Facebook raises minimum pay for contractors to $15 per hour | Hacker News Reader

Facebook raises minimum pay for contractors to $15 per hour

reuters.com

69 pointsvar_eps65 comments

If you work four jobs like that you might be able to live in Fresno and commute on the back of a pick up truck to San Jose.

$15/hr is a $30k a year FT job. Sure it's not going to make anybody wealthy. But I don't think there are many people making $120k a year commuting on the back of a pickup.

$15/hr is a $30k a year FT job. Sure it's not going to make anybody wealthy. But I don't think there are many people making $120k a year commuting on the back of a pickup.

I don't think the GP is saying folks are working 4 full time (40 hours per week) jobs to get up to 120k per year. I'm pretty sure 8 hours of sleep a week isn't feasible.

No way! It's more like a $15K/year job.

1) The tax treatment on 1099s is worse than for W2s

2) You're basing this on working (and billing) 2000 hours a year. That's not remotely reasonable, because contractors often have to spend time finding new jobs.

Plus 2000 hours is grueling! That means a strict 2 weeks of vacation - no sick time, no Christmas, no nothing. This is not how a W2 worker is treated, and most W2 workers (especially knowledge workers) can't produce quality work for 8 hours per day, year-round.

True, but contractors might also get overtime pay, so we can't just assume it's strictly worse. You also only have to actually work the hours you work, rather than working extra hours without extra pay.

1. This is for their vendors - contracting companies who directly hire the employee.

2. I've worked many contracts, and I'm in one now. I expect to bill 2000 hours this year.

3. 2000 hours isn't grueling. I've done this much work a week in grocery retail and in IT, during the day and overnight, and it's easy. 2600 hours is rough. 3200 hours a year is grueling.

I also don't think $120k/yr out here is going to make anybody wealthy given housing prices and cost of living. And that's with a modest lifestyle.

I know, "boohoo silicon valley problems" but that is a scary thought that $120k doesn't get you much of anything out here.

I'm sure it can get you plenty if you have realistic expectations.

Based strictly on cost of living, my current salary would be just a hair under $126k/yr in SF, and I live quite comfortably. Better than most of my friends who aren't in tech. Housing, certainly the most expensive aspect of living in SF, is 233% higher than my current location. I could, if I wanted to, pay that right now on my non-SF salary, but only because I don't want to live in a giant house or a penthouse apartment.

If you were to spend 30% of your $126k a year salary on housing that's nearly $3,100 a month. You can find plenty[0] at that rate.

TLDR: I don't know what you're definition of "much of anything" is, but $120k is certainly enough for an upper-middle class lifestyle, even in SF.

I guess I was more referring to wealth accumulation, driving towards retirement, starting a family, etc. At that amount, those things may not be super realistic for the standards most middle or upper-middle class people have when they envision that.

But at the end of the day, everyone makes their own choices in life.

Your comment was initially amusing, but then I did the math and realized how little $15/hour actually is. If someone were able to work the equivalent of full-time, they'd make what? 15 * 40 * 52 = 31,200? Where could you live anywhere near a Facebook office on that? Seattle? Definitely nowhere convenient to their bay area HQ.

When I visited Apple a few years ago somebody talked about some cleaners having a 3 hour commute each way.

There are low-income apartments at the opposite end of downtown (near ID) from Facebook's offices in SLU. Though, at that pay rate, a single renter might be making too much to qualify for them.

It would be no problem to live within an easy bus ride of FB offices in Seattle on 31k (with roommates). Lots of my friends do it.

Definitely not Seattle.

Definitely yes in Seattle. 33% of 31k is 10.3k, divided by 12 is $861 month for what you should pay for rent. (I can't remember if this number should include utilities, but yeah.)

Just padmap 850/month. You can even get within walking distance. http://www.padmapper.com/# A lot of these listings include rooms within an apartment/house.

Don't forget taxes.

Just FYI a general rule is hourly rate x 2,000 or easier for most people to remember is hourly rate times 2 and add 3 zeros.

It's a step in the right direction and it's a signal. If Facebook can afford to do this then other companies can afford to do it too.

It has little to do with whether a company can "afford" it. If the worker does not provide at least $15/hour worth of value to the company, they will be out of a job.

Positions which do not provide value > than the minimum wage will be eliminated, either because the roll they fulfill can be automated at that price point or its no longer worth while to the company.

Many companies will not pay their workers any more than they have to, regardless of how much value that worker is creating. Supposing that an employee is producing $50/hour of value, their employer could afford much more than $15/hour without losing money, but most will choose not to because they have no compelling reason to do so.

There are, of course, marginal roles and not-very-profitable businesses where the value of an employee is pretty close to the minimum wage.

If a worker is generating $50/hour worth of value for a company and the worker asked for a raise from $15/hour, the company would be stupid to let the worker walk away. It would not be long before they are unable to hire the required labor and they would be forced to raise wages simply due to supply and demand. For this same reason, at least one Walmart in South Dakota had to offer workers > $17/hour (https://twitter.com/Mark_J_Perry/status/476015079712776192/p...).

They would be stupid and yet they're okay with that because of optics and politics.

It really depends on the labor market. If they can easily replace one $15/hour employee with another, there's no incentive to raise wages. If unemployment is low or they need specific skills that aren't available in their area, they may have to raise wages. Most companies won't do that unless there is some external market force (like labor scarcity) to compel them to do so.

*then some other companies with similar scale and profitability can afford to do it too

It in no way means all or most other companies can afford to do so.

Or you could live in the East Bay or San Jose, both within a half hour drive:

http://rentheatmap.com/sanfrancisco.html

Eastbay is not cheap either. Either one has to live in Stockton/Modesto/Patterson or further east.

The real issue isn't wages - it's cost of living. If we really want to make people's lives better, we need to address whatever causes prices to increase (limited housing supply is probably the biggest culprit).

I was under the impression is was foreign demand for high yield real estate investment vehicles?

I don't know a lot about real estate though.

For those wondering what this means, it means that a Facebook contractor would still be in the lowest quarter of income earners in Santa Clara County [1]. As such, one would qualify for rental assistance, etc from the county, as the going rate for a /studio/ is $1200/month [2]. The inflated wages of the tech industry have placed an unbearable burden on the average person.

[1] http://www.hacsc.org/section-8-housing-programs/waiting-list...

[2] http://www.hacsc.org/section-8-housing-programs/housing-choi...

'Lowest quarter' is a huge range. I don't think it's scandalous that Facebook pays it's lowest skilled workers in the lowest quarter of wages.

If I looked at actual pay and actual expenses I might agree, but lowest quarter isn't a good argument to make.

The links have the pay and average expenses in them. Average pay for a studio is $1200/month, way out of the range a facebook contractor could afford.

Yeah but your headline was 'lowest quarter' as if that said it all.

It's like those people who say it's a scandal that half the population earn below the average wage.

Why would you expect someone who earns below average to be able to afford an average apartment? Do you know what average means and how averages work?

I expect them to be able to afford /an/ apartment, which they cannot. Do a search on craigslist for apartments under $833, which is a third of their monthly income, and tell me how many apartments you see. Facebook's wage means their contractors are still essentially in poverty.

Key point here... It would be interesting to see if they have anyone making less than that currently.

>>>Contractors will also receive...a $4,000 new child benefit for parents who do not receive parental leave

Contractors definitely did not receive that before...So that's another key point

I like that one :-)

Wow. It boggles my mind that any contractor working for Facebook would be making anything near that low.

Good for them! I like it.

A really bold and fair move would be to pay them comparable to their developers and other staff. Of course not going to happen anytime soon.

Why is that fair? They don't have the same education (in general), they aren't doing the same job, they don't contribute the same value, etc etc etc.

One dev (who I gave a plum job to) used exactly those arguments. When trying to dissuade me from helping marginalized coworkers with thieving bosses. I shrugged, and decided to stop helping his sociopathic entitled white male self. (And got him to occasionally help people nobler than him, as I had sufficient power to do so.)

> his sociopathic entitled white male self

You're a bigot. You're a sexist and a racist.

Flagged.

Why should a developer working 40 hours a week earn more than say someone cleaning toilets 40 hours a week? Both are investing 40 hours of their time, both add value worth 40 hours of work. Actually cleaning toilets seems a way less pleasant job and should be paid better. On the other hand the developer spend more time in education not getting paid and has to recapture this investment. They would probably not end up with the exact same wages but I see no justification for enormous differences.

The supply and demand situation is of course very different allowing developers to ask for high wages and on the other hand allows forcing the toilet cleaner to work for a low wage but this does by no means make this fair.

Because one skill takes vastly more investment to perform and it also is able to be performed by far fewer individuals (meaning competition for those that do exist).

As I said it is of course totally okay to get back the investment you made with your longer education. But the difference over the lifetime between being a developer and a toilet cleaner is way larger than that. Your second points is just exploiting the supply and demand situation - you can ask for a higher wage if your skill is rare but it does not mean you deserve it.

Why do you deserve to get back the investment made on the education? Is 'deserving' an oracle, where you stick in some action and it arbitrarily assigns the conclusion of 'does' or 'doesn't'?

Let's ignore supply and demand for the moment. What would be a fair wage? I argue it would be fair to get paid as much as you invest, an hour of work is an hour of work, in first approximation no matter what you do. Pretending to work obviously doesn't count, you really have to work as good as you can. If you do a hard job, say risking your health in a mine, you should get paid better because of that. There should also be some gradient to account for skill and experience compared with others doing the same or similar work. And if you spend several years at university to obtain the skills required for the job this is an upfront investment that has to be paid back by the wage or their might be a lack of incentives to go down this road.

In essence it really boils down to you invest an hour of your lifetime - working or upfront to get prepared for the job - and you get paid for that hour, what exactly you do does not matter much modulo some adjustments for especially risky or unpleasant jobs.

That is like saying that the gold watch should cost the same as the gold plated watch, which shouldn't depend upon the supply and demand of the materials it is made out of. Also, considering most digital goods can be copied in mere seconds, it would appear that they should be priced at $0.01. As for food, beef that is 30% fat should cost just as much as beef that is 3% fat.

And heaven forbid we apply this to relationships. If you are looking for a one night stand and spend the required hours, then you must get a one night stand. The supply and demand of your particular looks/social skills aren't factored in, only the time you invested.

I think it's brilliantly fair. You get what you can negotiate for. Seems like a perfect way to do things to me.

You are exploiting the supply and demand situation but how does that imply you deserve it? What makes your 40 hours more valuable than someone others 40 hours besides the difference in demand? Shouldn't someone doing unpleasant or dangerous work get paid better than someone sitting in an air-conditioned office independent of the required skills and supply and demand situation?

No I don't believe in any of that. I believe the only way to determine what someone should be paid is to keep offering money until someone you think is good enough takes the job, or it until it stops being worth offering the job at that level.

Anything else is artificial and causes more pain than good. And that's despite it being nobody's business how much I get paid or how much my company choses to pay me.

Until someone takes the job or it isn't worth it - that's entirely supply and demand based. I neither argue that this is something that doesn't work nor do I think I can suggest a better alternative. I just argue that this is not fair from a moral point of view because I see no good reasons that investing an hour of your lifetime cleaning toilets is any less valuable than investing an hour of your lifetime developing software.

That I would love. Not only did my colleagues generally have less pay, but less privilege and empowerment too. (They'd labor under an abusive-ass boss while I could determine how I best work.) Pretty rotten system we've got.

Maybe min. pay is supposed to be an entry level work. Duration will probably get you either directly hired or later laid off.

If that is the situation, why would you pay more than $15/hr.

Also, I wish there was a context of this "minimum pay" policy.

One would be forgiven to think a company like Facebook, with a market cap of 224.82B, would pay a little more?

I'm pretty sure $15/hr and 3 weeks paid vacation is extremely good for janitorial work.

Not in this area. $15/hr means that at paying a third of your gross (not net) pay in rent, you'll not afford anything anywhere near the facebook campuses, and will barely afford anything at all in the bay area. [1] The real estate market in this area is amazingly dysfunctional; the working class cannot live here.

[1] http://sfbay.craigslist.org/search/apa?maxAsk=833&bedrooms=1

But if you already in he area, it may work. Some people own houses, live with family, are students or have some arrangement that takes rent out of the equation.

Even so, $15/hr might be more than the average pay for janitorial work in this area.

And there are plenty of working class people living here. Were you under the impression that the working class people you see every day are all living somewhere else?

$15/hr may be more than average, but it's still a crappy amount of pay given the cost of living here. I know that working class people live in the area, but a lot of them put up with a lot of conditions that most tech folks wouldn't. Converted garages, having multiple roommates, etc. They may live here, but it is close to bare minimum survival.

Our neighbor had 5 roommates...in a one bedroom. The standard of living here is hilariously low.

Why would market cap have anything to do with it? Walmart has a larger market cap than Facebook ($239B) and pays $9 / hour to its workers [1].

[1]: http://money.cnn.com/2015/02/19/news/companies/walmart-wages...

Walmart also makes significantly less per worker than Facebook.

Thus proving the point about market cap...

In Facebook's defense, I doubt they have many minimum wage folks on staff. These are forcing their vendors, cleaning, catering etc. to pay a livable wage (undoubtedly Facebook will pay for this increase however).

Its not something you normally pay attention too. I have a 8 person office in SF that I get cleaned weekly. I have no idea what those individuals are getting paid of the amount I pay to the cleaning service.

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