Sen. Elizabeth Warren has a plan for everything, including a new one that would wreak havoc on the economy if it ever became law. The senator’s labor plan, which covers unionization, minimum wage, the election of company board members, and a host of other labor-related topics, would destroy the U.S economy as it now exists.
While the plan, according to Sen. Warren, is all about empowering American workers and raising wages, the truth is that a lot of workers would lose certain freedoms or even find themselves without a job altogether.
Independent contractors would be the first to take the heat. Sen. Warren’s proposal would force companies to treat these workers as full-time employees. The proposal is meant to ensure that the contractors receive steady pay and benefits, and that they have the right to form a union if they so desire. However, Sen. Warren doesn’t realize (or doesn’t want to realize) that many independent contractors work as such because they enjoy the freedom of working on their own terms.
Contractors can pick which jobs they want and which ones they want to pass up. They can work for more than one employer at the same time, and simply take off from work and go on vacation or attend to an emergency without receiving permission from a boss. That freedom ends the minute a contractor becomes an employee. What is more, there is a very real possibility that many contractors would lose their jobs altogether.
The state of California has already passed a law similar to the one that Sen. Warren is proposing. Recent estimates show that Lyft is likely to hire 300,000 fewer drivers than it would have otherwise. Independent contractors won’t be the only ones affected by this devastating new law. A lot of companies would let full and part-time workers go rather than go bankrupt trying to pay out a $15 minimum wage and shell out money for extra benefits.
Another big problem with Sen. Warren’s new law is that it would raise costs for everyone. Companies that operate with a narrow profit margin would have to raise prices to increase pay for workers. Workers would earn more money than before, but would then be forced to pay more for food, clothes, and other needed items. At the same time, companies would be forced to choose between total insolvency and offshoring to avoid Sen. Warren’s demand that corporations that make $1 billion or more a year have a board make-up consisting of 40% company workers. The value of these companies would plummet as shareholders would almost immediately sell out rather than work with a board structure that is not interested in maximizing profits.
The reality is that Sen. Warren’s great plan is all about maximizing government control over private industries. Entrepreneurs, small business owners, large business owners and the “hated 1%” would have no freedom to structure their business operations as they see fit. Federal government bureaucrats would get to determine how much a person is paid, how much say employees have in company operations, what benefits a person should receive, what terms and conditions of employment are offered and so much more.
Sen. Warren doesn’t care much about Democracy. As the Massachusetts senator admits, she would “boldly” use executive power to implement as much of her agenda as possible, without input from either house of Congress. Unfortunately, it will be poor and middle-class workers who will be hit the hardest.