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Comment by doki_pen | Hacker News Reader

Turning ordinary employees in to independent contractors is a disturbing trend that is eliminating traditional workers rights. Although some new companies have legitimate reasons for hiring contractors, for most it's not part of some new amazing model of labor, it's simply a way to save money. Usually it's illegal, but the IRS is being destroyed by budget cuts and can no longer enforce the law. Filing against your employer in these cases takes years to resolve. I guess if you believe in no protection of workers and mass exploitation of the working class, then it's a good thing. I personally think it's destroying a lot of markets. If people don't have any money they can't buy your shiny new product.

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The core underlying problem is traditional society benefits have been pushed onto employers in the US. This is absurd and hurts everyone. Employers don't have the same societal incentives, are less efficient at delivering them, it isn't part of their business anyway, and puts them in a position of power. Workers have a choice of not much of a safety net, or having to pick the least worst employers. If those benefits were moved back to being provided by society then it would raise the bar for all employers.

For example if paternity/maternity leave and income were society provided, then an employer could only be more generous. Even if they do nothing and fire the employees, at least those employees would get the leave and some income certainty. The same principle applies to healthcare, wages (compete with minimum wages/basic incomes etc) etc.

I think that instead of making more and more laws (each of which has more and more unintended consequences, loopholes, expenditures etc), go ahead and simplify. Treat everyone in society well, and make that treatment come from society, and not some idiotic stick poking at employers who have completely different incentives and competencies.

The problem is that businesses want to both not pay direct benefits for their workers and not pay taxes to fund government controlled benefits.

How about having unions, guilds and professional organizations provide the social safety net you cherish so much in the abstract. I am sure there would be many problems but at least there would be no doubt where the funding would come. "You deal with one of us, you deal with all of us. And if you play dirty we will make sure you don't get the service we provide at ANY price on this side of bankruptcy"

> The problem is that businesses want to both not pay direct benefits for their workers and not pay taxes to fund government controlled benefits.

That's not necessarily a problem. One could cut the corporate tax rate and fund benefits through income/dividend/capital-gains/sales/VAT taxes.

Yes agreed, someone has to pay at the end of day. The original model we have for what we currently call "benefits" are workers associations pooling resources to hedge against catastrophic worst cases. And to be fair no one wants to pay any more taxes than strictly needed, not just businesses.

One big problem I see with this is that of corporate personhood. If you cut corporate taxes and raise taxes on dividends and capital gains, you are basically promoting investors to not leave their money inside the corporation. Once this happen, you have to ask the question of what corporations are for? If they do not provide benefits for their employees, and not provide dividends for their legitimate owners, and yet not provide tax revenue for the government (and indirectly, to overall society) under which they operate, then exactly why do they do what they do?

Presumably, they're generating utility for whoever gave them all the money they declare as revenue. Insofar as those people are citizens of your country, a company helps citizens.

(Oddly, though, this means that it's in every government's best interests to encourage globalization, and then get their citizens to consume all their products from foreign companies, while not having to deal with having any local companies consuming local resources. Presumably, local employees would also be employed remotely by foreign companies, or by local foreign-owned corporate subsidiaries.)

Amusing. Of course all the superpowers did raise to global hegemony by outsourcing their economies to foreign allies!!!

Businesses desire predictably in the future for things out of their control (eg tax rates won't have huge random swings, laws won't randomly hugely change, competitors won't suddenly be favoured by legislators, employees cost a predictable amount). It is also to everyone's benefit that things are equal and fair (eg their competitors have to play by the same rules). Virtually everywhere employers pay additional taxes on their employees to provide government controlled benefits - eg in the US your employer also pays social security, medicare, unemployment insurance and similar taxes as you do, and often a similar amount. Paying them is just the cost of paying an employee, and their competitors have the same rules.

Social safety nets were funded and provided by churches and similar organisations for quite a while. The problem with using unions, guilds and professional organisations is that different professions pay different amounts. For example fast food workers, teachers and developers are in very different brackets hence can pay different amounts into the system. Why should a fast food worker get less maternity leave than a developer? I have no problem with disparate groups providing services, but do strongly believe that a fair and just society requires centralisation of the funding.

It took 200 years and a lot of bloodshed to establish those working rights. It's ironic how they're now being destroyed and workers themselves let this happen. I guess the social memory is capped at the timespan of two generations.

> It took 200 years and a lot of bloodshed to establish those working rights. It's ironic how they're now being destroyed and workers themselves let this happen.

Chain the bodies, and the slaves will fight you tooth and nail. Chain the minds, and they will defend their own servitude.

We'll probably have to go through a bunch of pain for this new working class until it gets so bad that the "union for mobile" is figured out and used to counterbalance the centralized power of the on-demand labor companies.

Alternatively, someone could create a model to the centralized company that just exploits labor without sharing ownership.

It depends on the relationship, being an actual independent contractor is truly liberating. Choosing your own hours, working only on things you want to, setting your own salary based on how much you want to t work. There is real freedom in that as long as you get paid appropriately and actually get that freedom.

Companies wanting to save money on benefits while having 9-5 workers with no freedom of choice of when or how to work and no freedom to take other jobs? That's abuse of the system and illegal.

The difference is important.

> Choosing your own hours, working only on things you want to, setting your own salary

you pretty much described the best case scenario here. On the contrary my dad was an independent contractor most of his life in construction (which was a also in a boom period making some people rich). For him this meant working 6-7 days / week (10-14 hrs), clipping coupons, and saving for a decade to buy a $70k house to avoid getting in debt. This while having sub-contractors working for him. He eventually did well (decades of hard work later) but I believe this situation is not so rosy for an average contractor unless you are at the top of your game in a very in demand industry

Yes, but when this article talks about the growing number of contract workers, that growing number is people doing regular jobs and being labelled contractors. I'm working right now, but feel free to google about this growing problem of workers being illegally mislabeled as contractors.

> That's abuse of the system and illegal.

Everything is legal as long as you don't get caught, and it doesn't seem like anyone is interested in doing any catching.

I think part of the problem might be that workers don't know their rights.

> It depends on the relationship

No, it depends on leverage. If you've got the most leverage, the relationship will be pleasant. If you don't, the relationship will be abusive. Just like everything else in capitalism. Supply/demand balance and friction matter far more than how "nice" your customer/employer is.

The distinction is crucially important: if relationship quality were an independent variable, everyone would be able to find decent relationships by hopping between jobs every now and again. Unfortunately, that's not how it works. The market determines what employers can and can't get away with, so someone stuck in a crummy relationship is likely to find a bunch of equally crummy relationships when they go job shopping.

> No, it depends on leverage. If you've got the most leverage, the relationship will be pleasant. If you don't, the relationship will be abusive. Just like everything else in capitalism.

Exactly. And it's not for nothing that "Workers of the world, unite!" is included in the Communist Manifesto, as uniting themselves against their employers was one of the few methods of gaining leverage for 19th-century workers.

If it counts I'm more of a Libertarian kind of guy, but even so I'm wondering for how long these growing power-unbalances will be ignored by both those "in power" (corporate employers, politicians, finance people) who just seem to crave for more and more, and also by us, the "normal people", who just carry on with our lives like things have never been better.

Because at the end of it all private property is merely a social construct, and once 100, 1000, 10000 people will find it strange that their combined earnings amount to what a "capitalist" or financier earns, then, just maybe, those people will decide to put that rich guy/girl in front of a wall and shoot him/her down. It happened before (see the Bolsheviks, for example), not sure why it couldn't happen again.

>not sure why it couldn't happen again.

Drones. And you better believe the powers that be will criminalize any movement that might level the playing field. The window of opportunity for change is closing.

There's a significant difference between the middle east and the USA in the number of disenfranchised chemists/EEs/mechEs/biologists/programmers per capita. The continued efficacy of technology developed "over there" is far from guaranteed if it is applied "over here."

I really, really hope it doesn't come to that. Horrible and messy would be the understatement of the century. Everybody loses, just some more than others. But my imagination has been drawn to this scenario more than once and I don't think the fight would be universally one-sided.

My hope is that we'll see some kind of market inversion when rent-seeking grows to a large enough part of the economy that the ever-falling inefficiency of distributed production becomes reasonable in comparison. Like communes, but without an anti-tech focus (progress in distributed production technology is what will turn them from bad ideas into good ideas, after all).

I just hope it happens before the violence starts in earnest.

But most seem to be w2 who don't get the benefits of being independent or employed.

Like most things in employment crappy poor employers spoil it for the rest.

> Choosing your own hours, working only on things you want to, setting your own salary based on how much you want to t work.

I've said this a few times before, but to pull this off takes a tremendous amount of work, effort and luck. Finding work and marketing yourself is another job in its own right that you have to do on top of existing client work. Furthermore, all of the risks that were once handled by the employer are now on the contractors shoulders. For most people, all this simply isn't realistic or sustainable.

> Usually it's illegal, but the IRS is being destroyed by budget cuts and can no longer enforce the law.

A civilization so small you can drown it in a bathtub.

The author is a shill for the capitalists and corporations and he's just trying to make a buck here glamorizing underemployment and selling poverty and desperation to the masses in the name of modernity and progress.

Right, except (1) it's your obligation to change the law as a voter and (2) profit-maximizing companies have every obligation to act in their shareholder's best interests, within the bounds of the law. So really, it's up to us as citizens to decide what's fair, and get the appropriate legislation passed to change it.

With regards to (1), I'll leave this here: http://www.bbc.com/news/blogs-echochambers-27074746

The vast majority of people who are effected by this in a negative fashion do not have the money needed to get their officials to listen.

Two great books on this topic you may have already read - Robert Putnam's "Bowling Alone" as well as Supercapitalism by Robert Reich. Reading these two works has really shifted my view on regulation and govenment in general from "something other people do" to something I think about in a more participatory way.

Putnam especially makes the point that an entire generation of Americans is growing up (I include myself here) treating government and politics as a spectator sport -- the province of party hacks -- rather than something ordinary people do during their off-hours. I'd highly recommend reading both in case you haven't.

yeah... if I could vote for a candidate that would do anything _remotely_ like this, I would. But the primary filtering is how much money the candidate can raise. The candidates might not be corrupt, but the electoral system is corrupted.

Do they have an obligation to ignore the law because it's very difficult for citizens to enforce it? Because that's closer to what the parent is describing.

Laws don't help if industry has the power to hamstring the organization responsible for enforcing it.

(Assuming you accept the sinister premise that industry is behind defending of the IRS)

What's a shareholder's best interest?

It's a meaningless phrase and simply an excuse for acting like a dick.

This made me laugh and is totally true. Defining your timeline seems like a necessary first step to using that phrase.

Well, it is always in the shareholder's interest to give the management sky high bonuses.

I believe your position is overly simplistic. It is quite clear that the power structure of the country (U.S.A.) is not concentrated in the working class. It's not simply a matter of 'change the law as a voter'. Besides, voters do not change laws, the elected representatives do. They often renege on their promises.

(2) is what some of think is wrong with the country and capitalism (as it is popularly thought of). Such a belief leaves unresolved the issue of negative externalities. Indeed, the problem with a degradation of workers' rights is one such negative externality.

The capacity of the American worker to vote against their self interest is quite high. Should the trend continue long enough we may find ourselves unwittingly in a rather unpleasant society.

>(2) profit-maximizing companies have every obligation to act in their shareholder's best interests, within the bounds of the law.

is profit-maximization a law? because i don't see why for example a company can't be formed for the purpose of "betterment of humanity" and if it earns some profit on the way - great - and if not - it is ok too. As long as shareholders agree to that, ie. buy shares of such a company.

There are actually at least two such companies at the moment - Tesla Motors and SpaceX. For both the profit and market position is secondary to, respectively, electrification of transport and making humanity interplanetary. Elon Musk explicitly said on many occasions that in case of Tesla profits are secondary and they don't care if in next decades they'll be top player or disappear completely, as long as everyone is driving electric.

How many companies are you putting money into month after month that aren't turning a profit or providing you any sort of return?

I say month after month because if the company is not turning a profit, someone has to keep the lights on.

Not maximizing profit doesn't mean you need to be in the red. You could break even, or just profit less. You still keep the lights on yourself, or even turn some profit, without 'maximizing' profit.

> is profit-maximization a law?

If we are talking about Public Companies, yes. Privately owned ones can do whatever they want, but in practice the ones that do'nt care about the bottom line tend to be driven out of the market by those who do.

> because i don't see why for example a company can't be formed for the purpose of "betterment of humanity"

Those are called NGOs.

> > is profit-maximization a law?

> If we are talking about Public Companies, yes.

Please cite the relevant law.

Companies have what is called fiduciary duty to their shareholders.

http://www.legalmatch.com/law-library/article/corporate-fidu...

This would work until you get some douche "Activist Investor" like Carl Ichan to buy up a bunch of shares and get all pissed because the company isn't working to maximize profit, despite it's stated goal that it wants to do something else. Because all that matters is that he can make money, and the thought that he could simply not buy shares in the company never occurred to him.

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