PPP vs. PRO: A textbook case of cognitive dissonance in Washington

Democrats care deeply about me and therefore want to save my small business.

Democrats care deeply about me and therefore want to outlaw my small business.

These are the contradictory messages Americans like me are receiving from Washington, D.C., where President Biden announced last week that the Paycheck Protection Program is changing to better help small businesses like mine. Just two days later, though, House Majority Leader Steny Hoyer (D-Md.) announced that Democrats plan to take up the Protecting the Right to Organize Act next week. It’s a bill containing language intended to outlaw small businesses like mine.

You read that correctly. This week, they want to save me, so that next week, they can destroy me.

I’ve worked full-time as a freelance writer and editor since 2003, running my own editorial business with clients that include national newspapers, magazines and websites. Under the PPP rules, I’m a small-business owner. The president specifically cited the need to protect small businesses like mine when he said, “We’re also making it easy for those one-person businesses—like the home repair contractors, beauticians, small, independent retailers—to secure forgivable PPP loans.”

This PPP concept is the opposite of the PRO Act, which Biden also has repeatedly said he strongly supports. The PRO Act’s top provision is adding language from California’s disastrous Assembly Bill 5 into federal law. PRO Act supporters say this change is needed because people like me aren’t running small businesses at all. They say we’re actually misclassified employees who are being exploited by big corporations, and that we can only be saved if corporations can no longer work with independent contractors. They believe we should be forced to seek traditional, union-friendly jobs for our own good.

It’s not possible, without cognitive dissonance, for lawmakers to support this week’s PPP changes and to vote yes next week on the PRO Act. This week’s action bolsters the 70 percent to 85 percent of independent contractors like me who continually say we want to remain self-employed. The PRO Act, as we all just learned watching the past year’s test run in California, puts us on a path that makes it impossible for us to keep running our small businesses at all.

The root of the problem for nonemployer firms like mine, in both the California law and the PRO Act, is language called the ABC Test. This language dates to the 1930s and, among other things, states that anyone contracted to do paid work cannot be in the same line of business as the company paying for that work.

So, as a nonemployer firm under this ABC Test, the home repair contractor that President Biden says he’s fighting to save would no longer be allowed to hammer even a single nail for any home repair company. The beautician Biden talked about couldn’t give a haircut for any beauty salon. And a writer like me couldn’t sell an article to any magazine. Forget about receiving new access to PPP loans to help us through the recession. Under this ABC Test that Biden is promising to make the basis of all federal labor, employment and tax law — starting with labor law in the PRO Act — our businesses could no longer legally operate in the United States at all.

The California version of this ABC Test law went into effect Jan. 1, 2020, and outlawed the work of so many nonemployer firms that the state’s Legislature had to add more than 100 exempted professions. The fallout has been so bad that when California voters got a chance in November to vote on a ballot proposition gutting the ABC Test law, they did so by a 59 percent to 41 percent margin.

And make no mistake: Many of the people already suffering the most in the pandemic get hit hardest by these ABC Test laws. The California version has had such a harmful effect on women- and Black-owned small businesses that the former head of the NAACP wrote an op-ed calling the law outright “racist.” Americans For Prosperity called it “devastating to women.” The head of the California Black Chambers compared AB5’s effects to the burning of “Black Wall Street” in Tulsa, Okla., a century ago. Forbes reported that the law had left “women business owners reeling.”

The truth is that Americans like me need to be saved not by, but from deeply misguided ABC Test legislation. Any lawmaker who agrees with making PPP better for small-business owners now, and who agrees that nonemployer firms like mine are important to the U.S. economy going forward, must also vote no on ABC Test laws like the PRO Act.

There simply are no two ways about it.

Kim Kavin lives in New Jersey. She is a co-founder of the nonpartisan, ad-hoc coalition Fight For Freelancers. She’s also a member of the American Society of Journalists and Authors, which is suing the State of California over Assembly Bill 5.