Barack Obama finally got the bad news that he was dreading.
The former President’s disastrous legacy was facing total obliteration.
And now this letter told Barack Obama everything he worked for was going down in flames.
The “gig economy” was one of the great economic innovations of the 21st century.
Companies like Uber and Airbnb allowed consumers access to services like taxis, renting homes, or delivering food that were formerly the province of unionized industries that jacked up prices in order to line the pockets of Big Labor bosses.
Unions heavily support Democrat politicians and Barack Obama sought to pay them back by sticking it to their free market competitors by destroying a company like Uber’s business model.
Uber operates so that the individuals who work as drivers for the service are independent contractors and not employees.
That means unions can’t organize them into dues-paying members, nor does Uber have to abide by government mandates for wages and healthcare.
This allows a business like Uber to charge less for a ride-sharing service than a unionized taxi cab.
So Obama’s Department of Labor rewrote the rules that classified Uber drivers as independent contractors and made them employees.
But the Trump administration reversed this in a letter from the Department of Labor’s Wage and Hour Division, arguing the Obama administration misinterpreted the law.
“Based on the facts you provide in your letter, it appears that the service providers who use your client’s virtual marketplace are independent contractors,” the Trump administration stated in its opinion letter.
“Your client provides a referral service. As such, it does not receive services from service providers, but empowers service providers to provide services to end-market consumers. The service providers are not working for your client’s virtual marketplace; they are working for consumers through the virtual marketplace. They do not work directly for your client to the consumer’s benefit; they work directly for the consumer to your client’s benefit,” the letter continued.
“It is therefore inherently difficult to conceptualize the service providers’ “working relationship” with your client, because as a matter of economic reality, they are working for the consumer, not your client. Indeed, they are similar to certain healthcare providers who use a homecare registry to obtain clients—workers whom WHD has previously stated can be classified as independent contractors under appropriate circumstances.”
Democrats were furious over this decision.
Obama’s former head of the Wage and Hour Division, David Weil, raged about the decision to the New York Times.
“It is outrageous for the Department of Labor to set policy in such an important area through the device of an opinion letter,” Weil ranted.
Forced dues collected by Big Labor fuel the Democrat Party’s political activities.
Unions spent 1.7 billion dollars on politics in 2016.
But over the last 36 years, union membership has fallen by 50 percent.
If the gig economy replaces unionized businesses such as taxi cabs, then the Democrats will lose a massive source of political funding.
And that is why Obama twisted the law to strangle the gig economy.
Do you agree with the Trump administration’s decision?
Let us know your thoughts in the comment section.