Comment by criley2 | Hacker News Reader

Comment by criley2 | Hacker News Reader

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"They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases most of these costs."

* Payroll taxes: OF COURSE they're saving the same amount on taxes! It's not like they pre-pay taxes on an assumed amount. It's a % of what they pay you. If they pay you less, they pay less taxes on your behalf.

* Workers Comp: Firms play insanely low rates on workers comp for programmers, and workers comp is generally calculated at (RATE for job class) * ($100 payroll allocated to job class). If you pay the employee less, your workers comp premium decreases at the same rate.

* PTO: If the company wishes to offer full time PTO benefits to a part timer, they may, but many businesses have separate PTO policies for full and part time employees, including slower accrual for part timers.

Training time and management overhead are probably the real costs here.

> In fact, more people working fewer hours increases most of these costs.

More people working fewer hours could also increase productivity (that's the point of this discussion) thus could increase revenue and profit, as well.

If you pay 10% more and make 20% more revenue, that's a GOOD DEAL

You're correct but you're missing one large expense: Health/Wellness (at least, in the US, where it's partially paid for by one's employer).

I'm assuming the OP was expecting to keep this benefit since it's a critical thing for most people. The company could choose to pay for less of a share (and most companies reduce or eliminate this benefit for part-timers) but assuming it's left alone, it would not be reduced any with a reduction in the cost of salary.

You mentioned training time and management, but there's also "employee support costs" that increase by employee count regardless of salary such as HR and other support staff, state/local/federal compliance requirements that are based on the total number of people employed rather than salary (though many of these are limited to full-time staff) and others that I can't speak to since it's not my area of expertise, but his point is still valid in those areas.

On PTO - you're right in that I haven't encountered an employee that doesn't reduce the total allotment of PTO for part-timers. But even if they didn't, this would go down precisely with salary since it's paid as a full day's work not worked and that day would now be 25% cheaper.

In a sane system the health insurance costs scale with wages.

Do the US ones not do that?

Why would that be a sane system? IMO a sane system is one where the paid cost scales with the real costs of the health care, no?

Ones health care costs arent going to be cut in half if hours are cut in half. Still need just as many annual checkups, may still have the same diabetes etc.

No, health care is implicitly a system of shared costs to benefit all of society by limiting the amount of ill people present as much as possible, thus increasing the health of everyone else by reducing contacts with ill people. In such a system, costs are of course taken on by every single participant according to their means.

Read up on german health insurance for example.

I agree that that is a sane system, but it's not correct to call the payment an "insurance cost" if it is calculated according to means, not according to expected future treatment costs.

That's what was causing the confusion and dissent.

(Also … don't ask what US health insurance costs are based on. It's too horrible to contemplate. They're based on, among other things, your employer's negotiating power vis-à-vis the health insurance industry.)

Fair enough. I spoke a little simply.

Forgive my sarcasm:

> Read up on german health insurance for example.

Which one, the one where middle income employees pay healthcare for all the poor and incapable, or the one where the wealthy and some happy civil servants don't?

The American system is terrible, but I really don't think that we are qualified to point fingers.

You failed to formulate a coherent disagreement. Please address the actual points of my post and speak clearly.

>the one where middle income employees pay healthcare for all the poor and incapable

That about sums up the US system... I don't particularly like the idea of the federal government getting their grubby fingers into more than they are constitutionally mandated to, but a single-payer system could cut out the byzantine insurance coding and billing bureaucracy that causes medical costs to be completely arbitrary and opaque.

It is a sane system because everyone is paying into it, and you can do things on a larger scale to help more people. With health care being disconnected from the job, it doesn't tie people to an employer they hate and changing jobs is less of a risk. There are pluses and minuses, of course.

They still should have checkups, but not everyone needs them annually. Still might have diabetes, but with less stress and actually having time to cook proper meals, the diabetes might be better controlled and have cost savings in the long term (fewer complications) - and possibly short term if they have type 2 and go from insulin to pills. Sweden has been testing out 6 hour days - with nurses, they find overall absenteeism has dropped and folks are happier. Large scale, this would probably mean that folks are sick less often. Might not be cut by 25%, but improvement is still improvement.

In a sane system healthcare is provided to everyone free and has nothing to do with employment status ;)

That is of course implicit. No wages, no costs.

The funding for health care still needs to come from somewhere, this optimally being a tax on income.

Yeah I got straw-manned pretty hard (and took the bait), like I was advocating a fully volunteer health network or money on trees situation...

There's no such thing. It's just deluding yourself and a bit dishonest to say "free" in this context, please try to say what you mean.

Is it actually, 'In a sane system healthcare is billed to everyone as a percentage tax on their income capped at some dollar amount'. Or perhaps you think it should be an uncapped percentage of income? I expect there is no country on Earth where the cost of healthcare literally has nothing to do with employment status, in-so-much as single-payer healthcare is always funded at least partially by income taxes.

One advantage most other countries have, with the government being the plan manager, is that the pool of taxes they can utilize for funding is larger. Income taxes partially fund health care, yes, but so does VAT.

But at any rate, if you ignore the "free" point of the original poster, that post was quite correct. America leans heavily on corporations to perform the management of health care, and I don't see that as particularly "sane" to be honest. To me, such is an unnecessary competitive advantage to large corporations that can better manage the bureaucracy and expense. Small business owners often cannot afford the time and expense to offer this (understandably, to be honest). Consequently, employees that are self-employed or working for small companies may have to forgo health insurance.

It is very possible that this leads to some talented employees resisting leaving a corporation purely for health insurance reasons, a phenomenon called "job lock" (https://www.jstor.org/stable/2118427?seq=1#page_scan_tab_con...).

At least when corporations search for a health plan, they are intensely competitive in finding the best plan for the price. Every year when their policies renew is another round of searching, comparing, and analyzing the various options in their local market. Health insurance has got to be the most expensive benefit a company offers by far, and I know even at a small startup we spend a lot of time finding the best plan for the money for our group.

Compare that to the US government, which isn't even legally allowed to negotiate on drug costs, and look where that has brought us [1,2]. So you could argue companies "waste" an enormous amount of resources having to procure health insurance for their employees year after year, but it also at least helps establish at least some competition in the market, which puts at least some pressure on prices. Companies health insurance budgets are not unlimited (unlike the Fed's) so we don't see quite the same run-away pricing as you do when the purchaser is literally printing the money to pay for it.

Obama's famous "you can keep your Doctor" lie is very telling. Different companies will elect for very different levels of coverage. The law requires that whatever level of coverage you chose to offer your employees is offered consistently from management down to your cheapest full-time employee, which is a really smart policy. Large corporations have better negotiating power in almost all respects of their operations, supply chain, and yes, employee benefits. We wouldn't imagine trying to 'level the playing field' in any other aspect of the operation of a company, so I don't think that's a compelling argument for single-payer health insurance?

When small businesses chose to forgo even offering health insurance (which is that even legal now?) that is actually a competitive advantage for them; they avoid a huge operating cost, and implicitly are selecting for the type of worker they are looking for -- single, young, and healthy.

[1] - https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

[2] - http://www.nola.com/politics/index.ssf/2016/07/medicare_pric...

The advantage of a "single payer" system would be to bring the benefits of large corporation negotiating power down to everyone.

If there was no competition at all, I'm sure that there is some potential for rising costs. But a lot of "single payer" systems actually do offer a fair bit of wiggle room for private market competition. The mess that is the state of the United States government health care really isn't a compelling argument here against single payer (the statistics for most of the rest of the world's health care systems, which are more integrated, kind of show this). I would expect that any "Medicaid / Medicare for all" system emerge in the United States would be two-tiered, like is the case in several other countries.

To be honest, I would almost describe the situation in America as oligopoly-like in many cases (in insurance and hospital networks in particular) depending on where you are, and that would mute the effect of any corporate competition.

You've made a false assumption that "intense competition" (italicised for emphasis!) always makes things cheaper. It doesn't apply with health insurance, which is why health costs are so much higher in the U.S than anywhere else. [1]

Fact: the system of private health insurance in the U.S makes it more expensive for everyone. Source: every other western country paying far less. It is possible for the free market to fail when the thing people are buying is something they would pay any amount of money for.

[1]http://gamapserver.who.int/gho/interactive_charts/health_fin...

Obviously I am talking about free like "education", not free as in "no human input" It's a bit "dishonest" to take ridiculous literal meaning of the word to misrepresent what's clearly my point.

To explain fully, I am advocating the system where a person who earns $0 per day can enter and leave a hospital treated for free. They don't work, don't contribute to society, but as a unit everyone just agrees to look after their basic health as a minimum. As well people with money can do the same without even a thought about what their health insurance does / doesn't cover or when it kicks in, they just pitch up to the hospital.

> In a sane system ... US

No. Almost nothing about the US healthcare system is sane, by any interpretation of the word.

In a sane system the health insurance pays for only catastrophic scenarios and has nothign to do with employment.

Providers post prices publicly and compete on said prices while maintaining customer satisfaction.

The US does not do that.

We have 1000s of reviews for restaurants and how the server behaved but no site where you can type a zip code and a procedure and get a list of providers and their prices and reviews.

> > They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases most of these costs."

> Payroll taxes: OF COURSE they're saving the same amount on taxes!

No, they aren't, in the US.

> It's a % of what they pay you.

Not a flat percentage; the social security portion of payroll tax has an income cap (the smaller Medicare portion does not), which is less than what most programmers make, so payroll taxes do not go down proportional to income for workers who are above the cap to start with.

Are you being serious? The cap is $118,500, you think most programmers make more than $118,500 per year?

In the bay area, I'd expect median to be somewhat higher than that. Which is obviously not the entire world or country, but is where a lot of the focus of this forum is.

Let me Google that for you. In the Bay Area, the average salary for a software engineer is $103K [1] - $110K [2], so below the cap.

1: http://www.payscale.com/research/US/Job=Software_Engineer/Sa...

2: https://www.glassdoor.com/Salaries/san-francisco-software-en...

The median salary for all "Computer and Mathematical Occupations" for San Jose-Sunnyvale-Santa Clara for 2015 was $128,850, for Software Developers the medians were $147,220 (Applications -- there were 42,650 of these) and $142,950 (Systems Software -- there were 27,260). Of the programming-related occupations, Computer Programmers and Web Developers were lower than the cap, but very small numbers of people (6,510 @ $93,940 and 2,930 @ $107,500, respectively.) From 2015 BLS data, which is more comprehensive and representative than whatever payscale and glassdoor are using. [0]

San Francisco-Oakland-Hayward is a little lower, but both kinds of Software Developers still average over $120K. [1]

[0] http://www.bls.gov/oes/current/oes_41940.htm#15-0000

[1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000

Those use self-reported data which is unreliable and only San Francisco, which is only a small portion of the Bay Area.

Using BLS data, which should be more reliable, for the San Francisco[1] and San Jose[2] metro areas, the average weighted by number of people in the job of annual mean wages for the job categories of "Computer Programmer", "Software Developer, Applications", "Software Developer, Systems" and "Web Developer" is $129,730.54.

[1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000 [2] http://www.bls.gov/oes/current/oes_41940.htm#15-0000

Thanks to you and dragonwriter for the links.. informative. So let's compromise on "It's right around the cap" :) Interesting that self-reported data is actually lower than the BLS figures--I'd have guessed it would be the opposite. A lot of people here like to humblebrag about how they "only" make $150K and how their stock options make their taxes so painful.

> A lot of people here like to humblebrag about how they "only" make $150K and how their stock options make their taxes so painful.

To be fair, as well as regional there is also industry variation, and a lot of people here work in the "Other Information Services" sector -- most online services would seem to be in that category -- which is (at least nationally) significantly above average pay for programming occupations. If that industry-based trend is also true for the region, then $150K for a developer could well be a below-median salary for region/occupation/industry combination.

I looked at the Glassdoor data as well. Remember that they're looking narrowly at job titles. If you add "senior software engineers," their average is around $118k. If you add "software architects," their average is around $140k. And so forth.

So if we're not talking about people with the job title "software engineer," but instead talking about people who are software engineers, including people who have a more advanced title, the average salary moves up.

If they are any good at all, yes.

That's not even close to true. The west coast is not the entire industry, no matter how much it likes to think it is.

> The west coast is not the entire industry, no matter how much it likes to think it is.

True, though many people live on the coast specifically because of its tech industry. Sweeping that away is no better than pretending that it's the only game in town.

It always makes me sad to see this same argument happen in every thread mentioning salary. Nobody ever wants to believe that their profession actually pays as much as it does.

Yes, you can certainly find a company to pay you less than $100,000 to program computers for a living. That's not in dispute. But know that you (meaning you as well as anybody else anywhere in the US or the English speaking world) can also find a remote gig paying more than that.

Good developers are very valuable. Even in the sticks. Please don't sell yourself short.

While I usually appreciate this kind of talk, it's irrelevant here. How much a theoretical developer could make has no bearing on the median developer salary right now, which is solidly below 118k.

Ha. That's a good one.

Employers appear to want you to be in at least a somewhat similar time zone as their core team and have some prior experience working remotely.

Take this hypothetical person living in the sticks. 3.5 years of experience doing local development. No prior remote experience -> not given the time of day by remote shops -> can't get remote experience.

As I said, it makes me sad. Because you're wrong. You've internalized this as though it were a fact, so you don't even try. And the only one it hurts is you.

You're assuming every developer is a "good" developer. The top 10% could probably find remote work, but the rest of us are stuck with what we can get. I've been trying to go that route for 3 years now and I'm at the point where I have to get a 'real job' to make ends meet.

Nowhere did I say I don't try. I do try. And in the rare instance that I receive a response, what does it say? Exactly what I said in my post.

It always makes me sad to see this same argument happen in every thread mentioning remote work.

Exactly HOW does one get $100,000 working remotely? When no-one's ever heard of you?

People should add a footnote when saying things like this.

"Yeah just get a six figures remote job......... if you have tons of experience/large network/expert on a niche/top open source projects".

A lot more than you'd think, after a few years of experience. 130k with benefits is par for the course in St.Louis for a full benefits senior programmer. Contracting, you can get way more: I reached the cap in August last year.

In the Bay Area, if you don't make that kind of money, you better be living in company housing, or you will have trouble renting a closet by yourself.

So yes, enough programmers make more than 120k for the payroll tax to be the same regardless.

In the bay area one can easily live on $100k a year. So long as they're willing to have a housemate (share a 2 bd room with someone else). Clearly not possible on a single income family, but either 1) Single person sharing a 2bd room place with someone els or 2) a dual income home renting a 2bd room place for their approximate 1 child.

I see too many bay area people thinking that ubers and expensive meals out are the "bare minimum".

I don't see how someone can rationalize that someone making $100k should have to have roommates.

I am not saying they need more money, but I don't understand how we have gotten to the point of chiding people making six-figures like they work at McDonalds and want a BMW.

Its simple. Prices are insane. So we expect people to do sane things, like live with other people.

Much of the rest of the world does it, no reason North Americans cant.

I would hope that they do, if they have any experience and are actually good. I don't have that many years of experience, and am working for a rinky-dink small ISV well outside any kind of tech hub, and I'm not far off from that.

In California? I'd hope that a typical developer makes around that much.

> The cap is $118,500, you think most programmers make more than $118,500 per year?

On review of the data, no; I was actually thinking more narrowly of software developers rather than broadly to all programmers, and even then its a little high (though the median salary for application developers (Software Developers, Applications) in the Information sector is close to the cap. [0]

Still, a substantial minority of programmers (broadly speaking) will be making above the cap, so reducing programmer salary in exchange for reduced hours will reduce payroll taxes by a substantially lower percentage than the percentage reduction in salary.

Another facet of this is that with more people comes more communication needs. So either more management or things get dropped.

So while it seems like a 25% drop in hours would only mean a 25% increase in number of employees that later number will go up much more just to handle the increase in communication.

Depending on the state, payroll taxes, workers comp, pto etc may or may not apply, or may be at a cap. If you're working 3 days a week, and that still meets the cap on worker's comp/unemployment, etc, then they're still paying the same amount. Many places will hit the max on a lot of employer-side taxes/benefits when you are working full time.

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