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Comment by danieltillett | Hacker News Reader

>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.

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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.

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