> Some of my favorite gigs I've ever performed aren't possible under this standard.
Let's not assume that because the cost to the employer goes up, they will drop all the former 'contractor' positions. Employee rates are based on what the market will bear, subject to law and regulation; they are not based on 'cost-minus' - cost to the employer, minus a profit. Using a very simple case of the cost and benefit: If the employer can hire you for $10/hr, they will, regardless of whether they make $20/hr or $200/hr from your labor; if the law increases your rate to $15, they still will employ you. Of course, if they only make $9/hr from your labor, they won't hire you at $10/hr in this simple theoretical case. Reality is more complex: They may be happy to absorb the loss for other reasons, such as completing a major project, pleasing an important client, acquiring or maintaining market share, developing talent, your compromising photos of the boss, etc.
It's similar to the mistake people make about pricing: They assume goods are priced at 'cost plus' - the seller's cost plus a profit - and that therefore if the seller's cost increases then the price must also (businesses encourage this misconception - 'if regulations increase our costs, then everyone will have to pay more!'). Really goods are priced based on what the market will bear. That is, goods are priced as high as possible (i.e., at the level which maximizes profit). If they can charge you $10,000 for an item costing them $100, they will. If they have to charge $50 for it, they will do that too; $50 is better than nothing. If their costs change, it doesn't change what the market will bear.
I'm not sure what you mean by that. Could you flesh it out? To me a "sunk cost" is something you've already paid for and can't get back - like your investment in that boat that sunk to the bottom of the ocean. Hiring is about future costs, not past ones.
Let's not assume that because the cost to the employer goes up, they will drop all the former 'contractor' positions. Employee rates are based on what the market will bear, subject to law and regulation; they are not based on 'cost-minus' - cost to the employer, minus a profit. Using a very simple case of the cost and benefit: If the employer can hire you for $10/hr, they will, regardless of whether they make $20/hr or $200/hr from your labor; if the law increases your rate to $15, they still will employ you. Of course, if they only make $9/hr from your labor, they won't hire you at $10/hr in this simple theoretical case. Reality is more complex: They may be happy to absorb the loss for other reasons, such as completing a major project, pleasing an important client, acquiring or maintaining market share, developing talent, your compromising photos of the boss, etc.
It's similar to the mistake people make about pricing: They assume goods are priced at 'cost plus' - the seller's cost plus a profit - and that therefore if the seller's cost increases then the price must also (businesses encourage this misconception - 'if regulations increase our costs, then everyone will have to pay more!'). Really goods are priced based on what the market will bear. That is, goods are priced as high as possible (i.e., at the level which maximizes profit). If they can charge you $10,000 for an item costing them $100, they will. If they have to charge $50 for it, they will do that too; $50 is better than nothing. If their costs change, it doesn't change what the market will bear.