: 11:34 already pretty crowded there. It is crowded, there's a lot of traffic and some very key, um, trafficky areas, friars road and particular. Um, but what the city really wants to do is refocus, uh, mission valley along the river and to take advantage of that trolley line that they had there. And there's, um, an additional purple Charley Line plan for the area and there's a, an additional trolley stop that's planned as part of the future riverwalk development, which would replace the golf course on the western side. But the idea is flip mission valley's model from commercial to residential and commercial or mixed use in, in I'm zoning speak and then you will balance out the people there and in theory that should create for less traffic on the roadways. They want people on bicycles, they want more friendliness and focusing their attention on making the river the organizational spine. They would like to see what's called the San Diego River pathway. They would like to see that completed from the ocean to the hills. Um, the way that happens is developers have to come in and redevelop properties and then take on parts of the pathways part of their project, but they've identified 17 miles of additional, um, bike path in mission valley. Speaker 3: 12:47 Chris, you're going to get on your bike and ride down this available. Well, you know, it's, one of the things that strikes me is that whenever I go down there, I'm seeing more and more new development, like the big Savita on center that has things like bike paths and parks and whatnot. Is that, would that be kind of a model for what the rest of it? Yeah. Speaker 4: 13:03 Yes and no. The problem with Savita is it faces inward. And so what the city would like to see is they would like to see big projects like that connect to each other. And so what they've done is they're going to kind of basically resend all the community plan ordinance and rezone all that mission valley. And in doing so, most of the zones will be this brand new mixed use stone. And that sounds like jargon, but it's not because part of that zoning requires developers to build pedestrian piss sales, not just through their own projects, but to connect to the other projects. And so in theory you should want to go from Savita to the project next door or from riverwalk to um, you know, whatever happens, uh, across fashion valley mall down the middle of the big city. Absolutely. Speaker 5: 13:49 Michael, I think a lot of us have, you know, could we were familiar with mission valley and a, you know, people say you're going to put how many there because we're familiar with the traffic, right? It wouldn't work that way. Obviously it's built on a sort of a different concept. But what I find interesting is that, you know, we've all had stories about the, the slowdown in home construction. Uh, the number of permits is at a low San Diego was the lowest in the first six months. Uh, San Diego County of the entire state, yet it's at City Hall methodically. They're going through and doing w what they've done in mission valley to various other communities. Uh, they just did the, the sports. We're in a midway district where they have big plans for the future to really ramp up housing density there a, the Granville community, which most people don't know about. Speaker 5: 14:27 It's just north here of a San Diego state. Uh, they're really welcoming it. A lot of people don't like the new development. They, you know, that's sort of an aging industrial area and they think they can become like the next a little Italy. So it's just interesting. Um, in a way while there's this, this building slow down to San Diego's out of laying the blueprint for a well, a sort of a building boom in the decades to come. Now that doesn't guarantee more affordable housing. It doesn't mean that it's going to speed up development. There's a lot of issues there with fees and regulations that people will have to overcome. But it is kind of interesting that with all this hue and cry about not enough housing that San Diego Elisa's laying the groundwork to, to really increase it a great deal. Speaker 4: 15:07 Right? And Mission Valley, if you're a city planner, if appears to be the perfect location to put all this housing because it does have transit already. And so, um, because of that connection, they really feel like this area can, can support that additional density. Speaker 5: 15:23 There's not a lot of opposition from existing homeowners. Is there, because you don't have single family homes, Speaker 4: 15:27 you saw it's, it's something like 99.5%, um, is multifamily. Um, there are, you know, owners of Condos, um, owners of townhomes, however it is, it is a renter's community. And I think that the, um, you know, maybe some of the opposition would, would have come through from some of those people and, and there have been some sticking points, right? So there's condos next to the river walk golf course, which is in the process of being redeveloped in and they take some issues, um, with that project. But that's on a project level. And I think, you know, some of the residents that did come out to city council were like, you know, we're willing to add housing at a time when people are saying, don't put it in my backyard. You know, we're, we're pretty special in that regard. Speaker 1: 16:14 So, uh, before we leave this topic, I did want to briefly talk about the, the big dog here, which is redeveloping the big stadium site. Of course San Diego States in the midst of negotiating with the city and, and doing that. How's that going? Kind of give us a thumbnail up. Speaker 4: 16:28 I wish I could tell you how negotiations, where we're going. Um, unfortunately if they're keeping things pretty close to the chest. I do think the fact that, you know, this, um, SDSU west measure was passed in November. Um, and we are now in September and we haven't seen an agreement shows that there are probably some really difficult sticking points. Um, but that's not stopped me to SDSU. So they've already released, um, their draft environmental impact report, which if you look at a city agency that sometimes takes up to two years to release, they did it in less than six months. And so that is out for now a comment period. It's thousands and thousands and thousands of pages of information. It is so much information, thousands of pages on, you know, what the impacts could be of their development. And there's a lot, um, particularly traffic. But um, so that the builder too, they've got the fancy drawings. You've hired contractors, they have, they have other projects out for bid. They're trying to hire a marketing expert. They are full steam ahead because what they want to do is they want to break ground early next year and get that stadium ready for 2022 football season. Speaker 1: 17:37 Wow. Another long talk for another day, maybe several days. Then the demolition of the stadium alone is a is mind boggling. But we'll get to that another time and move on. Well, after nearly two decades in Congress, Democrats, Susan is standing down and that's set up a scramble among aspirins for California's 53rd district seat in the House of Representatives. And here's what the Susan Davis told me about why she's retiring from Congress. [inaudible] Speaker 6: 18:01 if I know this situation, since I went back and forth, as you can imagine, uh, a few times was, had really more to do with my own clock, uh, and my own interests and the, the feeling of having accomplished, I think a great deal in the congress. Yeah. Speaker 1: 18:19 All right. Long time there. But Michael had first delay, the, the scope of the land here. Where is this district? And it's considered pretty darn safe for Democrats. [inaudible] Speaker 5: 18:27 it is a, as we've talked about before, we went on the air, Hillary Clinton won the district by 35 points. Now that's against Donald Trump. I think a different Republican might've done better, but it is pretty safe. A ground and the Democrats have a heavy voter registration advantage, but it goes basically from, I think like the edge of mission hills. Uh, all the way. It sort of straddles interstate eight and goes out to El Cahone and then swings down to, to Oh Mesa. So it covers a lot of ground like congressional districts do, but also a lot of different kinds of communities. Uh, but it is very democratic Speaker 1: 19:00 one part of the mission valley, which we were just talking about. And you noted in your column that the a safe status will make fundraising difficult for Democrats. Speaker 5: 19:08 Well, I has, I like to France, I always reserve the right to be wrong. Um, but it's going to be such a, every election year is a big year. Next year is going to be huge. And, uh, there's such a fight in co to, you know, for the control of the house, the Democrats want to hold onto it. The Republicans want to take over. The Democrats are pushing to Eh for majority in the Senate. And of course then there's the presidential race. So in a district where there's almost, I don't want to say no, there's no guarantees, but very likely a by a huge you 90 odd percent that's going to be a democrat. Will it be more difficult to raise money there? Uh, certainly people have their donors and stuff, but I think that weighs into the larger chess board aspect that this is not a swing district. Speaker 1: 19:49 Alright. And as we said, once a, a congresswoman Davis said, I'm not going again my, I'm done with this seat. All of a sudden a bunch of folks came forward here. Tell us some of the, uh, the, the bigger names that the people might [inaudible] Speaker 5: 20:01 I know I lost kind of, I think you know, everybody, a lot of names get thrown against. While, I think you were mentioning like, you know, 12, 15 names, but let's talk about who is in a, it's Sarah Jacobs, uh, the granddaughter of Irwin Jacobs, Cobra, founder of Qualcomm and supporter of the station I should say, and that transparency and a, he's a very wealthy, she's had money to spend on political causes including her own before. Uh, Georgette Gomez, the city council president. Uh, she's in, she's going to have a formal announcement on Saturday, but she's told that she's created a committee, told, uh, her constituents. So those are really two, the, the big candidates. There were a couple of lesser known people already in, uh, Jose Caballero, a navy veteran who had run for city office before and he's, you know, among the Progressive Democrat core and another fellow named Mo Joaquin Vac Vasquez, who was a mid low level advisor in the Obama administration. And then the one republican that's announced is a, I have a list here is um, a familiar Ramos. She's a hospice nurse. She's also a anti-abortion activist. Um, you know, that, is that a good fit for the district? May Be, but it's going to be a tough road that we haven't seen a lot of name Republicans, uh, expressing consideration yet til the ball players were low scored. Speaker 3: 21:12 Correct. Chris? Yeah, I was gonna say, I think we, there, there may be more coming. There's Ray lutes who's floated a long time on environmental activists last night. We haven't checked here since we went on the air. You know, one thing that struck me about your, at Goldman, this is upcoming official announcement. You know, she's in a very powerful position right now, city council president, chair of MTS, very soon to be heading for a higher office. Well, the first term debate Speaker 5: 21:38 on that, that, that and a, you know, Georgette Gomez has actually, that's been very impressive in terms of rising to that. Uh, she, you know, became a council president after just two years on the council and the, as you point out, the head of the Metropolitan Transit System Board, um, she's young and she's gotten, she was actually up for reelection. I was going to run for reelection. So you'd only think that her influence would grow. But there our city term limits and you're limited to two terms, the attraction to Congress in addition to dealing with a lot broader issues with two people feel they can do more there in some cases, uh, that, that, you know, basically if you're in a so called safe district and you don't get into trouble and you're relatively popular, you can stay almost as long as you want. And that appeals to people because it takes a long time to get seniority in Congress. Speaker 5: 22:23 She's young and who knows what her future would be, but it really, there has been among the politicals in town a real debate like why would she leave this? But, uh, obviously she has her sights set on that. And you wrote the Chia might have a, a bandages over at Jacob's well, yeah, they both have advantages. Uh, you know, we've talked about the fundraising difficulty that some may face, I'm not saying all but a certain, the, the, the lesser known candidates, uh, Sarah Jacobs has millions of dollars at her disposal. She spent millions of dollars of personal family money when she ran for Congress in the 49th district, which Darryl Leisa left and Mike Levin ultimately won. Uh, so she can jumpstart that. Uh, what I think that that, uh, Gomez brings to the table. In addition, she'll be able to raise money, but she's really been a community organizer, community activist and a lot of the party infrastructure. Speaker 5: 23:09 You know, the democratic clubs are of like people, they're sort of the progressive wing of the party, perhaps even a little more liberal than the district at large. And those clubs have a lot of influence on the party endorsement. Does that mean she'll get it? Who knows? But, uh, there's, she is probably a better known entity in that district because our Council district overlaps with some of it. Uh, one of the things I had also mentioned that you don't about Sarah Jacobs. She, she, she ran for that congressional seat up north. She was talked about to run for a Scott Pieter seat, uh, in the more Western 52nd district. And when Peter's was almost certainly gonna run for mayor and he didn't. And now she's, so there's, we'll, we'll the the seat shopping or district shopping wrap, uh, hurt her at all. I don't know. Right. Speaker 1: 23:51 I wanted to ask a about another powerful name in the cow in Sacramento. Tony Atkins. Speaker 5: 23:57 Uh, she said she's not going to run. I mean, Tony is a, you know, she's the Senate, uh, of the, the, I'm sorry, the president of the Senate. A very influential position. Yeah. You know, one of the most influential people in the state, to be quite honest with you. I think that also that ultimately she'll face, she faces term limits. Is there a statewide office in her future? I W I'm sure she's considering those options. So, uh, the, she clearly, you know, perhaps unlike Georgette Gomez, which is a much lower thing but a place of influence, she figured she's staying put right now there. Speaker 1: 24:26 All right. And we're almost out of time, so I won't dive into the entire thing going on in the, uh, Duncan Hunter district out there. We'll save that for another, another time. But you did make the point, the complexion of the San Diego, a congressional folks is going to change his name. Speaker 5: 24:40 It's been a very, you know, they, they have partisan differences there, but they, when it comes to San Diego issues and even earlier players, they really came together and actually I've seen them on stage together at certain events. They, they're very collegial. Uh, I'm not saying that's going to go away, but it takes time for new players to, to come in. And also you have this at matter of seniority. I mean, uh, Susan Davis was on the House Armed Services Committee for almost 20 years. She was the second ranking Democrat that means something and bring in terms of bringing home the Bacon, uh, to San Diego. And uh, we'll see how, where people end up in and what committees, uh, after this election. Speaker 1: 25:13 So much to talk about. So many segments that come. Well, that's great. Good, good reporting on that. Well, that wraps up another week of stories at the KPBS round table. I'd like to thank my guests, Jennifer van Grove at the San Diego Union Tribune. Chris Genuwine of times of San Diego and Michael Smollens also of the Union trivium. Now an important programming note. Next week, KPBS is joining hundreds of news organizations from across the globe to bring home the urgent need to confront the realities of our glomming a warming planet. Our special coverage of San Diego's climate crisis begins on Monday on KPI KPBS radio, television, and on KPBS dot o r g. And we'll devote next week's round table to this vital topic. I'm mark Sauer. Thanks for joining us today. Be sure to join us next week. Thank you.