To Protect Ag, Time for California to Roll Back AB 5 – Pacific Research Institute

To Protect Ag, Time for California to Roll Back AB 5


When rampant inflation and government policy collide, independent workers and consumers bear the brunt of the consequences.

The recent enforcement of California’s AB 5 is beginning to ripple through California and, by extension, the rest of the country. The law, intended to provide guarantees to independent contract employees for paid leave, medical insurance, and equal pay, has been called a push to force independent workers out of the employment arena by independent truckers.

Last week truckers staged a walk-out at the Port of Oakland to bring more attention to the problems with the law. Specifically, that AB 5 makes it difficult for independent truckers to maintain their autonomy and compete with unionized trucking companies for the same work.

The Port of Oakland is the largest U.S. hub for the shipment of chilled meat products to other Pacific ports, particularly in Asia. The walk-out of independent truckers forced value-added “chilled meat,” which has a limited shelf life to be frozen, losing its value in overseas markets, to avoid spoilage. More than 60 percent of Japan’s beef is exported from the Port of Oakland along with more than 70 percent of Japan’s pork.

Pacific Coast ports like Oakland and Los Angeles are hubs for food export and import, representing significant gateways for food in and out of the whole U.S. Walkouts by truckers in California, in turn, cause food shortages and increased food costs across the country by virtue of limiting access to food across the supply chain.

For example, truck shipments in California represented more than $1 trillion in value, trailing only Texas in value of shipments trucked in 2017, the most recent year data is available. Among those valuable shipments, approximately $34 billion in food items were shipped by truck across the U.S.

According to some industry statistics, independent truckers make up about 9 percent of truckers in the United States. There is an estimated driver shortage of 80,000 people that has not been addressed through policy or industry changes, adding to the challenges presented by AB 5.

As food costs soar, adding an average of $400 a month to a family’s grocery bill, increasing that burden by limiting food on the shelves through interfering with truck availability is adding insult to injury. The California Supreme Court declined to review AB 5 in June creating the current enforcement issues.

If the goal of AB 5 is truly to ensure independent contractors have access to the benefits afforded to regular employees, members of the California Assembly should suspend the implementation of AB 5 until a stakeholder process can be completed to consider the real needs of independent contractors. Specifically for the betterment of the law and the broader needs of the country. The U.S. is already burdened by overly myopic laws enacted by California’s politicians like Prop 12, do California’s lawmakers really want to be responsible for adding to the inflated cost of food?

Pam Lewison is a farmer, Pacific Research Institute fellow, and director of the Washington Policy Center’s Initiative on Agriculture.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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