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Part of the reason white collar firms outsource is that benefits usually need to be uniform across all employees. If you are a white collar firm with generous

Part of the reason white collar firms outsource is that benefits usually need to be uniform across all employees. If you are a white collar firm with generous benefit packages, it becomes comparatively expensive to hire blue collar workers yourself compared to outsourcing. Decent health insurance (~$20K/year) is more than the federal minimum wage ($14.5K/year). I'm not suggesting this is moral, but it is reality. At a factory, with many workers at similar pay levels, this won't be as much of an expense. Unfortunately, a second reason you see outsourcing are job functions where many of the workers in a geographic area are undocumented. Companies can't hire undocumented workers directly, but will allow a middleman to do so on their behalf.

jjeaff 6y ago
That's not true. You can offer better packages for your higher paid employees. Outsourcing blue collar labor has to do with offering any benefits at all. Once your company has 50 employees or more, you must offer at least a bare minimum health insurance plan to all full time employees. Outsourcing is cheaper, because you can deal with small companies that are more focused on taking advantage of employees by doing things like making sure no one works more than 30 hours a week.
- lotsofpulp 6y ago
  > You can offer better packages for your higher paid employees. Wouldn’t the company lose the tax benefits if they fail non discrimination testing because the highly compensated employees (HCEs) received disproportionate benefits?
  - jjeaff 6y ago
    Only if the factors you are descriminating with are considered protected. The ACA is still being implemented in this regard, so pay level or executive level may or may not become "protected" but as of now, I don't think it is.
gnicholas 6y ago
SF's recently-passed 'overpaid executive tax' [1] pushes companies further in this direction. https://www.nbcnews.com/business/business-news/san-francisco-voters-pass-overpaid-executive-tax-n1246644 https://www.nbcnews.com/business/business-news/san-francisco...
zaphirplane 6y ago
I see like the private jet and limo service, that is uniform across all employees and the CEO

jjeaff 6y ago

That's not true. You can offer better packages for your higher paid employees. Outsourcing blue collar labor has to do with offering any benefits at all. Once your company has 50 employees or more, you must offer at least a bare minimum health insurance plan to all full time employees. Outsourcing is cheaper, because you can deal with small companies that are more focused on taking advantage of employees by doing things like making sure no one works more than 30 hours a week.

lotsofpulp 6y ago
> You can offer better packages for your higher paid employees. Wouldn’t the company lose the tax benefits if they fail non discrimination testing because the highly compensated employees (HCEs) received disproportionate benefits?
- jjeaff 6y ago
  Only if the factors you are descriminating with are considered protected. The ACA is still being implemented in this regard, so pay level or executive level may or may not become "protected" but as of now, I don't think it is.

gnicholas 6y ago

SF's recently-passed 'overpaid executive tax' [1] pushes companies further in this direction. https://www.nbcnews.com/business/business-news/san-francisco-voters-pass-overpaid-executive-tax-n1246644 https://www.nbcnews.com/business/business-news/san-francisco...

zaphirplane 6y ago

I see like the private jet and limo service, that is uniform across all employees and the CEO