Covid hurt the Arizona economy more than it did most states, with the Grand Canyon State ranking 12th in the nation for the biggest increase in unemployment and seventh for the number of small businesses affected by the pandemic.
In that time of economic hardship, the flexibility and additional income of independent contract work played a critical role in helping countless Arizona households make ends meet—in fact, nearly a third of all small business employees in Arizona worked as gig or independent workers in 2021.
But that income and flexibility could now be in jeopardy, and Arizona Senators Mark Kelly and Kyrsten Sinema may play a key role in protecting the livelihoods of gig workers across the nation.
President Biden’s Labor Secretary nominee Julie Su presided over the Administration’s proposed new worker classification rule last fall, which could force independent contractors and gig workers to reclassify as full-time W-2 employees. While intended to help contract workers access benefits and union protection, forced reclassification would wreak havoc across the economy and disrupt vital sources of income for thousands of Arizonans.
Senators Kelly and Sinema are some of the last senators to decide on Su’s nomination and the worker reclassification rule, and the stakes are high. Gig work in Arizona jumped by 255% from 2010 to 2020, resulting in over 500,000 gig businesses operating in the state in 2022. Reclassifying gig work would mean disrupting the livelihood and work opportunities of Arizonans across a number of sectors, including in transportation, healthcare, services, and more. And it could put already-struggling Arizona small businesses in even greater threat of going out of business.
The impacts of reclassifying gig workers would be felt across the country. A study conducted by the Chamber of Progress found that forced reclassification would result in job or income loss for approximately 3.4 million American workers, costing the nation’s most vulnerable communities more than $31 billion. That would be the biggest loss of workers and wages nationwide since the start of the pandemic.
We’ve seen efforts like this fail already. As California’s State Labor Secretary, Su oversaw the implementation of a worker reclassification regime, known as AB5. But Californians were so heavily impacted across multiple industries that the state had to repeatedly roll out exemptions to the bill.
And ultimately, California voters passed Proposition 22, a sweeping proposal intended to protect California gig workers from reclassification and keep their independent worker status. Notably, support for Prop 22 was especially high amongst Black communities, Latinx communities, and women.
If the next Secretary of Labor pursues worker reclassification on a national scale, the results would be disastrous. Freelance, independent, and gig workers make up 36% of all employed people in the U.S., and the gig work contributes more than a trillion dollars each year to the American economy.
Not only would reclassification hurt our economy on a macro scale, but it’s also something that gig workers and voters don’t want. Chamber of Progress recently released new voter polling showing that Arizonans value gig work for providing the ability to be your own boss, earn extra income on the side, and the flexibility that gig work provides.
Our survey found that 82% of Arizona voters believe independent workers should be able to choose for themselves whether to work as a full-time employee or in the gig economy. Even the Department of Labor’s own data shows that 79% of independent contractors preferred their arrangement over a traditional job.
I hope that Senators Kelly and Sinema will recognize that forced worker reclassification would cause millions of people to lose job opportunities and critical income for apparent benefits they don’t really want. Especially in a time of economic turmoil and recovery from the pandemic, breaking up such a significant contributor to the Arizona economy would only make things worse.