People who use Uber, AirBnB, Deliveroo and similar companies are only fuelling this race to the bottom. Maybe one day it will catch up to them, and then it will be too late. Use your leverage while you still have it, Comrades.
It's not a race to the bottom. It's a correction. Why should your health care be determined by your employer? It's a ludicrous system that should have died decades ago.
Yes, a correction to the most dehumanized form of employer-employee relationship possible, which is following the logic of the market (dominated by asymmetric information and power) to its end.
> Why should your health care be determined by your employer? It's a ludicrous system that should have died decades ago.
Yeah but it's being replaced by insurance that is utterly unaffordable for a lot of contract employees. If we want to decouple health insurance and employers (and we should) then we should be proactively working out what that looks like in the future.
> utterly unaffordable for a lot of contract employees
Caused in part by the issues of employability of (some) chronically ill people, driving up costs, and making "individual" plans de facto "high risk pool plans". Which would be helped by, as you said (and I agree):
It’s not a race to the bottom. People who provide services using apps like Uber, AirBnB etc could have chose other ways to sell their services. They choose those apps because they offered the best balance of compensation and flexibility.
If holier-than-thou types try to ban these apps based on their own worldview, millions will suffer the loss of their first choice and be forced to accept their second choice - or unemployment.
There are pros and cons depending on your personal situation. Having that workforce profile can be liberating if you have the right skill set to keep you on track and organized. The freelance/GIG economy has a lot to offer not only younger workers but veteran workers looking to add more tools to their toolbox.
https://latechnews.org/los-angeles-gig-economy/
> Having that workforce profile can be liberating if you have the right skill set to keep you on track and organized.
Well yeah, some people are just awesome/lucky/blessed. Given nothing, they know how to build great things. But this is a strong minority of people.
The majority of people are just normal, they may have one or two skill that they are good at, but don't have the skills required to run their own company. A person can be a great employee developer whose capable of building awesome products, but an awful freelance one because they are not good at negotiation, management, finances, etc.
It's a step away from the efficient specialization of a corporate structure, where each employee only needs to be skilled at their particular job, to a guild-like structure where everyone is a worker, manager, accountant, book keeper and politician.
Ideally they would be coupled to our government, but since they aren't providing that, our employers should be obligated to ensure they are providing us with the means to keep ourselves healthy.
We should be able to get health insurance and bargain based on community groups or individually tax-free rather than by employer. If the entire Mormon church could collective bargain for health insurance for its members it would be WAY cheaper than any employer
(because they don't drink alcohol or smoke).
The parent was suggesting a superior risk pool. One big risk pool nation-wide isn't superior. The bottom 50% of healthcare consumers represent a mere 3% of all healthcare spending each year. That's the ideal risk pool, we know who that pool consists of: overwhelmingly younger people.
5% of healthcare consumers, are responsible for about 50% of all healthcare costs. That pool consists overwhelmingly of people over the age of 50. That's the high risk pool. Including them into any pool, isn't an improvement to the pool's cost structure.
What you're arguing for is that including them is superior morally. That's a perfectly legitimate premise obviously. It's radically inferior financially/economically, if we're talking about building risk pools.
Picking risk pools is not smart and I doubt it's economical either in the long run. You can pick young, healthy people first. That works for a while but then these people get older. Now you have to kick them out. This is good for short term profit but you can't run a system like that long term. If you eliminate thinking about risk pools and just insure the whole country the same you can also eliminate a lot of bureaucracy.
Why? From my perspective the whole problem with healthcare and insurance is these are way far from a free markets. Wouldn't it be better if the insurance companies would just look at what people want and offer just that for the prices that make both sides interested?
I don't think the states should have much power over this particular market. Insurance definitionally crosses state bounds. If I get in a car accident in Kentucky, Florida blue still pays my bills. This is clearly a federal commerce clause issue. If that's the case, the Feds should bust the limits.
Specifically I was replying to the idea of incorporating a large group outside the bounds of a company for insurance purposes. As it stands, the states may block it.
This is something that is coming down the pike with the changes the current administration has made for "association health plans". They solve some micro problems (healthy self-employed people will be able to buy cheap group health insurance without being part of a traditional employer group) while also making the overall problem much worse (the individual exchanges become a de-facto high risk dumping ground and get way more expensive).
This is a problem for high income self-employed people with preexisting conditions. They probably won't be able to buy into an association health plan and they won't get premium subsidies from the government because they make too much, which means their premiums will be a ridiculous percentage of their income.
I switched from self-employed contracting to full time W2 with my biggest client back in December. The biggest reason is because they offered to pay for very good small group health insurance.
My government takes a 20% cut from my salary for the exact same reason. Nevertheless, our public health care is so shitty that every self-respecting employer includes private healthcare in their package. So the government is basically forcing me to pay for something that I don’t intend to use (because I don’t want to die from nosocomial infections in a moldy hospital room).
Would you mind sharing the country name? I am sure (because I've tried it myself) the quality standards differ by orders of magnitude in different countries where it works this way.
That's historically the way it has been but it's absurd in general. Would you argue the same thing about housing, food, and water (they should all be provided by the employer)?
Really what we need is an expectation of being able to buy healthcare on our own with regular incomes.
No, the american approach is beyond absurd. Of course my employer should pay into(government ran) healthcare on my behalf. Of course they should pay into a pension plan. And yes, currently, if I stay beyond my mandated 7.5 hours, my employer has to provide food during that time. My employer also has to provide water during working hours. If my employer asks me to go somewhere on company business, they have to provide housing.
I wait with bated breath for the day we can have serious conversations about these topics without these ridiculous posts intentionally misrepresenting the other person's argument.
We can't have a reasonable conversation about it because it's a zero-sum war between labor and capital. It's not possible to decide issues such as benefits on the basis of what's best for the economy because where the benefits come from doesn't have a big macro-economic impact. What this argument is about is who gets how much of the pie.
If employer-based insurance goes away, it will be replaced with nothing. The effect will be to lower compensation -- a win for employers, and a loss for workers. That's the lesson of the Gig Economy, perhaps even the primary reason that the Gig Economy is so heavily sold: it is advantageous for employers.
Or it will be replaced by all sorts of alternatives like total market anarchy, fully nationalized healthcare, or some replica of another country's system, all of which would be a big improvement cost-wise.
You didn't really explain how the American approach was absurd. Also, 7.5 hours seems extremely arbitrary. Why pick that number of hours? Why not 4 hours? Why not 9?
For non-salary workers, in your "8 hour" work day there is a certain mandated amount of break time. X minutes per Y hours, for example, plus time for lunch. They might have taken 8 hours and subtracted two 15-minute breaks.
I'm not sure if the 8 hours is intended to be (8h + X break time), or (8h - X break time); I thought it was the former, but but might be mistaken. That's probably where the GP got their 7.5 from.
How true! However, there are some at state levels. For example [0]:
(2018) Under California law (which is much more generous to employees than federal law), if you are a non-exempt worker, you are entitled to meal and rest breaks: a 30-minute meal break if you work more than 5 hours in a workday, and 10 minutes breaks for every 4 hours you work
For an 8-hour work day, that would yield a 30 minute break + two ten minute ones.
Look at the history of labor and the 40 hour week. You have to pick a standard, otherwise the pick will default to employers who will choose ever increasing hours for a fixed salary. If we pick one together it's easier than standing as a lone worker saying 7.5 is reasonable.
Modern civilization has advanced, why should the work week stay at 40 (and eroding in many workplaces in America?)
In certain industries, absolutely. If you're a professional driver you can't drive more than 8 hours a day in EU(9 hours once a week) even if you're perfectly willing to do so, in the interests of your safety and everyone around you. But outside of those select few industries, no.
That's entirely for safety and has nothing to do with limiting your total hours worked in a week. You could easily work for the trucking company at a desk during extra hours.
Also, correct me if I'm wrong but there are approximately 7 days a week and 7*8 > 40.
You absolutely should get time and a half for work over 40 hours. The problem is that there are many places where that extra work is done without extra pay, most notably software.
If your desire for more money degrades the quality of life of everyone else in the workforce - you should absolutely be prohibited.
Let us suppose, what is at least supposable, whether it be the fact or not—that a general reduction of the hours of factory labour, say from ten to nine, would be for the advantage of the workpeople: that they would receive as high wages, or nearly as high, for nine hours’ labour as they receive for ten. If this would be the result, and if the operatives generally are convinced that it would, the limitation, some may say, will be adopted spontaneously. I answer, that it will not be adopted unless the body of operatives bind themselves to one another to abide by it. A workman who refused to work more than nine hours while there were others who worked ten, would either not be employed at all, or if employed, must submit to lose one-tenth of his wages. However convinced, therefore, he may be that it is the interest of the class to work short time, it is contrary to his own interest to set the example, unless he is well assured that all or most others will follow it. But suppose a general agreement of the whole class: might not this be effectual without the sanction of law? Not unless enforced by opinion with a rigour practically equal to that of law. For however beneficial the observance of the regulation might be to the class collectively, the immediate interest of every individual would lie in violating it: and the more numerous those were who adhered to the rule, the more would individuals gain by departing from it.
No employer pays for food outside of work. The vast majority of employers do not pay for housing. No employers are paying for your water supply at home (unless they are paying for housing).
You are confusing employers paying for things that are part of your job and paying for things to cover your entire life. It's ridiculous to tie the latter to your employer because then you have to fear for your life if you lose your job.
Oh I haven't confused anything. And you seem unaware how nationalised health insurance works - let me explain. Yes, my employer pays into my health insurance. I guess you could say that my health insurance is tied to my work, sure. Except that the crucial difference between what you imagine and what actually happens is that everyone who is a citizen is always covered for everything, always, unconditionally. Even if I lose my job, hey, I don't have to fear for my life because I'm still 100% covered. In fact I could be unemployed, homeless, and yes, you guessed it - I'm still fully covered, and so is everyone else. Same with a pension - everyone will get one, but it's the employer's responsibility to pay into the scheme, not mine - why would it be mine?
This is one of those solutions that seems simple and neat, but falls apart on a cursory inspection. For example, it implies that the poor should die of curable illnesses. It also largely ignores the economics of the situation — healthcare is inherently expensive because it involves high technology, high safety standards and lots of training. You can't have it be like food, where people just get it when they want it, because Taco Bell employees don't have to go through a decade of special schooling before they're qualified to work there. Without an individual mandate, an employer mandate or universal coverage, there's no way ordinary people will be able to afford anything beyond the most basic services.
Sure, there's a lot of newer tech in medical. But for a ton of routine medicine uses generic drugs, simple testing (scales, blood pressure, simply viewing abnormalities), and cheap care. For "routine medicine" this should be negligible cost - it's only because of systemic garbage I can't just go to the pharmacist and buy metformin without going through a fucking paywall.
Sure, I get something weird and/or strange, sure all bets are off.
I'd agree that drugs with almost no overdose risk are stupid to put behind a prescription, but a lot of prescription drugs are dangerous and are only used because the status quo is worse. Even metformin has side effects - you really shouldn't be taking it if you don't need it, and you professionally cannot know if you do.
And doctors want annual / quarterly renewals on prescriptions to check if your condition has gotten better or worse in regards to whatever the drugs were treating.
Because at the end of the day, if you overdose on something, someone will still call 911, an ambulance will still come haul you to the hospital, and doctors will still spend millions of dollars trying to save your life if they deem it feasible regardless of if you can afford it or not. Unless you have an explicit will saying not to do that. And when you cannot pay your million dollar hospital stay (and the uninsured cannot) the hospital gets to write off the loss and seek recompense from the government anyway.
And from the governments perspective, around the world, it is simply cheaper to provide regular and preventative care than to deal with the astronomical higher rate of emergency care people have to get in the US because they cannot afford the cheap routine stuff and instead cost the state life saving procedures instead.
"Something weird and/or strange"? A condition as commonplace and easily treatable as appendicitis requires more than generic drugs, a scale and a blood pressure cuff. Then consider other relatively common conditions like cancer (more than a third of the population will have to fight it at some point) or head injuries.
But even if it were just weird things that cost a lot, that would still be a serious problem with the idea of expecting people to just buy healthcare as needed.
Lots of people making below-average incomes get healthcare through their employer. And regardless, it's certainly possible with employer-provided healthcare for everyone who has a job to get insurance through it, whether or not that's happening now. It doesn't make sense to arbitrarily decide that an idea can only be compared to one specific implementation of one specific other idea — it should be compared to the strongest competing ideas, and its drawbacks should be acknowledged on their own merits.
While you don't get a 401k match as a freelancer or contractor, ideally you can get hourly rates to make up some of the difference. The rest can come from registering as a company, setting up a solo 401(k) - in the U.S. anyway - and then putting up to ~$54,000 of your income into a retirement fund pre-tax. That's a pretty significant potential tax savings.
The other thing to think about is flexibility in not being in an employer backed 401k. When I was in one the best average return was 4%. Independently I can get 15% through etfs that track the S&P. I can also get 30-50% playing in riskier tens like oil or commodities. While some argue against that, at least I now have the agency to decide.
I agree absolutely. Corporations should only pay employees money (including whatever amount it takes to buy reasonable insurance etc) and that should be up to the employee to choose an insurance company and pay them. Insurance companies should compete targeting not corporations but people as their customers.
Tell it your elected official, because the law currently obliges your employer to subsidize your insurance if they have greater than <X> employees.
This is not evil corporations pushing their insurance choice upon you, it's government pushing employee insurance mandates on corporations. If that bothers you(enough to compel you to take political action), then vote or write your elected official. If your elected official ignores you, then consider that you are not the majority, or your elected official simply does not care, and is motivated by something other than their constituents well being.
If companies were, all of a sudden, no longer required to subsidize health insurance, who wants to bet that they will immediately pass all the savings on to each employee in the form of a raise? I guarantee you shareholders pocket the difference.
Because doing it that way would be a public relations disaster, and likely destabilize the company.
The way they do it is by layoffs and planned attrition to return to growth. I'm sure everyone has seen a stock price jump when large scale layoffs are announced.
They do: this thread is about one of the most common ways – and there are plenty of stories of people being ordered to train their replacement contractors to do the same job at lower rates – but other popular strategies include cutting benefits, reducing annual raises relative to the cost of inflation, or not hiring adequate numbers of people and pressuring the staff to try to do the extra work anyway (i.e. unpaid overtime).
The main counterbalance is market pressure, which is why high-demand programmers don’t see this as often as other fields where people have less leverage, and, in bluer states, the risk that doing so will trigger government action.
I agree, however our government is not up to the task. Ever since Congress passed Obamacare it has been in a fight to survive, instead of trying to improve the system (which has clear benefits) Republicans have spent the past few years trying to dismantle it along with other "entitlements".
The American worker is getting squeezed on both sides, private employers are offering less and less and government is not picking up the slack. The void will be filled, either by a private corporation or government, but if it's not you can say bye to the middle class.
As I recall, Obamacare didn't do much, if anything, to decouple health plans from employment. If anything it made it more tightly coupled, by mandating employers with more than so many full-time employees provide health plans. The individual mandate didn't decouple health plans from employers, it just provided additional insult to injury by causing those whom were un- or under-employed and couldn't afford a now even more expensive full price health plan to be facing an even larger tax bill at the end of the year.
Any other good or bad effects from Obamacare notwithstanding, if you want to decouple health plans from employment and specific employers, Obamacare is the wrong direction.
It did quite a bit to make it easier to buy insurance as an individual such as getting rid of pre-existing condition exclusions and adding subsidies for low income people.
I mentioned Obamacare as more of a government solution to the problems mentioned in the parent post but I agree. However remember that Obamacare provides and individual insurance market at the state level (which is doing terribly..) along with medicaid expansion. These seem closer to the ideal of what American 'single payer' would look like.
The creation of exchanges for purchases and removal of preexisting conditions as exclusions made it much more possible to buy insurance outside of group plans.
I contracted for a few years and it was impossible to get insurance at a reasonable cost because of an extremely common health condition that’s never caused complication in my life. So I was only able to get insurance through employers.
This. I had asthma as a child. Now? No meds, no issues, for two decades.
I would not qualify for affordable healthcare because of that pre-existing condition without Obamacare. Even as is, with the fragility of our political system, I am very wary of contract work; the concern that I could lose healthcare at any time based on elected idiots stymies me.
My mom did for me between my turning 18 and going to college, since the cutoff to be on a parent's insurance hadn't been raised. She was outright refused by a number of providers, and finally managed to get me on a plan with Kaiser Permanente, which was still pricey, and which required us driving 40 miles to see a primary care physician (we were not in the sticks, either, but in the suburbs. On prior insurances I'd been able to see a doctor just a few miles from us, but that was the closest office a KP approved doctor worked from)
Sure, you found some company willing to take your money claiming you had "insurance". In reality, had you actually try to use it, would have been in "pre-existing condition" hell. Because the asthma could have cause $ailment, and they don't cover preexisting. Tood bad, so sad. Glad you paid the premiums!
The other part of precondition hell was recisions, where if you had an expensive condition, the insurance company would look for evidence of a (potentially unrelated) pre-existing condition that had not been disclosed, cancel your insurance based on that (perhaps refunding all the premiums you had paid, for all the good that did you) and call it a day; as part of ending preexisting condition exclusions, the ACA ended recision.
As someone who was diagnosed with T2 diabetes thanks to Obamacare, I greatly appreciate the work the ACA did. It's not great, but it's a hell of a lot better than what I had prior - nothing.
Which points out the problem. Childhood asthma is a super common, yet extremely low risk condition for adults. Yet it was grounds to refuse coverage, or to raise premiums on the individual, rather than price it into the overall pool.
So imagine it's something high risk. "Oh, you have cancer? Yeah, we're not taking you on. Or if we do, we're going to charge you what we expect you to cost, which is going to be insanely high, to where you probably can't afford it."
Net effect: you can't afford healthcare.
The whole point of insurance is to spread the cost and risk widely, so that the healthy outliers help cover the cost of the unhealthy outliers. The fact that it's not always clear who those are (i.e., the healthy eating jogger who has a brain aneurysm and requires multiple expensive surgeries and months of care) should help with any perceived unfairness (though people are really, really bad at accepting that bad things can happen to them).
We're talking about whether it's reasonably possible for an average person to start their own small business or start consulting if they don't have another income earner in the home to back them up.
Your response is, "Well, what if you have cancer?" Fine, I wasn't trying to solve every problem for every person. I'm not suggesting that the current state of healthcare in the US is ideal, or even good. Instead of seeing that there is a path forward and considering that each individual might have to adjust to their own needs, or might have to take a different path altogether, you're just trying to shut down the conversation because the solution I provided is not universally applicable. That's an unnecessary and unhelpful response.
People are talking about guaranteed issue, because for the most part they don't want a system that screws over people with preexisting issues (which is what a market based system without guaranteed issue will tend to do).
Do you have any actual experience purchasing health insurance before ACA, and later through an ACA exchange? I am not sure what exactly you are "recalling." I purchased health insurance for me and my wife through Covered California last year and found the process quick, the comparisons easy to make, and the pricing clear and reasonable. I have not purchased health insurance myself before the ACA, but from what I was told the options for independent contractors were few and expensive, and were difficult to find.
I was laid off in late 2013, shortly before the ACA took effect. When I was laid off, I had the opportunity to keep my existing plan on an individual basis through COBRA. My savings and cash flow would not permit such. Some web searching lead me to believe that I'd be facing similar rates if I went shopping myself, so I opted to go without, and see what happened when the ACA took effect. In the beginning of 2014, I looked at my state's exchange. The plans were now even more expensive, and per the questionnaire on the exchange's site, I was ineligible for the subsidy to make it less-unaffordable because of how much I'd made in the previous year. So I said "fuck it", and opted to eat the tax penalty when I filed my taxes in the following year.
So, no, in my experience, the ACA did not decouple the affordability of a health plan from one's employer -- it made it worse.
> So, no, in my experience, the ACA did not decouple the affordability of a health plan from one's employer -- it made it worse.
I still don't follow your reasoning. You seem to be saying that any health insurance is too expensive for you to afford, so the ACA doesn't work? As you saw from COBRA, health insurance is expensive, and your compensation package from full-time employment obscures that expense, because typically your employer asks you to pay only part of the expense from your salary. You have to figure the real cost of health insurance into your rates as an independent contractor. The ACA made it easier to shop for health insurance as an independent.
I was in a similar situation to yours - when I was laid off last year, I ended up picking a plan from Covered California that was $80 less expensive per month than the offered COBRA plan, with significantly lower out of pocket costs ($0 vs $9,000 deductible, for starters), in a much more highly rated provider network. So the plan that I was getting from my employer was a lot worse than what I chose to buy through ACA. This would be more apparent if your employer paid out the cost of all of your benefits in your salary and then had you pay the full cost of insurance (which is essentially what happens when you are an independent contractor).
Maybe it is different in your state. In mine, FL every September I get a notice asking if I want to continue to use employer provided healthcare or would I prefer to find something on the exchange. Employers of a certain size are compelled to offer health insurance and employees are free to choose something different. That doesn't sound like it's tightly coupled to me.
Finally, according to our healthcare rep, no one has been penalized for not taking a healthcare plan. The IRS sends out scary notices every year that they swear to god are going to assess penalties this year. And they haven't so far.
> Within a decade, contractors and freelancers could make up half of the American workforce.
This is pretty shocking to me. With recent trends you can easily see that the other half of the population will be people in IT and health care (home service providers, nurses, etc.)
I've never had a contract job, I'm not sure if part-time college jobs count, are contract employees getting work via an agency or are they on their own? If these agencies exist are they helping to negotiate on behalf of their workers?
It feels like there is space for a digital employment agency, there must be a way to combine the "flexibility" of contract work with the longer term cushion that comes with a full time job.
I've been freelance for decades. Recently I got a gig thru an agency, but only because the corp I'm doing work for has an onerous 'qualified vendor' hurdle I don't have the resources to pass.
So all of it exists, as it surely would in an efficient market!
Agencies goals are to negotiate for themselves while keeping compensation of the contractor negotiated to ensure the highest profit margin. Many companies use contract agencies because it shields them from the burden of dealing with unemployment.
Those home service providers and healthcare providers at home are/will be contractors for an agency. I've had to deal with this with in home help for my 86 year old mother, unless you hire someone directly as a freelancer, the help will be a hourly contractor where the agency takes half of the fee.
I am a contract employee who gets work via an agency. I have full health benefits (health, vision, dental which costs me about $200/mo), paid holiday, vacation, and even paid overtime (1.5x my hourly rate). All of this was negotiated ahead of time, along with the salary range I was looking for.
Any new opportunities that are available, my agency contacts me and asks if I am interested in doing work there, or if I want to stay at my current place. I have been working at my current place in govt defense embedded work for the past 2+ years getting paid more than most direct hires with the only real downsides being no 401k matching and no personal/sick time when looking at total comp. I am also able to work from home and make my own hours, so I am more flexible than direct hires who have to remain in the office during "core hours".
Some people here have been contract workers for well over a decade, so as long as the company has a need for you, you can remain on contract. If you want to go direct with the company you are contracted at, you can also negotiate that during their periods when they open up direct hiring.
This is my situation here in the Midwest as a defense contractor, so it may differ elsewhere and in different fields of work. Needless to say, it's not a bad gig, especially if you can get into an area where the company can't afford to lose you. For example, I am one of two people in the entire company who knows the OS architecture for every vehicle we make, and I got paid extra money to grind out a few hours a week to learn that architecture.
That's not exactly a downside from a total compensation perspective, so long as you are considered self-employed for setting up a one-participant 401k. You get significantly more control over what portion of your total compensation is taxable vs tax-deferred.
There is a difference between a body shop and a self employed contractor you are an employee or worker of the agency and not really a self employed contractor.
Are there no umbrella companies in the USA? like we have in the UK to avoid the IR 35 hassles.
Employer "benefits" are things that are all freely available a la carte. There's no reason contractors can't buy health insurance from a marketplace or contribute to an IRA and wind up with the same end result. You as a contractor just have to factor those additional costs in to your decision-making process when evaluating compensation packages.
The "benefit" portion of that statement is that the employers typically take on a portion of that cost so it's reduced for the employee. Have you ever filed taxes as a freelancer? You nearly pay double because you're both the employer AND employee in that situation... The same goes for other benefits as well like healthcare - There are no group discounts when you're the only one getting coverage.
The government provides incentives (tax exemption) for employer provided insurance, which distorts the market. Seems like extending that benefit to freelancers or eliminating it entirely would be extremely helpful.
https://www.mercatus.org/publication/tax-exemption-employer-...
>There's no reason contractors can't buy health insurance
Likewise, with the individual mandate removed, there's no reason employees can't opt out of health insurance. But in both cases, the pay does not change. If I opt out of health insurance, and save my company hundreds of dollars per paycheck, I do not get a raise in that amount. The incentive then is to accept health insurance as a employee and do without as a contractor.
The problem for everyone is uninsured contractors will also have incentive to avoid treatment as long as possible due to the expense. By the time they seek treatment, the cost of treating the problem has ballooned. They won't be turned away, they won't be able to pay, and hospitals won't go out of business. I'll let you guess who ends up paying for the outsized medical bills they generate.
If someone is laughing in your face everywhere you go (especially with unemployment at an all-time low right now) then you probably need to recalibrate your expectations. However I'd venture a guess that most people aren't actually asking for higher rates. Most people do a terrible job negotiating for compensation (and by terrible I mean they don't even try).
> Most people do a terrible job negotiating for compensation (and by terrible I mean they don't even try).
He's talking about stuff like Uber. Their whole deal is having a take-it-or-leave it gig-employment offer. They'd laugh in his face if they actually took the time to talk to anyone face-to-face, which they don't.
Uber & other app gigs are not about to make up the half of the American workforce that the article discusses. Most jobs, contract or otherwise, still require face-to-face negotiation.
The "gig economy" being discussed isn't highly paid software developers. It's dudes working uber / lyft / postmates. These people have no negotiating power.... you take the gig or you leave it.
It is amazing how out of touch people in the software echo chamber are....
The article specifically calls out a web developer example and suggests that "within a decade, contractors and freelancers could make up half of the American workforce." Nowhere except the parents' comment is the "gig economy" being discussed. The vast vast majority of employment/contract opportunities out there involve face-to-face negotiations.
Keep this in mind when looking at the government's monthly job reports. We've set the wrong metric, so while unemployment may be low the power that would normally flow to workers from a tight job market doesn't exist here.
“We find that 94% of net job growth in the past decade was in the alternative work category,” said Krueger. “And over 60% was due to the [the rise] of independent contractors, freelancers and contract company workers.” In other words, nearly all of the 10 million jobs created between 2005 and 2015 were not traditional nine-to-five employment.
IMO this is one of the many different manifestations of a financial squeeze (or at least a "power shift") against middle- and lower-class workers that has been growing over 50 years.
What I find intellectually-interesting is the idea that it's a big hetereogenous system where different parts and aspects are "crumpling" (both concurrently and sequentially) rather than one big politically-noisy snap.
Push kids towards college for earning-potential; defer usual retirement ages; have fewer children; live in a smaller place; both spouses work, live in the city, since you need a denser job-supply for both spouses to be hired and commute; work a second part-time job; etc.
Most things are this nuanced, but tabloids and headlines would rather condense everything to 140 characters.
Especially in economics, nothing is simple. Everything has branching consequences and influences. Nothing happens in isolation. Trends are the products of a thousand knobs being tuned according to another thousand knobs each.
Being on your own in the workforce often means you don't have the safety net of benefits and other forms of support that traditional workers do.
Even the first sentence is kinda stupid. Benefits are a form of salary. Independent have the freedom to buy the benefits they want and spend their income as they please. What's wrong with that ?
The best antidote to fear, she says, is to create a new social safety net where freelancers can rely on each other
I fear people like her trying to force us "for our own good"
Unfortunately cash is not as efficient in procuring the sorts of services that are normally provided by benefits, due to the advantages of structured negotiation.
You are unlikely to get as good a deal from health insurance providers as your employer.
Beyond just pricing there’s also a question of availability: prior to the ACA you could easily find former contractors who needed to take a corporate job because they or a family member had some sort of long-term condition or risk factor which meant that insurance plans wouldn’t cover them at less than extortionate rates.
Having insurance negotiated by individuals is a huge impediment for entrepreneurship.
This is why a Social Health Care system would be such a boon to entrepreneurship. It would remove one of the biggest worries for people creating their own business.
Increasing the size of the risk pool, for a genuine pool, and a genuine insurance product, should reduce individual pool member costs.
Of course, that word genuine, in both contexts, is abused in US healthcare “insurance”, as I’ve discussed in numerous of my comments (and I work in the industry - it’s an absolute abuse of the definition).
As FireBeyond noted, the system you’re defending takes more of your money: not only are U.S. medical costs substantially higher – on average! It’s even worse for independent buyers — but the layers of inefficiency designed into the system mean that the outcomes are worse.
The other side of this is considering what happens if you get sick: should we just let you die and bill your next of kin for the cleanup costs? If you’re not that heartless, all of the alternatives cost more than helping people get medical care. I’d much prefer to pay a little more so people can get treated rather than pay for them to be disabled and out of the workforce, or to spare their families the crippling cost of trying to effectively be an insurance pool with a single-digit number of members.
I'm not trolling you - but yes I am that heartless. This could have a lot to do with upbringing, but mine was full of analogies of humanity to nature. One of those was a firm belief that there is no "safety net" to catch me or my family. If I succeed, they succeed - if I fail, then we all fail. Everyone is responsible for themselves.
Everyone's particular set of values will vary, but that is mine.
It's not just negotiation strength. The theory of the firm gives lots of reasons why employment can afford to reward people better than individual contractors.
Though if you have niche skills or knowledge (and I'd include contacts in that), you can be better off with contracts that leverage your specialisms specifically, and not waste your time with work that can be done cheaper by more freely available labour.
Employers can provide benefits for cheaper due to economies of scale buying a lot of them from big insurance orgs. Individual contractors, even if they weren’t already being pushed into possibly-exploitative relationships with companies like Uber et al., don’t get those discounts. Life on the other side of the API layer ain’t so rosy.
I don't agree at all, and even if having an employer is better for economies of scale this doesn't mean we should force employers to give benefits (employers could negotiate deals and propose them to their employees).
The economies of scale argument is not always a good argument because you need to specify where does the deal cut comes from. I think it comes from the fact that the overhead in negotiating a huge amount of contracts is more amortized. So we could have this kind of good deals if independents find a way to reunite themselves. Otherwise the economies of scale argument could basically be the answer to everything ("We need a worldwide government because of economies of scale").
Who knows what we people will find to address this issue. Maybe we'll have coworking space packages with benefits ?
Coordinating activities is different from happening to act the same way.
the act of uniting is literally antithetical to being independent. I can't even understand why you would ask that question. Why can't red be blue, makes about as much sense as asking why independent people couldn't unite and still be independent
Unite means to join together. You could say you united two pieces of Lego when you snap them together, or when people join in a group it can be called uniting them. The USA is the United States of America because the different states joined together into one nation.
My apologies if there was a misunderstanding over language. Your English is good enough that I had assumed you were a native speaker
Ok that's what I wanted to say. We are all voluntarily united by the same brand of smartphone we buy, why not the same for a healthcare / others benefits groups ?
I gave an example. There could be a franchise of co-working space / hotels / resorts all over the world for nomadic or independent people and they would do the bargaining for their clients.
The issue is that any decent health plan is around $700 dollars and you cannot deduct that as an expense from your salary when you're a contractor or 1099. Now if you could deduct any and all types of "benefits" (so to speak) from your taxes as contractor, I think that would be a win.
You may want to check with your CPA as you can certainly deduct health insurance as an expense as a 1099 contractor. It’s actually easier as a contractor to deduct these as straight business expenses than as a w2 employee.
I wonder if contract workforce will fade as unemployment falls. The last 10 years the job market has been bad so many people had no choice but to work on contract. Now they have more of a choice.
Odds are that these people are not reskilling and will be left out of any new boost we have. Also consider where and when any recovery happens, most people already on tenuous ground are less likely to move to take advantage of that.
Former member of Freelancer's Union here, though the only service I ever used was the health insurance. A decade ago it was pretty solid, and certainly better and cheaper than you could get on the individual markets. AFAICT these days it's about on par with the open ACA markets.
I'm a member of Freelancer's Union. I don't interact with the union much, but I do buy life and term disability insurance from them. By the time I joined their health insurance offering changed from custom plans to just listing on and off exchange individual plans. Not that there's anything wrong with that, it's just nothing more than you can get on healthcare.gov or your state's exchange, or shopping the off exchange market yourself.
I'm sure I'll get some flak for saying this on HN, but I would encourage everyone not to take a contracting gig unless you're absolutely desperate for work. I don't believe most people are cut out to properly negotiate the pay for a contracting position (in that they do not know how to properly account for all of the benefits they are not getting). And by taking a contracting position you are basically encouraging the contracting and gig economy to grow, and allowing employers to take even more advantage of their employees by baiting them with a carrot on a stick. You can argue the gig economy allows flexibility for the worker, which is true to some extent, but I can't imagine this flexibility wouldn't cause a huge amount of stress in the day to day lives of people who need gainful employment to support someone else (children, elderly parents, etc.)
Look, I can't claim to have been a contractor for any significant length of time, so maybe I'm talking out my ass and every freelancer here can tell me so. But the fact is the american people have let employers have too much power for far too long, and encouraging people to take contract work seems to me like just another step in the wrong direction of giving these companies even more power, and then everyone is worse off for it.
Why should HN disagree with you? I completely agree, I sometimes have problems asking for the right amount of money. And I do it more than the average. It's hard to demand what you want
I don't think HN should disagree with me. In fact I think everyone on HN should repeat what I said to everyone they know . Don't take contract work, unless you're absolutely desperate. The reason I was being so defensive though was because I know there are a lot of freelancers on HN. I'm not trying to bash their lifestyles or work choices, just pointing out that taking this kind of work (whether as a software engineer or as a janitor) sets a precedent that encourages employers to further view their employees as red numbers on a spreadsheet to be marginalized and reduced. But thank you for the comment, I get somewhat heated when this topic comes up because it seems like such an obviously bad deal for so many people.
Pretty specific to america. Most other countries don't tie healthcare (and a myriad other social services and benefits) and gainful employment to one another.
Contract work in Toronto was pretty good, especially with clients from markets with higher cost structures. You still generally want healthcare coverage on-top of the public system in Canada, but you can often get a better rate through either small business groups or an alumni association or other such alternatives. The downside of contract is you work some unpaid hours on the business itself (although you bill every hour you work for a client if you bill hourly, or use judgement on how much to work if you bill weekly). The pay tends to range from above market to way above market but some of that is absorbed by benefits. Taxes tend to be potentially lower in Canada for contract work in Canada depending on your structuring. Trudeau did attempt to change that with a policy to alter how holding money within corporations works so the way you achieve lower taxes does put some of your income at risk of some version of this policy eventually passing.
Contract work should be fine. I frankly blame the American government for tying healthcare to not just employment status but particular employer so tightly for so long. It is frankly ridiculous and disgraceful that our political leaders are not held to account for this.
The early Tea Party was supposed to be organized around a theme of "stop the nonsense and denial!" with respect to these kinds of problems, but it was quickly corrupted by the ignorant and by the people who were hoping to find ignorance. Rather than turning energy and community action into positive change, they were derided and stymied.
So now we have Trump who is basically nonsense and denial personified.
Not that Obamacare did anything to get us off the employer healthcare crutch. In that respect, things seem to have just gotten worse.
And I'm a person that doesn't think everything needs to be political! It's just hard to get around the fact that American is grossly misgoverned here. But the American voter can't bring itself to vote on real issues instead of rooting for its political team. This gives me little hope that we'll ever get the 2/3 to 3/4 consensus we'll need to practically fix this (1).
(1) Even if we don't need that many people agreeing to pass legislation, I think things like reforming entire sectors of the economy and employer/employee relationships requires very broad support to be both fair and lasting. Having 51% of voters pee in the cornflakes of the other 49% doesn't get us anywhere. Hopefully that's clear given American politics since 2006 or so.
EDIT: To tie this back to contract work, contract work is great and provides needed dynamism and small-business know-how to the economy. But it's very risky. One needs an independent source of income (other investments, working professional spouse) or a big pile of capital so you can weather ups and downs, take health sabbaticals if needed, hire temp help sporadically, etc.
Oh I agree completely, it should be fine. But mega-insurance already managed to lobby basic universal health care out of existence. And now that those safety nets have been removed, employers want to have their cake and eat it too by not giving health insurance to their employees. I'd rather the american people have some access to healthcare than none at all. So until the people figure out that universal healthcare is the only way to go, unfortunately this is the best option.
maybe some mega insurance was against obamacare, but a lot of them wanted it to continue because it was providing steady business. most individuals liked it for the changes like kids being on parent's health ins till 25.
I find people on both sides of the political spectrum who think healthcare should be entirely decoupled from employment (but available for all), and I absolutely agree.
Most of the "gig economy" is not contracts like a freelancer negotiates. It's tons of tiny jobs at non-negotiable rates like Uber or Fiverr pay their "contractors".
I agree that they're terrible jobs that one should take only if truly desperate for work or perhaps to supplement another income. But talking about whether people taking them are cut out to negotiate contracts totally misses the point.
I'd rather not get caught up in semantics, but you are correct, and what I said was mistaken. The point still stands, that independent "employment" is usually a bad deal.
Uber is the cute one. There are people going into debt buying that Uber approved four door taxi.
All to be at the mercy/whims of this company.
Most of the workforce cannot work in tech. People are desperate. Hell--even most of tech will be thinned out in a few months.
I don't see it getting better either.
I don't see a business out there not trying to eliminate jobs. You have immigrants that are happy with being exploited. You have a whole generation of people who don't believe in unions.
I know a lot of you don't believe in government regulations, and I'm not either for the most part, but these "side hussle", gig jobs are begging for a butt slapping. F they want to exploit workers--move to the country that allows exploitation. Just go!
If you can't guarantee minimum wage--have the federal government takeover the website. Yes, I'm looking right at you Mechanicalturk/Fiverr. (I know nothing about Fiverr--but can just picture the thieving site.). If you are taking advantage of Independent Contractor laws--have the federal government do their job. Don't pay sales tax--have the you know. Hold onto fees for weeks because you can--gave the federal government shut it down. I'm not just picking on tech. I would like to do away with all volunteer jobs, in every sector of society, except within the family. Yes, Moderators would get paid. Internships would be history.
It was kinda cute a few years ago, but now I see companies just exploiting.
"Hay bro--we got our app. Website is hot. Now how do we get someone to deliver our product for essentiall free? Oh yea--and those taxes? I guess that's why they had Retail leases? You mean the customer drove their car to us? Trippy? Our app will work? Why bro? Because American employment hasen't been this bad in years. What--the unemployment number is low? You have to look at the ever increasing "able bodied, but just gave up" number. There's tons of works we can Hussle."
My first job out of college was a contracted position and it sucked. The salary was average and the benefits nonexistent. I was let go along with all the other contractors when the market the company was in took a downturn and it was probably the best thing that could have happened to my career. The job helped me build some work experience for my resume but I would never take another contracting position unless the pay was extraordinary or I had no other choice.
As a tech worker I appreciate your firm pro-worker stance, but what if we don't support the current system of having your health care be tied to your job, and letting your employer dictate your allotted vacation time and holidays, while allowing them to ask for unlimited legal unpaid overtime?
Join unions and be active in government. That's really as simple as I can put it. I don't have an answer to how best to get others to do those things, especially with the general apathy I feel in my generation for anything government-related. But those are the solutions.
Is there a programmer's union? If not, would it be worth it to start one? Honestly, it's something I've been thinking about for some time now. I have a lot of family and friends from NYC who have expressed both pros and cons to me about unions. I have no experience with it but I'm becoming more and more interested as I become aware of industry-wide problems.
HN's own idlewords, also known as Pinboard, has started an organization named Tech Solidarity, which is definitely not a union but but labor organization is one of it's goals.
I've recently come to this conclusion too. I did remote freelance work for several months, and it was miserable. Some clients are better than others, but if they find you online (and you're not speaking at conferences, etc) it's most likely because they want cheap work.
However I have heard success stories (online) from people that find work in their local area/network.
I've decided to do my own thing (a sort of micro ISV), and if at all possible I plan to not do freelance work ever again. I'm probably not cut out for it, but I also think software development is just a poor profession for (fixed price) freelance work.
I've been working as a contractor for the last year and a half, so I speak from experience, but only anecdotally. Regarding the notion that the flexibility of a contracting position might cause stress for those w/ children, I've found the opposite to be the case. When my child is sick, I simply take a day off and don't bill for that day. I don't worry about sick days at all. This sort of flexibility is a huge plus at this point in my life.
If you have a spouse who is employed and you can gain health coverage for him/her, and if this sort of child care flexibility is important to you (because, say, your toddler gets sick all the time), then working as a contractor can make sense.
At the same time, I generally agree with you regarding the precedent it sets in the aggregate. I also realize that the case I've described is somewhat special.
I guess it must be different in the US vs the UK. Contracting in the UK (at least in the IT world) is very popular and quite lucrative. (I guess not having to worry about health insurance helps somewhat, though)
I've been permanent, and I've been contract, I really hope I get to finish the rest of my career as a contractor.
"No benefits" is a somewhat strange way to think about it because all of these benefits, you can buy yourself. They are just really expensive. The underlying problem is that these jobs do not pay as much as people would like. That is still a very real problem. But since this article does not discuss pay at all, it's hard to really understand what's going on from the article.
Am I in the minority here for being a contract developer who is happy to be in this place?
* I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax.
* My wife works full time so she has our back for health insurance
* I can save way more for retirement with an SEP IRA than I ever could with a company-sponsored 401k...it's $55k/yr for 2018 (assuming you contribute 25% of earnings or make $220k/yr)
I can understand that the Gig Economy is certainly not benefiting everyone (e.g. Uber drivers, Postmates runners), but I mean boutique consulting firms have existed for a while and many of them achieve many millions in revenue even with only a few partners. Am I missing something or delusional in my thinking?
How would your situation change, if item number 2 was no longer there. (ie, your wife became a contractor) I think that is the largest concern/tipping point for most people..
Seems like the OP is making enough money that it wouldn't be a significant issue - assuming the OP is living within his/her means. It's the 3rd point ($$) that differentiates the OP from the vast majority - as far as I can tell.
Single father and consultant of 5 years here. It's easy if you're conservative/responsible with your money. Buy health insurance, get short and long term disability. Keep 6 months of expenses in your emergency fund. Don't have any consumer debt. I think the hardest part for most people is being able to not burn through their money as fast as they get it.
The national average income for Uber drivers is about $20/hr. That's plenty to live off of. The average in Detroit is only $9/hr. That's a tough place to be, but not unique to consulting or gig jobs.
Are you factoring business expenses into that $20/hr, or are you confusing raw revenue with income, and failing to take into account all the risk that Uber offloads onto its contractors?
If you're confused, then you have a lot in common with many Uber drivers!
Yes, that national average of $20/hr is after expenses.
That language, offloads, is loaded. This idea that it's someone else's responsibility to handle even the most trivial of life's decisions for us is toxic. If you don't understand the basic concepts around running a small business, there's plenty of books on the subject in the library.
"In early 2015, a study commissioned by Uber found that drivers in 20 cities, including New York, Los Angeles, San Francisco, and Boston, were grossing around $17 an hour.... But the $17-an-hour figure was based on data from 2014, when Uber rates in most cities were higher than they were in late 2015. It was also based on gross earnings and did not account for driver expenses."
That Washington Post article is garbage. It cites as the source of its numbers, the Buzzfeed article I quoted. But the only place the number "$20" appears in the Buzzfeed article is this:
"None of these advertisements mention driver expenses. The same goes for the alerts Uber sends to drivers — sometimes five times a day or more — telling them that other drivers on the road were making $20 or $30 an hour in gross fares."
Okay, so the first google result I found had an inflated number. I don't really get what point you're trying to get to. If you think I'm arguing Uber is a good/lucrative place to work, I'm not.
You do seem to be arguing that Uber drivers should have sufficient money to do a variety of things based on completely erroneous information about how much money they have.
Let's put some context on this. Disability insurance is $30/mo. And that amount is generally tax deductible for the self employed.
Yes, if you're poor it will be harder to buy health insurance, but you can avoid consumer debt at virtually any income. You can save up an emergency fund at virtually any income level. The fact that it might get more difficult to do any of these things as you get closer and closer to the lowest end of the poverty spectrum... is that really the argument we're trying to have? Because that seems like a silly thing to interject in a conversation about people who are going to be starting and running small businesses.
Disability insurance is $30/month for you, a person whose job has a near zero risk of causing a disability and whose job can still be performed even with many forms of disabilities. It is dramatically more for people with riskier jobs.
There are basically two options for disability insurance, 50% or 75% of what you currently make. I'm sure there's other options, but those are the default choices. The minutia of what's covered basically the same across the industry and if you just choose the first provider you talk to it's not really different than getting it from your employer where you had no choice of providers or coverage. The big barrier is realizing you have personal agency and can do basic things like shop.
> The big barrier is realizing you have personal agency and can do basic things like shop.
This argument reminds me of web designers who blame users for the mistakes they make when presented with a horrible user interface -- that there is no system so terrible that the user can't be a moral failure, 100% responsible for their own misfortune.
The difference between you and me is that you believe poor people are stupid and I don't. Otherwise you wouldn't have felt the need to qualify how difficult it would be for "poor people" to figure out how to buy disability insurance, a product that's largely off the shelf.
Fundamentally it's lack of time due to having to work 2+ gigs likely while juggling child care or elder care. People with money can pay people to do things for them, freeing up time. Even if they do it themselves, they likely have a more comfortable life so it's easier to devote an evening or a weekend to figuring out complicated medical/legal/financial scenarios.
Do you similarly feel that it's impossible for poor people to buy car insurance? Disability insurance is LESS complicated than that. Do you want the 50% of your current salary or 75% of your current salary option? That's it. Maybe you can pay a few extra bucks for a rider that increases your disability coverage each year as you get a raise. This is not complicated stuff and any insurance agent is going to be happy to walk you through it if you have questions.
Nobody's saying it's impossible or even difficult. But if I'm rushing from my shift at McDonald's to pick up my kid and drop them off at home with some dinner before heading to the late shift at Home Depot, I'm not going to be able to talk to an insurance agent who might very well be happy to walk me through it, let alone spend time actively thinking about what coverage I need.
You dodged my first question. Apply the same thing to car insurance. Are poor people generally incapable of attaining the "expertise" to be able to purchase car insurance?
Car insurance is much simpler than health insurance. Still, I expect most people without car insurance are poor, and the reason they don't have it is not simply a lack of money but also (and relatedly) a lack of time.
Generally yes, poor people are less capable of gaining the "expertise" to do many things, because they are busy trying to stay alive. It's textbook hierarchy of needs.
Noticed other replies; why the fixation on car insurance? I thought we were talking about structural impediments to poor people?
>Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.
This is in the context of a discussion about starting your own business. If you're on the tier of hierarchy of needs where you're struggling for food, then sure, maybe you shouldn't be starting your own business at this point. However, if you have the intellectual capacity to buy car insurance, and also are in a position to be starting your own business, you almost certainly have the cognitive ability to purchase disability insurance.
Poor people seem perfectly capable of buying car insurance as evidenced by the fact that millions of poor people have car insurance. What makes you think that purchasing disability insurance is so much more difficult?
They are certainly capable of buying it (at least, when regulation means that it is something you often are compelled and assisted to do before taking a newly-purchased car home, and reminded you must do under penalty of law when registering a car, and actually cited for if you fail to do it and are pulled over driving a car—which is a whole lot of pressure taken together), and many do; whether they are capable of making good decisions and weighing alternatives in that process is...unsupported by the evidence you've cited, as is the question of how this is germane to disability insurance absent a similar regulatory environment.
This discussion started out with me saying that you can start your own business even without another person in the house backing you up financially.
Somehow we've gotten from there to a point where you're suggesting that a poor person who is somehow capable of starting their own small business is, by the very nature of being poor, fundamentally incapable of making a good decision regarding disability insurance options. And it is because of this fundamental lack of cognitive ability that we need a regulatory environment demanding that the business owner (who is themself) must purchase disability insurance on their behalf?
I'm sorry, but you've just gotten to the point of nonsense.
> Somehow we've gotten from there to a point where you're suggesting that a poor person who is somehow capable of starting their own small business is, by the very nature of being poor, fundamentally incapable of making a good decision regarding disability insurance options.
I don't think anyone is actually suggesting that.
I was suggesting, essentially, that poverty is a vicious cycle. That, to quote the movie Hell or High Water, "I been poor my whole life. So were my parents, an their parents before 'em ... It's like a disease, passing from generation to generation. Becomes, a sickness, that's what it is ... Infects every person you know"
And obviously this isn't a universal. There are always exceptions, that goes without saying.
yes sometimes they are - because they are poor. The reason many poor contractors can't afford things like disability insurance is because they don't have the money. They have sub optimal spending habits thanks to poverty traps when they have much less income to begin with.
Please read the full context of the conversation. This is not a discussion about whether a specific poor person might have enough dollars in their pocket to buy disability insurance. This is a discussion about whether or not poor people have the cognitive ability to purchase disability insurance. The OP suggested that by the very nature of being poor a person should not be expected to be able to attain the "expertise" required to purchase disability insurance.
My contention is that this is a disgustingly classist view against poor people. Poor people, by and large, seem perfectly capable of purchasing car insurance, and disability insurance is generally less complicated.
That wasn't a platitude. That was a suggestion that the smart place to end the conversation was there. If you'd like to continue it, we can, it's just not easy over text.
Poor people seem perfectly capable of purchasing car insurance, as evidenced by the fact that millions of poor people have car insurance. What is it, specifically, about being poor that leads you to believe they lack the cognitive ability to purchase disability insurance? Or did you understand something other than cognitive ability when you read they couldn't attain "expertise?"
Given the high cost of healthcare in the US, the lack of affordable housing and other constraints, no, this is not merely an issue of lack of personal restraint.
Are we trying to talk about an average person who might be considering branching out on their own or are we going to try to solve every problem for a blind one legged cancer patient? For the average person it very much is a matter of adopting different behaviors including but not limited to personal financial restraint.
You are making a lot of assumptions about my current income and how much I have made historically. I did all of those things except buy my own health insurance when I was working inside at a pizza place, that means I was making less than people who deliver pizzas for a living.
I think the real tipping point is income level as an independent worker. Personally, I'm in software and got a 60% pay increase when I jumped to 1099. My wife didn't have health insurance offered before, and she still doesn't. But the $680/month I'm paying is easily covered by the increased income. (I was paying around $300/month even when my employer offered health insurance. And my coverage is actually much better now.) But I'm not a typical contractor, just a typical software contractor.
Are you paying 680/mo for just yourself or both you and your wife? That seems like a really high number, but maybe that’s the privilege of youth talking...
We are 38/33 and that's medical for both. Additional $57 for vision/dental (optional, of course). This is in PA. I was unsuccessful in using the marketplace, and in my county there's basically only one insurance provider any more. So I get quotes from them directly. On the bright side, it's good coverage. We could save $150/mo, but the deductibles go through the roof. Since we are child-bearing age (and my eyes are terrible), we prefer better coverage.
The trends in the article don't impact people like you much -- but they have a huge impact on these Uber drivers and Postmates runners, and there are a lot more of them. Your situation doesn't generalize to the wider population.
It might work for some people. Many people don't have a spouse providing health insurance - without that it's drastically different. Probably your spouse has a reliable job so you can weather the danger of not having work when a contract ends. You are fortunate, good for you. But if you got hurt, and were single, you'd be much more vulnerable. I'm lucky, I work in a full time job with all the benefits, but not everyone is that lucky.
I consulted for 5 years. I bought my own health insurance, and short and long term disability. I budgeted properly so that I could easily weather periods of time between contracts. This is all while being a single father. It's really not difficult, the hardest part for most people seems to be being responsible with your money. It's certainly not a matter of luck though. The only reason I stopped is because someone offered me significantly more than I was able to make on my own.
Last time I contracted I got into a individual market Blue Shield Silver Plan PPO for around $1100 a month. This was for family coverage. It is a matter of budgeting asking for a higher rate if need be. At the end of the day we all need to be aware of some form of budget to know how much we need and how much we can set aside and what not.
Did you ever require care that was not covered by insurance or maxed out your coverage? Or have an expensive pre-existing condition? There's certainly an element of luck involved, especially when it comes to the US healthcare system!
>Did you ever require care that was not covered by insurance or maxed out your coverage?
Not that I recall, but that situation could happen to you if you had employer or government provided coverage.
>Or have an expensive pre-existing condition?
No, but there are other options like health-shares. These are usually tied to religious organizations and works almost exactly like health insurance, pooling costs. Obamacare grandfathered in existing health shares but made it illegal to start new ones.
>There's certainly an element of luck involved, especially when it comes to the US healthcare system!
There's a certain element of luck to life in general. I'm certainly not dismissing the unfortunate souls you're referring to, but we equally should not pretend like these things are all that difficult for the average person to do.
There's an element of luck involved in absolutely everything.
Not specifically to you but this conversation is highly interesting because it demonstrates the two different attitudes - one from the person you were replying to and one from pretty much everyone else.
In software engineering it is the attitude of people who come up with a solution to their problem as compared to the attitude of the people who are complaining that the solution is not general enough and therefore should not be considered a solution.
That's a really interesting comment. I had taken it a little differently.
It feels to me that our minds have been atrophied by generations of being told that we can't do anything. Forget budgeting a small business, we can't even budget for our own family. Someone else, be it the government or our employer, has to provide some universal solution to all my problems like saving for retirement or being able to buy an antibiotic for my kid. So someone presents a solution, and rather than being able to take that, adjust it to our individual needs, our psyche is so weak that we just sit back and try to figure out all the ways we can avoid taking agency in our own lives, we need big brother to solve it for us.
Ultimately it's perhaps the same thing though. In your scenario people want to pick apart the solution so they can return back to deciding that their employer or the government has to provide a solution for them.
To me, this conversation represents the two classes.
One guy is living life probably pulling in upwards of $150,000 a year (or living in a lower cost of living place with six figures income). Simply budgeting well will cover all these things. And another thinks that "budgeting" means you don't get to eat on Mondays so you can keep on bills.
This discussion is not a comparison between a low income contract job and a job as a neurosurgeon. It's a comparison between a low income contract job and the type of "traditional" job that same worker might be qualified for.
Buying your own workman's comp is 0.0075% of your salary in my state ($0.75 per $100 in salary). Disability insurance is $30/mo for $50k salary, so if you're making $30k/yr then disability will be even less. You can make a budget, avoid consumer debt, and save an emergency fund at virtually any level of income. The median national income is $32k/yr for a single person. Sure, a lot of people making that kind of money also have bad personal finance habits. But the idea that it's impossible to live a decent life on the kind of income that half of all single people in the country are making is hyperbole.
Your numbers seem unrealistically low for the types of jobs that low income contract workers usually have. For a job like software development where very few types of injuries are likely to occur on the job and where very few types of injuries would prevent you from performing the job the rates are low. For a higher risk job, like driving the rates will be higher. For instance, in Florida a driver's worker's comp will cost almost ten times the number you stated[1].
For the majority of those jobs you're going to be making more money, too. Take, for example, construction work. Sure, your disability, workman's comp, etc. is going to be higher than if you're working a desk job. But at the same time the going rate for a random illegal immigrant you pick up at Home Depot around here is $20/hr.
I guess I'm person 2? I think that's not really what I was saying.
Here's my personal experience - I had a single parent who always worked and always had health insurance through her employer. In her 50s she got hurt and couldn't work much (no cobra, no money either) and lost her insurance. She worked in retail for a while. Then she got cancer and died. Maybe if she'd had more frequent checkups it might have been caught earlier? Maybe less stress would have helped? Who knows. I think if we had national health insurance or health insurance you can't lose, then a lot of people wouldn't face this problem, it would help in the aggregate. She never got to 65, so she didn't jump onto the safe medicare.
So you're saying even working for a company (retail) she was at least no better or worse off than if she'd been a consultant who couldn't afford health insurance on her own.
Whether or not there are improvements to be made to our healthcare system is an entirely different discussion than whether or not an average, able bodied person could reasonably go out on their own without another person working in the home to back them up financially. Of course it would be better/easier to have a support system with another worker in the house. Of course it would be better if you had easier access to healthcare. I would never suggest otherwise.
Also, I'm sorry for your loss. My mother is a cancer survivor and it's just a shit situation all the way through.
At the same time, companies fire by the millions in aggregate in a recessionary environment. Or worse, your employer simply vaporizes and goes out of business, which similarly happens in droves.
If you're a contractor, your exposure depends on who you're doing business with, how strong their circumstances are, just as it does when it comes to who is employing you.
The U6 went up to ~17.5% during the great recession. There is a very small group of elite tech companies that weathered that storm without firing people. Google is up at 80,000 employees now, Microsoft is at 125,000. Do they avoid layoffs in the next recession? I'm skeptical. Microsoft has almost no growth, any recession would hit them hard. Google's growth is 1/3 what it was ten years ago, a recession would slam their ad business and bring their growth down toward single digits.
> * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsored 401k...it's $55k/yr for 2018 (assuming you contribute 25% of earnings or make $220k/yr)
Note on this point: many company-sponsored 401ks do allow you to contribute up to $55k/yr - though a good chunk of that will be after-tax money. (Though again, the after-tax can often be converted to Roth, which has its own benefits)
Disclaimer: I am not an accountant and I am definitely not your accountant.
Heads up that you can only contribute 20% of your earnings up (up to the limit) to a SEP-IRA. This is because you can contribute up to 25% of your taxable income, but your contributions are deducted from your income.
For example, if you make $1, and put $0.20 in your SEP-IRA, your taxable income is $1 - $0.20 = $0.80, so the $0.20 you put in is the full 25% of your income.
To contribute $55K in 2018, you will need to generate $275K of income.
Disclaimer: I am not an accountant and I am definitely not your accountant.
You are correct to say that you can contribute 25% of compensation. However, your wages are different than your profits, even as a self-employed person.
Let's say you are self-employed and you make $1 of profits and pay yourself $0.80 of wages. You can contribute the other $0.20 you have to your SEP-IRA, since it's 25% of your wages (or 20% of your profits).
Because of this, you need $275K of profits to generate $220K of income and a corresponding $55K SEP-IRA contribution.
I guess part of why I posted that is the audience - I imagine in submitting this article to HN, it is meant to resonate with two subsets of people here:
1. Entrepreneurs running gig economy startups and the implications for how they should treat their workforce
2. Tech workers who work in the gig economy (e.g. Gigster developers, PullRequest reviewers, independent developers)
So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?
Man is a featherless biped may work to describe the category. But if you give a tax break based on the number of men living in each home, you'll find a lot of people plucking chickens.
> I guess part of why I posted that is the audience - I imagine in submitting this article to HN, it is meant to resonate with two subsets of people here:
That's a pretty limited view. There are plenty of non-entrepreneurs on HN who are looking for interesting technology and tech-related society articles. It could also be meant to resonate with people who just think that the gig economy is questionable development.
> So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?
I don't agree with that. I think the problem with contract work, especially the gig economy kind, is that it's a further progression of the dehumanization of work. More an erosion of the social contract than a failure of government regulation. That dehumanization reduces the buffers between actual people and the more sociopathic aspects of capitalism.
Drivers choose Uber when other options are available. So why would you judge that, and imagine that your view of “societal consequences” should trump their right to freely choose the best employment option for them and their personal situation?
trump their right to freely choose the best employment option for them and their personal situation
Yes, because of the externalities. If an Uber driver in London gets sick, he or she will still be treated by the NHS despite Uber’s business model involves paying no employer’s NI.
If you want to say the NHS simply shouldn’t treat those who don’t contribute well that’s a whole ‘nother thing...
The real question I have is what prospecting looks like, as that is typically the most difficult part of the process. In my experience, many BigCos like contracting through temp staffing agencies.
Are there reliable sources of contract work? I have yet to find any, though I admittedly haven't been looking the hardest.
Staffing agencies are reliable sources open to all programmers, but I have never personally taken a contract from one.
The best paid work comes from a professional network. When I look for a new project I send an email to former co-workers and some past clients asking for leads. I then follow up on those leads.
I am not a developer. I don't make a lot of money. I wouldn't say I am happy with my situation.
But, I am medically handicapped. When I had a corporate job, I lived in fear of losing my job for taking too much time off. My life revolved around getting myself together enough to make it to work 5 days a week.
I don't have those issues anymore. I can take time off at will and resume working when I feel better. My access to paid work is not threatened by that.
My income is portable. This has allowed me to repeatedly move to improve my quality of life. Historically, this was a luxury enjoyed by only the jet set and well off retirees, not working stiffs.
I think we need to provide national healthcare in the US to make the lack of benefits less of a problem. But I think if gig work is well designed, it can raise quality of life for ordinary people.
I wish my life were easier. I am really grumpy about it not being easier. But gig work is a viable solution for me under circumstances where most normal jobs simply are not. This has helped make it possible to make headway on my problems when I should simply be doomed with no real hope.
So I think we need to just focus on making gig work a positive. I don't think it is a given that it has to be a terrible experience, even for people who aren't making tons of money.
Well my utilization rate is 100% right now, so I objectively make more money than I made before, there is no getting around that one. If it were lower I would indeed need to pad it more, and hopefully with my next engagements I will be able to hit that rate :)
For those interested (namely, me) could you describe your current situation?
* What sort of business entity are you using? What considerations did you make when choosing this entity?
* What is your work like? Are you remote/onsite? Do you have one client or multiple?
* What is your staff like? Are you a lone worker? Do you have coworkers in your business? What did you choose to offload onto others?
* How do you manage taxes, insurance (beyond those covered by your wife), and finances?
* What alternatives have you considered in the event that your wife couldn't cover you?
Mostly interested because this seems like a viable career path (to me) but I would definitely want to consider it with eyes wide open and learn from someone else's successes and failures.
* Currently sole proprietor. Will switch to LLC or C Corp in 2018 (depending on income), but I'd talk to your accountant to find out what's best for you.
* I'm remote currently with high utilization client (as a subcontractor) and smaller retainer clients.
* I am a firm of 1.
* I have an accountant to manage taxes and finances. I keep meticulous records of what is a business vs a personal expense. The subcontractor gig is insured by the main contracting company. The retainer gigs stipulate it is knowledge/access only, so without any IP deliverables required, so there's no need for insurance on that. I may get insurance if my employment situation changes in terms of the contracts I take on. For this, I'd talk with your lawyer.
* I would just buy health insurance through the state. I live in MA, so we have to have something. We're both young and healthy, and she has an incredibly stable job, so I don't worry about this one too much.
I should point out that I'm very new to this (4 months in) so definitely don't look at me as a source of having "done things right" - I am learning every day and still sweating it all.
Very interesting. Thanks for being candid with your freshness to this experience; it's valuable all the same. A few more questions, as your availability permits:
* Have you considered an S-corp? If so, reasons against listing it as an option?
* Any recommendations in general contractors (even if not specific ones, just things to look for in a general contractor)?
* I guess I just lifted the term as it seemed appropriate; given you mentioned subcontracting I imagine there is an entity above you that does the direct contracting - any recommendations for what to look for in that contracting authority?
* LLC with S-Corp designation. This is very tax-advantaged vs. Sole Proprietor.
* Currently, I'm mostly on-site for one client.
* 1-person shop.
* I have an accountant. You want a good, small business
accountant.
* I buy health insurance for my family through the ACA exchange. It's very expensive so make sure you factor it into your rate.
I've had 2 FT gigs that lasted 6 months each since 2004 and regretted it both times. If you can handle having to network and interview frequently you can make more money with more flexibility as a contract developer.
* I use hourly mostly because it is common and is met with the least resistance. Either way, raise your rate at least a little after each gig. Don't get complacent, just keep ratcheting it up.
* I've actually been blessed with a great accountant. He's saved me thousands over the years and sent letters to the IRS on my behalf clearing up a couple issues along the way. I would look for someone who specializes in small, professional service firms that is used and referred by people in your area. If they tell you they don't think you should organize as an LLC, look elsewhere.
* Starting out I used recruiting firms. They have the advantage of an established network and getting you paid every 2-weeks. The disadvantage of course is they take a cut. Their first ask will always be a low-ball hoping they can get a huge margin. Always try to get them to make the first offer and always ask for more. You'd be surprised how much room they have to negotiate up most of the time. As I've made connections over the years I've relied more on my network, but I'll still use an agency to fill the gaps. Also, boutique consulting agencies can be great for sub-contract work. They often need to staff up for a project they just landed, but don't want to take on full-timers and they usually command excellent rates.
> boutique consulting agencies can be great for sub-contract work
I just wanted to second this point. In this way, checks both boxes off: one for getting the advantage of an established network like a recruiting firm; two for getting you the higher rates and not needing a middleman
> Am I in the minority here for being a contract developer who is happy to be in this place?
> * My wife works full time so she has our back for health insurance
Being an independent contractor or a self employed business owner is fine for someone who has an entrepreneurial bent coupled with unique skills that are in high demand. Such people can likely charge rates that more than compensate for the lack of employer benefits as a contractor.
However, the contractors described in the article don't appear to have that combination of advantages. Presumably they also don't have spouses who can carry them on their health insurance plans. In a previous era, their jobs might have previously carried benefits, but many of these jobs have been reclassified as "variable workforce" positions, as companies restructure their employment to minimize the carried costs and risk of fulltime employees.
> This far exceeds the 15% markup for self-employment tax.
It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors.
I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan.
>"It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan."
This is what bugs me to no end about insurance. They get you with a low intro rate, then jack it up a massive amount annually, and leave your option as basically switching (if there are better options even available), or shouldering more of the risk by moving to a high-deductible plan (which makes them more money).
Are there no good, consistently-priced insurance options for those who are not full-time employees with benefits?
Not just that; they keep changing the plans, so that the plan you are currently on may not be available next year, but there is a "similar" one that is 20% more expensive and has worse coverage (and/or higher deductible).
Those contractors that have LLCs may look into group rate insurance, as those are generally cheaper than individual ones (but you may need to have more than one employee to qualify).
Just because you are a contract developer does not mean you earn a high income. Even in the United States.
I am sure that few in my situation would like to admit it. For most of my adult life I have worked as a programmer on a contract basis mainly online for rates or fees that are well below the market rate for my area. For the last few years I have worked for non-funded or poorly funded startups for very small income amounts and no benefits. Even for jobs that were on site, many of the opportunities were spelled out in the ad or description as low rates like $70 or even $40 an hour.
I am sure that people will find lots of reasons to believe that I did something wrong or am an exceptional case, but I don't believe that. I think I am just an exception in terms of people like me who will admit it.
I have had a few well paid contracts but the income isn't consistent.
But not every contract programming gig is rich. It just absolutely isn't. And not everyone can get those high paying gigs. Also for me I have been trying to get into business in startups and not all startups can or want to receive funding and somebody like me is taking those jobs and happy to have them.
Again, go ahead and try to say there is something unusual or wrong. about me. I maintain the only really unusual thing is that I am admitting it on HN.
My current startup does have a lot of potential so I am hopeful about future income.
I worked in both ways and there are pros and cons.
If you are a good negotiator then contracting is best. I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me.
At the end of the day you pay either way in the sense that high benefits affect salary.
I’d rather get the straight hourly or daily rate and then build on costs for vacation, pension, insurance, etc.
Now it stinks if the rate does not cover necessary expenses as I’ve seen IT jobs try to straight line convert FTE to contractors (eg, $100k salary to $50/hour rate) but that’s why you need to be good at negotiating.
> I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me.
This isn't always true though. For example, health insurance. My employers package is far far better than anything I could get as an individual, and costs 1/5 f the closest comparable package that I could buy on my own.
Oh definitely. When I ran my 1099 business it was impossible to get insurance similar to my employers at the same cost. I had to pay a lot more.
But that’s what I mean by building it into your rate. If you know insurance costs you $20k to be similar to what a big company pays only $10k, then add it into your contract. Of course, contracting isn’t for everyone, especially if you can’t get a high enough rate to be more valuable to you than w2.
One aspect of the "gig economy" that I've not seen covered is the way it effects gigsters professional social graphs. At the deep end of Mechanical Turk services where work is dispatched by an algorithm (Uber/Lyft/AirBnB/etc.) there are no upward connections to supervisors and managers and officers and no lateral connections to coworkers.
This means that working does not provide insider access to potentially better (or alternative) jobs when coworkers move on. There's no implicit social framework for insider information. There's no personal channel where a Lyft driver finds out that Uber is a better opportunity (or vice versa).
To put it another way, two Lyft drivers have little basis for connecting on Linkedin. Not that I think Linkedin is great. Only that gigsters don't even get the loose social connections that Linkedin facilitates...and cynically, the gig economy casts other Lyft drivers as competitors rather than coworkers.
I think you raise a good point. This is possibly the effect of using apps to lower the transaction costs of arranging services. It allows work projects to be decomposed into isolated, repetitive micro-jobs.
Another aspect of gig economy companies controlling networking: they typically ban workers from communicating directly with customers. Ostensibly it's for safety reasons, but the real reason is most likely to prevent workers and customers from circumventing the fees. The result is that workers are not able to develop a regular set of clients which could provide referrals, etc.
Ride-hail drivers work alone, but they’re banding together online to compare notes, uncover new policies, and help each other navigate the rough roads of the gig economy.
Similar online communities exist for Mechanical Turk.
(I don't think your overall point is wrong, just pointing out that contractors often figure out ways to organize online anyway... This is a good trend, and hopefully spreads as a way to counteract the sometimes-isolating world of contract work...)
Personally, I think web forums like that are a poor substitute for actual interpersonal social connection. A 1-1 relationship with a friend, colleague, or supervisor can give you in particular a leg up when you need it. Any broadcast medium can't fill that role, all it can do is disseminate information to a wide group.
> can give you in particular a leg up when you need it. Any broadcast medium can't fill that role, all it can do is disseminate information to a wide group.
If all we're talking about is getting a small number of people a leg up, then is it so bad (socially) that contract work lacks that? In my mind, the whole question is about overall social benefit, thus benefit to the "wide group." In fact, if web forums are as equality-inducing as you imply (which I kind of doubt, to be honest), that would count as a big benefit overall to that kind of system.
> If all we're talking about is getting a small number of people a leg up
That's the wrong interpretation. It's about giving a large number of people each a personalized leg up. It's equality-inducing in the worst sense to have everyone hit the same indifferent and impersonal wall. Personalized opportunities are how you find holes through that wall.
Basically real human relationships are a safety valve in an inhumane system. Weak and distant broadcast relationships aren't.
One of the ways people get better jobs is when a former boss or coworker moves into a position with the authority to hire. Online communities centered around driving for Lyft/Uber don't provide that. As described, they tend to provide support to help people survive as gigsters not advance their careers. Perhaps they provide some ways to marginally leverage the system to obtain somewhat better wages, which isn't nothing but its not career enhancing.
I have noticed that too. If you drive for Uber you don't get much insight into the company, you never talk to a boss to learn something and you don't learn from coworkers. You also don't develop a brand or reputation for yourself.
This is a really great insight. It certainly bolsters the argument that these are dead in jobs. As in, the professional social graph literally dead ends.
On the other hand, I know a couple of people who started driving for Lyft recently to supplement income when their other freelance work slows. They've found pretty creative ways to make the most of the gig. One guy in particular is doing some social/influencer type stuff around it and has found some clients for his primary work as a content writer.
Going in the other direction, my wife is a lawyer and is always chatting with drivers and giving them her business card. She helped a driver with some questionable traffic tickets. Nothing major, just a short phone call and some free advice that got the tickets throw out. When his brother got hit by someone running a red light, she got the case.
There's always value generated when people connect. Sure, two Lyft drivers don't have a lot of reason to connect, but a Lyft driver has the opportunity to connect with people who do other things. Maybe there's some value in that that is just now being explored.
Sure, people can get creative. The difference is that gigsters have no alternative to being creative. But chatting up riders is part of Lyft driver's work because they must maintain high ratings. To put it another way, being a content writer or social influencer is entirely orthogonal to driving a car or delivering groceries or walking dogs on demand. A person can be a content writer or social influencer while having a regular job with benefits and coworkers and an expanding professional network...and most people would be better off career-wise in such circumstances.
I mean in the story, it is the lawyer in the back seat making some rain. It isn't the driver getting hired at the law firm or even getting a lead on a better job. The driver just avoided some of the costs of doing business that they might otherwise have payed. Not that that's nothing, but it's not career enhancing.
Actually, there are large Uber/Lyft driver groups on Facebook and probably elsewhere (9000 members for Bay Area alone), where information on deals and threats spreads like wildfire. It is not formal, but there seems to be some social capital acquired by members helping each-other out. In that kind of environment, the connections don't get deep, but breadth can't be beat (especially if you contribute valuable stuff to the group).
What's more interesting is that the the available Gig Economy workforce has aggregated so well that Social Groups can become the new Unions, and mass actions can trigger swiftly. Uber is valued highly due to switching costs, but one can start a competitor and let most of the company's drivers know in a day.
Our lack of universal and convenient primary care hinders the formation of small or new large businesses. Our medical care quality is low due to lack of data sharing that national health services enjoy for free. Our oddly expensive but low performing healthcare is a pathetic vestige of our apartheid racist labor history here in the USA. These issues do not concern fancy elective medicine we also sadly fetishize amidst our ongoing dysfunctioning. We prefer endless pitches of futuristic delusions than reliable heartbeat services. We will continue to suffer this needless hamstringing until we catch up with civilized people who can add, subtract, multiply and divide.
We should uncouple insurance from employers anyway. Offering benefits such as insurance was a hack that started during WW2 so that companies could get around the idiotic wage freezes imposed by the government, and it gives your employer far too much power over your health.
In my experience, the way the workforce is changing towards a contract economy helps no one except for employers.
In the short term, contractors can get more money by far - hour to hour. But when life events crop up such as illness, death in the family, personal injury, etc, the house of cards can become unstuck pretty rapidly if people haven't planned well enough for their rainy day.
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[ 4.9 ms ] story [ 303 ms ] threadIn the UK it’s provided by the NHS but these companies systematically dodge employer’s NI.
Yeah but it's being replaced by insurance that is utterly unaffordable for a lot of contract employees. If we want to decouple health insurance and employers (and we should) then we should be proactively working out what that looks like in the future.
Caused in part by the issues of employability of (some) chronically ill people, driving up costs, and making "individual" plans de facto "high risk pool plans". Which would be helped by, as you said (and I agree):
> decouple health insurance and employer
If holier-than-thou types try to ban these apps based on their own worldview, millions will suffer the loss of their first choice and be forced to accept their second choice - or unemployment.
Well yeah, some people are just awesome/lucky/blessed. Given nothing, they know how to build great things. But this is a strong minority of people.
The majority of people are just normal, they may have one or two skill that they are good at, but don't have the skills required to run their own company. A person can be a great employee developer whose capable of building awesome products, but an awful freelance one because they are not good at negotiation, management, finances, etc.
It's a step away from the efficient specialization of a corporate structure, where each employee only needs to be skilled at their particular job, to a guild-like structure where everyone is a worker, manager, accountant, book keeper and politician.
5% of healthcare consumers, are responsible for about 50% of all healthcare costs. That pool consists overwhelmingly of people over the age of 50. That's the high risk pool. Including them into any pool, isn't an improvement to the pool's cost structure.
What you're arguing for is that including them is superior morally. That's a perfectly legitimate premise obviously. It's radically inferior financially/economically, if we're talking about building risk pools.
Why? From my perspective the whole problem with healthcare and insurance is these are way far from a free markets. Wouldn't it be better if the insurance companies would just look at what people want and offer just that for the prices that make both sides interested?
Specifically I was replying to the idea of incorporating a large group outside the bounds of a company for insurance purposes. As it stands, the states may block it.
This is a problem for high income self-employed people with preexisting conditions. They probably won't be able to buy into an association health plan and they won't get premium subsidies from the government because they make too much, which means their premiums will be a ridiculous percentage of their income.
I switched from self-employed contracting to full time W2 with my biggest client back in December. The biggest reason is because they offered to pay for very good small group health insurance.
Really what we need is an expectation of being able to buy healthcare on our own with regular incomes.
Citation needed.
I'm not sure if the 8 hours is intended to be (8h + X break time), or (8h - X break time); I thought it was the former, but but might be mistaken. That's probably where the GP got their 7.5 from.
(2018) Under California law (which is much more generous to employees than federal law), if you are a non-exempt worker, you are entitled to meal and rest breaks: a 30-minute meal break if you work more than 5 hours in a workday, and 10 minutes breaks for every 4 hours you work
For an 8-hour work day, that would yield a 30 minute break + two ten minute ones.
0: https://calaborlaw.com/what-break-periods-am-i-entitled-to/
Modern civilization has advanced, why should the work week stay at 40 (and eroding in many workplaces in America?)
Also, correct me if I'm wrong but there are approximately 7 days a week and 7*8 > 40.
Let us suppose, what is at least supposable, whether it be the fact or not—that a general reduction of the hours of factory labour, say from ten to nine, would be for the advantage of the workpeople: that they would receive as high wages, or nearly as high, for nine hours’ labour as they receive for ten. If this would be the result, and if the operatives generally are convinced that it would, the limitation, some may say, will be adopted spontaneously. I answer, that it will not be adopted unless the body of operatives bind themselves to one another to abide by it. A workman who refused to work more than nine hours while there were others who worked ten, would either not be employed at all, or if employed, must submit to lose one-tenth of his wages. However convinced, therefore, he may be that it is the interest of the class to work short time, it is contrary to his own interest to set the example, unless he is well assured that all or most others will follow it. But suppose a general agreement of the whole class: might not this be effectual without the sanction of law? Not unless enforced by opinion with a rigour practically equal to that of law. For however beneficial the observance of the regulation might be to the class collectively, the immediate interest of every individual would lie in violating it: and the more numerous those were who adhered to the rule, the more would individuals gain by departing from it.
You are confusing employers paying for things that are part of your job and paying for things to cover your entire life. It's ridiculous to tie the latter to your employer because then you have to fear for your life if you lose your job.
Sure, there's a lot of newer tech in medical. But for a ton of routine medicine uses generic drugs, simple testing (scales, blood pressure, simply viewing abnormalities), and cheap care. For "routine medicine" this should be negligible cost - it's only because of systemic garbage I can't just go to the pharmacist and buy metformin without going through a fucking paywall.
Sure, I get something weird and/or strange, sure all bets are off.
And doctors want annual / quarterly renewals on prescriptions to check if your condition has gotten better or worse in regards to whatever the drugs were treating.
Because at the end of the day, if you overdose on something, someone will still call 911, an ambulance will still come haul you to the hospital, and doctors will still spend millions of dollars trying to save your life if they deem it feasible regardless of if you can afford it or not. Unless you have an explicit will saying not to do that. And when you cannot pay your million dollar hospital stay (and the uninsured cannot) the hospital gets to write off the loss and seek recompense from the government anyway.
And from the governments perspective, around the world, it is simply cheaper to provide regular and preventative care than to deal with the astronomical higher rate of emergency care people have to get in the US because they cannot afford the cheap routine stuff and instead cost the state life saving procedures instead.
But even if it were just weird things that cost a lot, that would still be a serious problem with the idea of expecting people to just buy healthcare as needed.
Even if the best case where they act if your best interest, you have to deal with all your benefits changing when you change jobs.
If all contractors are making 20% above a FTE, that's fine, but that's a decent chunk of change if you're high salary.
This is not evil corporations pushing their insurance choice upon you, it's government pushing employee insurance mandates on corporations. If that bothers you(enough to compel you to take political action), then vote or write your elected official. If your elected official ignores you, then consider that you are not the majority, or your elected official simply does not care, and is motivated by something other than their constituents well being.
The way they do it is by layoffs and planned attrition to return to growth. I'm sure everyone has seen a stock price jump when large scale layoffs are announced.
The main counterbalance is market pressure, which is why high-demand programmers don’t see this as often as other fields where people have less leverage, and, in bluer states, the risk that doing so will trigger government action.
The American worker is getting squeezed on both sides, private employers are offering less and less and government is not picking up the slack. The void will be filled, either by a private corporation or government, but if it's not you can say bye to the middle class.
Any other good or bad effects from Obamacare notwithstanding, if you want to decouple health plans from employment and specific employers, Obamacare is the wrong direction.
I contracted for a few years and it was impossible to get insurance at a reasonable cost because of an extremely common health condition that’s never caused complication in my life. So I was only able to get insurance through employers.
I would not qualify for affordable healthcare because of that pre-existing condition without Obamacare. Even as is, with the fragility of our political system, I am very wary of contract work; the concern that I could lose healthcare at any time based on elected idiots stymies me.
So imagine it's something high risk. "Oh, you have cancer? Yeah, we're not taking you on. Or if we do, we're going to charge you what we expect you to cost, which is going to be insanely high, to where you probably can't afford it."
Net effect: you can't afford healthcare.
The whole point of insurance is to spread the cost and risk widely, so that the healthy outliers help cover the cost of the unhealthy outliers. The fact that it's not always clear who those are (i.e., the healthy eating jogger who has a brain aneurysm and requires multiple expensive surgeries and months of care) should help with any perceived unfairness (though people are really, really bad at accepting that bad things can happen to them).
Your response is, "Well, what if you have cancer?" Fine, I wasn't trying to solve every problem for every person. I'm not suggesting that the current state of healthcare in the US is ideal, or even good. Instead of seeing that there is a path forward and considering that each individual might have to adjust to their own needs, or might have to take a different path altogether, you're just trying to shut down the conversation because the solution I provided is not universally applicable. That's an unnecessary and unhelpful response.
Do you have any actual experience purchasing health insurance before ACA, and later through an ACA exchange? I am not sure what exactly you are "recalling." I purchased health insurance for me and my wife through Covered California last year and found the process quick, the comparisons easy to make, and the pricing clear and reasonable. I have not purchased health insurance myself before the ACA, but from what I was told the options for independent contractors were few and expensive, and were difficult to find.
So, no, in my experience, the ACA did not decouple the affordability of a health plan from one's employer -- it made it worse.
I still don't follow your reasoning. You seem to be saying that any health insurance is too expensive for you to afford, so the ACA doesn't work? As you saw from COBRA, health insurance is expensive, and your compensation package from full-time employment obscures that expense, because typically your employer asks you to pay only part of the expense from your salary. You have to figure the real cost of health insurance into your rates as an independent contractor. The ACA made it easier to shop for health insurance as an independent.
I was in a similar situation to yours - when I was laid off last year, I ended up picking a plan from Covered California that was $80 less expensive per month than the offered COBRA plan, with significantly lower out of pocket costs ($0 vs $9,000 deductible, for starters), in a much more highly rated provider network. So the plan that I was getting from my employer was a lot worse than what I chose to buy through ACA. This would be more apparent if your employer paid out the cost of all of your benefits in your salary and then had you pay the full cost of insurance (which is essentially what happens when you are an independent contractor).
Finally, according to our healthcare rep, no one has been penalized for not taking a healthcare plan. The IRS sends out scary notices every year that they swear to god are going to assess penalties this year. And they haven't so far.
This is pretty shocking to me. With recent trends you can easily see that the other half of the population will be people in IT and health care (home service providers, nurses, etc.)
I've never had a contract job, I'm not sure if part-time college jobs count, are contract employees getting work via an agency or are they on their own? If these agencies exist are they helping to negotiate on behalf of their workers?
It feels like there is space for a digital employment agency, there must be a way to combine the "flexibility" of contract work with the longer term cushion that comes with a full time job.
So all of it exists, as it surely would in an efficient market!
Any new opportunities that are available, my agency contacts me and asks if I am interested in doing work there, or if I want to stay at my current place. I have been working at my current place in govt defense embedded work for the past 2+ years getting paid more than most direct hires with the only real downsides being no 401k matching and no personal/sick time when looking at total comp. I am also able to work from home and make my own hours, so I am more flexible than direct hires who have to remain in the office during "core hours".
Some people here have been contract workers for well over a decade, so as long as the company has a need for you, you can remain on contract. If you want to go direct with the company you are contracted at, you can also negotiate that during their periods when they open up direct hiring.
This is my situation here in the Midwest as a defense contractor, so it may differ elsewhere and in different fields of work. Needless to say, it's not a bad gig, especially if you can get into an area where the company can't afford to lose you. For example, I am one of two people in the entire company who knows the OS architecture for every vehicle we make, and I got paid extra money to grind out a few hours a week to learn that architecture.
That's not exactly a downside from a total compensation perspective, so long as you are considered self-employed for setting up a one-participant 401k. You get significantly more control over what portion of your total compensation is taxable vs tax-deferred.
Are there no umbrella companies in the USA? like we have in the UK to avoid the IR 35 hassles.
> You as a contractor just have to factor those additional costs in to your decision-making process when evaluating compensation packages.
Likewise, with the individual mandate removed, there's no reason employees can't opt out of health insurance. But in both cases, the pay does not change. If I opt out of health insurance, and save my company hundreds of dollars per paycheck, I do not get a raise in that amount. The incentive then is to accept health insurance as a employee and do without as a contractor.
The problem for everyone is uninsured contractors will also have incentive to avoid treatment as long as possible due to the expense. By the time they seek treatment, the cost of treating the problem has ballooned. They won't be turned away, they won't be able to pay, and hospitals won't go out of business. I'll let you guess who ends up paying for the outsized medical bills they generate.
And then when they laugh in your face, try it with another company. And another. And another. And let me know how it goes.
http://www.kalzumeus.com/2012/01/23/salary-negotiation/
He's talking about stuff like Uber. Their whole deal is having a take-it-or-leave it gig-employment offer. They'd laugh in his face if they actually took the time to talk to anyone face-to-face, which they don't.
It is amazing how out of touch people in the software echo chamber are....
“We find that 94% of net job growth in the past decade was in the alternative work category,” said Krueger. “And over 60% was due to the [the rise] of independent contractors, freelancers and contract company workers.” In other words, nearly all of the 10 million jobs created between 2005 and 2015 were not traditional nine-to-five employment.
https://qz.com/851066/almost-all-the-10-million-jobs-created...
What I find intellectually-interesting is the idea that it's a big hetereogenous system where different parts and aspects are "crumpling" (both concurrently and sequentially) rather than one big politically-noisy snap.
Push kids towards college for earning-potential; defer usual retirement ages; have fewer children; live in a smaller place; both spouses work, live in the city, since you need a denser job-supply for both spouses to be hired and commute; work a second part-time job; etc.
Especially in economics, nothing is simple. Everything has branching consequences and influences. Nothing happens in isolation. Trends are the products of a thousand knobs being tuned according to another thousand knobs each.
You are unlikely to get as good a deal from health insurance providers as your employer.
Having insurance negotiated by individuals is a huge impediment for entrepreneurship.
Apparently to you everyone for socialized medicine is a freeloader who doesn't work or pay taxes.
This polarized vision is a large part of what plagues the country.
Of course, that word genuine, in both contexts, is abused in US healthcare “insurance”, as I’ve discussed in numerous of my comments (and I work in the industry - it’s an absolute abuse of the definition).
The other side of this is considering what happens if you get sick: should we just let you die and bill your next of kin for the cleanup costs? If you’re not that heartless, all of the alternatives cost more than helping people get medical care. I’d much prefer to pay a little more so people can get treated rather than pay for them to be disabled and out of the workforce, or to spare their families the crippling cost of trying to effectively be an insurance pool with a single-digit number of members.
Everyone's particular set of values will vary, but that is mine.
https://en.wikipedia.org/wiki/Theory_of_the_firm
Though if you have niche skills or knowledge (and I'd include contacts in that), you can be better off with contracts that leverage your specialisms specifically, and not waste your time with work that can be done cheaper by more freely available labour.
The economies of scale argument is not always a good argument because you need to specify where does the deal cut comes from. I think it comes from the fact that the overhead in negotiating a huge amount of contracts is more amortized. So we could have this kind of good deals if independents find a way to reunite themselves. Otherwise the economies of scale argument could basically be the answer to everything ("We need a worldwide government because of economies of scale").
Who knows what we people will find to address this issue. Maybe we'll have coworking space packages with benefits ?
You cant rely on a group and be independent at the same time!
Why couldn't independent unite themselves voluntarily ?
the act of uniting is literally antithetical to being independent. I can't even understand why you would ask that question. Why can't red be blue, makes about as much sense as asking why independent people couldn't unite and still be independent
My apologies if there was a misunderstanding over language. Your English is good enough that I had assumed you were a native speaker
I gave an example. There could be a franchise of co-working space / hotels / resorts all over the world for nomadic or independent people and they would do the bargaining for their clients.
What is it you want to know, though?
Look, I can't claim to have been a contractor for any significant length of time, so maybe I'm talking out my ass and every freelancer here can tell me so. But the fact is the american people have let employers have too much power for far too long, and encouraging people to take contract work seems to me like just another step in the wrong direction of giving these companies even more power, and then everyone is worse off for it.
The early Tea Party was supposed to be organized around a theme of "stop the nonsense and denial!" with respect to these kinds of problems, but it was quickly corrupted by the ignorant and by the people who were hoping to find ignorance. Rather than turning energy and community action into positive change, they were derided and stymied.
So now we have Trump who is basically nonsense and denial personified.
Not that Obamacare did anything to get us off the employer healthcare crutch. In that respect, things seem to have just gotten worse.
And I'm a person that doesn't think everything needs to be political! It's just hard to get around the fact that American is grossly misgoverned here. But the American voter can't bring itself to vote on real issues instead of rooting for its political team. This gives me little hope that we'll ever get the 2/3 to 3/4 consensus we'll need to practically fix this (1).
(1) Even if we don't need that many people agreeing to pass legislation, I think things like reforming entire sectors of the economy and employer/employee relationships requires very broad support to be both fair and lasting. Having 51% of voters pee in the cornflakes of the other 49% doesn't get us anywhere. Hopefully that's clear given American politics since 2006 or so.
EDIT: To tie this back to contract work, contract work is great and provides needed dynamism and small-business know-how to the economy. But it's very risky. One needs an independent source of income (other investments, working professional spouse) or a big pile of capital so you can weather ups and downs, take health sabbaticals if needed, hire temp help sporadically, etc.
I agree that they're terrible jobs that one should take only if truly desperate for work or perhaps to supplement another income. But talking about whether people taking them are cut out to negotiate contracts totally misses the point.
All to be at the mercy/whims of this company.
Most of the workforce cannot work in tech. People are desperate. Hell--even most of tech will be thinned out in a few months.
I don't see it getting better either.
I don't see a business out there not trying to eliminate jobs. You have immigrants that are happy with being exploited. You have a whole generation of people who don't believe in unions.
I know a lot of you don't believe in government regulations, and I'm not either for the most part, but these "side hussle", gig jobs are begging for a butt slapping. F they want to exploit workers--move to the country that allows exploitation. Just go!
If you can't guarantee minimum wage--have the federal government takeover the website. Yes, I'm looking right at you Mechanicalturk/Fiverr. (I know nothing about Fiverr--but can just picture the thieving site.). If you are taking advantage of Independent Contractor laws--have the federal government do their job. Don't pay sales tax--have the you know. Hold onto fees for weeks because you can--gave the federal government shut it down. I'm not just picking on tech. I would like to do away with all volunteer jobs, in every sector of society, except within the family. Yes, Moderators would get paid. Internships would be history.
It was kinda cute a few years ago, but now I see companies just exploiting.
"Hay bro--we got our app. Website is hot. Now how do we get someone to deliver our product for essentiall free? Oh yea--and those taxes? I guess that's why they had Retail leases? You mean the customer drove their car to us? Trippy? Our app will work? Why bro? Because American employment hasen't been this bad in years. What--the unemployment number is low? You have to look at the ever increasing "able bodied, but just gave up" number. There's tons of works we can Hussle."
https://techsolidarity.org
However I have heard success stories (online) from people that find work in their local area/network.
I've decided to do my own thing (a sort of micro ISV), and if at all possible I plan to not do freelance work ever again. I'm probably not cut out for it, but I also think software development is just a poor profession for (fixed price) freelance work.
If you have a spouse who is employed and you can gain health coverage for him/her, and if this sort of child care flexibility is important to you (because, say, your toddler gets sick all the time), then working as a contractor can make sense.
At the same time, I generally agree with you regarding the precedent it sets in the aggregate. I also realize that the case I've described is somewhat special.
I've been permanent, and I've been contract, I really hope I get to finish the rest of my career as a contractor.
* I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax.
* My wife works full time so she has our back for health insurance
* I can save way more for retirement with an SEP IRA than I ever could with a company-sponsored 401k...it's $55k/yr for 2018 (assuming you contribute 25% of earnings or make $220k/yr)
I can understand that the Gig Economy is certainly not benefiting everyone (e.g. Uber drivers, Postmates runners), but I mean boutique consulting firms have existed for a while and many of them achieve many millions in revenue even with only a few partners. Am I missing something or delusional in my thinking?
If you're confused, then you have a lot in common with many Uber drivers!
That language, offloads, is loaded. This idea that it's someone else's responsibility to handle even the most trivial of life's decisions for us is toxic. If you don't understand the basic concepts around running a small business, there's plenty of books on the subject in the library.
Where on earth is that number coming from? Uber?
https://www.buzzfeed.com/carolineodonovan/internal-uber-driv...
"In early 2015, a study commissioned by Uber found that drivers in 20 cities, including New York, Los Angeles, San Francisco, and Boston, were grossing around $17 an hour.... But the $17-an-hour figure was based on data from 2014, when Uber rates in most cities were higher than they were in late 2015. It was also based on gross earnings and did not account for driver expenses."
This is from an article complaining about how little Uber drivers make...
>But in three large metropolitan cities, drivers make far less than the national average, about $20 per hour, after expenses.
"None of these advertisements mention driver expenses. The same goes for the alerts Uber sends to drivers — sometimes five times a day or more — telling them that other drivers on the road were making $20 or $30 an hour in gross fares."
Yes, if you're poor it will be harder to buy health insurance, but you can avoid consumer debt at virtually any income. You can save up an emergency fund at virtually any income level. The fact that it might get more difficult to do any of these things as you get closer and closer to the lowest end of the poverty spectrum... is that really the argument we're trying to have? Because that seems like a silly thing to interject in a conversation about people who are going to be starting and running small businesses.
Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.
This argument reminds me of web designers who blame users for the mistakes they make when presented with a horrible user interface -- that there is no system so terrible that the user can't be a moral failure, 100% responsible for their own misfortune.
Generally yes, poor people are less capable of gaining the "expertise" to do many things, because they are busy trying to stay alive. It's textbook hierarchy of needs.
Noticed other replies; why the fixation on car insurance? I thought we were talking about structural impediments to poor people?
>Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.
This is in the context of a discussion about starting your own business. If you're on the tier of hierarchy of needs where you're struggling for food, then sure, maybe you shouldn't be starting your own business at this point. However, if you have the intellectual capacity to buy car insurance, and also are in a position to be starting your own business, you almost certainly have the cognitive ability to purchase disability insurance.
i.e., being poor is harder than it looks ...
Somehow we've gotten from there to a point where you're suggesting that a poor person who is somehow capable of starting their own small business is, by the very nature of being poor, fundamentally incapable of making a good decision regarding disability insurance options. And it is because of this fundamental lack of cognitive ability that we need a regulatory environment demanding that the business owner (who is themself) must purchase disability insurance on their behalf?
I'm sorry, but you've just gotten to the point of nonsense.
I don't think anyone is actually suggesting that.
I was suggesting, essentially, that poverty is a vicious cycle. That, to quote the movie Hell or High Water, "I been poor my whole life. So were my parents, an their parents before 'em ... It's like a disease, passing from generation to generation. Becomes, a sickness, that's what it is ... Infects every person you know"
And obviously this isn't a universal. There are always exceptions, that goes without saying.
>It's also expensive, inconvenient, time-consuming, and risky to be poor. None of the suggestions you make are "easy" for poor people.
>Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.
This whole thing is about me calling out rectang for suggesting that poor people are too stupid to buy disability insurance.
You: "The soft bigotry of low expectations..."
You: But what if you're mentally disabled?
You: Jane
;)
The long answer to this question is, in fact, extremely long.
My contention is that this is a disgustingly classist view against poor people. Poor people, by and large, seem perfectly capable of purchasing car insurance, and disability insurance is generally less complicated.
You have to have sufficient income to consistently cover basics with money leftover. Some people simply don't have that.
Not that I recall, but that situation could happen to you if you had employer or government provided coverage.
>Or have an expensive pre-existing condition?
No, but there are other options like health-shares. These are usually tied to religious organizations and works almost exactly like health insurance, pooling costs. Obamacare grandfathered in existing health shares but made it illegal to start new ones.
>There's certainly an element of luck involved, especially when it comes to the US healthcare system!
There's a certain element of luck to life in general. I'm certainly not dismissing the unfortunate souls you're referring to, but we equally should not pretend like these things are all that difficult for the average person to do.
Not specifically to you but this conversation is highly interesting because it demonstrates the two different attitudes - one from the person you were replying to and one from pretty much everyone else.
In software engineering it is the attitude of people who come up with a solution to their problem as compared to the attitude of the people who are complaining that the solution is not general enough and therefore should not be considered a solution.
It feels to me that our minds have been atrophied by generations of being told that we can't do anything. Forget budgeting a small business, we can't even budget for our own family. Someone else, be it the government or our employer, has to provide some universal solution to all my problems like saving for retirement or being able to buy an antibiotic for my kid. So someone presents a solution, and rather than being able to take that, adjust it to our individual needs, our psyche is so weak that we just sit back and try to figure out all the ways we can avoid taking agency in our own lives, we need big brother to solve it for us.
Ultimately it's perhaps the same thing though. In your scenario people want to pick apart the solution so they can return back to deciding that their employer or the government has to provide a solution for them.
One guy is living life probably pulling in upwards of $150,000 a year (or living in a lower cost of living place with six figures income). Simply budgeting well will cover all these things. And another thinks that "budgeting" means you don't get to eat on Mondays so you can keep on bills.
Person 2: But what if you're a diabetic blind one legged cancer patient?
Buying your own workman's comp is 0.0075% of your salary in my state ($0.75 per $100 in salary). Disability insurance is $30/mo for $50k salary, so if you're making $30k/yr then disability will be even less. You can make a budget, avoid consumer debt, and save an emergency fund at virtually any level of income. The median national income is $32k/yr for a single person. Sure, a lot of people making that kind of money also have bad personal finance habits. But the idea that it's impossible to live a decent life on the kind of income that half of all single people in the country are making is hyperbole.
[1] https://www.floridawc.com/workerscompensation/policy/rates/
Here's my personal experience - I had a single parent who always worked and always had health insurance through her employer. In her 50s she got hurt and couldn't work much (no cobra, no money either) and lost her insurance. She worked in retail for a while. Then she got cancer and died. Maybe if she'd had more frequent checkups it might have been caught earlier? Maybe less stress would have helped? Who knows. I think if we had national health insurance or health insurance you can't lose, then a lot of people wouldn't face this problem, it would help in the aggregate. She never got to 65, so she didn't jump onto the safe medicare.
Whether or not there are improvements to be made to our healthcare system is an entirely different discussion than whether or not an average, able bodied person could reasonably go out on their own without another person working in the home to back them up financially. Of course it would be better/easier to have a support system with another worker in the house. Of course it would be better if you had easier access to healthcare. I would never suggest otherwise.
Also, I'm sorry for your loss. My mother is a cancer survivor and it's just a shit situation all the way through.
It's a trade-off and comes with definite benefits like you listed.
At the same time, companies fire by the millions in aggregate in a recessionary environment. Or worse, your employer simply vaporizes and goes out of business, which similarly happens in droves.
If you're a contractor, your exposure depends on who you're doing business with, how strong their circumstances are, just as it does when it comes to who is employing you.
The U6 went up to ~17.5% during the great recession. There is a very small group of elite tech companies that weathered that storm without firing people. Google is up at 80,000 employees now, Microsoft is at 125,000. Do they avoid layoffs in the next recession? I'm skeptical. Microsoft has almost no growth, any recession would hit them hard. Google's growth is 1/3 what it was ten years ago, a recession would slam their ad business and bring their growth down toward single digits.
Note on this point: many company-sponsored 401ks do allow you to contribute up to $55k/yr - though a good chunk of that will be after-tax money. (Though again, the after-tax can often be converted to Roth, which has its own benefits)
Heads up that you can only contribute 20% of your earnings up (up to the limit) to a SEP-IRA. This is because you can contribute up to 25% of your taxable income, but your contributions are deducted from your income.
For example, if you make $1, and put $0.20 in your SEP-IRA, your taxable income is $1 - $0.20 = $0.80, so the $0.20 you put in is the full 25% of your income.
To contribute $55K in 2018, you will need to generate $275K of income.
I don't think this is correct. We are talking about employER contribution to the employee SEP-IRA account, which is 25% of the compensation, not exceeding the annual limit (https://www.irs.gov/retirement-plans/retirement-plans-faqs-r...).
You are correct to say that you can contribute 25% of compensation. However, your wages are different than your profits, even as a self-employed person.
Let's say you are self-employed and you make $1 of profits and pay yourself $0.80 of wages. You can contribute the other $0.20 you have to your SEP-IRA, since it's 25% of your wages (or 20% of your profits).
Because of this, you need $275K of profits to generate $220K of income and a corresponding $55K SEP-IRA contribution.
For more, see: https://en.wikipedia.org/wiki/SEP-IRA#Reduced_rate
It's low skill work, groundskeepers, janitors, housekeepers, drivers. Businesses have moved to contracting to effectively lower total compensation.
1. Entrepreneurs running gig economy startups and the implications for how they should treat their workforce
2. Tech workers who work in the gig economy (e.g. Gigster developers, PullRequest reviewers, independent developers)
So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?
Man is a featherless biped may work to describe the category. But if you give a tax break based on the number of men living in each home, you'll find a lot of people plucking chickens.
That's a pretty limited view. There are plenty of non-entrepreneurs on HN who are looking for interesting technology and tech-related society articles. It could also be meant to resonate with people who just think that the gig economy is questionable development.
> So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?
I don't agree with that. I think the problem with contract work, especially the gig economy kind, is that it's a further progression of the dehumanization of work. More an erosion of the social contract than a failure of government regulation. That dehumanization reduces the buffers between actual people and the more sociopathic aspects of capitalism.
Yes, because of the externalities. If an Uber driver in London gets sick, he or she will still be treated by the NHS despite Uber’s business model involves paying no employer’s NI.
If you want to say the NHS simply shouldn’t treat those who don’t contribute well that’s a whole ‘nother thing...
* Contract developers have greater flexibility on taxes. "Pass through" entities are big now.
* Contract developers are more independent in a lot of ways. Some employees have clauses where they give up all IP they create.
* Contract developers often move from project to project more, which gives them a better network effect then their W2 counterparts.
Are there reliable sources of contract work? I have yet to find any, though I admittedly haven't been looking the hardest.
The best paid work comes from a professional network. When I look for a new project I send an email to former co-workers and some past clients asking for leads. I then follow up on those leads.
But, I am medically handicapped. When I had a corporate job, I lived in fear of losing my job for taking too much time off. My life revolved around getting myself together enough to make it to work 5 days a week.
I don't have those issues anymore. I can take time off at will and resume working when I feel better. My access to paid work is not threatened by that.
My income is portable. This has allowed me to repeatedly move to improve my quality of life. Historically, this was a luxury enjoyed by only the jet set and well off retirees, not working stiffs.
I think we need to provide national healthcare in the US to make the lack of benefits less of a problem. But I think if gig work is well designed, it can raise quality of life for ordinary people.
I wish my life were easier. I am really grumpy about it not being easier. But gig work is a viable solution for me under circumstances where most normal jobs simply are not. This has helped make it possible to make headway on my problems when I should simply be doomed with no real hope.
So I think we need to just focus on making gig work a positive. I don't think it is a given that it has to be a terrible experience, even for people who aren't making tons of money.
* What sort of business entity are you using? What considerations did you make when choosing this entity?
* What is your work like? Are you remote/onsite? Do you have one client or multiple?
* What is your staff like? Are you a lone worker? Do you have coworkers in your business? What did you choose to offload onto others?
* How do you manage taxes, insurance (beyond those covered by your wife), and finances?
* What alternatives have you considered in the event that your wife couldn't cover you?
Mostly interested because this seems like a viable career path (to me) but I would definitely want to consider it with eyes wide open and learn from someone else's successes and failures.
* I'm remote currently with high utilization client (as a subcontractor) and smaller retainer clients.
* I am a firm of 1.
* I have an accountant to manage taxes and finances. I keep meticulous records of what is a business vs a personal expense. The subcontractor gig is insured by the main contracting company. The retainer gigs stipulate it is knowledge/access only, so without any IP deliverables required, so there's no need for insurance on that. I may get insurance if my employment situation changes in terms of the contracts I take on. For this, I'd talk with your lawyer.
* I would just buy health insurance through the state. I live in MA, so we have to have something. We're both young and healthy, and she has an incredibly stable job, so I don't worry about this one too much.
I should point out that I'm very new to this (4 months in) so definitely don't look at me as a source of having "done things right" - I am learning every day and still sweating it all.
* Have you considered an S-corp? If so, reasons against listing it as an option?
* Any recommendations in general contractors (even if not specific ones, just things to look for in a general contractor)?
Thanks for your time and response(s)!
* A general contractor? I hear that term I think of those guys who work on your house. Could you be more specific?
* I guess I just lifted the term as it seemed appropriate; given you mentioned subcontracting I imagine there is an entity above you that does the direct contracting - any recommendations for what to look for in that contracting authority?
* LLC with S-Corp designation. This is very tax-advantaged vs. Sole Proprietor.
* Currently, I'm mostly on-site for one client.
* 1-person shop.
* I have an accountant. You want a good, small business accountant.
* I buy health insurance for my family through the ACA exchange. It's very expensive so make sure you factor it into your rate.
I've had 2 FT gigs that lasted 6 months each since 2004 and regretted it both times. If you can handle having to network and interview frequently you can make more money with more flexibility as a contract developer.
* What are some recommendations you have for establishing a rate? Do you use hourly, weekly, or project?
* What do you look for in a small business accountant (it sounds like you may have had a less-good one in the past)?
* What avenues do you typically find yourself using for contract work? i.e. LinkedIn, job boards, word of mouth, etc?
* I've actually been blessed with a great accountant. He's saved me thousands over the years and sent letters to the IRS on my behalf clearing up a couple issues along the way. I would look for someone who specializes in small, professional service firms that is used and referred by people in your area. If they tell you they don't think you should organize as an LLC, look elsewhere.
* Starting out I used recruiting firms. They have the advantage of an established network and getting you paid every 2-weeks. The disadvantage of course is they take a cut. Their first ask will always be a low-ball hoping they can get a huge margin. Always try to get them to make the first offer and always ask for more. You'd be surprised how much room they have to negotiate up most of the time. As I've made connections over the years I've relied more on my network, but I'll still use an agency to fill the gaps. Also, boutique consulting agencies can be great for sub-contract work. They often need to staff up for a project they just landed, but don't want to take on full-timers and they usually command excellent rates.
I just wanted to second this point. In this way, checks both boxes off: one for getting the advantage of an established network like a recruiting firm; two for getting you the higher rates and not needing a middleman
Being an independent contractor or a self employed business owner is fine for someone who has an entrepreneurial bent coupled with unique skills that are in high demand. Such people can likely charge rates that more than compensate for the lack of employer benefits as a contractor.
However, the contractors described in the article don't appear to have that combination of advantages. Presumably they also don't have spouses who can carry them on their health insurance plans. In a previous era, their jobs might have previously carried benefits, but many of these jobs have been reclassified as "variable workforce" positions, as companies restructure their employment to minimize the carried costs and risk of fulltime employees.
It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors.
I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan.
This is what bugs me to no end about insurance. They get you with a low intro rate, then jack it up a massive amount annually, and leave your option as basically switching (if there are better options even available), or shouldering more of the risk by moving to a high-deductible plan (which makes them more money).
Are there no good, consistently-priced insurance options for those who are not full-time employees with benefits?
Those contractors that have LLCs may look into group rate insurance, as those are generally cheaper than individual ones (but you may need to have more than one employee to qualify).
I am sure that few in my situation would like to admit it. For most of my adult life I have worked as a programmer on a contract basis mainly online for rates or fees that are well below the market rate for my area. For the last few years I have worked for non-funded or poorly funded startups for very small income amounts and no benefits. Even for jobs that were on site, many of the opportunities were spelled out in the ad or description as low rates like $70 or even $40 an hour.
I am sure that people will find lots of reasons to believe that I did something wrong or am an exceptional case, but I don't believe that. I think I am just an exception in terms of people like me who will admit it.
I have had a few well paid contracts but the income isn't consistent.
But not every contract programming gig is rich. It just absolutely isn't. And not everyone can get those high paying gigs. Also for me I have been trying to get into business in startups and not all startups can or want to receive funding and somebody like me is taking those jobs and happy to have them.
Again, go ahead and try to say there is something unusual or wrong. about me. I maintain the only really unusual thing is that I am admitting it on HN.
My current startup does have a lot of potential so I am hopeful about future income.
If you are a good negotiator then contracting is best. I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me.
At the end of the day you pay either way in the sense that high benefits affect salary.
I’d rather get the straight hourly or daily rate and then build on costs for vacation, pension, insurance, etc.
Now it stinks if the rate does not cover necessary expenses as I’ve seen IT jobs try to straight line convert FTE to contractors (eg, $100k salary to $50/hour rate) but that’s why you need to be good at negotiating.
This isn't always true though. For example, health insurance. My employers package is far far better than anything I could get as an individual, and costs 1/5 f the closest comparable package that I could buy on my own.
But that’s what I mean by building it into your rate. If you know insurance costs you $20k to be similar to what a big company pays only $10k, then add it into your contract. Of course, contracting isn’t for everyone, especially if you can’t get a high enough rate to be more valuable to you than w2.
Slow-motion train wreck.
* Do the work from home or wherever I want
* Use my own tools and equipment
* Work when I want to (within reason)
* Have a say in the deadlines
* Can turn down projects
But the minute you dictate my hours and where the work is done? No way.
Isn't that how US law determines if someone is actually a contractor vs an employee?
This means that working does not provide insider access to potentially better (or alternative) jobs when coworkers move on. There's no implicit social framework for insider information. There's no personal channel where a Lyft driver finds out that Uber is a better opportunity (or vice versa).
To put it another way, two Lyft drivers have little basis for connecting on Linkedin. Not that I think Linkedin is great. Only that gigsters don't even get the loose social connections that Linkedin facilitates...and cynically, the gig economy casts other Lyft drivers as competitors rather than coworkers.
Another aspect of gig economy companies controlling networking: they typically ban workers from communicating directly with customers. Ostensibly it's for safety reasons, but the real reason is most likely to prevent workers and customers from circumventing the fees. The result is that workers are not able to develop a regular set of clients which could provide referrals, etc.
The Network Uber Drivers Built:
Ride-hail drivers work alone, but they’re banding together online to compare notes, uncover new policies, and help each other navigate the rough roads of the gig economy.
Similar online communities exist for Mechanical Turk.
(I don't think your overall point is wrong, just pointing out that contractors often figure out ways to organize online anyway... This is a good trend, and hopefully spreads as a way to counteract the sometimes-isolating world of contract work...)
If all we're talking about is getting a small number of people a leg up, then is it so bad (socially) that contract work lacks that? In my mind, the whole question is about overall social benefit, thus benefit to the "wide group." In fact, if web forums are as equality-inducing as you imply (which I kind of doubt, to be honest), that would count as a big benefit overall to that kind of system.
That's the wrong interpretation. It's about giving a large number of people each a personalized leg up. It's equality-inducing in the worst sense to have everyone hit the same indifferent and impersonal wall. Personalized opportunities are how you find holes through that wall.
Basically real human relationships are a safety valve in an inhumane system. Weak and distant broadcast relationships aren't.
Otherwise they might talk too much: https://motherboard.vice.com/en_us/article/pgkk7b/newbie-dri...
It's a total dead-end.
On the other hand, I know a couple of people who started driving for Lyft recently to supplement income when their other freelance work slows. They've found pretty creative ways to make the most of the gig. One guy in particular is doing some social/influencer type stuff around it and has found some clients for his primary work as a content writer.
Going in the other direction, my wife is a lawyer and is always chatting with drivers and giving them her business card. She helped a driver with some questionable traffic tickets. Nothing major, just a short phone call and some free advice that got the tickets throw out. When his brother got hit by someone running a red light, she got the case.
There's always value generated when people connect. Sure, two Lyft drivers don't have a lot of reason to connect, but a Lyft driver has the opportunity to connect with people who do other things. Maybe there's some value in that that is just now being explored.
I mean in the story, it is the lawyer in the back seat making some rain. It isn't the driver getting hired at the law firm or even getting a lead on a better job. The driver just avoided some of the costs of doing business that they might otherwise have payed. Not that that's nothing, but it's not career enhancing.
What's more interesting is that the the available Gig Economy workforce has aggregated so well that Social Groups can become the new Unions, and mass actions can trigger swiftly. Uber is valued highly due to switching costs, but one can start a competitor and let most of the company's drivers know in a day.
In the short term, contractors can get more money by far - hour to hour. But when life events crop up such as illness, death in the family, personal injury, etc, the house of cards can become unstuck pretty rapidly if people haven't planned well enough for their rainy day.