The United States national unemployment rate is 10%, even higher in many states like California. The judicial ruling passing Assembly Bill 5, providing gig workers benefits of employees, could worsen things. 

Assembly Bill 5, passed in 2019, designated that most gig workers will be considered full employees, meaning they will be entitled to minimum wages, benefits, and other protections. 

Rideshare companies like Uber and Lyft argued that the law should not apply to them. Due to the pandemic, rideshare companies were already dealing with dwindling demand. With this ruling, they faced high labor costs, which means the number of jobs in an already tight labor market will reduce further. Just when households need a source of extra income, the passing of this bill is making things worse.

Most of the gig or contract workers prefer flexibility and have opposed the passing of Assembly Bill 5. Many of them work for additional income from other jobs, and turning contractors into full-time employees makes them expensive for employers, which means fewer jobs. Moreover, converting freelancers to permanent employees destroys the flexibility of hiring contract workers. 

In the labor market, gig work keeps people active even when the economy is not in good shape. Long periods of unemployment can make it harder for people to find a job and may even erode skills. By doing part-time or freelance work, people can avoid falling into the trap of long-term unemployment. It not only provides structure but boosts morale.

The passing of Assembly Bill 5 was a bad decision as it took away the flexibility and freedom for gig workers to work for themselves.