I have long feared that the Biden Administration would emulate the disastrous, anti-worker policies of California. The Administration’s recent nomination of California Labor Secretary Julie Su to lead the U.S. Department of Labor suggests that my fears may be turning into reality.
California’s labor policies do not put American workers first, but the Biden Administration has already shown an alarming tendency to follow their lead. Despite a comprehensive study that found that past minimum wage increases in California have led to significant reductions in employment in the state, especially in industries with lower paid employees, President Biden signed an executive order that increased the federal minimum wage to $15 an hour. This nearly matches California’s current minimum wage of $15.50. The Biden Administration also seems to be ignoring the fact that for every 10% increase in the minimum wage over the last 30 years, California has experienced a nearly 5% reduction in employment in low-wage industries.
It’s no coincidence that California has the highest cost of living in the continental United States. When politicians raise the minimum wage, workers bear the cost, as the resulting price increases often burden the low-income groups that the minimum wage increase is designed to help. American workers cannot afford to see California’s minimum wage policies go national.
But the Biden Administration has not just focused its efforts on increasing the minimum wage. The Biden Department of Labor has also proposed a rule right out of California’s playbook that would make it more difficult for workers to choose jobs as independent contractors. The department’s current rule, which was instituted by the Trump Administration, uses two clear factors to determine whether a worker is an independent contractor. In contrast, the Biden Administration’s new rule, the so-called “totality of the circumstances” analysis, is unnecessarily confusing and may be used to scare businesses into not utilizing independent contractors at all.
New regulations like these move the entire country closer to California’s anti-worker contracting law, which places such burdensome restrictions on independent contractors that it outlaws many business models. Hundreds of freelance careers, from bloggers to music teachers to independent truckers, have been damaged by this law. Many of those affected have shared heartbreaking stories about losing their incomes, their clients, and their livelihoods.
The Biden Administration pulled their new rule straight from California, and American workers will suffer if it is implemented. Policies like this do not recognize that many businesses cannot operate profitably under an employee-only model, and that many workers want the flexibility that comes from being a contractor. This rule is one of many modeled after California’s policies that would reduce American workers’ freedom to choose employment that works best for themselves and for their families.
These policies are a major reason that California, despite its significant natural resources and stunning climate, has seen its population decline for the last three years in a row. California has now lost almost 2 million people to interstate migration since 2010 and experienced the largest one-year exodus from the state on record in 2022.
Along with this exodus of people, businesses have been leaving California at an alarming rate. According to an analysis by the Hoover Institution, 352 firm headquarters left California from 2018 to 2021. New research from the Los Angeles Area Chamber of Commerce reports that the number of businesses leaving the state nearly doubled between 2012 and 2019, confirming that these departures began long before the pandemic.
The Biden Administration wants to make California’s labor policies the standard for the entire Nation. But if they did so, where would people move to escape these burdensome regulations?
Linda McMahon is the Chair of the America First Policy Institute and the former Administrator of the U.S. Small Business Administration.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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