Tuesday, July 05, 2005

"Free" Restaurants and Jobs

Got a kick out of this article linked to from lewrockwell.com: Looks like because of all the government interference in starting businesses in Italy, some folks are operating unofficial restaurants out of their homes, feeding people for a "voluntary contribution", or some such thing, as opposed to a formal payment. How cool! I love to see guerilla activism like that.

One or two years ago I started wondering if something could be done, along the same lines, for employment purposes: It's gotten much more costly to hire the average employee nowadays, especially in California. It costs much more than the employee's hourly wage to hire someone with Workmen's Compensation and other insurance requirements. I wondered if maybe people could be encouraged to do their own guerilla activist type employement effort?

What would happen if a movement started to get a whole bunch of folks to become "Independent Contractors" (IC)? If you became an IC, you'd work for yourself but take a contract from a client, that client being any "normal" business, like Taco Bell or Pearson's Building Center. So, instead of adding you to their payroll, and dealing with all the insurance, tax and regulatory hurdles, they just send you whatever fee you agreed upon for delivering your services, whether it be working the takeout window or serving the businesses' customers in the lumber yard.

Of course, you'd also end up with many of the hassles of the self employed like buying your own insurance, a business license and doing quarterly estimates with your income taxes, but an IC might well be a better deal for the business than having people on the payroll. They'd still be paying for the work but the state would be cut out of the equation. If more and more people and businesses went that route, we might see a real shift in the way people and businesses work in the country. You'd probably need a lawyer and accountant to figure out a way to make it work, but, it might eventually make the State irrelevant in employer/ employee relationships.

But, alas, that's just a pipe dream. Way too many people are accustomed to demanding someone else hire them and are afraid of the responsibility of being "out on their own"- That being the major obstacle. And if such a movement did pick up some momentum, you can be assured there'd be a major squawk from the nanny staters to have ICs regulated " for their own good" and we might end up back on square one.

That said, you could always try and go the IC route on your own right now. If successful, you'd find your own little niche employment scheme. Being self employed does have its drawbacks, though. Believe me, I know. But, if you want to leave your life free of the State, you may want to give the idea some thought. If you figure out how to really make it work, let me know so I can spread the word.

"Most people fear liberty because it means individual responsibilty...."- Ben Franklin


At 10:20 AM, Blogger Jeff said...

Isn't that how our local Denny's got into big trouble a few years back? They had what they thought were IC's but the State said no, fork over the back taxes?

At 1:29 PM, Blogger Fred said...

I don't think that's exactly what happened with Denny's, although I could be wrong.

If memory serves me correct, Denny's was having problems with Workmen's Compensation payments as they were so high. I believe somehow they ended up getting into some agreement with some local indian casinos to get their workmen's comp thru the casino's program, which was different than the state program.

The State said that it wasn't sufficient enough for them to substitute the indian program for the State program and they had to shut down and/ or pay the money they "owed" to the State Workmen's Comp program.

I could have that wrong but that's the way I remember it. I don't know that the Denny's employees would fit the definition of what I'm proposing as they all would need individual(?) business licenses and would have to take care of their own wage withholding and such to be true independent contractors and I don't recall hearing about any of them doing that. I would think they were all getting regular Denny's paychecks, werern't they?

At 5:05 PM, Blogger Jeff said...

There was something about they were contracting with the Indian Casino for workers. Part of their work was being done by contracted labor. It did have something to do with workman's comp. It is a digression from you point though.

In the suit against Microsoft many years ago, the Judge stated that if you dictate the time, place, method and tools of work, then the workers are employees and not subcontracters as Microsoft claimed.

I think your proposal could work in some limited situations, but whenever a crew of workers were needed to fulfill a specific set of tasks in a particular way, it'd be hard to pass them all off as IC's, such as running a restaurant.

I also think your proposal is a bandaid fix to a flooding hemorrhage. The demands put on employers are unreasonably expensive and complex, at least for small business.

As a libertarian, I presume that you believe the cause of the problem is Government interference in the free market. As a whatever it is that I am, I believe the problem comes from corporations interference and control of the governing process. I think that tax laws are so incredibly complex because lobbyists for accounting firms influenced the process to create more business for themselves. It's what I believe without any direct evidence to support my belief. I should write my own blog about it rather than fill up your comment space :)

At 6:40 PM, Anonymous Anonymous said...

Ever see food trucks at highway rest stops? Think those guys are licensed to be there? Think again. Ask CalTrans. I betcha any exchanges going on there are donations.

At 8:54 AM, Blogger Fred said...

Thanks for the clarification on the Denny's case Jeff. Memories grow dimmer each day.

That Microsoft case Jeff mentions is along the lines of the local case where two exotic dancers sued T. Great Razooly and the Tip Top Club for back wages. Strangely enough, both Razooly and one of the dancers are Libertarians.

The dancers (actually, I got the impression that one started it and dragged the other one into it) claimed because there were all these rules they had to follow, while they performed their trade at the club, they were employees and should have been paid at least minimum wage. The judge, perhaps falling back on the MS ruling, ruled for the dancers, citing the fact that Razooly had a rule book relating to behavior that dancers had to abide by.

That may be the law but I disagree with that sort of thinking simply because even a contractor might have to abide by rules of conduct at a particular work place. If the IC doesn't want to abide by the rules, they shouldn't engage in the contract and work at that place to begin with.

For instance, if I became an IC and contracted with Taco Bell to work the takeout window a few hours each day, seems to me they would have the right as business owners to have me wear a uniform and follow their cash collection procedures while working the window. If I didn't want to abide by those rules, either the business owners or I could simply void the contract. Freedom of choice.

At 9:20 AM, Blogger Jeff said...

Here's an excerpt from ,this article:

Combining constant lowering of costs, empowerment and emotional fulfilment of employees has often required ingenuity. In December 1999 the Bank of America, after announcing the prospect of 10,000 redundancies, sent all its employees a glossy brochure inviting them to adopt an automated teller machine. Adoption meant assuring, on their own time and at their expense, the weekly maintenance of an ATM machine in an urban or rural area. The brochure explained how to keep your ATM on the road to success; pick up any trash that may have been left behind, clean the screen and keyboard, make sure the lights are working and trim bushes. The initiative promised to be a win-win endeavours characteristic of the new economy: customers would enjoy shiny ATMs, employees would derive pride and satisfaction from their volunteer work and shareholders would gain value.

I'm not sure how exploitation of labor could be avoided under your plan. In fact, I'm sure it could not. After the Labor Commission nixed B of A's morale boosting plan,

The bank was outraged at the suggestion that it might have tried to lower its costs with the threat of layoffs. It also assured the world it never intended to use the ATM's hidden camera for quality control purposes (11).

At 9:22 AM, Blogger Jeff said...

Oh, I know about the memory thing. With each passing year and each passing beer...


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