Job security is a myth, sure. But that doesn't mean that contracting carries the same risk; the risk is greater.
Meanwhile, as an FTE, you get vacation time, sick days, bonuses, and company purchasing perks. You get a much better insurance coverage than you can afford to get privately.
* As a full time employee you might get a severance package, if the company doesn't feel like dealing with you, but it's completely optional.*
I've been around for quite a few years now and have never once heard of a company not offering at least a month's severance. Technically, sure, it's optional, but it's also insurance: they don't have to worry as much about you suing them if they pay you a little on the way out.
* I'd rather be unemployed (and motivated to find a better deal) than working for less.*
That's your choice, but I have to wonder about your math. What are you paying for health benefits, and what would they be as an FTE -- and how much better would they be? I bet it would make up the difference. What about paid vacation? Sick days? Holidays? You get jack-squat for those as a contractor.
Note that the author is Australian, and health insurance works very differently.
We have a public system, but many people choose to buy private insurance as well. Depending on the level of private insurance you can pay anything from $2000-$10000/year (for one person).
It's very rare for a company to pay for a person's insurance, though.
In my particular case I get paid around $90/hr ($135/hr for overtime, plus paid major holidays). Which comes to around $180K/yr. The full time position I was offered is $130K/yr. There's no way in the world vacation + health insurance is worth $50K.
So if I take a month off, I lose $14.4K ($90 * 160 hours). A decent insurance PPO plan is $1100/month for me any my wife. So that's another $13.2K. So the total is $27.6K. And I don't think that many FTEs have a month of paid vacation.
The way it works here (Australia) is a contractor charges GST (basically a value-added tax) to the employer of 10%. The 10% is standard, so people don't usually include it in discussions of their rates (ie, if he is getting $90/hour, then the company is paying $99/hour).
After that you can handle the money how you like - if you are smart you can setup a company or trust so you only pay the company tax rate on most of your income. At worst you just pay yourself the income, and so you are taxed as though you have the $180K income.
The company thing still comes with a caveat in that you have to prove that you're not just using it as an umbrella to reduce your tax. There are a set of tests that a company goes through at tax time, and they have to pass them in order to be considered a proper company (the 80/20 rule is one of those tests).
In the US, employers pay a medicare and a social security tax. If you are self-employed, you have to pay those taxes in addition to your regular taxes, because you are the employer too.
Meanwhile, as an FTE, you get vacation time, sick days, bonuses, and company purchasing perks. You get a much better insurance coverage than you can afford to get privately.
* As a full time employee you might get a severance package, if the company doesn't feel like dealing with you, but it's completely optional.*
I've been around for quite a few years now and have never once heard of a company not offering at least a month's severance. Technically, sure, it's optional, but it's also insurance: they don't have to worry as much about you suing them if they pay you a little on the way out.
* I'd rather be unemployed (and motivated to find a better deal) than working for less.*
That's your choice, but I have to wonder about your math. What are you paying for health benefits, and what would they be as an FTE -- and how much better would they be? I bet it would make up the difference. What about paid vacation? Sick days? Holidays? You get jack-squat for those as a contractor.