In their zeal to use the government to protect jobs and enhance workers’ benefits, California’s unions have repeatedly ignored the law of unintended consequences. Their efforts — backed by lobbying, grassroots organizing, and loud rallies by activists — often succeed in the Capitol or the ballot box given their fearsome political power. But they never make life better for workers. Their successes can never stop the march of progress, although they do make a mess of things. The most notable modern example was their successful passage of Assembly Bill 5 in 2019. The goal was to sideline the rideshare industry (Uber and Lyft) by forbidding companies from using contractors as their main labor pool. The measure also targeted most types of freelance work and independent contracting, thus leading to massive job losses in the midst of pandemic shutdowns. As usual, union plans to help workers hurt ordinary workers while carving out special protections for union members. As I reported regularly for The American Spectator, it all blew up in their faces after the pushback forced the Legislature to exempt more than 100 industries from restrictions. Then the rideshare companies secured passage of an initiative that exempted their drivers. But that hasn’t dissuaded unions from continuing along their Luddite path. In 2022, state unions backed Los Angeles’ Measure ULA, which imposed punitive transfer taxes on the sales of “mansions,” although the tax also applied to apartments and commercial buildings. Once again, that ironclad law of unintended consequences struck. LA’s apartment building ground to a halt, thus harming the housing market and destroying jobs for union contractors. It quashed property tax collections, which has made it harder for LA’s city government to pay for its huge armies of government bureaucrats. And now the labor federation, led by former Assemblymember Lorena Gonzalez of San Diego (and author of AB 5) is back at it. The group and the AFL-CIO are trying to pressure Gov. Gavin Newsom to impose far-reaching restrictions on artificial intelligence. What could possibly go wrong this time? As CalMatters reported this month, the unionistas went right for the jugular by vowing not to support Newsom’s likely presidential run if he doesn’t sign additional anti-AI measures. “I don’t think you’re going to have a lot of motivation to walk precincts for somebody who won’t engage working class voters on the very things that are taking away their jobs,” Gonzalez said, according to the publication. Newsom has signed some AI regulations, but — to his credit — has vetoed the worst ones. For instance, in September 2024 the governor vetoed Senate Bill 1047, which, per the Senate floor summary, “requires developers of powerful artificial intelligence models and those providing the computing power to train such models to put appropriate safeguards and policies into place to prevent critical harms. This bill establishes a state entity to oversee the development of these models.” The measure would have required, under the threat of severe penalties, AI firms to predict ways in which their models could cause a variety of “harms.” AI algorithms are something of a black box and it’s unrealistic — and damaging to the growth of the industry — to create a new government agency with broad powers to second-guess every decision. As the Chamber of Progress wrote in its official opposition, the bill “forces model developers to engage in speculative fiction about imagined threats of machines run amok, computer models spun out of control, and other nightmare scenarios for which there is no basis in reality.” Yet the labor groups insist now that Newsom back something similar in the Legislature this year. Newsom also vetoed a child protection AI bill that was equally vague and far-reaching in its restrictions that attempt to prevent any conceivable harm from AI to children. Newsom is smart enough to realize that anything that quashes growth in the industry threatens the state’s endless big-spending plans. The nonpartisan Legislative Analyst’s Office offered the following explanation in its November analysis of the state’s budget (which is highly dependent on the stock market): These strong income tax collections are being driven by enthusiasm around AI, which has pushed the stock market to record highs and boosted compensation among the state’s tech workers. With so much exuberance surrounding AI, it now appears time to take seriously the notion that the stock market has become overheated. History suggests that the stock market is prone to overreact to major technological advances, even if the technology itself turns out to be revolutionary. Our steeply progressive tax system relies on the success of homegrown AI companies. California is home to 32 of the top 50 AI companies, per state statistics. Furthermore, if Newsom is serious about reaching the White House, then he probably doesn’t want to be the governor running with large budget deficits and top companies bleating about the state’s anti-tech climate as they hightail it to Texas or Florida. And whatever one thinks of him, Newsom is rather savvy on the tech issue, as illustrated by his long veto message of SB 1047. Here’s a snippet: Adaptability is critical as we race to regulate a technology still in its infancy. This will require a delicate balance. While well-intentioned, SB 1047 does not take into account whether an Al system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data. Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology. He did sign a less restrictive, but less than ideal measure (Senate Bill 53) that focused on transparency and some others. Meanwhile, some supporters of that vetoed child-oriented bill (Senate Bill 1064) are circulating a statewide petition to place before voters an AI regulation on the November ballot. That and an onerous measure for a wealth tax, which he opposes, could give Newsom fits on the campaign trail.  The Trump administration’s approach to AI regulation could actually do Newsom a big favor by shifting the debate from state capitols to Congress. That makes the most sense given that AI developers will struggle to conform to an ever-changing number of AI restrictions coming from all 50 states. Regardless of politics, the sooner Congress takes on this mission, the better it will be for the industry, the economy, and consumers. Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org. Image licensed under CC BY 2.0.