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Comment by mdorazio | Hacker News Reader

On one hand, I appreciate the spirit of this ruling. It's meant to prevent companies from outsourcing their core business to "freelancers" who are really people who do all the work of normal employees, minus healthcare, retirement, job stability, etc. and force the state to cover these things in part. On the other hand, it's getting increasingly difficult to tell who is freelancing because they prefer that setup and are secure with it vs. who is freelancing because the market for stable, good jobs cratered in their industry.

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I’ve long thought the distinction was dumb.

Everyone should just be treated as a freelancer. Id rather pay for my own health care thank you very much.

There’s practically no advantage to having health care, retirement, etc dictated by your employer and plenty of downsides.

>There’s practically no advantage to having health care

Only if you're young and healthy and have no pre-existing conditions. Otherwise, enjoy the fun of paying massive premiums for shitty care because you no longer have the group rate from your employer.

If those employer group rate things didn't exist, the whole system would be different. The insurance companies would still want peoples money, they'd just come up with some other arbitrary way for people to group up or do away with the grouping all together (which is how it should be).

Why would they, if they know someone will cost them a lot of money then what incentive do they have to ever insure them for non-exorbitant amounts if they can avoid it? Every other form of insurance would either not insure them or charge them massive fees (home owners, renters, life, car, etc.).

Group rates are a hack if anything and insurance companies have no incentive to make less money by having their own version of it.

edit: To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt.

What you're calling insurance (insuring people who have pre-existing conditions, or are known to be very expensive) is not insurance. That's just plain old welfare/socialism.

I'm fine with welfare, but keep it out of insurnace. Let insurace be for insurance (i.e. known but unpredictable risks), and welfare be for welfare.

> To explain further. Let's say insurance company A has a group plan and B insures people individually. A is then forced to charge half their clients more than B as the average rate is identical. Thus it's in those people's interests to move to company B and pay less. Now those left on A's plan have even more average risk (as all the low risk people have gone to B) and the rate needs to go up. Rinse and repeat until A has no clients or is bankrupt.

The problem is the same thing happens with employers. Employer A provides high quality health insurance, so everyone with a preexisting condition takes a job at employer A while employer B out-competes them by providing less/no insurance and picking up all the healthy employees who choose them because they can pay better wages. Then it's employer A rather than insurance company A that goes out of business and the remaining employers are the ones that don't provide health insurance.

You can try to get out of that by requiring all employers to provide health insurance, but it really has nothing to do with the employers. It would be superior to require all individuals to buy health insurance instead, but people seem to hate that.

The other option is to require insurance not to deny coverage or set rates based on the existence of a condition if the individual had insurance coverage at the time when the condition became known. Then as long as you were carrying insurance you're covered, which most people will then want to do for exactly that reason, which would thereby prevent the death spiral. But if you don't want to buy insurance, well, then you don't have insurance. See what happens if you wait to buy fire insurance until after your house is already on fire.

Arbitrary grouping should be outlawed. It should be based on their entire pool of business. Law of large numbers means some will always be sick. They should make money by preventing sickness not by directly or indirectly increasing the cost of care.

Or it'd just be socialized like public education and the postal service...

Also if you don't have a mortgage or kids. Freelancing is great when you're young, single, and have few long-term obligations. When you get older, well there's a reason mid-life people working mediocre jobs at large corporations don't up and quit for freelance life en masse.

You cut off the sentence you quoted. Its undesirable to have "health insurance" tied to your employer.

That’d be true if we had a functioning free market. It’s one of the things that Obamacare tried to do with the state exchanges, with varying success.

Employers get to deduct health care premiums from pre-tax, whereas freelancers have to pay for premiums out of their after-tax income. It can make a fairly big difference if your marginal tax rate is high (which it probably is in CA).

The opposite is true. If you are a freelancer, healthcare premiums are an above-the-line deduction, which practically has the same effect as a business expense. This is better than a regular deduction because you get it even if you don't itemize deductions. See https://turbotax.intuit.com/tax-tips/home-ownership/deductin...

The problem is you literally can't get all the benefits that a big company can negotiate.

Why not use a website like groupon?

That's more of an issue with the healthcare industry and insurance companies.

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

Depends quite a bit on how much the "freelancing" brings in, doesn't it? There's a potential self-contradiction to this view that I'd like to tease out.

Say you're "freelancing" and doing well enough that you can afford to pay not only the extra self-employment tax, but also to pay full market rate out of pocket for every single benefit that a stable employer would provide.

How many clients would you need to make that happen? In my experience, the most successful high-end freelancers - and your comment implies to me, at least, freelancing at a skilled professional level - have a small rotation, or maybe only even one, major repeat client(s).

The dynamic very quickly shifts to one of where the freelancer might as well, for all practical purposes, be an employee of those clients or that one major client, right? Except paying more for everything an employer otherwise would pay for.

You only think healthcare is overrated until you need it and find out there is no free market there and you owe 5 or 6 figures for something you thought was routine.

There’s a reason that medical bills are the #1 cause of bankruptcies in the US.

As someone who is not an at-will employee, being a non-American who lives somewhere with at least vaguely sensible labour laws, I'm very glad to have some security of employment provided for by law, which I would not get as a freelancer or contractor.

The downside to these rulings is that it has the potential to cause unemployment for these gig workers. As the saying goes, the least exploited people by employers are the unemployed.

It is like in American Samoa when the federal minimum wage was passed. It crushed their economy (dominated by tuna canning) since the tuna canning mills couldn't afford to pay top dollar for the raw tuna from the fishermen. The fishermen ended up going to Vietnam and southeast asia where their catch could be sold for more. The Vietnam mills were able to pay more because of the lower labor costs. The end result was that the unemployment rate in American Samoa skyrocketed to over 40% and even to this day it is still at around 20%-30%.

This general line of reason is based on a flawed idea that all of these employers would be willing to offer the same number of full time, full-entitlement positions, if it weren’t for the option of contracting. Everybody who’s in a contracting position is benefiting from having the option to do so, otherwise they wouldn’t be doing it at all. If you restrict people’s ability to freely enter into contracts with one another like this, you are absolutely guaranteed to be taking peoples jobs away from them. This is never discussed here, and it’s not obvious that the benefit to the smaller number of people who are left with employment after the fact is a worthwhile trade off.

Obviously there are going to be fewer actual employees.

Its not certain that the situation will be better if the companies stop misclassifying. However, how certain are you that the overall situation will be worse? Because we know right now the taxes and health insurance issue is a killer for misclassified employees.

With minimum wage it's kind of the same thing. Should we set the minimum wage to $1 an hour to ensure as many jobs as possible?

I agree that companies taking a hike creates a real problem. But it is hard for me to accept that the solution is to let them do whatever they want and workers have no protections from them.

> However, how certain are you that the overall situation will be worse?

It will quite obviously be worse for everybody who is left without employment.

Also, as this article points out, jurisdictions that pass these laws tend to be competing with other jurisdictions to attract business. For the case highlighted in the article (freelance writers), the outcome was that nobody’s working conditions were improved, and that the residents of the jurisdiction in question simply all lost their jobs.

Setting a minimum wage poses the same problems. Set it too high, and you kill jobs and business. All such restriction have the same consequences. The question that should be asked is whether it’s reasonable for people to enter into freelance contracts. I don’t think it’s reasonable to deny people who could benefit from them the opportunity to do so. I do however think it would be reasonable to deny people the opportunity to enter into a working arrangement where they’re paid $1/hour. I don’t think the two are equivalent at all, and I think that most discussion around ‘compassionate’ ideas like this do a very poor job of weighing up such pros and cons.

> I do however think it would be reasonable to deny people the opportunity to enter into a working arrangement where they’re paid $1/hour.

Why? Can you elaborate?

Because you can make an reasonable argument that prohibiting such arrangements would not cause much harm. Personally, I think that people should be free to enter into any employment agreement that they want to. Anytime you implement a minimum wage that’s higher than the market value of somebody’s labor, you’re restricting their ability to find employment.

Of course there’s the risk that if there was no minimum wage, that large portions of the working class would only be able to gain very low wages. I don’t think that’s very realistic though. People won’t enter into an employment arrangement that doesn’t benefit them, and will tend to seek out the best opportunities available to them.

But in any case, I don’t think a minimum wage in general is entirely unreasonable, but it can become so when it starts to have a significant effect on access to minimum wage jobs.

That's two self contradictions and a reference to a 'working class'.

No, no one gets to decide what others elect to do with their time. Especially here, where many people work for zero monetary compensation on open source projects.

What next, ban open source projects? It's work and there are no benefits. Blasphemy?

Is ‘working class’ an offensive term now?

And where were my self contradictions?

Contributing to an open source project isn’t necessarily an employment arrangement, neither is volunteering, or being an unpaid intern. This comment of yours doesn’t contribute much to the discussion.

Yes, "working class" is offensive. Like just about any other classification criteria is. Are you not woke enough to see this?

Your two self-contradictions are

1. "you can make an reasonable argument that prohibiting such arrangements would not cause much harm" vs "Anytime you implement a minimum wage that’s higher than the market value of somebody’s labor, you’re restricting their ability to find employment"

2. "People won’t enter into an employment arrangement that doesn’t benefit them" vs "I don’t think a minimum wage in general is entirely unreasonable"

> the spirit of this ruling

That's pretty much the case for every new legislation, most of which abound in unintended consequences.

At the least they could have been a little more thoughtful and and added exemption clauses if you choose your own hours, own working materials, and similar.

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