Social security systems in European countries tend to be based around people earning a regular salary losing their jobs, rather than consultants having occasional dry spells between projects. This is a problem with the gig economy in general - our social security nets aren't very well designed for it (perhaps an argument in favour of UBI, or at least some different thinking into how social security should work for the growing precariat).

You can't expect society to pay for you regularly if you choose to become a consultant. You need to charge more and keep a buffer.

If someone pays the same taxes and contributions into society as others, then surely they are entitled to something in return? I get there's no easy answer here but gig workers are also "consultants" who may not be earning enough to build a buffer.

Well yes, they do get something in return for their taxes, don't they?

As far as gig workers, they do get something in return for the instability, which is (in theory) higher hourly pay and more flexible achedules. If they aren't getting this, they aren't really gig workers and should be labelled as employees, but if they are, they get a benefit for the risk they take.

Personally I think that many gig workers should be simply classified as normal employees.

Another issue is that gig workers and consultants don't pay for unemployment insurance at all, so they're actually not paying the same contributions as others.

What about all the people with other responsibilities like single parents or caregivers or people with disabilities who can't commit to a regular 9-5 job? They're not getting high paid gig jobs, just flexible hours.

Exactly. Generally consultants can reduce their tax liability in various ways.

Gig workers who not earning enough would be better off with a permie low paid job, if they were able to get one. Unfortunately, a lot of people are not useful enough to society to contribute and live in some places - I think the solution is to send them somewhere else where they can be useful and find a job.

> Unfortunately, a lot of people are not useful enough to society to contribute and live in some places

That would include such socially useless people like school teachers and nurses, I guess.

The answer to this is "charge more". You should be pulling in _at least_ 2 hours worth of payroll costs (note: not 2 hours of pay) for each worked hour. This give you a buffer for lulls.

Could you elaborate? What's payroll costs?

They mean the costs a company would bear for you if you were a full-time employee. This includes your theoretical employment salary plus extra costs an employer pays for having that employee on their books, for example in the UK there is employers national insurance (tax), as well as other overheads like a fractional contribution to office space and software licenses.

Do like I (and the author of the article seems to do) do:

Work for a consulting company.

Company have sales, accounting and a lawyer.

I have all the benefits described in the article.

Consulting companies take a cut and and working for one company closes more doors that it opens.

Businesses usually have a handful of preferred suppliers they source consultant from, as well as black lists.

One thing a consultant has to figure out is how the procurement works in places they want to join. Some things are surprisingly public, like many tendering websites. You do not have to answer to a tender directly, but you can always check who is winning and who is likely to need more people aboard and apply using that knowledge.

They do “take a cut”, but signing up and managing relationships with big companies is extraordinarily difficult, time consuming and expensive.

If you are working through one boutique consultancy you aren’t actually doing too badly. Sometimes you’ll be working through a system integrator, through a boutique consultancy, and through a staffing agency. And to some degree they are all delivering some value, simply because working with big corporates is so painful and getting direct relationships is so difficult.

You are also paid peanuts (compared to real contractors/consultants), and you have close to zero say of what projects / clients you get to work on / with. And you are essentially just a cost cell in an excel spreadsheet for the HR of the consulting company (interestingly, clients may respect you more).

At least that was my experience. So you can have the best of both worlds, or the worst...

Well, you can do as I do and work for a company that is owned by the employees. I have plenty to say about were I work as long as there is a good opportunity and if there are none that our sales team can find I wouldn't have found them on my own anyways I'm afraid ;-)

But yes, I still only have a very good salary, not what HN would expect for "real contractors" but it is stable and worry free and I have good colleagues.

In my experience and from what I hear, the rates are nothing like working for yourself - just the usual distribution of salaries for what you work on. If it's SAP consulting, yeah you might earn well (Germany - SAP stuff pays like 50%+ more).

9. In many countries job is viewed as a tax dodge and people become hostile if you tell them you work as a consultant. Often this messaging is sponsored by big corporations providing consulting services - they hate independent consultants and spend a lot on lobbying to make it as difficult and costly as possible to work as independent.

the last one is the toughest, and really comes down to how strong your stomach is and how your business model is structured - e.g. it can't be hourly & net 60, more like flat-fee, 50% upfront.

The solution is an old financial trick that has fallen a bit out of fashion: saving. Not spending everything you earn. It's easy given the very decent consulting rates in software. Sometimes I wonder if everyone is financially illiterate now...

For management consultants, charging more is a far better signal than austerity.

Why not both? ¯\_(ツ)_/¯

Because it’s not as fun.

Saving smooths the earnings to some extent, but the fundamental issue remains. Mortgages and schools are financial committments for decades.

And being an employee isn't that much different since you can be fired or made redundant.

Given how much money you can charge as a consultant, is not terribly hard to live well within your limits and tolerate a temporary lack of jobs.

That can be the chance to learn something or build some other passive income stream.

I think the main problem is that most people, once they can charge 1000£ per day, they go and blow a lot of it on expensive holidays and an expensive lifestyle.

You could work for a consulting company, collect a regular and stable paycheck, and still get the same experience.

TLDR suffering builds character?

yes, as long as you're the type that doesn't try to blame all your suffering on externalities, whatever doesn't kill you makes you stronger.

This is such a dumb saying. People who got into (say) a car crash and lost control of all their limbs surely did not get any stronger. Neither did the army veterans who spend the rest of their days traumatized after seeing their entire squad blown up.

There is a vast array of options to get weaker even if you have the right mindset.