Re:From idea to replacing full-time salary in 4 months
by gnaritas on Monday April 16, 2012 @03:39PM
(#3848963)
Of course he doesn't pay them less, he's cheating on taxes to pay them more by 1099'ing them wrongly, they are employees and he'll have to pay them less once he starts doing it right thus losing his current advantage in the market.
But now the company they came from has to hire 8 new maids. If his business model is superior, he may eventually drive the old company out of business and employ at least as many maids as they did. Even if he only employed the same amount as the old company, he is providing more value to his customers, either through increased efficiency or lower costs. So even in the case of there being no new jobs created, creative destruction has again moved our economy forward.
Judging by how fast his first maid came to his company, I doubt he pays them less (I didn't see him mention this).