Friday, November 09, 2012

Well, America, you got what you wanted...

A Washington DC contract attorney who goes by the nom de plume 'Raised by Wolves' (RBW, in future references) has written an excellent analysis of what is going to happen to contract opportunities (as well as permanent positions) once ObamaCare hits in January 2013. Among other comments, he asks what contract agencies will do when the new requirements that basically force any company with more than 30 employees to either buy them over-priced, horrible government-issued insurance or pay a hefty per-employee penalty. His answer is as follows:

There are only two choices. First, nobody works 30 hours a week for an agency ever again. That probably is an unworkable solution, but it is not unthinkable, given the trend in the industry toward a 40-hour cap on projects. A 30-hour cap would mean more bodies, staggered, but would not be a dramatic departure from the no-OT policy that already governs so many projects. Given the staggering costs of forced health coverage (or penalties), agencies won't consider this option unworkable. They'll think about it, and you'll have to start finding two projects at a time to make a living wage. Assuming, of course, that agencies and the firms that hire them stop enforcing their concurrent employment policies that ban working two projects at a time.

The second choice is, your taxes just got harder. Agencies could deem contract attorneys to be independent contractors and start issuing 1099s instead of W-2s. That means you'll have to make quarterly estimated tax payments for withholding, Social Security and Medicare taxes. Oh, and by the way, it also means you'll be responsible for the employer's half of those Social Security and Medicare payroll taxes, as you will now be self employed. Of course agencies will raise your rates to make up for the fact that your share of the payroll taxes doubled while their share disappeared. Don't doubt it for a second.

Now RBW was focusing on the contract attorney field, but his analysis is valid for any field where contracting is common. This includes the high-tech fields where I earn MY living. And my reaction is that RBW is spot-on. I don't know about you, but I've noticed that where I live, there are lots and LOTS of contract offers. Perm? None. Everyone wants to hire contractors. Gee, I wonder why? Could it be that companies know what's coming and are trying desperately to avoid the coming storm? Why, yes, it could. Which is also why permanent opportunities are going to be few and VERY far between for the next ten-twenty years. The Democrats have basically made it uneconomical to hire permanent employees. And so they are desperately trying to get people to do contracting instead. Of course, my sympathy for most of these companies is miniscule since these are largely the same companies whose CEOs are in bed with the Democrats.

But hey, America basically voted for two issues in the 2012 election. These issues, as constantly screamed forth by the Democrat propagandists in the press corps were:

  1. Lots and lots of government 'free' shit (paid for with Other People's Money) and...
  2. Killing babies so that irresponsible and feckless young women can have lots of fun without consequences while forcing everyone else to pay for that fun, as Sandra the Slut memorably begged for.

Those were the two main campaign issues the Democrats and their media shills pushed over and over again (in between dragging out seventh-grade stories and telling us what a scary and horrible guy that Mitt Romney fellow was, of course). So guess what, America? You got what you wanted. I hope you enjoy it when the inevitable bill comes due.

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