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Comment by brc | Hacker News Reader

The reason airbnb and uber exist is because the prior business models are broken with regards to a big enough portion of their potential customers. A conversation with the average taxi driver will reveal the job is no ticket to the high life or consistent pay.

The way forward is to get rid of the concept of 'benefits' packages and just let people work for a gross pay and let themselves choose their own benefits from that.

Ultimate flexibility is what efficient economies are about. Unions don't like that future and understandably try and fight it. It's a futile fight in the end.

The reference to qualifying for a loan based on permanent work is not relevant. A history of stable earnings is enough to qualify for a loan. Permanent positions are no guarantee of enough employment to pay down most loans.

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> The way forward is ton get rid of the concept of 'benefits' packages and just let people work for a gross pay and let themselves choose their own benefits from that.

This. Among other things, it would go a long way towards fixing the health insurance problems in the country. One of the reasons the private health insurance market is so dysfunctional is that relatively few people participate in it (most people are covered by their employers).

The way the rest of the world has “fixed” health insurance is to have the state involved. Even the USA does this for anyone over 65 (where most of the spending occurs) and for anyone who is a veteran. For some reason covering the young and healthy seems too hard. It is almost as though there is a huge vested interest keen on maintaining the status quo at the expense of everyone else. Given that only unions are evil this could not be true.

Kevin A Carson outlined in an essay how hospitals justify their prices on everything from saline to surgery on a managerial model which treats every service/good as revenue on the accounting books. Oddly enough, they got this model from the auto industry which did the same sort of model which obviously demands consumers to use the service/good as much as possible.

For example, how many patients actually need a CT scan? Not many, really, but if you dig deeper the reason they do this is to get the maximum value of of their CT scan equipment even if a patient's symptoms don't match anything that would require such a service. Equally, many hospitals also compete with each other thus duplicate services or spend their budget on the look/feel of their facilities (how many people care wth the foyer of a hospital looks like?) which leads to the higher prices. Essentially, each patient pays the full cost of the medical services rendered unlike how consumers in other industries (the price of a meal or a cell phone is not at cost, often it's lower when you factor in everything to bring it to market).

I think the way to clear the system is to do a multi-tier approach which may include single payer healthcare, but if you were to install that system into our hospital system as is then expect the US to go bankrupt in less than a decade. We have to break the back of the monopolists before we can get anything close to sane market prices.

You do realize we had a time before unions and common benefits right? What makes this time any different?

Well today the government (i.e. tax payers) will subsidize a good portion of health care

As a European, I'll tell you that is a great thing.

Without the bargaining power of large groups of employees, how will reasonable costs and levels of service be maintained? It's well established that people on their own without insurance get charged much higher rates than people with insurance get charged for the same procedures at the same hospitals. Presumably the same effects apply to individuals trying to obtain a price for insurance versus an employer bargaining for a group of employees.

Seems to work ok in many places around the world and in different products within the us. You don't need 'group buying' for auto or home insurance, or car or home purchases.

In fact group buying probably hinders the ability to get the right product/person match.

Of all the problems to solve, it seems pretty easy. Even if that just means groupon for benefits.

I'll bite. Where are these "many places around the world" that have your desired laissez-faire approach to health care? Are you talking about places like India or what?

Also, I would hate to see a health care system as badly managed as Groupon.

I live in Australia. I have private health insurance. It's an old policy from when I was employed with a package. The policy costs no more than when it was part of that package. That's maybe because the policy is priced based on me (age mostly) rather than the employer. I'm not 100% sure why there's no real difference between employer based policies and personal policies.

Anyway point is the problem is solve able.

I'm just getting this from Wikipedia, but: "Health care in Australia is universal. The federal government pays a large percentage of the cost of services in public hospitals."

I would happily have Australia's solution in the US. It would go much farther than Obamacare.

My group policy cost more (~60%) working at a corporation than my paying for it on my own - because they are averaging costs for everyone.

Are you sure you're making an apples to apples comparison?

>The way forward is to get rid of the concept of 'benefits' packages and just let people work for a gross pay and let themselves choose their own benefits from that.

Well until you change the tax laws any such change is just going to result in a pay cut. The whole reason things like healthcare are offered as benefits rather than straight salary is because benefits are tax efficient.

>Ultimate flexibility is what efficient economies are about. Unions don't like that future and understandably try and fight it. It's a futile fight in the end.

Sure get rid of the unions, but let employers band together in trade associations. I am sure that these employer organisations would never collude to hold down wages.

Edit. It is good to see that everyone here has forgotten about all the big tech companies banding together to hold down tech wages.

I agree with you I think there's too much idealism in here and not enough reality.

For example this: > The way forward is to get rid of the concept of 'benefits' packages and just let people work for a gross pay and let themselves choose their own benefits from that.

is the quickest way to lose all your benefits and gain nothing... why does he think corporations are really nice caring people who will give you a little extra pay for losing the mandated benefits, and not simply cut the benefits and keep the pay the same? Anything not mandated is optional, and if it's optional the employer doesn't have to pay it and more than likely won't.

From another comment in here, I think this is the result of his flexibility:

Most "associates" (your average workers) get 30 hours/week and zero benefits, except when mandated otherwise by law.

Even if companies wanted to do the right thing and keep the overall pay constant (history would suggest otherwise), because of the way benefits like healthcare are treated by the tax system, getting rid of benefits would make all employees worse off - basically more of your income would go in tax. I don’t think this is an ideal outcome.

> Even if companies wanted to do the right thing and keep the overall pay constant

It has nothing to do with what companies want. They don't pay an employee $X because they like to get rid of money, they pay $X because if they offered less that employee would go elsewhere and they would have to settle for a less productive employee, or none at all.

Actually it is a bit more complex than this. There is a lot of stickiness in wages, but ultimately all wages are set at the margin. Assuming an efficient market then any change from tax efficient benefits to straight salary will result in an effective cut to the employee.

You misrepresent my argument. It's not about stripping people of benefits, it's about not forcing contractors to become employees. Paying a gross salary and letting the person choose their own benefits from that is better for all involved. If someone wants to be tax efficient for retirement contributions, vehicles, whatever, then let them do so. Others may prefer to claim all their income and just pay the tax.

Separating the makeup of compensation and benefits is separate from organizing to negotiate for higher pay. You do t need a permanent union to organize for benefits.

No you don't need a union, but when the group you are negotiating with is in a union (trade association) and you aren't then you might find yourself at a major disadvantage. You are not in a strong position to argue for benefits or salary on your own.

Unions are neither all good nor all evil. They are one way that employees can gain some leverage in the negotiation process. If they didn't make sense then companies would certainly not form their own to argue for their interests.

I should mention that I am an employer not an employee.

Still not understanding me. Currently the union might bargain for employment benefits. This is antiquated and treats all employees as though they want the same things, which cannot be true. Why would you collectively bargain for things that each person values differently?

So it's better to agree to a rate of gross pay, and get paid as a contractor. The individual can then choose what benefits to award themselves, whether it is a higher level of healthcare or retirement payments, or just take the maximum up front income and pay taxes accordingly.

From an employers point of view, a whole piece of headache goes away if the people you pay sorts out their own benefits packages.

The Orignal article is about trying to reclassify contractors as employees, and do so in the name of 'benefits' as though contractors can't get the benefits themselves. Well, that's simply not true.

Whether you organise for higher pay is another thing, and you can form a union to do that, or not.

Actually many unions argue for flexibility of how their members are paid - it is the overall pay that is important.

Once you have settled on a gross pay, how it is paid needs to take into account the tax system. In the case of some benefits it is better for the employer to pay since the effective tax rate is lower.

The whole issue of contractors verse employee is quite complex and even from a employers perspective it is not clear cut that one is better than the other in all cases. I think we can agree that in general it is best if people have the maximum flexibility possible without creating external costs.

I don't think this is the best idea in terms of solving the labor problem. It's more likely we need to make it easier for workers to form cooperatives and/or unions to minimize the excess economic rents on labor. That way, the workers can economize better in terms of healthcare or anything else really. Benefits is just a stop gap that should've been replace by better wage regulation or worker owned businesses where a worker's daily wage doesn't come below their cost of living (housing, healthcare, and food being the core line items in it).

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