But, I am medically handicapped. When I had a corporate job, I lived in fear of losing my job for taking too much time off. My life revolved around getting myself together enough to make it to work 5 days a week.

I don't have those issues anymore. I can take time off at will and resume working when I feel better. My access to paid work is not threatened by that.

My income is portable. This has allowed me to repeatedly move to improve my quality of life. Historically, this was a luxury enjoyed by only the jet set and well off retirees, not working stiffs.

I think we need to provide national healthcare in the US to make the lack of benefits less of a problem. But I think if gig work is well designed, it can raise quality of life for ordinary people.

I wish my life were easier. I am really grumpy about it not being easier. But gig work is a viable solution for me under circumstances where most normal jobs simply are not. This has helped make it possible to make headway on my problems when I should simply be doomed with no real hope.

So I think we need to just focus on making gig work a positive. I don't think it is a given that it has to be a terrible experience, even for people who aren't making tons of money.

It's low skill work, groundskeepers, janitors, housekeepers, drivers. Businesses have moved to contracting to effectively lower total compensation.

1. Entrepreneurs running gig economy startups and the implications for how they should treat their workforce

2. Tech workers who work in the gig economy (e.g. Gigster developers, PullRequest reviewers, independent developers)

So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?

That's a pretty limited view. There are plenty of non-entrepreneurs on HN who are looking for interesting technology and tech-related society articles. It could also be meant to resonate with people who just think that the gig economy is questionable development.

> So I read this and bring up my point because it seems like contract work, inherently, is not the problem. The problem is, what others have mentioned, that the government regulates employment in such a way that we tie benefits like health insurance to the employers, and do not align incentives properly. Would you say that's an accurate assessment?

I don't agree with that. I think the problem with contract work, especially the gig economy kind, is that it's a further progression of the dehumanization of work. More an erosion of the social contract than a failure of government regulation. That dehumanization reduces the buffers between actual people and the more sociopathic aspects of capitalism.

Man is a featherless biped may work to describe the category. But if you give a tax break based on the number of men living in each home, you'll find a lot of people plucking chickens.

Yes, because of the externalities. If an Uber driver in London gets sick, he or she will still be treated by the NHS despite Uber’s business model involves paying no employer’s NI.

If you want to say the NHS simply shouldn’t treat those who don’t contribute well that’s a whole ‘nother thing...

Heads up that you can only contribute 20% of your earnings up (up to the limit) to a SEP-IRA. This is because you can contribute up to 25% of your taxable income, but your contributions are deducted from your income.

For example, if you make $1, and put $0.20 in your SEP-IRA, your taxable income is $1 - $0.20 = $0.80, so the $0.20 you put in is the full 25% of your income.

To contribute $55K in 2018, you will need to generate $275K of income.

I don't think this is correct. We are talking about employER contribution to the employee SEP-IRA account, which is 25% of the compensation, not exceeding the annual limit (https://www.irs.gov/retirement-plans/retirement-plans-faqs-r...).

You are correct to say that you can contribute 25% of compensation. However, your wages are different than your profits, even as a self-employed person.

Let's say you are self-employed and you make $1 of profits and pay yourself $0.80 of wages. You can contribute the other $0.20 you have to your SEP-IRA, since it's 25% of your wages (or 20% of your profits).

Because of this, you need $275K of profits to generate $220K of income and a corresponding $55K SEP-IRA contribution.

For more, see: https://en.wikipedia.org/wiki/SEP-IRA#Reduced_rate

Being an independent contractor or a self employed business owner is fine for someone who has an entrepreneurial bent coupled with unique skills that are in high demand. Such people can likely charge rates that more than compensate for the lack of employer benefits as a contractor.

However, the contractors described in the article don't appear to have that combination of advantages. Presumably they also don't have spouses who can carry them on their health insurance plans. In a previous era, their jobs might have previously carried benefits, but many of these jobs have been reclassified as "variable workforce" positions, as companies restructure their employment to minimize the carried costs and risk of fulltime employees.

Not specifically to you but this conversation is highly interesting because it demonstrates the two different attitudes - one from the person you were replying to and one from pretty much everyone else.

In software engineering it is the attitude of people who come up with a solution to their problem as compared to the attitude of the people who are complaining that the solution is not general enough and therefore should not be considered a solution.

One guy is living life probably pulling in upwards of $150,000 a year (or living in a lower cost of living place with six figures income). Simply budgeting well will cover all these things. And another thinks that "budgeting" means you don't get to eat on Mondays so you can keep on bills.

Person 2: But what if you're a diabetic blind one legged cancer patient?

Here's my personal experience - I had a single parent who always worked and always had health insurance through her employer. In her 50s she got hurt and couldn't work much (no cobra, no money either) and lost her insurance. She worked in retail for a while. Then she got cancer and died. Maybe if she'd had more frequent checkups it might have been caught earlier? Maybe less stress would have helped? Who knows. I think if we had national health insurance or health insurance you can't lose, then a lot of people wouldn't face this problem, it would help in the aggregate. She never got to 65, so she didn't jump onto the safe medicare.

Whether or not there are improvements to be made to our healthcare system is an entirely different discussion than whether or not an average, able bodied person could reasonably go out on their own without another person working in the home to back them up financially. Of course it would be better/easier to have a support system with another worker in the house. Of course it would be better if you had easier access to healthcare. I would never suggest otherwise.

Also, I'm sorry for your loss. My mother is a cancer survivor and it's just a shit situation all the way through.

Buying your own workman's comp is 0.0075% of your salary in my state ($0.75 per $100 in salary). Disability insurance is $30/mo for $50k salary, so if you're making $30k/yr then disability will be even less. You can make a budget, avoid consumer debt, and save an emergency fund at virtually any level of income. The median national income is $32k/yr for a single person. Sure, a lot of people making that kind of money also have bad personal finance habits. But the idea that it's impossible to live a decent life on the kind of income that half of all single people in the country are making is hyperbole.

[1] https://www.floridawc.com/workerscompensation/policy/rates/

It feels to me that our minds have been atrophied by generations of being told that we can't do anything. Forget budgeting a small business, we can't even budget for our own family. Someone else, be it the government or our employer, has to provide some universal solution to all my problems like saving for retirement or being able to buy an antibiotic for my kid. So someone presents a solution, and rather than being able to take that, adjust it to our individual needs, our psyche is so weak that we just sit back and try to figure out all the ways we can avoid taking agency in our own lives, we need big brother to solve it for us.

Ultimately it's perhaps the same thing though. In your scenario people want to pick apart the solution so they can return back to deciding that their employer or the government has to provide a solution for them.

Not that I recall, but that situation could happen to you if you had employer or government provided coverage.

>Or have an expensive pre-existing condition?

No, but there are other options like health-shares. These are usually tied to religious organizations and works almost exactly like health insurance, pooling costs. Obamacare grandfathered in existing health shares but made it illegal to start new ones.

>There's certainly an element of luck involved, especially when it comes to the US healthcare system!

There's a certain element of luck to life in general. I'm certainly not dismissing the unfortunate souls you're referring to, but we equally should not pretend like these things are all that difficult for the average person to do.

I am sure that few in my situation would like to admit it. For most of my adult life I have worked as a programmer on a contract basis mainly online for rates or fees that are well below the market rate for my area. For the last few years I have worked for non-funded or poorly funded startups for very small income amounts and no benefits. Even for jobs that were on site, many of the opportunities were spelled out in the ad or description as low rates like $70 or even $40 an hour.

I am sure that people will find lots of reasons to believe that I did something wrong or am an exceptional case, but I don't believe that. I think I am just an exception in terms of people like me who will admit it.

I have had a few well paid contracts but the income isn't consistent.

But not every contract programming gig is rich. It just absolutely isn't. And not everyone can get those high paying gigs. Also for me I have been trying to get into business in startups and not all startups can or want to receive funding and somebody like me is taking those jobs and happy to have them.

Again, go ahead and try to say there is something unusual or wrong. about me. I maintain the only really unusual thing is that I am admitting it on HN.

My current startup does have a lot of potential so I am hopeful about future income.

Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.

This argument reminds me of web designers who blame users for the mistakes they make when presented with a horrible user interface -- that there is no system so terrible that the user can't be a moral failure, 100% responsible for their own misfortune.

Generally yes, poor people are less capable of gaining the "expertise" to do many things, because they are busy trying to stay alive. It's textbook hierarchy of needs.

Noticed other replies; why the fixation on car insurance? I thought we were talking about structural impediments to poor people?

>Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.

This is in the context of a discussion about starting your own business. If you're on the tier of hierarchy of needs where you're struggling for food, then sure, maybe you shouldn't be starting your own business at this point. However, if you have the intellectual capacity to buy car insurance, and also are in a position to be starting your own business, you almost certainly have the cognitive ability to purchase disability insurance.

i.e., being poor is harder than it looks ...

Somehow we've gotten from there to a point where you're suggesting that a poor person who is somehow capable of starting their own small business is, by the very nature of being poor, fundamentally incapable of making a good decision regarding disability insurance options. And it is because of this fundamental lack of cognitive ability that we need a regulatory environment demanding that the business owner (who is themself) must purchase disability insurance on their behalf?

I'm sorry, but you've just gotten to the point of nonsense.

I don't think anyone is actually suggesting that.

I was suggesting, essentially, that poverty is a vicious cycle. That, to quote the movie Hell or High Water, "I been poor my whole life. So were my parents, an their parents before 'em ... It's like a disease, passing from generation to generation. Becomes, a sickness, that's what it is ... Infects every person you know"

And obviously this isn't a universal. There are always exceptions, that goes without saying.

>It's also expensive, inconvenient, time-consuming, and risky to be poor. None of the suggestions you make are "easy" for poor people.

>Consider how much time, energy, and expertise it takes even to research disability insurance and buy the appropriate product.

This whole thing is about me calling out rectang for suggesting that poor people are too stupid to buy disability insurance.

You: "The soft bigotry of low expectations..."

You: But what if you're mentally disabled?

You: Jane

;)

The long answer to this question is, in fact, extremely long.

My contention is that this is a disgustingly classist view against poor people. Poor people, by and large, seem perfectly capable of purchasing car insurance, and disability insurance is generally less complicated.

If you're confused, then you have a lot in common with many Uber drivers!

That language, offloads, is loaded. This idea that it's someone else's responsibility to handle even the most trivial of life's decisions for us is toxic. If you don't understand the basic concepts around running a small business, there's plenty of books on the subject in the library.

Where on earth is that number coming from? Uber?

https://www.buzzfeed.com/carolineodonovan/internal-uber-driv...

"In early 2015, a study commissioned by Uber found that drivers in 20 cities, including New York, Los Angeles, San Francisco, and Boston, were grossing around $17 an hour.... But the $17-an-hour figure was based on data from 2014, when Uber rates in most cities were higher than they were in late 2015. It was also based on gross earnings and did not account for driver expenses."

This is from an article complaining about how little Uber drivers make...

>But in three large metropolitan cities, drivers make far less than the national average, about $20 per hour, after expenses.

"None of these advertisements mention driver expenses. The same goes for the alerts Uber sends to drivers — sometimes five times a day or more — telling them that other drivers on the road were making $20 or $30 an hour in gross fares."

Yes, if you're poor it will be harder to buy health insurance, but you can avoid consumer debt at virtually any income. You can save up an emergency fund at virtually any income level. The fact that it might get more difficult to do any of these things as you get closer and closer to the lowest end of the poverty spectrum... is that really the argument we're trying to have? Because that seems like a silly thing to interject in a conversation about people who are going to be starting and running small businesses.

You have to have sufficient income to consistently cover basics with money leftover. Some people simply don't have that.

* Contract developers have greater flexibility on taxes. "Pass through" entities are big now.

* Contract developers are more independent in a lot of ways. Some employees have clauses where they give up all IP they create.

* Contract developers often move from project to project more, which gives them a better network effect then their W2 counterparts.

Are there reliable sources of contract work? I have yet to find any, though I admittedly haven't been looking the hardest.

The best paid work comes from a professional network. When I look for a new project I send an email to former co-workers and some past clients asking for leads. I then follow up on those leads.

* What sort of business entity are you using? What considerations did you make when choosing this entity?

* What is your work like? Are you remote/onsite? Do you have one client or multiple?

* What is your staff like? Are you a lone worker? Do you have coworkers in your business? What did you choose to offload onto others?

* How do you manage taxes, insurance (beyond those covered by your wife), and finances?

* What alternatives have you considered in the event that your wife couldn't cover you?

Mostly interested because this seems like a viable career path (to me) but I would definitely want to consider it with eyes wide open and learn from someone else's successes and failures.

* LLC with S-Corp designation. This is very tax-advantaged vs. Sole Proprietor.

* Currently, I'm mostly on-site for one client.

* 1-person shop.

* I have an accountant. You want a good, small business accountant.

* I buy health insurance for my family through the ACA exchange. It's very expensive so make sure you factor it into your rate.

I've had 2 FT gigs that lasted 6 months each since 2004 and regretted it both times. If you can handle having to network and interview frequently you can make more money with more flexibility as a contract developer.

* What are some recommendations you have for establishing a rate? Do you use hourly, weekly, or project?

* What do you look for in a small business accountant (it sounds like you may have had a less-good one in the past)?

* What avenues do you typically find yourself using for contract work? i.e. LinkedIn, job boards, word of mouth, etc?

* I've actually been blessed with a great accountant. He's saved me thousands over the years and sent letters to the IRS on my behalf clearing up a couple issues along the way. I would look for someone who specializes in small, professional service firms that is used and referred by people in your area. If they tell you they don't think you should organize as an LLC, look elsewhere.

* Starting out I used recruiting firms. They have the advantage of an established network and getting you paid every 2-weeks. The disadvantage of course is they take a cut. Their first ask will always be a low-ball hoping they can get a huge margin. Always try to get them to make the first offer and always ask for more. You'd be surprised how much room they have to negotiate up most of the time. As I've made connections over the years I've relied more on my network, but I'll still use an agency to fill the gaps. Also, boutique consulting agencies can be great for sub-contract work. They often need to staff up for a project they just landed, but don't want to take on full-timers and they usually command excellent rates.

I just wanted to second this point. In this way, checks both boxes off: one for getting the advantage of an established network like a recruiting firm; two for getting you the higher rates and not needing a middleman

* I'm remote currently with high utilization client (as a subcontractor) and smaller retainer clients.

* I am a firm of 1.

* I have an accountant to manage taxes and finances. I keep meticulous records of what is a business vs a personal expense. The subcontractor gig is insured by the main contracting company. The retainer gigs stipulate it is knowledge/access only, so without any IP deliverables required, so there's no need for insurance on that. I may get insurance if my employment situation changes in terms of the contracts I take on. For this, I'd talk with your lawyer.

* I would just buy health insurance through the state. I live in MA, so we have to have something. We're both young and healthy, and she has an incredibly stable job, so I don't worry about this one too much.

I should point out that I'm very new to this (4 months in) so definitely don't look at me as a source of having "done things right" - I am learning every day and still sweating it all.

* Have you considered an S-corp? If so, reasons against listing it as an option?

* Any recommendations in general contractors (even if not specific ones, just things to look for in a general contractor)?

Thanks for your time and response(s)!

* A general contractor? I hear that term I think of those guys who work on your house. Could you be more specific?

* I guess I just lifted the term as it seemed appropriate; given you mentioned subcontracting I imagine there is an entity above you that does the direct contracting - any recommendations for what to look for in that contracting authority?

It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors.

I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan.

This is what bugs me to no end about insurance. They get you with a low intro rate, then jack it up a massive amount annually, and leave your option as basically switching (if there are better options even available), or shouldering more of the risk by moving to a high-deductible plan (which makes them more money).

Are there no good, consistently-priced insurance options for those who are not full-time employees with benefits?

Those contractors that have LLCs may look into group rate insurance, as those are generally cheaper than individual ones (but you may need to have more than one employee to qualify).

Note on this point: many company-sponsored 401ks do allow you to contribute up to $55k/yr - though a good chunk of that will be after-tax money. (Though again, the after-tax can often be converted to Roth, which has its own benefits)

It's a trade-off and comes with definite benefits like you listed.

At the same time, companies fire by the millions in aggregate in a recessionary environment. Or worse, your employer simply vaporizes and goes out of business, which similarly happens in droves.

If you're a contractor, your exposure depends on who you're doing business with, how strong their circumstances are, just as it does when it comes to who is employing you.

The U6 went up to ~17.5% during the great recession. There is a very small group of elite tech companies that weathered that storm without firing people. Google is up at 80,000 employees now, Microsoft is at 125,000. Do they avoid layoffs in the next recession? I'm skeptical. Microsoft has almost no growth, any recession would hit them hard. Google's growth is 1/3 what it was ten years ago, a recession would slam their ad business and bring their growth down toward single digits.