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Silicon Valley's Dirty Secret: Using a Shadow Workforce of Contract Employees To Drive Profits (cnbc.com)
An anonymous reader shares a report: As the gig economy grows, the ratio of contract workers to regular employees in corporate America is shifting. Google, Facebook, Amazon, Uber and other Silicon Valley tech titans now employ thousands of contract workers to do a host of functions -- anything from sales and writing code to managing teams and testing products. This year at Google, contract workers outnumbered direct employees for the first time in the company's 20-year history. It's not only in Silicon Valley. The trend is on the rise as public companies look for ways to trim HR costs or hire in-demand skills in a tight labor market. The U.S. jobless rate dropped to 3.7 percent in September, the lowest since 1969, down from 3.9 percent in August, according to the Bureau of Labor Statistics. Some 57.3 million Americans, or 36 percent of the workforce, are now freelancing, according to a 2017 report by Upwork. In San Mateo and Santa Clara counties alone, there are an estimated 39,000 workers who are contracted to tech companies, according to one estimate by University of California Santa Cruz researchers. Spokespersons at Facebook and Alphabet declined to disclose the number of contract workers they employ. A spokesperson at Alphabet cited two main reasons for hiring contract or temporary workers. One reason is when the company doesn't have or want to build out expertise in a particular area such as doctors, food service, customer support or shuttle bus drivers. Another reason is a need for temporary workers when there is a sudden spike in workload or to cover for an employee who is on leave.
Ever want to know what it feels like to be a $20 whore? Get involved in one of these 'contracting' deals. They have no investment in you, you're paid what you're paid, and if you're stupid enough to let them alter the deal so you hang around longer than 6 or 12 months, you'll NEVER get paid another penny more, no matter how much the economy changes in the meantime, and if you complain too much, all it takes is a phone call and you're FIRED, with no consequences for them, they'll get another $20 whore in your place, to be used like a toilet. You wonder what 'capitalism gone bad' looks like? This is part of it. Hire people outright? Give them a reason to hang around? LOL that's so Last Thursday! The NEW HOTNESS is just treating people like the robots everyone keeps talking about taking everyones' jobs. We've truly become a degenerate society when shit like this is going on.
It lowers tech wages too since you don't have long term employment. Plus it dodges taxes.
Hi, consultant here. I don't see it lowering wages, or dodging taxes.
That's because if you want short term help, a company will mostly be paying HIGHER wages than they would real employees. And those employees (or a consulting firm) will be paying all those taxes you think are somehow being "dodged". Which is why the wages are higher...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The vast majority of the times I've seen a company use contract workers, it's a management problem.
Manger has work that needs to be done, and all existing employees are busy. This work is not some sort of short-term bump in the road, there will be work for years.
Manager asks for another employee.
Executives and/or HR say "No", because it would violate some arbitrary rule on number of employees or number of direct reports or something similar.
However, the manager is allowed to hire a contractor at 150% the cost of an employee, because that doesn't violate the arbitrary rule. Contractor ends up as de-facto employee, and everyone desperately hopes that doesn't bite them in the ass.
It's a quick and easy way to get H1-B workers for one thing.
The US issues a fixed number of H1-B visas each year. Whether those people work as direct employees or employees of a contractor makes no difference. The number is the same.
It lowers tech wages too
No it doesn't. It increases wages. It lowers non-wage benefits.
you don't have long term employment.
Many of the people discussed in TFA are regular W2 employees working for a contracting company, not individual contractors.
Plus it dodges taxes.
No it doesn't. The taxes net out the same. It just shifts who pays them.
Nobody wants to vote for strong worker protections.
No, not stronger, nor better. Just different. In many ways, 1099 workers get a better deal than W2 workers.
If you want this to change you're going to need help from the government.
No thanks.
The more they pay for an opinion, the more weight they place on it.
Which is why I have the clients best interests at heart when I extort...er...negotiate my rate. It's so they get full value, if I let them get away with paying me less, they'd be liable to ignore my advice.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'