FWIW, all the contractors we hire make more per hour than they would as a full time employee, because we are not paying benefits. Whether or not that is actually a good deal depends on whether they have another source of health insurance, etc., and whether that hourly wage is high enough to carry them through lean months. And also, of course, how they feel about having to constantly keep an eye out for their next project. Although, as Laura points out, that is something most regular employees need to be doing these days, anyway.

If you lose your job and find another one, you regain some security. In most fields, they hire contractors so they can pay them less.

For 1099 families in the top 10-20% of the income distribution, budgeting for the lean months makes sense.

For the rest, budgeting based on lean months may mean chronic stress about expenses like paying medical bills for children, especially expensive asthma medications. I want to live in areas with few illegal drug users or people who involve the police in their domestic disputes. I count that as “where I want to be in life” not “fun stuff that makes me happy”. I guess being able to provide a secure environment for my kids lets me avoid unhappiness.

It is frustrating that physically secure housing is so expensive in many parts of the country.

@Twin Mom- I think paychecks are kind of an illusion of security though. In some fields you might never lose your job, but in many it’s quite possible. If you always have multiple projects, though, or ones waiting in the wings, you’re more diversified. As for relying on a given level of income, the all-1099 families I know budget based on lean months. Then when more comes in, it’s gravy. I think this is a good way to budget in general. You spend less on big recurring payments so you have more to save or to do the kind of fun stuff that makes people happy.

In cyclical fields where depth of knowledge is required, worker demand and supply will be severely out of balance. One of my relatives worked as an environmental consultant for mining companies in the ’90’s and did very well, but when environmental laws reduced mining in the US, his niche went away.

I wish I didn’t have to work this way- I miss the security of insurance and a paycheck.