
The Rise of the 1099 Economy: More Americans Are Becoming Their Own Bosses - edward
http://www.forbes.com/sites/joelkotkin/2012/07/25/the-rise-of-the-1099-economy-more-americans-are-becoming-their-own-bosses/
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jacquesm
More people starting out for themselves can have several causes, and one of
those strongly correlates with unemployment. Not everybody that starts for
themselves does so because they think that 'working for the man' is no longer
for them, as often as not it is that the man has decided that he has surplus
employees and kicks them to the curb. That those people then need income and
that many of them are then forced to start their own business or perish is a
direct effect of this. If you throw that many people into the meatgrinder some
of them will succeed but let's not pretend that those choices were made of
free will.

~~~
happyscrappy
Being your own boss has huge advantages, tax and otherwise, at least in the
US.

~~~
_delirium
There are some significant disadvantages as well, though. One is that there
are fairly large cost/access disadvantages for healthcare compared to being
part of a corporate group plan, although Obamacare has improved the access
part.

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cylinder
Obamacare hasn't improved the access part unless you're subsidized. Maybe the
plans are a little better, but you're still paying exorbitant premiums,
especially in corrupted states like New York where you've got to subsidize the
high incomes of medical malpractice lawyers.

Important to note that employees of large corps are still paying big premiums,
they just think they're not because the employer is paying half or more. But
if those costs weren't there they could be passed to the employee as wages.
This is one of the strongest explanations for the stagnation and decline of
wages in the US over the last couple decades. If we made everyone buy their
own insurance, there'd be riots in the streets.

~~~
_delirium
> Obamacare hasn't improved the access part unless you're subsidized.

That's the "cost" part of cost/access; access is whether you can get health
coverage at all. Pre-Obamacare, access to healthcare was pretty dicey outside
a corporate health plan, up to the insurer whether they were interested. If
you had significant negative health history, you effectively had to work for a
large corporation in order to get under the group umbrella. My own health is
fortunately good, but I have more than one friend who chose not to start a
company or join a small startup because of the healthcare issue (one has a
congenital heart problem, which poses no issue for getting corporate group
coverage, but previously made individual coverage a no-go).

~~~
zrail
I'm part of that group of people. I held back on starting my own business for
almost a year because I would not have had access to health insurance at all
due to my medical history. Obamacare means that I can buy it. After that it's
just money. Bill a few more hours and/or raise my rate a few percent and I
don't notice the difference.

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jeffreyrogers
Funny how we went from the 17th/18th century model of self employed craftsmen,
to the 19th/20th century model of working for a large manufacturer, and now
the trend appears to be back towards self employment.

Of course, as jacquesm noted in his comment, a lot of this is probably due to
people being unable to find other, desirable work.

~~~
happyscrappy
While it is great if people started businesses when they can't find work this
has not been my experience. The people that I see starting businesses are the
most ambitious and are seeking more.

~~~
georgemcbay
Well "starting a business" and being a 1099 earner are conceptually two very
different things that only sometimes overlap, though within this thread they
are often being used interchangeably (probably because the article this thread
is about conflates them in some places).

I know of a few people who are now 1099 earners not because they wanted to
"start a business" in the traditional sense but rather because they are
working through temporary staffing agencies structured this way to avoid the
benefits they would otherwise have to provide when using full-time W2
employees. Celebrating this state of affairs as people being empowered to
become their own bosses is very misleading. To be fair to the original
article, it does make mention of the fact that this situation is not all
roses, but the message is overall somewhat muddled by the title and overall
gist.

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mark_l_watson
Except for working at WebMind and Google, I have been a 1099 consultant for
about 16 years.

One thing I worry about is the USA government, that seems very keen on
extracting taxes from non-rich people, will start plugging up some of the fair
tax right offs that 1099 workers get.

The first part of this process, I think, has been the pressure on companies to
make people work as W-2 workers. W-2 workers have fewer tax write offs.

~~~
deskamess
What are the disadvantages for companies to make people work as W-2? Is there
more paperwork on their part?

~~~
justboxing
As @snowwrestler has mentioned, the disadvantages arise from the Company
required to take on liability for damages, work not completed etc, as well as
the provision of benefits (sick leave, retirement plans etc).

In the context of being an Independent Contractor however, my experience has
been that very few companies are willing to directly hire a person as a 1099
Software Contractor. A majority of them have you come on as a "W-2
Contractor". What this means is that the Recruiting Company "forces" you to
sign up with them as a "W-2 Contractor", and they in essence withhold taxes,
and provide mostly Sh*ty benefits, and give you a lower rate than if you were
an independent 1099 Contractor.

On the flip side, the Company at which you will be performing your work has
none of the risks associated with 1099 Contractors, and can fire you at any
time without any risk of a lawsuit from you, since their legal agreement is
with the recruiting company that hired you as a "W-2 Contractor", and not with
you directly.

Hope this makes sense.

I hate this situation and I wish some Jobs / Career startup company would
address this pain point, i.e. software engineer forced to go through "W-2
Companies" and hence getting a lesser hourly rate and thrust with benefits
that the contractor doesn't need (as his spouse may have medical benefits from
a fulltime job etc). i.e. it would be cool if a startup career website could
connect 1099 Independent Contractors with the Companies that need them, and
get them the higher rates that are currently being "eaten" by the middle-men /
brokers that masquerade as Recruiting Companies and make you get on a W-2 at a
much much lower rate.

~~~
usernamepc
Like many others have mentioned, the client companies don't want to be
involved in hiring 1099s directly because of the liability (lookup
google/odesk). What our startup
[http://www.oncontracting.com](http://www.oncontracting.com) is doing instead
is making the staffing space more transparent and empowering contractors with
information- so you can lookup the various preferred staffing agencies that
service certain clients and then shop among them to go with whoever charges
the lowest markup.

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xacaxulu
It's almost as if there is some sort of huge incentive for organizations to
not have full time employees or have to pay for their healthcare, vacation
days, taxes etc.

