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Stop forcing benefits down my throat and give me hard cash, dammit

Maybe this gig economy means we need to redefine work?

Do they call it the welfare state because it's 'well fair'?

This is an entirely standard assumption, by the way. When we evaluate the US welfare system, which gives people food stamps, rent vouchers and so on instead of just straight cash, even the Census (the people who measure poverty) agrees that the value gained by those who receive them is less than the cost of providing them, simply because preferences do vary.

India is revising its entire welfare system – moving from the provision of food and cooking oil etc. to straight cash – based upon the same insight. It's even one of the less contentious explanations for part of the gender pay gap: that women with children are willing to trade slightly lower wages for slightly more flexibility in working hours etc.

The fact that we all have to take the same package of goodies along with our pay packet definitively makes us poorer than if we were able to just take it all as cash and then decide how we want to allocate that. My suggestion is therefore that we stop making ourselves poorer. Instead, we should abolish all those statutory provisions and simply allow people to negotiate whatever deal they like.

At which point there'll be the usual cries that I'm stamping the faces of the working classes into the dust again. But it is worth noting that the United States has no federally mandated paid vacation time, yet pretty much everyone above the level of minimum wage foot slogger does indeed get paid vacation time.

Maybe not as much as Europeans do, but then that's because taxes upon income are lower over there, as Ed Prescott pointed out, so it makes sense to work more hours. It's also true that there's no federally mandated maternity pay: but most career women do get it.

Note also something rather important about the UK's maternity pay system. For statutory maternity pay, the employer only pays 10 per cent of it: the other 90 per cent comes as a reduction in the amount of national insurance they've taken off everyones' cheques that they then have to send on to HMRC. It's really just a method of administering a welfare benefit rather than something the company is providing.

Furthermore, there is the inequity of different methods of work organisation costing employers different amounts of money. We generally don't like those sorts of distortions in an economy: so, let's get rid of the distortions.

Which is, of course, what the other side are saying, too: let's get rid of the distortion by making everyone an employee. I'm simply saying that we can make ourselves richer by making everyone a contractor. That way we get the money gross and get to decide how to split it up amongst our various different desires: leisure, retirement, children and all the rest.

Finally, there's the personal example. My income is from way too many sources for any tax authority to ever manage to peg me down as an employee. That means that I am cruelly done by, in that I get no sick pay, no retirement contributions, no maternity pay (to be honest, that's not actually a major problem) and no statutory holiday pay. I am, of course, bereft.

Except that there is that other side to it. I get all of the cash that any employer is willing to offer me as that cash. I then get to decide how to allocate it across my various interests and in accordance with my personal utility function. In my case, zero on taking the grandkiddies to the beach and more on beer for me, as there's no one able to nag me about what I'm going to do on my holiday.

So there's two possible descriptions of my suggestion that all of those statutory provisions should be swept away. I could just be that lackey of the plutocrats, doing the stamping into the dust thing out of jealously that I don't get the same benefits they enjoy. Or I could be suggesting that everyone should get to enjoy that higher value from that same cost to the employer of being able to decide exactly how to allocate that total income.

For it really is true that the insistence on providing holiday pay and all the rest does come out of the cash wages that an employer is willing to offer. So, given that this is the 21st century, why not free everyone to make their own personal choices? ®

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