back to article Stop forcing benefits down my throat and give me hard cash, dammit

This rise of the gig economy might mean that we should redefine the whole concept of being an employee, as compared with being a contractor. There is a political argument going on around this very subject already. There's plenty of people in the US arguing that Uber's drivers – and all those other people at TaskRabbit, Lyft …

Page:

  1. Neil Barnes Silver badge

    While this looks fine at first sight

    it seems to me that many people would prefer to have some mandated stability in their employment. This is probably dependent on a person's risk aversity, of course - but what seems to be happening in the contract market is that companies are increasingly employing contractors at rates not significantly different from employee rates, while giving them none of the employee benefits. It's wonderful for the employer, but I would argue that for many employees it's not the way they would choose to work.

    I know this is probably heresy for Tim, but a point which could be made that a company has responsibilities to the society in which it operates, rather than just to its shareholders... I suspect the breaking point occurred when 'personnel' departments - which at least maintained the illusion of some sort of interest in the employees - mutated into 'human resources': the nightmare where the employees are just plug-in replaceable parts.

    1. Useless User

      Re: While this looks fine at first sight

      Basically, the idea of the "sharing" economy is to break up unified hives of workers into an atomised powerless mass, where single worker bees will forever out-compete each other, driving prices down, while the company reduces costs and responsibilities to a minimum for the benefit of VCs, mezzanine financiers, lawyers, lobbyists and later shareholders.

      Greetings from The Iron Heel.

      1. Alan_Peery

        The Iron Heel "Marxism for fans of ripping yarns"

        It's fun to see The Iron Heel mentioned here, as I listened to it last week while finishing up some DIY. Great fun as an adventure novel, and well worth a listen even if your political tastes differ.

        I stole the title of this comment from http://www.theguardian.com/books/booksblog/2007/dec/07/howdidjacklondonssocialist

        The book can be had for free at http://www.gutenberg.org/files/1164/1164-h/1164-h.htm as it is outside copyright.

        https://en.wikipedia.org/wiki/The_Iron_Heel

    2. Mark 65

      Re: While this looks fine at first sight

      Absolutely agree. I read this

      Or I could be suggesting that everyone should get to enjoy that higher value from that same cost to the employer of being able to decide exactly how to allocate that total income.

      and the first thing I thought is that there's fuck all chance of any employee enjoying the higher value. The employer will simply reap the benefits of any mandated provision's removal. The balance of power does not lay with the employee which is why unions exist and why we have mandated entitlements - because the market simply cannot be trusted to provide them. It seems Tim is living in some sort of utopia whereby employees with rights reduced to that of someone in a Dickensian workhouse would be paid far more to compensate. Utter bollocks.

      Now, there is certainly an argument to be made that Governments can often overstep the mark with the levels of entitlement mandated in crass vote-buying exercises whereby they lose sight of the aim of the mandate and the cost to society and the employers as a whole. That I will wholeheartedly agree with. There is always a sweet spot between legally mandated entitlements and the level of subsequent employment. It is much like minimum wage which I abhor simply because it doesn't create much benefit when the subsequent job losses are taken into account - it simply gets set too high. I believe the money would be better spent on free health and education so that people have little excuse for not bettering themselves. You should get higher pay for being of more use (in theory) not because someone said you must.

      1. Tim Worstal

        Re: While this looks fine at first sight

        "The employer will simply reap the benefits of any mandated provision's removal."

        How?

        Currently, to employ someone, the employer adds up all he costs of the pay, the benefits, the taxes that must be paid etc. And then decides whether to hire more or less people. The decision being whether that total package is more or less than the benefits and output of the extra people.

        How the package is sliced and diced doesn't (absent tax rules) make any difference to the employer. If you cut the cost of the benefits then the employer is still willing to pay the total sum. And competition would quickly mean that they were again if the benefits were cut.

    3. Charles Manning

      Stability?

      " many people would prefer to have some mandated stability in their employment."

      That stability is a false sense of security.

      I have been a contractor for the last 8 or so years full time and previous 20 or so years part time).

      A week ago one of the companies I did work for rolled over and went belly up with little notice. Everyone out on their ear with a couple of weeks wages - looking for a new job.

      I have multiple clients running simultaneously. I am used to the feeling of going out to engage customers. I can work more hours when there is more work and less when there's less work.

      There are a few companies around who don't want to sign up new employees, but are willing to engage people short term to achieve specific goals. They won't hire the person looking for a job, but they'll hire the contractor.

      Who is really in the more stable and secure position? The employee or the contractor?

      1. John Brown (no body) Silver badge

        Re: Stability?

        "I have multiple clients running simultaneously. I am used to the feeling of going out to engage customers. I can work more hours when there is more work and less when there's less work."

        That still places you in a minority. I'd be prepared to bet that the vast majority of people on minimum wage or thereabouts would have great difficulty in deciding on putting money aside for the tax man or medical bills or just for a "rainy day" rather than essentials they need now. I'd also be prepared to bet that those same people WILL NOT get all of the extra cash equivalent to the lost "benefits".

        Something like Tim suggests might work at the "professional" or "career" level where people are sometime in a position to negotiate their contracts,but the vast majority are simply not in jobs like that. They'd end up waiting on street corners for the employers "enforcers" to come around offering a days work for a some shitty fixed price, take it or leave it and most would be desperate enough to take it.

        1. Charles Manning

          Re: Stability?

          " I'd be prepared to bet that the vast majority of people on minimum wage..."

          ... would be better dumping their dead-end job and thinking a bit more like an entrepreneur.

          Get a rake and a leaf blower and go gardening. You'll make far more money than minimum wage as well as having more than one customer. One customer leaving is not a threat to your income.

    4. Kubla Cant

      Re: While this looks fine at first sight

      what seems to be happening in the contract market is that companies are increasingly employing contractors at rates not significantly different from employee rates

      I have seen no evidence of this. Contract rates are, of course, more volatile than permanent salaries, and there are always a few comedians hoping to hire a senior contractor with a comprehensive portfolio of skills for school-leaver rates. But in 30 years of contracting I've hardly ever seen a permanent job that pays what a comparable contract job does.

  2. James 51

    Perhaps if you've got nice employers who treat employees/contractors well the system you describe would have merits worth discussing. In a world were even successful companies off shore jobs to temporarily push up share prices, were there are attacks on the ability of those who wish to negotiate collectively by private business and by the government (who is suppose to be looking after their interests, ha), were companies who structure themselves to pay virtually no tax in a territory where they operate payroll taxes are one of the things it is hardest to dodge, were insecurity could prevent reporting of harassment etc etc. In utopia maybe, but this is not a utopia.

    1. TheTick

      Of course in a free market if you feel you are being treated badly as an employee or contractor you can look elsewhere for work and find somewhere better, or start a better company yourself. As a contractor this is nice and easy as you simply don't renew the contract which is much less hassle than resigning.

      I've never heard of a company off-shoring to temporarily push up share prices, they do it to reduce costs and have a more flexible workforce without so many govt regulations weighing them down. Now if everyone was a contractor it's a million times easier to reduce the workforce by, again, simply not renewing contracts. That may sound bad to you that companies can just let people go without issue, but it also means companies are less reticent to hire contractors when they know there's no chance of a tribunal if they forget to cross their t's on the redundancy notice.

      Unions have a bit of a history of their "collective negotiations" being little more than blackmail with things like the closed shop and the coal miners bringing down Ted Heath. Thatcher was right to stamp it out. Unions helping their members is no bad thing, but some use their members for their own political aims.

      Companies restructuring themselves to pay less tax? Well so do I, and so probably do you (got an ISA?).

      I'd love to see a more flexible workforce like Tim suggests, even though in my personal case I'd probably be worse off (currently on a pretty high wage for what I do which they don't have much choice about thanks to some TUPE arrangements a couple of years ago). Companies would be so much more inclined to hire people for work without all the bullcr*p that comes with employees, and wage renegotiations will be much easier for contractors; done a good job and they are asking you to renew? Ask for 20% more!

      1. Anonymous Coward
        Anonymous Coward

        @The tick

        "Unions have a bit of a history of their "collective negotiations" being little more than blackmail with things like the closed shop and the coal miners bringing down Ted Heath. "

        Whereas when employers ganged together to fix working rates that was OK? Adam Smith has something to say about that, by the way.

        Closed shops, oddly, suited many employers. They meant, for instance, that competition was very hard to start up. In the days of the print unions it was very, very hard to start a new newspaper because if you didn't employ union workers you would be picketed, and all the closed shop workers were currently employed elsewhere. Why do you think they persisted so long? Eddie Shah was allowed to be the fall guy to try to bust the print unions, he lost out, Murdoch benefited because Shah had debugged using modern presses which were cheaper to run than the labour-intensive machinery of the other papers.

        1. JohnMurray

          Re: @The tick

          Of course, employers would never, ever, break any laws. Such as collecting and disseminating information (mostly inaccurate ) about their employees/ex-employees, and then using it to prevent them obtaining employment.

          Nah...never 'appen mate.

          Oh wait....

          And the unions are doing an excellent job protecting their members....by legal action against those companies, mostly ones big enough to have known better.

          HMRC current means of defining self employment would seem to mean that genuine taxi drivers are, while many private hire drivers are not.

          Pf course, with no paye the gov would be squillions down in income....but we're going down that route anyway, since many employers regard part timers as disposable...

      2. ecofeco Silver badge

        Missed the entire history of the 19th and early 20th century, did you? Because that's what it would really look like. Again.

    2. DaveDaveDave

      @James51

      How about we leave the thinly-veiled antisemitic conspiracy theories out of it this week, huh?

      1. James 51

        Re: @James51

        @Dave Quoi?

        @TheTick I've worked in companies were this has happened. As for your point about ISAs, no I don't but I do have a pension. The difference is that I'm not employing a small army of accountants and laywers to snake through loopholes so that I am suddenly being paid in a tax haven instead of the country where I work.

        1. DaveDaveDave

          Re: @James51

          "@Dave Quoi?"

          I didn't think it was hard to understand. Take your foetid antisemitic bile elsewhere.

          1. Doctor Syntax Silver badge

            Re: @James51

            Could you point out the antisemitic bits to me. If they were there at all they were certainly more than thinly-veiled.

            1. James 51

              Re: @James51

              I think at this point Dave is just trolling or farming down votes.

      2. Anonymous Coward
        Anonymous Coward

        Re: @James51 @Davedavedave

        Downvoted and reported for abuse. I've looked at his post history - trolltrolltroll. He just looks for opportunities to insult people, and if he can't find any he makes them up.

        1. gazthejourno (Written by Reg staff)

          Re: Re: @James51 @Davedavedave

          Thanks. I'm leaving the reported post up (else the rest of the thread makes no sense) but he's now on the pre-moderation naughty step for the foreseeable future.

      3. Mark 65

        Re: @James51

        @DaveDaveDave: Dude, keep taking the tablets. Nutter.

      4. Charles Manning

        Why I upvoted DaveDaveDave

        The dude is clearly farming downvotes.

        As I write this he has 47.... that's got to be close to a record.

        The only way to combat this is to give him upvotes.

  3. Chris Miller

    Another advantage of being a contractor

    Is that you pay legitimate expenses out of gross income (or count them as tax deductions, whichever way you prefer to think about it). This ought to include that £4,000+ season ticket for a 'seat' (good luck with that!) on the misery line. (Of course, if you're a real contractor working for several different outfits, a season ticket probably isn't appropriate in any case).

    Many continental countries allow this to be done by employees anyway. So those French colleagues are not only paying about one third of your travel costs, they can charge it against tax, too.

    1. Yet Another Anonymous coward Silver badge

      Re: Another advantage of being a contractor

      A lot of that is because a generation ago the only contractors were lawyers/accountants/etc and they got to make the rules. When every receptionist or sandwich shop worker is an indpendant contractor expect the tax loopholes to get tightened as quickly as they were when every programmer decided that they were now contractors paying themselves dividends.

      1. Chris Miller

        @YAAc

        That might be true for those taxed as self-employed ('Schedule D'), but if you've formed a limited company, it's hard to see how legitimate expenses could be denied. No doubt there could be even more stringent tests (like IR35) to identify those who are really employees and simply trading as contractors for the (largely perceived) tax advantages.

    2. Alan Brown Silver badge

      Re: Another advantage of being a contractor

      "Many continental countries allow this to be done by employees anyway. So those French colleagues are not only paying about one third of your travel costs, they can charge it against tax, too."

      Dutch colleagues get 100% of their travel costs (public transport) paid for(*). The alternative is Amsterdam and Rotterdam turning into something worse than London in terms of both population density and congestion. This way people are spread along the Randstad and it's generally a pleasant country to live in.

      I used to commute from Rotterdam to Amsterdam every morning on well-run trains. The UK equivalent would be a catchment area from Hastings/Brighton/Portsmouth to Nottingham/Birmingham/Kings Lynn/Bristol, but for everyone working in London, not just the upper middle classes.

      The side effect of this policy is that businesses have stopped heavily clustering around the major cities and are also spread up and down the Randstad

      The UK's transport and taxation system is bass-ackwards in a huge number of ways and working tax credits are one of the more stupid examples - it's far more efficient to let people keep more of the money they earn than to make them pay tax, handle it internally and then pay it back out again.

      (*) There are allowances for company cars but these are taxed heavily and road taxes are a killer too. A public transport season pass allows unlimited travel outside of working hours and gets covered by the company, whereas every non-work km in a car is taxable as a perk.

      As far as Tim's proposal goes: As others have pointed out, it would be a return to policies of the 18th, 19th and early 20th centuries. One of the defining characteristics of the middle 20th centuries (up to ~30 years ago) was a decline in inequity.

      Since Reganomics and Thatcherism became the governing policies, the gap between rich and poor has been widening ever more quickly. Such gaps tend to lead to popular uprisings, which means they're not sustainable long-term - and unlike even 20 years ago it's almost impossible to cover up and intimidate groups into silence, no matter how much people like Murdoch might think they control the flow of information.

      1. Mark 65

        Re: Another advantage of being a contractor

        The UK's transport and taxation system is bass-ackwards in a huge number of ways and working tax credits are one of the more stupid examples - it's far more efficient to let people keep more of the money they earn than to make them pay tax, handle it internally and then pay it back out again.

        The purpose of that particular system is to facilitate the "ticket clip". In order to perform it the money must flow through the system "creating employment" and feeding Government suppliers.

  4. Mark #255

    hmmmm

    Your entire thesis seems to be that because flexibility in non-cash-worker-rewards vs extra cash is beneficial to you, that we should all have this extra "flexibility" imposed on us.

    Which is fine for those who truly do have the freedom to pick and choose ("career women", you write, and "those not on minimum wage"). But for those who don't, you're effectively giving their employers the freedom to "allow" their employees the chance to work themselves into an early grave.

    And I'm sure that would never be abused.

    Oh, hang on, we already have zero-hours contracts. And they've turned out to be an untrammelled force for good, haven't they?

    1. TheTick

      Re: hmmmm

      "extra "flexibility" imposed on us."

      Erm, it wouldn't be imposing anything on you, I think he's suggesting that current impositions on employers are removed. Whether you think that's a good idea or not is another issue, but he's suggesting less impositions, not more.

      1. Yet Another Anonymous coward Silver badge

        Re: hmmmm

        They are removed here - there is a special exemption for high tech companies (those where 50% of employees use a computer). No statutory holidays, no bank holidays, no overtime, no limit on working hours. The result is that salaries are half as much as in that bastion of pinko commie liberalism the USA.

        There are also a rapidly reducing number of jobs since all the good people are in Silicon Valley and the companies are moving there to find the people.

    2. P. Lee

      Re: hmmmm

      The point of all the employee benefits is that for many jobs, they are so low-paid that it doesn't make economic sense to have to employ accountants for each person. Far better and cheaper just to have standard rules. Accountants only make sense for the well-off.

      Another point is the possibility that given the option of cash over holiday, the employee opts for cash. The employer then notices that his employees are spending the extra cash on nights-out on the town and other frivolities which aren't strictly required for life and decides to cut wages. The enforced holidays are there to protect the workers from such practises. Remember Catbert's "timebank"? Now someone is seriously suggesting it?

  5. Zog_but_not_the_first
    Trollface

    Great idea!

    I like it. When do we start dismantling the corporations and reimagine them as workers consultants' cooperatives?

    Sauce for the goose and all that...

    1. Tim Worstal

      Re: Great idea!

      About 50% of the work that Ronald Coase did for his Nobel was on exactly this issue ("Theory of the Firm"). When is the firm the correct structure, when the network of contractors?

      Ans: when one is more efficient than the other for the task at hand given the current level of technology.

      1. Doctor Syntax Silver badge

        Re: Great idea!

        "When is the firm the correct structure, when the network of contractors?"

        Why consider these as alternatives?

        Ideally a firm would like a predictable workload growing at a manageable rate. To deal with that it would ideally like a predictable workforce.

        In practice it gets neither. Workload varies as orders or contracts come along or end. The workforce varies as people quit and have to be replaced, take annual or parental leave or fall ill. The fit of available employees to work is statistically noisy.

        A sensible way of dealing with that would be to set target employee levels to deal with average workloads and availability or maybe a bit lower and fill the gaps with some form of contract staff. In some cases these may be employees of an agency in others freelancers. In effect this is fitting larger amounts of work than a single firm could provide with a larger workforce than a single firm could employ; as the numbers get bigger the noise become less in proportion. The individual firms have the benefit of a core workforce used to working together and used to the firm's way of working and for the workers there's a choice of employee benefits or flexibility depending on what they value.

        (Yes, I know this doesn't take into account economic fluctuations which affect lots of firms at the same time but that's going to be a problem for any system.)

        Historically what we've had is a tax system designed and administered by permanent employees who simply don't get the notion that there are alternatives. (Actually some of them do get it but they then leave to become self-employed tax advisors so the system remains run by permies.) The result is that they came up with IR35 to pretend that only employees exist. This blurring of the distinction resulted in the notion that there could be a class of people who could be treated as employees when it suited the engager but denied any employment rights and hence we get zero hour [employment] contracts. And it's abuses such as this latter situation that the then IR's then political mouthpieces said that IR35 was meant to prevent.

        What we need to realise is that the permanent employee, the agency employee and the freelance contractor operating as a bona fide business all have valuable roles to fill.

      2. Anonymous Coward
        Stop

        Re: Great idea!

        "About 50% of the work that Ronald Coase did for his Nobel..."

        Nobel?? What Nobel? There is no such thing of Economics Nobel.

    2. Anonymous Coward
      Anonymous Coward

      Re: Great idea!

      "we" may not be able to dismantle corporations but we can choose to organise ourselves in ways that do not follow big business patterns.

      Says me, who works in a "company of part-timers".

      On a different note, what would be nice in terms of statutory rights is the right to take up to a certain amount of leave (even if unpaid). People should be able to take a break if they want to.

    3. naive

      Re: Great idea!

      It is a brilliant idea, it is in fact the same model with which lawyer and accountant offices work, and was also used after the 1917 revolution in Russia. There it did not work because of the huge disconnect between central planning, resource allocation, market demand and the realities of life. It did not fail because people were lazy or unwilling.

      The volkswagen model shows it is a successful model, Volkswagen was in the 1930's by law owned by the Unions. This Union ownership was transferred to the state of Saxony, which still holds a majority of voting rights. This model will never become reality, the 1% holding the 80% of the worlds assets would lose here, they own enormous propaganda machines, elect our politicians and control if we get jobs. And they do it so well that even people with low wages, paying a higher percentage of taxes then a billionaire, thinks this is great.

      1. DaveDaveDave

        Re: Great idea!

        " the 1% holding the 80% of the worlds assets would lose here, they own enormous propaganda machines, elect our politicians and control if we get jobs. And they do it so well that even people with low wages, paying a higher percentage of taxes then a billionaire, thinks this is great."

        More antisemitic conspiracy rubbish.

        1. Zog_but_not_the_first

          Re: Great idea!

          @DaveDaveDave

          "More antisemitic conspiracy rubbish."

          How is this anti-Semitic?

          1. Naughtyhorse

            Re: Don't feed the troll....

            Who are you calling big nose?

          2. Yet Another Anonymous coward Silver badge

            Re: Great idea!

            Because the claim that the giant global companies are all secretly controlled by Arabs ?

        2. Stuart Moore

          Re: Great idea!

          "antisemitic"

          You keep using that word. I do not think it means what you think it means

          1. John Brown (no body) Silver badge
            Coat

            Re: Great idea!

            He's a wannbe Grammar Nazi. He means anti-semantic.

            1. Hellcat

              Re: Great idea!

              Perhaps he means anti-symantec?

              That's a force we could all get behind.

  6. Stuart Moore
    Meh

    If statutory holiday was reduced then the people at the bottom of the pile would be exploited - since there are some overheads to having more employees doing doing the same number of total hours, it's cheaper to have fewer people doing longer hours, so companies will push for it. Those who are skilled (like most Register readers) have flexibility here so can insist on better terms, but the people at the bottom of the pile will get exploited, and that's not a society I want to live in.

    There are possibly also other benefits that are harder to measure - ensuring people have some time off will benefit their health and so reduce the drain on the nhs/incapacity benefit in the future.

    That said more flexibility is useful. My current company ignores bank holidays- you get an equivalent amount of annual leave, you can take it on the bank holidays or at another time, great for taking time off when it's cheaper to go on holiday. My previous one let you buy or sell up to to a week of leave (although when when I went to buy some they looked at me surprised as they were so used to people being overworked and selling some of their leave)

    I disagree with the article, but it's good to be challenged as to why I do, more of this sort of thing.

  7. Anonymous Coward
    FAIL

    There's the standard libertarian fallacy here - that people are nice, charitable, etc.

    Paid holiday won't be replaced by negotiation, because the individuals will have no bargaining power. We live in the era of zero hour contracts - people will be given the choice of working every hour the employer wants, or being replaced by another unit of interchangeable exploitable schmuck. Only those with unique, irreplaceable talents will have any flexibility in the resultant system.

    It's the same problem with removing welfare: the reality is that it won't be replaced by charity, because the vast majority of people are selfish jerks. They'd much rather watch someone die in a gutter than give up a few precious pennies. It's not like this is hypothetical - welfare was born out of such an arrangement, as a solution to the problem.

    1. TheTick

      People in the UK give over £10 billion a year to charity, despite also being taxed. Lots of people are nice and charitable. I've lived and worked with all sorts of people in my life (except the significantly rich) and I've found most people will give someone a hand when they are in need. It's just p*ss-takers they have a problem with. The vast majority of people are NOT selfish jerks.

      Welfare was initially a few shillings for people over 70 (something like the equivalent of over 100 in life expectancy now), who would complain about that eh? But it quickly expanded as soon as politicians realised they could buy votes with it. Now we have a permanent benefits culture trapping millions in poverty with marginal tax rates higher than the top tax band (haven't kept up with this though, perhaps the Tories have sorted it?) and all these people will vote for the parties that keep them down on benefits street rather than give them a hand up to main street. State welfare has nothing to do with people's welfare.

      Zero hour contracts are desired by quite a few people. Why would you take that flexibility away from them just because you don't like the thought of it?

      1. Paul Crawford Silver badge

        "People in the UK give over £10 billion a year to charity"

        The problem is the UK's welfare spending is an order of magnitude bigger than that, and there is no way that those of a chartable disposition are in a position to donate 10x more for reasons that are not personal factor to them (e.g. protecting animals, children, etc)

        1. TheTick

          "The problem is the UK's welfare spending is an order of magnitude bigger than that"

          I couldn't agree more, it's a huge problem that the UK govt spends so much on welfare. I'm fairly sure that both of us can think of instances where govt welfare spending is not, shall we say, efficient?

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like