> There are true gig workers. And then there's the huge number of "non-employee / gig-work" where its just a collection of companies avoiding social security taxes.
That doesn't make a lot of sense when the employee still has to pay the tax. Nobody is avoiding it. The claim that employers pay half is just a feel-good claim with no economic basis.
There is no real difference between paying $10.62 to a contractor who has to pay $0.62 more in social security tax and paying $10 to an employee and $0.62 to the social security administration. And the employee would (all else equal) choose a job paying $10 as an employee over a job paying <$10.62 as a contractor, so the companies hiring contractors have to pay that much more or offer some other countervailing benefit to be competitive.
> There is no real difference between paying $10.62 to a contractor who has to pay $0.62 more in social security tax and paying $10 to an employee and $0.62 to the social security administration. And the employee would (all else equal) choose a job paying $10 as an employee over a job paying <$10.62 as a contractor, so the contractors have to pay more or offer some other countervailing benefit to be competitive.
Except the ads posted in your local bulletin board / signposts are "Want a job for $10/hr?!??"
So what happens in practice, is that the gig-worker is paid $10 (costing the company $10), vs the employee who'd be paid $10 (costing the company $10.62 + other bits, like health care and various insurances)
Which lasts until you send them the documents showing the real numbers and they figure it out.
Give people some credit. The education system isn't perfect but people can do basic arithmetic. Or if they can't then maybe solve that instead of this.
> Or if they can't then maybe solve that instead of this.
Why not both? If a problem is identified with our culture, its not exactly a strong argument to say "Well, here's another problem I'm more concerned about".
All I'll say is: lets solve both problems simultaneously. There's many problems in the world, and we should work on solving as many of them as possible.
I've got friends (who were with me in that knife salesman gig work) who didn't understand the difference at all, no matter how many times I explained it to them. People's brains just don't work the way you say. Sure, I understood the difference and how to do my own taxes, but not everyone has that capability unfortunately.
Because they're alternatives to each other. You don't need both.
If people don't understand how to compare their alternatives, they're going to get screwed left and right, not just in the difference between employee and contractor. So we have to fix that more general problem if it exists.
And solving that problem means not only that you don't need to prohibit people from being classified as contractors but that doing so is a net harm. Because prohibiting it for the benefit of the person doing the math wrong (solvable the other way) is a harm to the person who benefits from the arrangement, e.g. because they want the more flexible hours that come from being a contractor instead of an employee.
> Because they're alternatives to each other. You don't need both.
Sure we do.
Our education system sucks (as proof by my friends who were unable to grasp this basic arithmetic). AND we have a Gig vs Employee issue that also needs to be clarified through the law.
Lets fix both. I don't see any problem working towards the problem you suggested, nor the problem I suggested. I'm sure our failure in education is also causing issues in other aspects of our society unrelated to this particular issue.
> Our education system sucks (as proof by my friends who were unable to grasp this basic arithmetic). AND we have a Gig vs Employee issue that also needs to be clarified through the law.
Fixing the education system solves both of them, because then people aren't fooled into becoming a contractor when it doesn't benefit them. Then you don't need the government to force them into being an employee including in cases where they're better off as a contractor -- you only need to do the first one.
Also, if you tried to explain it multiple times to them, maybe it isn't the education's systems fault? Like you said above, their brains are unable to grasp it. No amount of education reform is going to fix that.
> The claim that employers pay half is just a feel-good claim with no economic basis.
Can you expand on this? Is it that employers don’t really contribute an equal amount to the employee withholding? Or is it an acknowledgment that absent this withholding, one would expect the money to show up in the regular paycheck?
If two jobs are equivalent, workers are going to pick whichever one pays better. That means if Walmart is offering $10 to employees and Target tries to offer $10 to contractors (who have to pay more of the taxes), workers will take jobs at Walmart because they get a bigger paycheck. Target will have to pay more if they want to get people to work there as contractors by an amount equivalent to the difference in taxes.
Which means saying that the company pays this amount and the worker pays that amount doesn't really mean anything. In the case where the worker nominally pays less of the tax, the company doesn't have to pay as much to the worker to make the job equally attractive. It doesn't really change who pays.
Of course this is theoretical and real systems have friction and stupidity in them, so people who are lazy or bad at math may end up taking a worse deal because it was framed in a particular way. But that's an information problem -- it has information solutions.
Instead of spending all this time campaigning to classify people as employees, just send out pamphlets to all the Uber drivers with a cost breakdown of what the equivalent employee wage would be compared to what Uber is paying them. Maybe some of them will quit and then Uber will have to pay the others more. Maybe the people doing the job aren't as dumb as they're made out to be and have their reasons. Either way, you solve the information problem with information, not prohibition.
That doesn't make a lot of sense when the employee still has to pay the tax. Nobody is avoiding it. The claim that employers pay half is just a feel-good claim with no economic basis.
There is no real difference between paying $10.62 to a contractor who has to pay $0.62 more in social security tax and paying $10 to an employee and $0.62 to the social security administration. And the employee would (all else equal) choose a job paying $10 as an employee over a job paying <$10.62 as a contractor, so the companies hiring contractors have to pay that much more or offer some other countervailing benefit to be competitive.