Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.
You realize that the people that demographics of people who like to drive for Uber are those coming from minimum wage jobs, who have none of the above either. Most drivers I talk with love Uber because their pay almost instantly doubles and they have freedom to work as much as they want.
> > no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.
> You realize that the people that demographics of people who like to drive for Uber are those coming from minimum wage jobs, who have none of the above either.
After deducting the portion of SE taxes equivalent to the employer share of payroll taxes (which isn't counted in employee wages), the wage is equivalent to $10.43/hr, which is only a hair above minimum wage in CA.
And, in CA, minimum wage earners are covered by mandates for unemployment coverage and, depending on employer, paid family leave and (since July 2015) paid sick leave.
Except that your original number is based on 28 hrs work not 40 hrs. And many people who make minimum wage, especially those that choose to be drivers, aren't full-time, and they don't receive any benefits.
> Except that your original number is based on 28 hrs work not 40 hrs.
IIRC, the paid sick leave benefit in CA is prorated in amount based on hours worked, but still available to part time employees for those employers covered; unemployment coverage applies to part time work (weekly benefits are based on weekly earnings, so part-time workers get less benefit than full-time workers with the same wage); California disability insurance and paid family leave (the two are linked) are not restricted to only full-time workers.
There is no real difference between the two. If you were a robot working effectively 365 days a year you would be able to command a proportionally higher salary/wage. "Paid" time off is as much of a lie as "employer" payroll taxes.
There is when comparing hourly compensation in a role that provides no paid time off with hourly compensation in role that provides paid time off. For instance, a $10/hr that accrues 1 hour of paid sick leave for every 30 hours of work (the minimum for an accrual plan meeting California's paid sick leave mandate) is better paid than a $10/hr job that does not (the actual value is up to $10.33/hr, though restrictions on the use of paid sick leave may make it somewhat less but always greater than $10/hr.)
> "Paid" time off is as much of a lie as "employer" payroll taxes.
Employer-share payroll taxes are not a lie, either; they are both real taxes, and they really do not come out of your gross pay (they may reduce the gross pay the employer is willing to offer, but that doesn't make them "a lie", it just means they have other effects.)
The distinction probably was most critically important to people who had employment contracts in place that straddled the time when payroll taxes were first implemented, since the employee share was the part that the employee's reimbursement was reduced below the status quo ante, whereas the employer share was not.
Like paid time off, its important to keep the difference in mind when comparing employment that has employer-share payroll taxes (generally, W-2 employment) with employment that does not but instead pays the equivalent of both shares as self-employment taxes (1099), since the nominal pay of the two kinds of employments is not directly comparable without adjusting for the differences.
> they may reduce the gross pay the employer is willing to offer, but that doesn't make them "a lie", it just means they have other effects
The effect (minimum wage employees not withstanding) is the same as if the entire tax was employee-share. It is coming out of the worker's pocket. Therefore the 'employer' part is a lie and mostly an ingenious way to hide the tax from the voting base (because unlike other taxes, it does not show up on your pay stub or tax return).
That said it's true that you need to take both these things into account in order to make an apples-to-apples comparison between self-employment income and a given W2 job. But that goes both ways, a $10.33/h job with unpaid time off is the same thing as a $10/h job with 'paid' time off and you have no reason to prefer the latter.
