A Company Will Pay You To Learn To Code, Then Take 15 Percent Of Your Pay For 2 Years

A sensible trade-off, or a easy mark for abuse?  JL

Samantha Cole reports in Motherboard:

Modern Labor pays people $2,000 a month for five months while they learn to code, following a curriculum remotely from wherever they live for at least 30 hours every week. If they land a job that pays $40,000, Modern Labor takes 15% of their salary for two years.A typical coding bootcamp can cost $11,000 for two to seven month courses, with some charging $20,000. It’s easy to imagine the model becoming its own type of hamster wheel. The brokenness of the education system leaves ample room for private for-profit companies to move in.
Most coding bootcamps almost sound like get-rich-quick schemes: Devote a few months to learning a new skill from home, and walk into a job that could pay you $70,000 a year to start. For the most immersive programs, you’ll need to put your life on hold while you learn full-time.
Usually, students pay for those coding bootcamps upfront while they take time off their jobs to learn. Startup coding bootcamp Modern Labor pays people $2,000 a month for five months while they learn to code, following a curriculum remotely from wherever they live for at least 30 hours every week (working out to roughly minimum wage). After graduation, if they land a job that pays at least $40,000, Modern Labor takes 15 percent of their salary for the next two years. For example, if they find a job that pays $80,000, they’ll pay Modern Labor $24,000 over two years.
A typical coding bootcamp can cost around $11,000 for two to seven month courses, with some charging as much as $20,000.
Modern Labor’s business model is an example of an “income sharing agreement,” a scheme that’s on-trend for Wall Street and Silicon Valley entrepreneurs looking to disrupt education. (In 2016, Larson founded Leif, a software startup that helps schools design ISA programs.) Critics of ISAs call them “a form of indentured servitude” because graduates are obligated to hand over part of their earnings for years. Similar to Modern Labor, Purdue University and the startup Lambda School are two entities that are experimenting with income sharing agreements.
Modern Labor is backed by tech accelerator Y Combinator, according to its website, and launched at YC Demo Day earlier this month.
In January, student loan expert and former Elizabeth Warren advisor Julie Margetta Morgan told VICE that these programs speak to the post-recession hell that young people face. Burdened with student loan debt from traditional schools that did little to prepare them for the workforce, they’re seeking ways to hedge their bets on career choices and schools that will provide a safe return on what is a high-stakes financial investment in America.
“We’ve been pushed into this world where we’re asking people to make these really complex calculations about future income and payoff and that just doesn’t seem like it’s the world we ought to be living in,” she said.
As its first cohort—a modest three-person class—enters its third month at Modern Labor, the company is grappling with how best to weigh those risks and graduate a class prepared to enter the tech workforce.
“It turns out that education is one of the biggest investments people make in their lives, and it’s risky,” Francis Larson, who co-founded Modern Labor with Oliver Birch in 2017, told me in an email. “It’s expensive and there is an uncertain payoff. You might get the right skills and it was worth it, or you might not.”
Modern Labor’s first cohort began in February, and consists of two men and one woman. One of those students, 33-year-old Courtney Angotti, told me in a phone conversation that she decided to join after participating in another bootcamp last year called Code Talk. She’s switching careers—from performing, acting, and singing in Los Angeles to the tech sector—and didn’t feel ready to jump into a job right after graduating her last bootcamp, she told me.
Angotti, who runs a blog about her technology career journey and answers questions about Modern Labor on a YouTube channel (she said she’s not working for them in any official capacity or as a recruiter), told me that when we spoke she’d been coding for the last 17 days without a day off—even if some of those days she only worked a few hours at a time. She said she’s working between 30 and 40 hours per week on a full-stack curriculum learning front and back end development, and manages a couple of hours of free time in between coding sessions.
“In the very beginning we were experimenting with demand and put higher hours [on the website] but it’s pretty clear that very few people can work productively over 30 hours a week on anything mentally difficult,” Larson told me.
Larson said that right now, students are classified as independent contractors for Modern Labor, and don’t get benefits or health insurance—this is the same employment class as Uber drivers or other gig economy jobs. Although people enrolled in Modern Labor’s income sharing agreement are not working on projects that directly benefit the company or its clients, Larson said, the company isn’t ruling that out for the future.
“Independent contractor status makes sense right now because we don’t control much of what they do, and what they do doesn’t directly produce economic benefit for us during the program,” Larson said. “If we start doing more serious external projects with the trainees prior to the end of the program, then we would need to classify them as employees, and that’s fine too.” One of Modern Labor’s selling points, at least from its marketing materials, is that it will “find you your new job,” according to the website. Larson told me that’s not a guarantee—but it’s in the company’s interest to help you land a job that makes over $40,000, since if you don’t, it loses its investment on you. He told me that the company markets to employers, and hires a placement agency for “roughly each cohort” to help students find jobs. Larson also told me that if trainees don’t land a job earning more than $40,000 within five years, the contract ends.
“I think they’re gonna want us to stay with them, but you don’t have to. I don’t think anybody’s worried about it.” Angotti said. “You can spend a year teaching yourself to code and still not get a job.”
The staffing platform, he said, is an online web application that Modern Labor built in-house for employers to find and hire trainees from the bootcamp. From there, they’re placed into short-term contracts that last one month to a year where Modern Labor is the employer but the trainee works for a client, or are moved into permanent roles where they’re hired full-time by another employer. On the platform, trainees and employers have profiles where they can showcase their needs and skills.

"We want to be the island of consistency in a world where work engagements are getting shorter and shorter.”

If trainees go this route—from training under Modern Labor’s auspices to contracting out on its platform—they’re still expected to pay back the 15 percent of what they make for two years.
A Reddit thread from a month ago reported seeing a listing for Modern Labor on job search website Indeed that said successful applicants “agree to work for our staffing company if our offer is as good as your other job offers." Two weeks ago, one of the founders for Modern Labor commented in this thread saying that it has since removed that condition, which would have forced graduates to work for the company if it could make a competitive offer.
The founder’s account also acknowledged in another comment that $10,000 disbursed over five months “is almost certainly not enough for some areas and can be challenging with a family.”
Trainees don’t have to work for Modern Labor if they don’t want to, Larson said.
“Nonetheless, our goal is to make sure their experience is so good that they want to spend a big chunk of their career with us. The ultimate goal is to have a large, happy community where everyone can really flourish. We want to be the island of consistency in a world where work engagements are getting shorter and shorter.”
Before I contacted Modern Labor for this story, the website stated that students should expect to work 40-60 hours per week. After I asked Larson about the time requirement and what students were working on for that much time per week, the website was changed to say 30 hours.

Left: Screenshot from ModernLabor.com on February 22. Right: Screenshot of the same section, on March 28

Angotti said that 30 hours per week was always the minimum requirement expectation for graduation. To ensure that they’re logging those hours, students have to install a time-tracking app that takes a screenshot at random intervals throughout the day, and monitors how much time they spend actively working.
“It’s up to you how you structure your time, there’s no one telling you when to be done, there’s no deadline,” Angotti said. The students do weekly and sometimes daily check-ins with each other, and the tendency to compare your progress to someone else's’ can be stressful.
“There’s gonna be a time where you feel behind, because you did the minimum and someone else got 40 or 50 hours,” she told me. “That can be frustrating and annoying. You think about it when you wake up, go to bed, thinking, ‘did I do enough?’”
The time commitment isn’t the only Modern Labor requirement apparently in flux, at least to the general public, even as the first cohort is mid-session.
Angotti told me that during her time at Modern Labor so far, they’ve tweaked some of the experience requirements to attract people with some coding experience instead of total novices.
“They wanted people who already posted stuff on the internet,” she said. “They’ve amped up the requirements, to either have more experience or the capacity to learn quickly.” Someone arriving with zero prior coding experience would not survive the first week, she said.
The Modern Labor website states, with typical Silicon Valley machismo, “the most important thing we care about is evidence of grit.”
After she graduates, Angotti said she expects to feel confident that she’ll have the support of Modern Labor to showcase the skills she’s acquired and find a job. By mid-March she’d already completed 15 projects, which can be used to demonstrate her abilities to employers.
As one of the first three to go through Modern Labor’s program, Angotti is a willing test subject for what some economists and entrepreneurs see as the future of education—and those analysts also reject the “indentured servitude” moniker for ISAs.
“ISA originators certainly have no right to flog students who don’t pay,” research analyst Preston Cooper wrote in Forbes. “Far from the ‘indentured servitude’ smear, ISAs actually offer students more freedom and fewer obligations than traditional student loans.”
The higher education system in the US is undeniably deeply broken, with the average college graduate coming out of school carrying, on average, more than $37,000 in loan debt. It takes the average graduate at least seven months to find a job after college—time spent potentially deferring payments on that debt, and accruing even more interest.
“We believe strongly that there is a large population in the United States who are effectively stuck in a trap,” Larson told me. “They are smart but don’t have the right skills. Because they don’t have the skills, they can’t earn enough to save meaningfully to take time off in order to learn.” It does feel like a trap. But as Modern Labor and other ISAs extend beyond coding, it’s easy to imagine the model becoming its own type of hamster wheel. Talent is cultivated, and then turned back into capital in the form of a years-long debt to the private company that trained you.
Modern Labor might be fairly innocuous on the spectrum of capitalist necessary evils, but the brokenness of the education system leaves ample room for private for-profit companies to move in.