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Why not make everyone independent contractors?


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#1 SOAP

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Posted 18 February 2014 - 07:31 AM

I work on and off as a freelance designer, had had jobs were I received a 1099 instead of a W-2, and recently my fiance has recently been hired as an indie contractor as well. There's many pro's and con's to it but sometimes I get the foolish notion that maybe we should just abolish traditional employer/employee relationships altogether and make all jobs independent contractor jobs.

 

It's not something I think about seriously, nor do I think it will magically fix all our problems with the economy. I'm pretty sure it would exploited to hell by employers desperately looking to weasel their way out paying out benefits, livable wages, retirement ect. to their workers. Blah, blah...

 

HOWEVER, since it is such a huge problem for employers to cover all the cost that comes with having employees, conservatives are always complaining about how it hurts the economy, and liberals complain about corporations mistreat their employees, sometimes I wonder why don't we just go the opposite extreme and just make everyone an independent contractor. Everyone. Every single last worker. From janitors, to teachers, to doctors, to CEO's. At the very least everyone who works in the Private sector.

 

At the very least it would be... different. Different as in not better or worse, just... a huge change. One thing that would be different, or should if done right, is that it would change how employers relate to their employees. Workers would have more power and equal footing, more-or-less, with their employers since they're no longer their bosses, per se, but their clients. They wouldn't be confined to a schedule or even a workplace, necessarily. And a worker can always hire someone else to do their work for them. As an indie contractor, you're getting paid for the end result. Who does it and where does not matter.

 

The downside is that you don't get any benefits, such jobs are only temporary, and I'm pretty sure your client can break your contract and essentially "fire" you for any damn reason at any time they please. And there's probably a whole bunch of legal headaches that go in to that as well. However, maybe at least some of these would be offset by the fact that with everyone as a contractor, the job force will be highly mobile. You might lose a job more easily but you might end up finding another just as fast. And if you do good enough work, it might speak for itself. You might end up working for several clients instead of just one employer.

 

Hopefully this would encourage people to work harder, since they'll feel empowered by having more say in what their pay is, when, and where they'll work, even if the burden of their training, healthcare, and retirement falls squarely on their shoulders.

 

As crazy as it sounds, I think it could work. But then again, I can see it falling to pieces rather quickly. There's already a huge misunderstanding on how independent contracting is suppose to work. For example I've seen companies try to claim someone as a independent contractor when in reality they were enforcing a lot rules and expectation on the worker that would only be appropriate if they were an employee.

 

In any case, it would be interesting to see.



#2 Hana-Nezumi

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Posted 18 February 2014 - 07:57 AM

You basically mentioned yourself all the reasons it absolutely wouldn't work... The minor potential benefits are completely outweighed by the massive potential for abuse and complete instability.

#3 SOAP

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Posted 18 February 2014 - 08:46 AM

Instability isn't what I'm worried about. Life is unstable. My line of thinking is with more instability might come with more flexibility and opportunities. You might not be guaranteed a stable paycheck for years on end but being freed from obligation to a single company might open more options for workers. The potential for abuse worries me more. Currently companies already mislabel employees as independent contractors to avoid paying taxes and such. Largely this comes from employers and workers being equally ignorant, though employers might actively keep their workers ignorant since it behooves them more to keep their workers in the dark about what the rights are. I'd imagine there'd need be harder crack downs by the IRS on such abuses, especially if everyone is going to a contractor now.

 

Another way I'd imagine offsetting the abuses is to keep labor unions, but re-purpose their role in the labor force slightly. They would act as a union of contractors, who may or may not chose to all work for the same client for a given period of time. Instead of one contractor having to watch his or her own back, they all collective negotiate with the client and all parties involved make sure no one person is being abused. They'd also collectively will shoulder the cost of healthcare, retirement, training, ect for their members. Essentially,  a group of people all doing the same job, acting as equals, and watching each others' backs.

 

If anything, this is worse for employers, who are now clients and have less control over their workforce, since it's not something they own but a group of people they have to engage with as equals. I'm also pretty sure the IRS wouldn't care for such a change either as that would mean less tax revenue from employers. And if they can't get it from employers, contractors might get hit harder on an individual level. But it does bring more power to the individual even if it brings more responsibility.

 

I'd imagine most people won't care for that kind of power in their own lives though and would be more than happy to continue having others control their lives if it means more predictability and less responsibilities. I ain't mad at that at all though...


Edited by SOAP, 18 February 2014 - 08:46 AM.


#4 Jasi

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Posted 18 February 2014 - 10:31 AM

Why would unions not take over any potentially abusive roles that you see employers as having? You're basically saying now unions are the employers. 



#5 Egann

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Posted 18 February 2014 - 11:32 AM

Well, in theory the employee/ employer relationship is just a medium-to long-term contract relationship. In theory.

 

Also, nice to see you again, SOAP.

 

The real problem is that people like stability in their lives. Working for one employer at a set rate or salary? That's stable. You can plan budgets, use your financial resources accurately, and generally have a feeling for your own situation in life. And, as any good business mind will tell you, a stable cash flow is actually worth more than a somewhat larger cash flow which is irregular (the specific amount depends on interest rates).

 

But it would have some implications for entry level work in particular. One of the problems we have at the moment is that the minimum wage is too high. Back when times were good back in 2006, yeah this minimum wage would have been fine, but wages need to shrink when the economy bursts. Of course the reverse is also true: when times are good, workers seldom ask for enough raises to actually be what they're worth to the employer.

 

So...you're a contractor. The economy goes belly up and your next contract is worth a third less than your last one, no fault of your own. Most people can't survive that sort of swing without falling into bankruptcy because our debt system assumes steady payment.



#6 SOAP

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Posted 18 February 2014 - 04:40 PM

Why would unions not take over any potentially abusive roles that you see employers as having? You're basically saying now unions are the employers. 

 

Because unions would be more like memberships. The difference, in theory, is that it's like the difference between the credit union and a bank. In a bank, your money isn't yours, it belongs to the bank and they make a profit off it by loaning it out to others. That's why some banks fine people for not having enough in their account. Not for overdrafting, but for not having enough money. They're beholden to shareholders to make profit, which fuels all a lot of shady practices like giving out loans they know customer's can't afford. Wheras witha credit union, the customers are the owners and you own your money.

 

In theory making labor unions the new "employers" should work the same way. Workers are still their own bosses. They might elect one of their as a representative during decision making, negotiating with clients, ect. It's far more equitable and democratic. And it's a much smaller, more manageable scale than the current employer/worker relationships we have. Much of the abuses we have in the workforce is the distance between employers and workers is so great, neither one can relate to the other. Employers don't know the struggles of their employees. They just see them as yet another expense. And employees don't always see all costs their employers have to deal with just to keep them employed.

 

Well, in theory the employee/ employer relationship is just a medium-to long-term contract relationship. In theory.

 

Also, nice to see you again, SOAP.

 

The real problem is that people like stability in their lives. Working for one employer at a set rate or salary? That's stable. You can plan budgets, use your financial resources accurately, and generally have a feeling for your own situation in life. And, as any good business mind will tell you, a stable cash flow is actually worth more than a somewhat larger cash flow which is irregular (the specific amount depends on interest rates).

 

But it would have some implications for entry level work in particular. One of the problems we have at the moment is that the minimum wage is too high. Back when times were good back in 2006, yeah this minimum wage would have been fine, but wages need to shrink when the economy bursts. Of course the reverse is also true: when times are good, workers seldom ask for enough raises to actually be what they're worth to the employer.

 

So...you're a contractor. The economy goes belly up and your next contract is worth a third less than your last one, no fault of your own. Most people can't survive that sort of swing without falling into bankruptcy because our debt system assumes steady payment.

 

I don't know if minimum wage is too high. Probably for small businesses and franchises but I kinda feel ts hard to believe bigger companies, like Wal-Mart, can afford to pay their workers a bit more than the bare minimum. Cost of living certainly is high. Even if you cut back to bare minimum essentials, it's still hard to break even trying work $7.22 an hour. Even if it's stable paycheck, that's a stable miserable life. You could try to get a second, a third, a fourth job but then you end up working just live. Most workers probably are fine with that. I guess people prefer consistency over a feast-or-famine kind of life. It is very hard for things to change for the better though when your life life is always in the hands of others. With the way things currently are, employers benefit from having a workforce that's constantly on the brink of poverty and with no real power of their own because that keeps labor cheap. It also benefits them to keep them uneducated. Why pay for a handful of educated, highly skilled workers when they have a dozen more unskilled workers for the same price? I don't agree that's the best way for things to run. It's definitely not the only way.

 

Edit: That's why I find the notion of "Pulling yourself up by your own bootstraps" laughable. You can't exactly pull yourself by your own bootstraps if your boots don't belong to you.


Edited by SOAP, 18 February 2014 - 04:54 PM.


#7 JRPomazon

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Posted 24 February 2014 - 08:53 PM

I have a friend who works as a bio-engineer for a company in the Boston area. He's worked for them for several years but still is considered an independent contractor. He wants the company to hire him as an employee, but for one reason or another they just won't although this has not stopped them from hiring new people into their work force. This in itself is a shitty situation, where a company doesn't want the complete responsibility of hiring a worker and providing him benefits but likes him having to do the work. This for every job in the country? We'd all be on welfare because it'd be a consistent payment each week rather than looking to for a spot before being completely replaced with another cog.






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