Monday, October 10, 2011

Inside the Shadow Economy


Employers’ new ruse: “Independent contractors”

This is nothing "new". I was a motorcycle mechanic for most of my working life. I've worked at large dealerships and two-man operations, which were by far the more fun of the two.

The dealerships played by all the rules - paychecks, deductions, maybe some benefits. The bikes came in broken and left fixed. Yawn.

The small indie shops were the best! Health plan? Drag ya out inta the street and call 911. The only bennie was unlimited use of the ubiquitous "stoner bench". Heh. General ambiance was loose and freewheeling. The bikes came in broken and left fixed. Whee!

The only "paperwork" was the transfer of some small pieces of green paper from the boss's hand to mine on payday or right after the customer had paid his bill. Short and sweet "paper trail". Untraceable and tax-free to whatever extent you chose. One guess as to that choice. Heh.

That's the reason I only get $577 per month Social Security. Oh, well...

There was nothing so formal as any declaration of "independent contractor". It was the way we wanted it and it's the way it was. Cash on the barrelhead. Next case. Hey, if the gummint had gotten its hands dirty fixin' bikes, we'da kicked 'em some down. Fair's fair, but they never showed up.

The "underground" or "shadow" economy appears to be alive and well. The real American Way!


Fixer said...

No doubt. The deal I would work out when I was in small shops was that they put me on the books part time (15 - 20 hours a week) and pay me the rest in cash.

Anonymous said...

I danced in and out of the black economy for about 25 years. You check any economic theory, it doesn't exist.

Pure undiluted capitalism. Cash or marketable goods for whatever you need. One transaction. No taxes. No paperwork. No regulations. No lawyers. No judges. No cops. Delivery on payment. Simple.

The service can get you whatever you want for a price. Price rises and falls with supply. Yeah, the stuff I dealt with was stolen.

I'll know that it is really getting bad in the US when truckloads of food, liquor and cigarettes start being hi jacked.

For about 10 years, I had no insurance but needed multiple medications just to live.

The service could tell me which doctor to go to and get script. Buy the smallest amount possible so I had legitimate prescription bottles.

It could be funny. Having a dealer at the open air drugstore look at a list of what meds I wanted and start screaming, "Man, I'm not fucking Walgren's."

The Precious said...

As usual, reporters don't know what they are writing about. Gordon is right. There is nothing knew about it. As a tech writer I was contracting for years, mostly with AT&T. The payoff was a better hourly rate than direct employees. No benefits, but you got $35 or more an hour while the directs were getting $25. During a downturn, they laid off contractors first. This was going on 30 years ago. Then the rules changed and they couldn't keep contractors indefinitely. I knew contractors who stayed at the same job for years and years (I used to change jobs frequently because I got a better rate every time I did). A lot of folks liked staying at the same desk for a long time, so they were contracting on the same job for years. Anyway, they changed the law so that the companies couldn't keep you as a contractor more than one year (or something like that) or they HAD to hire you as a direct. This actually wound up hurting people, because now the company would just lay you off for one month out of twelve and then bring you back., so you got to have one month without any income because of that law to protect you.

The last contract I took, I got a substantial rate working for Avaya through a contract house (a contract house is a company that pays the contractors and has a contract with the customer to supply the labor). Avaya was going to put me on the beach for a month and bring me back, but I hooked up in a direct position with my current company instead. I prefer direct employment. There's not much more security, but you don't have to lose a month of income every year and you can have a relationship with your co-workers.

BadTux said...

Yeppers, the lamestream media is *definitely* lame. Like, how all those construction job sites have all those illegals? They're all contractors who actually work for a labor contractor, said labor contractor being a dude with a pickup truck who is supposed to be verifying their citizenship and paying their Social Security taxes and shit but the contractor pays the labor contractor in cash, the labor contractor sticks it in his wallet after paying the workers in cash, and that's that. The contractor has it on record that he paid Bob's Contract Labor for the Mexicans that were working, and if the Feds want to go after unpaid taxes, they gotta go after Bob's Contract Labor. Good luck with that, given that the address on the invoice that the contractor paid is utterly fake!

So anyhow, yeah. Lame media. Lame, lame media.

- Badtux the Non-contract Penguin