The permanent dismantling of large companies has begun

By | April 16, 2013
How our society is going to be profoundly shakeen up as a result of corporate downsizing.

I've noticed the increasing shift of permanent jobs into freelancer or contractor jobs. And I can fully understand it from a business perspective. But I'd never, until now, stopped to consider what that might mean for society at large.

We're not just looking at a world in which individuals need to become entrepreneurs in order to avoid unemployment. We're looking at a social structure that is built upon the premise that people have stable jobs at an employer, and enterpreneurs are the 1% who get all sorts of exemptions. Our public social support system, taxation models, media licencing agencies, and litigation trolls are simply not designed to operate with an enterpreneurial population.

So, with the cost of maintaining workers larger than the cost of hiring freelancers, and with public policy still allowing freelancers a lower contribution to public funds than non-self employed equivalents, we can expect that public debt should increase if the entrepreneur / worker balance shifts considerably. And that means we can expect dramatic policy changes in order to match the changing needs.

/via +Wayne Radinsky 

Theory of Nobel Prizewinning Economist Predicts Entrepreneurship vs Employment
The question many employed people ask today is “if” should they go out on their own as an entrepreneur.

4 thoughts on “The permanent dismantling of large companies has begun

  1. Otto Hunt

    Some products, for the foreseeable future, will be most efficiently produced by huge companies. Examples are: the extraction and refining of oil, and the production of integrated circuits.

  2. Sophie Wrobel

    +Phil Haigh I was referring to the social contributions associated with hiring an employee, which is considerable at least in Germany: hiring an employee with a 1500 salary means roughly 1500 in social contributions in addition to the salary, making the cost to the company around 3000. Or the company can hire a freelancer to do the same job, pay something between those two numbers, and avoid all those social contributions. The freelancer is not required to pay them either.

  3. Phil Haigh

    I disagree simply on the premise that as a freelance consultant I still contribute more tax than large corporations, on a per head basis. I don't have a Lichtenstein subsidiary that I rent buildings from. I don't have a Luxembourg subsidiary that I'm paying for the right to use the company logo.

    I'm not shifting profits outside of my country of residence. My company pays all its local taxes, as do I. And what money I make I spend inside the country I earned it in. And I think you will find that this is the situation for the majority of freelancers in the majority of countries.

    Running big business these days is about maximising profit and minimising tax, globally. Freelancers just don't operate like that.


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