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The Challenges of Being in the New Contract Workforce

193 points by happy-go-lucky 9y ago

gaius 9y ago
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.
- tghw 9y ago
  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.
  - gaius 9y ago
    Why should your health care be determined by your employer? In the UK it’s provided by the NHS but these companies systematically dodge employer’s NI.
  - mywittyname 9y ago
    It is both.
    - bronson 9y ago
      A correction to the bottom?
      - Chaebixi 9y 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.
  - untog 9y ago
    > 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.
    - FireBeyond 9y ago
      > 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): > decouple health insurance and employer
- cbeach 9y ago
  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.
rsbartram 9y ago
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/ https://latechnews.org/los-angeles-gig-economy/
- mywittyname 9y ago
  > 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.
SamReidHughes 9y ago
Good (edit: in the long run). The services they list, like health insurance, retirement, or pensions, should be decoupled from your employer.
- z_open 9y ago
  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.
  - wincy 9y ago
    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).
    - maxxxxx 9y ago
      Just make one big risk pool nationwide. Easy to administer .
      - adventured 9y ago
        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.
40acres 9y ago
> 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.
- JoeAltmaier 9y ago
  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!
- brightball 9y ago
  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.
- stevenwoo 9y ago
  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.
- Spooky23 9y ago
  It's called a bodyshop. They've been around for decades.
- hatsubai 9y ago
  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.
mi100hael 9y ago
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.
- noxxten 9y ago
  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.
  - zip1234 9y ago
    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-provided-health-insurance https://www.mercatus.org/publication/tax-exemption-employer-...
  - mi100hael 9y ago
    Yep, I've been there. Like I said: > You as a contractor just have to factor those additional costs in to your decision-making process when evaluating compensation packages.
  - deleted 9y ago
    [deleted]
- danjoc 9y ago
  >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.
frgtpsswrdlame 9y ago
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. https://qz.com/851066/almost-all-the-10-million-jobs-created-since-2005-are-temporary/ https://qz.com/851066/almost-all-the-10-million-jobs-created...
- Terr_ 9y ago
  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.
  - zanny 9y ago
    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.
ttoinou 9y ago
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"
- vinceguidry 9y ago
  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.
  - acdha 9y ago
    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.
    - trfergus 9y ago
      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.
      - module0000 9y ago
        Yea - we can work and pay taxes to give you a "boon" as you try out your next big idea. Sounds great for you, not so great for me. Hard pass.
rb808 9y ago
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.
- downrightmike 9y ago
  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.
lev99 9y ago
Is anyone here a member of the mentioned freelancer union? I'd be interested in hearing a member's perspective.
- twobyfour 9y ago
  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. What is it you want to know, though?
- zrail 9y ago
  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.
rdlecler1 9y ago
I think this speaks to the importance of universal healthcare.
Ancalagon 9y ago
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.
- NicoJuicy 9y ago
  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
  - Ancalagon 9y ago
    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.
deleted 9y ago
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gadders 9y ago
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.
- yarrel 9y ago
  The US doesn't have the NHS.
  - gadders 9y ago
    >> (I guess not having to worry about health insurance helps somewhat, though)
- deleted 9y ago
  [deleted]
lacker 9y ago
"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.
- module0000 9y ago
  What's going on is ad revenue. Pick a touchy subject, write something(references and quality not required), and watch the impressions stack up.
acconrad 9y ago
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?
- briffle 9y ago
  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..
  - Consultant32452 9y ago
    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.
    - dgabriel 9y ago
      But possibly not easy for an Uber driver, rather than a highly skilled tech worker.
      - Consultant32452 9y ago
        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.
jrowley 9y ago
I guess one of the only advantages of more contractors is that may eventually push us to single payer healthcare system.
prepend 9y ago
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.
- maccard 9y ago
  > 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.
  - prepend 9y ago
    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.
Animats 9y ago
The US will have huge numbers of broke old people in future decades.
- logfromblammo 9y ago
  Reminder: the 2020s is a "future decade".
- dredmorbius 9y ago
  That's a realisation which hit me about 5-7 years back. Slow-motion train wreck.
apercu 9y ago
I'm totally cool with "contract" work (that's what I do in a way) so long as I: * 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.
- deleted 9y ago
  [deleted]
- dabockster 9y ago
  > 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?
  - apercu 9y ago
    There is freelance contract and contract employment. Those are two different things, but, yea, to a degree you're right.
brudgers 9y ago
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.
- mrxd 9y ago
  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.
- Robotbeat 9y ago
  Perhaps there's not social connection directly in the workplace, but there IS social connection between Uber/Lyft/etc drivers online. It was on HN a week or two ago: https://www.fastcompany.com/40501439/the-network-uber-drivers-built https://www.fastcompany.com/40501439/the-network-uber-driver... https://news.ycombinator.com/item?id=16110598 https://news.ycombinator.com/item?id=16110598 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...)
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jonbarker 9y ago
Very excited about MTurk's feature called Premium Qualifications. Anyone ever have success with this?
Chiba-City 9y ago
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.
db48x 9y ago
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.
King-Aaron 9y ago
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.
WalterBright 9y ago
> According to the poll, 51 percent of freelance and contract workers do not receive benefits common to many full-time jobs — sick leave, unemployment insurance or retirement savings. Back when I worked at Boeing, there were many contractors. They usually were paid double the hourly rate of the salarymen. But they got no benefits, and could be let go without notice. Turns out that the Boeing benefits package was worth about 40% of the salary, and coupled with the unreliability of contract employment, it worked out about even steven to be paid double. Sadly, the article does not delve into the pay differential aspect of salary vs contractor. Safety nets don't come for free.
cbeach 9y ago
As a contractor I don’t feel I opted out of a “social contract.” Instead, I opting in to a tailored package of benefits that I choose myself. I fund (at very reasonable cost) my insurances directly. The phrase “social contract” sounds like statist utopian fiction to me. It’s a sad world indeed, when employees can only rely on the impersonal, bureaucratic HR department of their massive employer. Or the cold, dead hand of the state and its civil servants. Freedom lies in taking responsibility for your own affairs. Insuring yourself against calamity. Saving money for a rainy day. Step outside our one-size-fits-all system, and further both your career and your security.

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.

tghw 9y ago
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.
- gaius 9y ago
  Why should your health care be determined by your employer? In the UK it’s provided by the NHS but these companies systematically dodge employer’s NI.
- mywittyname 9y ago
  It is both.
  - bronson 9y ago
    A correction to the bottom?
    - Chaebixi 9y 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.
- untog 9y ago
  > 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.
  - FireBeyond 9y ago
    > 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): > decouple health insurance and employer
cbeach 9y ago
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.

rsbartram 9y ago

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/ https://latechnews.org/los-angeles-gig-economy/

mywittyname 9y ago
> 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.

SamReidHughes 9y ago

Good (edit: in the long run). The services they list, like health insurance, retirement, or pensions, should be decoupled from your employer.

z_open 9y ago
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.
- wincy 9y ago
  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).
  - maxxxxx 9y ago
    Just make one big risk pool nationwide. Easy to administer .
    - adventured 9y ago
      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.

40acres 9y ago

> 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.

JoeAltmaier 9y ago
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!
brightball 9y ago
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.
stevenwoo 9y ago
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.
Spooky23 9y ago
It's called a bodyshop. They've been around for decades.
hatsubai 9y ago
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.

mi100hael 9y ago

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.

noxxten 9y ago
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.
- zip1234 9y ago
  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-provided-health-insurance https://www.mercatus.org/publication/tax-exemption-employer-...
- mi100hael 9y ago
  Yep, I've been there. Like I said: > You as a contractor just have to factor those additional costs in to your decision-making process when evaluating compensation packages.
- deleted 9y ago
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danjoc 9y ago
>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.

frgtpsswrdlame 9y ago

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. https://qz.com/851066/almost-all-the-10-million-jobs-created-since-2005-are-temporary/ https://qz.com/851066/almost-all-the-10-million-jobs-created...

Terr_ 9y ago
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.
- zanny 9y ago
  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.

ttoinou 9y ago

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"

vinceguidry 9y ago
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.
- acdha 9y ago
  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.
  - trfergus 9y ago
    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.
    - module0000 9y ago
      Yea - we can work and pay taxes to give you a "boon" as you try out your next big idea. Sounds great for you, not so great for me. Hard pass.

rb808 9y ago

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.

downrightmike 9y ago
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.

lev99 9y ago

Is anyone here a member of the mentioned freelancer union? I'd be interested in hearing a member's perspective.

twobyfour 9y ago
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. What is it you want to know, though?
zrail 9y ago
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.

rdlecler1 9y ago

I think this speaks to the importance of universal healthcare.

Ancalagon 9y ago

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.

NicoJuicy 9y ago
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
- Ancalagon 9y ago
  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.

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gadders 9y ago

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.

yarrel 9y ago
The US doesn't have the NHS.
- gadders 9y ago
  >> (I guess not having to worry about health insurance helps somewhat, though)
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lacker 9y ago

"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.

module0000 9y ago
What's going on is ad revenue. Pick a touchy subject, write something(references and quality not required), and watch the impressions stack up.

acconrad 9y ago

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?

briffle 9y ago
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..
- Consultant32452 9y ago
  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.
  - dgabriel 9y ago
    But possibly not easy for an Uber driver, rather than a highly skilled tech worker.
    - Consultant32452 9y ago
      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.

jrowley 9y ago

I guess one of the only advantages of more contractors is that may eventually push us to single payer healthcare system.

prepend 9y ago

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.

maccard 9y ago
> 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.
- prepend 9y ago
  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.

Animats 9y ago

The US will have huge numbers of broke old people in future decades.

logfromblammo 9y ago
Reminder: the 2020s is a "future decade".
dredmorbius 9y ago
That's a realisation which hit me about 5-7 years back. Slow-motion train wreck.

apercu 9y ago

I'm totally cool with "contract" work (that's what I do in a way) so long as I: * 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.

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dabockster 9y ago
> 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?
- apercu 9y ago
  There is freelance contract and contract employment. Those are two different things, but, yea, to a degree you're right.

brudgers 9y ago

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.

mrxd 9y ago
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.
Robotbeat 9y ago
Perhaps there's not social connection directly in the workplace, but there IS social connection between Uber/Lyft/etc drivers online. It was on HN a week or two ago: https://www.fastcompany.com/40501439/the-network-uber-drivers-built https://www.fastcompany.com/40501439/the-network-uber-driver... https://news.ycombinator.com/item?id=16110598 https://news.ycombinator.com/item?id=16110598 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...)

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jonbarker 9y ago

Very excited about MTurk's feature called Premium Qualifications. Anyone ever have success with this?

Chiba-City 9y ago

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.

db48x 9y ago

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.

King-Aaron 9y ago

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.

WalterBright 9y ago

> According to the poll, 51 percent of freelance and contract workers do not receive benefits common to many full-time jobs — sick leave, unemployment insurance or retirement savings. Back when I worked at Boeing, there were many contractors. They usually were paid double the hourly rate of the salarymen. But they got no benefits, and could be let go without notice. Turns out that the Boeing benefits package was worth about 40% of the salary, and coupled with the unreliability of contract employment, it worked out about even steven to be paid double. Sadly, the article does not delve into the pay differential aspect of salary vs contractor. Safety nets don't come for free.

cbeach 9y ago

As a contractor I don’t feel I opted out of a “social contract.” Instead, I opting in to a tailored package of benefits that I choose myself. I fund (at very reasonable cost) my insurances directly. The phrase “social contract” sounds like statist utopian fiction to me. It’s a sad world indeed, when employees can only rely on the impersonal, bureaucratic HR department of their massive employer. Or the cold, dead hand of the state and its civil servants. Freedom lies in taking responsibility for your own affairs. Insuring yourself against calamity. Saving money for a rainy day. Step outside our one-size-fits-all system, and further both your career and your security.