CEO of Uber: Gig Workers Deserve Better
nytimes.com
nytimes.com
- Every person deserves a baseline quality of life and benefits
- The person's employer is tasked with the above responsibility
- If a corporation pays their workers less than the above baseline, they are bad. We should shame them, and pass laws to ensure that they pay their workers better
- If a corporation decides not to hire someone at all, and operates with a smaller workforce by tweaking their business model, that is perfectly acceptable and even laudable
Combine all of the above, and you end up with a world where corporations go above-and-beyond to reduce their headcount, and entrepreneurs specifically avoid labor-intensive business models. Firms like DE Shaw are publicly lauded for making lots of money with a tiny elite workforce, while spinoffs like Amazon are publicly shamed for actually employing hundreds of thousands of middle class workers. All this only worsens the situation for those in the lower-middle-class in the long-term, because now they have fewer work opportunities, and less demand for their labor.
Clearly every person deserves a baseline quality of life and benefits. But instead of heaping this responsibility on the subset of corporations that hire low-skill workers, this responsibility really should lie with everyone. Tax billionaires, tax the upper-middle-class, tax profitable corporations, and use the money to strengthen the social safety net for low-skill workers. That would eliminate this entire mess.
Of course legislation could - and should - go after Amazon in other ways. But it makes the point that you don't want lawyers trying to define corporate taxation policy, because too few lawyers have the first clue how to define policy with no loopholes and real teeth.
Means-testing causes huge bureaucracies in the US. The rules around the means-testing make it very difficult for the social programs to actually provide anything in a reasonable amount of time. Or if they do they have byzantine requirements like you have to make X number of job-seeking contacts during the week, you have to interview, and you have to take classes from people who haven't searched for a job outside of the public sector in 20 years. Or for food stamps you're limited to only a few sections of the store.
Right now employers get a discount for pooling their employees together for insurance, and as an employee you either take that discounted plan (which your employer pays part of) or go out on your own which is almost always significantly more expensive.
Getting rid of the bundling and pooling would actually make the insurance market competitive and give people a choice. It would also mean that having good health care is no longer something your employer holds over you, increasing your ability to change jobs, walk out of a bad employment situation, or go out on your own as a freelancer/contractor.
Getting rid of the employer health insurance advantage this way, or via a more radical single-payer system, would actually boost self-employment and very-small business, who currently have disadvantages in getting or providing these benefits.
In the US insurance system your employer gets to decide what it costs for you to get medical care. The ACA cemented all the worst parts of the insurance system and made it illegal for me to choose my own insurance if I want to work for a larger company.
Meanwhile I have changed jobs once in the last 3 years but in that same timespan I have had 6 different health plans / providers because companies renegotiate their plan every year and often pick a new one because they can get a better deal or the previous plan increased in price.
Having my own chosen plan via an open marketplace that was mine and not my employers would have actually resulted in more stability.
Or redesign those stores to not depend on as much human labour.
I don't directly begrudge a company or CEO their profits and paycheck, but if corporate profits are at all time highs while investment in infrastructure, education, healthcare, etc. are inadequate, that points to an imbalance that isn't being solved by the labor market.
So why not just remove all the money from the economy? I personally find Walmart's business model of chronically underpaying people then making them dependent on a huge bureaucracy to make up the living wage pretty repugnant. Whereas paying them an extra $6.00/hr means they no longer have to spend time waiting in line and on the phone during their off hours. They don't have to look specifically for landlords who accept section 8 vouchers.
The living wage removes a huge amount of hidden labor involved in living off of minimum wage and that's what you're missing here.
Now, you're upset about the residual $z-$y coming out of your pocket. But you might instead be grateful that Walmart is kicking in $y-$x to support your extravagant political demands. That's the subsidy.
> it's much better for me to be making up the hidden costs of chronically underpaid workers
Those workers are only underpaid according to your notions of fairness. You think _Walmart_ should be tasked with implementing _your_ moral vision at _their_ expense. I think _you_ should be tasked with implementing _your_ moral vision at _your_ expense.
The notions of private property and free markets are about moral vision and fairness. They are enforced with the threat of violence, and they benefit members of society unequally. Some people like to pretend that they’re natural, that they’re a given, and that challenging any component of them is imposing one’s own morality on some God-given system.
That is false. No economic system is more or less about morality and fairness than any other. You believe in letting the capital retain more of the earnings than the labor because you think that is moral. It has nothing to do with some supposed position of neutrality.
And if we consider all of the locally owned retailers that have gone out of business due to Walmart's (admittedly efficient) business practices, then saying something like "Walmart doesn't need to exist" really isn't that all that crazy.
In the same fashion society needs people that make enough money to meet their basic needs like food and medicine so that they may spend their additional funds on higher margin items that actually keep Walmart afloat.
Businesses and the wealthy people that own them are vastly the beneficiaries of such policies as maintain a healthy functional society in the same way as they benefit from roads but for any given business if they can shirk their share they can keep the difference so they are incentivized to forget.
It is strange that you consider paying their share a gift rather than a due. It seems worshiping economics is a barrier to understanding it.
A moment's thought should convince you that commerce antedates redistribution, wage floors, etc. Prosperity doesn't require a collectivist thumb on the scales.
It certainly isn't the US where in fact said thumb is presently pressed firmly on that scale via social security, food stamps, medicare, medicaid, tanif, section 8 and so forth.
Once everybody has an alternative job to go to outside the private sector, it no longer matters if Uber decides not to pay people and instead automates all the vehicles.
Then everybody wins due to improved productivity - Uber and the people with community jobs.
The private job then just has to be better than the guaranteed one and they will get the labour.
Where's your central planning in that?
I think UBI would function as a replacement for minimum wage, in this case. Why would anyone take a job paying less than 5?
Having employers provide benefits like healthcare is crazy. The US really needs to move beyond it. I’m surprised there isn’t more agreement politically, the benefit obligation is a huge drain on small companies and solo entrepreneurs.
Not to mention the cost of staff needed negotiate, maintain, and explain the options to employees.
I quit my job and thanks to the insurance changes in the US a few years ago, I was able to stay on my parents health insurance for a meaningful amount of time. It allowed me to take the chance of starting my own company. Unsure if I would have done the same, had circumstances been different.
> I quit my job and thanks to the insurance changes in the US a few years ago
So you're saying that you were able to take the chance to build a startup because of the safety net?
In this case, the employer is the parent's employer. Which means that the people who can take the risk to create startups is limited to "people whose parents have health insurance". Which excludes a large section of society, including for example poor people.
(also--and this might be a bit of a jump for someone just learning about inequality of opportunity--but a fun thing to research online is "why is the US the only country with employer-based health insurance", especially once you discover the answer is "slavery")!
I actually confused my facts here - it's tipping I was thinking of that comes directly from slavery. Employer-paid health care just _continues_ because of racism, as opposed to being created by it.
The bottleneck to highly publicized startups is investors. Investors are less likely to let people use their money if they think the government will get in the way of their growth.
And the sort of worries Americans have about healthcare stopping you from starting a business we just move those worries elsewhere to rent or whatever.
> From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there -- at least its not as highly publicized.
There are a lot of startups in Europe; particularly France, UK, Germany, Switzerland and Scandanavia, and they are well publicized locally. I hypothesize they don't get surfaced to the attention of Americans for a few reasons:
1. Essentially no country in Europe provides businesses with as many freedoms as America does. American businesses have more autonomy, and a lot of basic facts about American life primarily exist within the framework of a business (e.g. healthcare). This makes it a less attractive environment for investors, so these startups don't get international attention as easily.
2. Partly as a result of #1, and also because of a reduced cost of living (and thereby labor) in much of Europe, startups in Europe typically don't pay as well as those in America.
This is to say that Europe has lots of entrepreneurialism, it just exists in a less recognizable way compred to America due to cultural, political and economic differences.
Europe provides a better social net, and this is funded in larger part by heavier taxes on companies. To encourage entrepreneurship, small companies are exempted from many taxes and regulations, which causes there to be a more prominent cliff as a company grows from small to large.
This is perhaps most noticeable in France, where a lot of stuff kicks in with your 50th employee, and so there are a great deal more companies with 49 employees than 50 employees.
I think a consequence of this is that European entrepreneurs tend not to result in as many large companies as American entrepreneurs, as you'll have more people who stop at a smaller size to avoid the penalties of being large.
IMHO, universal healthcare and childcare would indirectly lead to a lot of new startups.
It makes sense with a system like a universal basic income.
Where we stand now, society is expecting everyone being supported by one or more (self)employed jobs, so underpaying people is unacceptable.
I'd argue a change like UBI should come first before lifting the need for companies to pay their employees better.
People factor in the assistance they expect to receive when taking a job in terms of food, healthcare, and money when they take a job that will with assistance provide them the means to live. It is not unheard of at some low paying employers to guide new employees to benefit programs to help them meet their needs.
In effect such programs reduce the market clearing price for labor at the expense of other tax payers. Such program often require that the recipients work but not for how much. At the limit sufficiently generous benefits could inspire someone to work for $1 per year and you could subsidize taco bells entire workforce but the minimum wage and the limits of federal dollars both prevent this.
I don't know how you're even supposed to go from such a premise that is demonstrably, empirically false.
Bare survival is very cheap in America.
There are niches wherein some can survive on little because they can rent a room or stay with family, because they don't have medical issues and can go without insurance etc etc. These are situational factors that don't scale to a whole society or even the whole of an individuals life.
Indoor shelter isn't necessary for survival. Motor vehicles aren't essential for survival. And you go to the ER and get emergency care if you're in trouble.
The base line for survival is pretty low. It's just "continue to not be dead".
All of this is just to say that, empirically, I have seen the following to not be true in the sense that you mean it (required to live being short for "required to live a decent standard of living"), though it is true in the literal sense that I described it:
> In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.
The poor often go largely without healthcare. Their health deteriorates severely, but it's better than just starving to death. A lot of people have very long bus commutes to work because they can't afford a car or housing close to their workplace or to the best public transportation. Their credit score is probably no good, so they can't get a loan on a "cheapish" car. So if they do get a car, they're stuck maintaining a beater.
They may not have living parents who can help them, or their parents may be just as poor as they are.
Your assumptions are all based on a middle-class individual from middle-class upbringing. That doesn't make any sense when we're talking about the plight of the poor, who are the ones most affected by government assistance, minimum wage, etc.
Absolutely false. People will always work at the highest wage they can obtain unless they value their time above what that wage. No government assistance leads to even more people working for $1/hr because they're even more desperate.
Government benefits lower the floor so low that people literally couldn't live if they were paid solely in wages rather than wages + benefits.
- markets are efficient
- people are rational
- everyone has perfect information
- there are no power imbalances
Aside: Do you play poker? I've started to wonder if Freedom Markets™ advocates are familiar with that kind of meta thinking.
I know that libertarian types like to pretend government regulations just appeared into reality suddenly, without anything provoking them. But the reality is, most government regulations were put in place to save people from unsafe conditions that the free market exploited.
When you pay taxes for a single payer healthcare system, you're absolving the company the responsibility to provide health insurance to their employees (read: "underpay their workers"). Many societies are okay with this because the end result is actually better/more efficient for everyone.
Do you vehemently oppose the US federal electric-vehicle tax credit of up to $7500 until the day you decide you'll buy a Tesla, when you'll switch to staunchly demanding that it be radically increased? (https://www.fueleconomy.gov/feg/taxevb.shtml)
These all represent your taxes going to support things that you are unlikely to benefit from personally, after all.
If you remove the impact to other people from the calculus of where you'd want tax dollars to go, then I think most people would opt to enrich themselves rather than not. But that's just not how the world works. The reality is that any given person's tax dollars are used on all kinds of things that will never directly benefit them, or even their families or even socioeconomic class.
Unfortunately right now the middle class is being stuck with most of the bill on a PER-CAPITA income basis. And considering the wealth gap between the rich and the middle class is SUBSTANTIAL, it means we're essentially having relatively poor people (middle class) pay the bills of very poor people (lower class).
When you zoom out a little (and remove irrational emotions about the topic clouding your perception), it's easier to see the disconnect.
Also no need for the line about irrational emotions - lets have some proper discourse please.
If you are a business owner and most of your income comes from capital gains, still not possible to pay anywhere near 22%. Rate on capital gains is 33.3% (20% federal + 13.3% state).
It doesn't negate your point, but for Tesla specifically, no vehicles bought in 2020 or later are applicable for the federal tax credit at all (the page you linked acknowledges this). Raising the $7500 amount wouldn't benefit any Tesla buyers.
An entirely self-interested Tesla buyer would first want the per-manufacturer limit on the tax credit removed or increased. Then maybe have that credit amount increased.
A better safety net, in addition to achieving the same immediate outcome of workers living with better conditions, also means workers have more options. It might lower the supply of potential Walmart employees and actually also increase their wages or working conditions. But more importantly it would mean they could leave Walmart and still get by. Or they could work fewer hours without worrying about things like losing their employer sponsored health insurance. More people could live more fulfilling lives rather than being so reliant on their job at Walmart.
Walmart used to have a page for employees telling them how to apply for food stamps.
Those costs should be charged back to the company.
But many would see that as morally repugnant. Not everyone, but a majority, and especially a politically powerful plurality. That is what you will need to deal with to make a change.
There are a lot of people arguing that "platforms" like Uber are capturing too large a fraction of the economic surplus created by transactions on the platform.
30% for matching buy/sell orders? Do you have any idea how insane that is relative to what NYSE charges?
Uber doesn’t make money. It is only insane if it can be done for cheaper.
One way of getting drivers more money is to de-fragment these marketplaces through compulsory order routing rules.
NYSE is built to much stricter specifications; if they can pull it off there's no reason Uber can't do it given their less demanding requirements.
I also think it's an unsustainable business model; even if you do all things perfectly, there are people out there that might be aware of Uber but will still not be using it for various reasons, so over time the payoff from marketing will still be decreasing. If your business is only sustainable because of marketing then over time, all other factors remaining equal, your profitability will still be declining.
> If companies could just not then you need to explain why apparently everyone is putting their money into something obviously unprofitable.
If every company chose not to do it then we'd all be better off. But since one company does it, the others have to follow otherwise they'd be left behind.
There's also the issue of attributing the profitability of ad spending; a lot of companies spend ad dollars without exactly knowing whether it's actually bringing in revenue (if I search for brand X on Google, they'd be the first hit, but then they also put ads up there, if a person clicks the ad it counts as a conversion and Google gets paid, but was that a true conversion or would the user have clicked on the non-sponsored link had the ad not been there?).
When a company allocates budget for marketing the marketing team will usually spend it all and produce results to justify their own paychecks/pay rises/bonuses and yet those results might not be "true" due to the aforementioned issue for example.
There are many intermediaries between a customer and NYSE which have historically had pretty high fees which are all getting taken by Uber in this case. Those fees (and corrupt business practices) were eliminated by electronic trading, increasing competition, and high frequency trading.
And exchanges such as NYSE themselves only lowered their fees in response to competitor exchanges (there are 13 right now in the US, with 3 more launching this year), which is an obvious way to improve things.
So I'd say the difference is the lack of competition in general.
I guess one obvious reason for lack of competition is network effects. The intermediaries in the stock market at least allowed for a layer of abstraction that could be swapped around without that being visible to the customer.
So, a fairly obvious conclusion in the end: The fact that the exchange component and the end user interface are bundled together reduces competition and keeps these prices high.
I'm sure eventually someone will figure out a clever way to make an independent UI that abstracts over Uber/Lyft/etc despite none of them wanting that, and that should introduce a lot more competition and lower prices.
this is an insanely complex feat to accomplish. it's also expensive.
what does a taxi service do? it's a guy sitting at dispatch assigning calls to cabs.
the stock exchange is complex too. not nearly as complex, with much more well-defined and common rules. but even they don't just charge you. they also charge listing fees, regulatory fees, governance, access to data fees, and sell services and software for trading. you are also comparing a trade transaction to a cab ride. sorry, a cab ride is a much bigger and more involved thing than a button you click on a website.
I don't think you are making your complexity argument in good faith. It is ridiculous to suggest that Uber's order matching and payment infrastructure is more complex than the full chain of financial intermediation, from order matching through clearing, settlement, and custody.
you want to compare to nyse? cool. ask them how much money it will take to trade every stock worldwide following local rules, for any country's citizen. hire 4 million workers. make sure i can use the same app for every transaction and just put it on my amex.
I imagine the pricing is relative to the scarcity and difficult of matching buy/sell orders. Given that NYSE is a national network, that can meet supply and demand instantly between any two individuals in the world, it's substantially different than the much scarcer order-matching reality that a service like Uber would operate in.
TO fulfill an Uber order for a particular interested buyer involves a much smaller set of potential sellers than the NYSE. Thus, it would stand to reason that Uber gets a larger cut than the NYSE. If all Uber did was find a car for your somewhere in the world, that would make it much cheaper. Of course, an uber user is paying to find a car a few minutes away. If NYSE had the additional burden of having to find a physical person near you to exchange stock certificates, you'd expect a higher premium, and indeed, when this paper exchange of certificates was any kind of reality, the NYSE's prices were higher.
Do you seriously believe that no venue would pop up that yields the driver >70% of the trade price, allowing them to bid lower overall?
This is exactly what the SEC did with Reg NMS and transaction costs declined precipitously.
Citation needed - correlation is not causation. The research on this is mixed and plenty of people argue Reg NMS has increased transaction costs and reduced liquidity. It mostly acts as a subsidy to poorly run exchanges, and indeed the most efficient exchanges and the most liquid markets in some global products are now in Europe.
Honestly, transit is a tough nut to make profit on. Pacific Electrics red cars in LA failed to make a profit and folded. All the private railways in NYC failed to make a profit even during the days when people had to either take a train or walk, and still folded (these bankrupt companies were bought up cheap publicly and became the mta) Public transit looses money just like highways do, but all of this is justified because the gain is realized in other sectors of the economy.
However, uber and lyft are private companies and don't benefit from general gain in other sectors, so in my mind these companies have an expiration date once vc investors finally open a history book.
The author of this article was paid $42 million last year. Uber's top 7 executives received: "$11.4 million in salary and cash bonus, plus $71 million worth of equity awards." [0] Maybe instead of paying their CEO and executives that much, Uber should pay their workers more?
[0] https://observer.com/2020/05/uber-ceo-pay-shareholder-backla...
https://investor.uber.com/news-events/news/press-release-det...
(not I am using Q1, because Q2 has been an... atypical quarter for this sort of business)
So many people in the US - arguably still the world's most prosperous country - live on the precipice of ruin and failure because their country just doesn't give a shit about them (hence the ongoing push to make their _employer_ give more of a shit about them), and it's really heartbreaking.
To add insult to injury, every party involved that doesn't give a shit about them, yet benefits from not giving a shit about them, also pretends to give a shit about them.
The entire "essential worker" hero ad campaign at the start of COVID really put a bad taste in my mouth.
Few if any of the businesses that ran those ad campaigns actually cared about their workers or felt they were heroes (if they did, they'd treat them with basic human decency, which they don't). Instead, they treat them like garbage, lie to them, and lie to everyone else portraying that they somehow don't treat their workers like garbage.
Modern corporate propoganda (that's what it is, no matter what you want to relabel it) is pretty disgusting, especially in the fact that it's successful. We've really lost our humanity in this system and it's some of the subjective yet arguably "good" or positive attributes of humanity.
Agreed, but ultimately the responsibility to care for all citizens should fall on the government first.
Anyone who lives in a country should feel supported and cared for by their government. That's literally why it exists.
Employers should certainly care for their employees as well, but that should be an added benefit, not the primary safety net.
This is the opposite of the libertarian / conservative philosophy, which is that government should have no role in people's lives and people should support themselves -- government's just a referee for disputes.
So one could argue that it's an unrealistic "philosophy" that is just used to provide cover for said people's selfish bullshit.
Also, when born into a system that forces you, on threat of violence, to participate in it, there is no peaceful alternative that permits an opt out, so saying that those people benefit (in your view) when they have no other option, is extremely disingenuous. Do people also benefit from the war on drugs being waged against them?
There are lots of legitimate critiques of libertarianism. Neither the false dichotomy nor the ad hominem you offered are among them.
Not everyone agrees that that particular form of stability and security that you seem to think is such a huge benefit is worth the cost: specifically, that every person alive in a certain region must be forced, on threat of violence, to pay and participate in that stability-providing system, even if they vehemently do not consent to such.
Perhaps you value stability and security above all else, and think it’s a good deal. Others that do not, and consider the price (morally, in the legitimization of armed robbery, to say nothing of the dollar figure) too high, are not being selfish by having those values.
Libertarianism is not the opposite of “socially interdependent”. It’s the opposite of “forced at the point of a gun”.
It's easy to have these bullshit opinions when you're a white male adult who didn't get eaten by wolves at 5 months old because there was a whole society and social structure that allowed you to safely grow up into the adult you are now.
And now that you've benefited from all that society has given to you in order for you to be where you are today, you want to opt out?
Pay back every dollar spent on you by everyone else, since you were born, and only then you can go live alone in the mountains..
It honestly baffles me that libertarians can look at the US as it is now and think, "if the government were smaller, life would be better for everyone." I don't see the connection to the two at all, even if I try to follow the libertarian reasoning.
[1]: https://www.healthsystemtracker.org/chart-collection/health-...
That would be nice, but that is not our world. A country and by extension a government is a historical institution created by a governing class: a monarchy or created through war land boundary. The citizens of a nation, until the US attempted, did not have any say in their country's destiny. That was entirely controlled by the ruling class.
The concept of a nation authentically caring for its own citizens is completely modern.
The US does the same with their military. Drape the flag over everything, trip over themselves thanking people for service, giving 10% military discounts and giving home loans with 3% down payments....but should we pay the armed forces a competitive wage? No. It’s even more cringe when all this service stuff is then extended to police and firefighters.
As if there are two classes of people in the country, those sacrificing themselves and willingly accepting less money to “serve” their country, when it’s really just their only option because all the business left their town or they messed up in high school.
I don’t ever want to be paid with “thanks” or “hero worship”. I’ll take the cash.
1. Don't require housing etc money
2. Are ranked up to any degree higher than random POG
?
There are plenty of people going to Ivy League schools who have military backgrounds.
Going to one of the military schools is highly prestigious. They aren’t easy to get into in the least.
However, it is predictable. If you aren't super career minded and are on track to be stuck at minimum wage for a long time, then the military provides a lot of structure and probably higher compensation.
If you have the option to get into a tech/finance/etc high paying career, then there's no contest. Entry level engineer at big tech companies make about the same wage as an O6 living in a high cost of living area and like 20++ years in service. Once you get promoted once, you're making more than a general.
Typical offsetting factors that rational agents weigh include pensions, education subsidies and other benefits, job stability, and perceived upward mobility.
What is really crazy to me is financial regulators on GS schedule.
And federal government pays well compared to a lot of local stuff.
We were paid 50 cents above minimum wage, and it wasn’t until just recently that I realized what was going on: the park was leveraging the social status associated with being a guard in order to pay us much less than we deserved for such a demanding job. They substituted “hero worship” (like you mentioned) for the cash our labor was actually worth.
I quit a month before the season ended and don’t intend to go back.
Have you looked into what the armed forces pays? It’s not bad.
Even as a low ranking enlisted person, you get housing, healthcare and then a salary (albeit low, but it’s mostly discretionary). You can qualify for the GI Bill which pays for schooling once you get out. And if you’re in for 20, you get a pension and healthcare with the option of retiring at 40 if you went in at 20.
I believe you also get a housing allowance is you qualify to live off base and if you serve in a combat zone, a big chunk of pay is tax exempt.
I’m sure someone will be along to correct my inaccuracies.
If you add it all up, a military career is by no means a poor financial choice.
But what about total compensation, including all benefits?
You can't find a private job with a pension plan any more.
Total compensation is decent in the military, but imo it’s definitely not work the risks to life and limb if deployed. Any good soldier could probably make a lot more in the private sector for the same amount of work hours and stress.
I don’t know that this is true for all government jobs... I know that California and especially San Francisco have (or had) lavish compensation programs.
If there aren’t any buyers, $1 is a competitive offer.
The pay reflects the cost of completing the task.
1. It never seems to solve the problems it claims to address. When evidence against it is brought to bear, its advocates move the goal post.
2. There is never an established "end state." More and more areas of life magically become "rights" and then get added to its ever increasing responsibility.
3. It is commonly used as a means to buy votes and sow social dissent by convincing a receiving group that a productive group wants to take their livelihood away.
4. The US government is arguably not representative enough to be tasked with providing it. The nation is too large, the people are too divided, and the political system is too corrupt.
5. It relies on confiscation by the aforementioned unrepresentative entity. And those that never use it shoulder a disproportionate burden of its funding and implementation.
The idea that a social safety net is a Universal Good Thing needs to be reevaluated.
I do agree that we could still do a better job than what we are doing but many of your points are never going to change under any large welfare system, at a minimum points 2-5 fall into this category in my opinion.
Sure it does. There are dozens of Western European countries where people do not go bankrupt due to medical debt, post-secondary education is free or affordable, homelessness is not a serious issue, and large portions of the population are not incarcerated.
> 2. There is never an established "end state." More and more areas of life magically become "rights" and then get added to its ever increasing responsibility.
Sure there is. Scandanavian countries, for the most part, have had a fairly undertstable steady-state relationship with their social safety nets for decades, with policy arguments mostly taking place on the margins.
> 3. It is commonly used as a means to buy votes and sow social dissent by convincing a receiving group that a productive group wants to take their livelihood away.
Creating government policy that is appealing to voters is the basis of democracy.
> 4. The US government is arguably not representative enough to be tasked with providing it. The nation is too large, the people are too divided, and the political system is too corrupt.
Sure. But it's probably worth trying to change that right?
> 5. It relies on confiscation by the aforementioned unrepresentative entity. And those that never use it shoulder a disproportionate burden of its funding and implementation. The idea that a social safety net is a Universal Good Thing needs to be reevaluated.
Yes, it requires those who amass a disproportionate amount of the society's financial resources to shoulder a disproportionate financial burden of maintaining that society. They're still doing pretty well, go to Geneva sometime and hang out with rich people and see for yourself.
Not to mention the myriad other reasons for success in the US, such as being the only developed nation with large resource stores left intact after WW2?
Not to discount the very important work of US scientists and engineers who objectively did make great progress, but to say that the nation’s success depends on not helping its most vulnerable is ridiculous.
Also that the largest sea empire in the world spent that war desperately buying stuff from us.
People’s opinions of the US’ social safety net bear no resemblance to what’s actually happening on the ground.
During the 2008 crisis, unemployment benefits were extended to 2 years.
Seems like a pretty good “safety net”?
Except if you haven't been able to get unemployment because, you were a contractor, say a driver for Uber.
Except for the whole "no health care" part.
Except for the fact that that $600/week is gone now and you're among the millions of people who are still unemployed.
Except if you weren't able to get unemployment because your state's unemployment office has terrible IT problems and they still haven't caught up.
No, this isn't a pretty good "safety net".
But the govt is already planning to replace the $600.
The $600 is gone but employment remains.
Some people have had IT issues, but most are getting unemployment.
The contractor issue (except healthcare) is no different than other countries.
If you are high school educated, do not have children until you are married, and have a any level of job it is nearly impossible to be poor in the US. The above account for only 4% of all recipients of food stamps. The other 96% are people who don't want to work who are continually unemployed, have multiple children outside of wedlock yet want the same quality of life as everyone else. Decisions have consequences and I don't feel I should have to continually pay more so a minority of the population can have nice things regardless of the choices they made!
Morality here is about treating workers with a minimum level of dignity based on human rights, it's about paying us more fairly given that we are the ones producing value (the maxim that "an idea is nothing without execution" should be taken up by the investor/entrepreneur class also, without workers your idea is fucking nothing). It's also about making corporations abide by the rule of law that every other citizen has to, we need a more moral and just system, this free for all of Darwinian economics is a shit system given our current technological capabilities as humanity.
Why "workers", why not "citizens" or "people"?
The tragedy in the US is that the government has successfully abdicated its responsibility to care for its people and has convinced everyone that they must be defined by their job, or by their productivity, and that any societal benefits or safety net they obtain in life is a reward for that work, as opposed to simply having it because their country cares for them.
If you want to bring "human rights" into the conversation, let's stop connecting it with compensation and productivity.
Edit: on re-read, it sounds like I'm arguing with you or rebuking what you're saying. I'm not. I agree with what you're saying, just adding on that it should be a broader conversation. =)
If they were voluntarily idle then there would be a harsh factual basis of not being enough to feed them when there was work to be done. That was the logic of the past anyway. It may not be a right or good answer but it is /a/ reason.
Obviously things change with time and we are on an appatent trajectory to an "awkward middle" of both needing people to do some advanced work and outrunning useful tasks performable by everyone. Incentivizing upskilling to those who can perform non-automatable jobs while avoiding a defacto fixed underclass makes it extra awkward.
I can't imagine a justification that would put the term "workers" ahead of "people" in the context of affording human rights to fellow citizens.
every other system tried so far has been much shittier
it's misleading to call equity compensation "getting paid". there's a strong argument that executives are being over-payed, but say the CEO receiving a salary of ~1.6M (11.4/7) is a lot less egregious than them being paid $42M. surely the equity conferred to the execs gets them some cash availability in various ways, but it isn't exactly the same as just giving them money (eg what would happen if the CEO uber sold off all of his stock?).
maybe the cash portion of exec salaries ought to be much lower or maybe their equity compensation ought to be much lower, but i don't think either of these things by itself or in combination is going to solve the structural problems of the american economy such as healthcare being tied to employment.
> it's misleading to call equity compensation "getting paid".
A person who has a portfolio worth tens/hundreds of millions of dollars does not have to liquidate it to leverage its value. They can secure cash loans on extremely preferential terms backed by their assets, for one.
Futher, who cares if it's "exactly the same as giving them money" or not? That doesn't change the inequality inherit in such compensation packages, just how they pay taxes.
> [neither reducing cash or equity comp] is going to
> solve the structural problems of the american economy
> such as healthcare being tied to employment.
The solution for me is not to redistribute wealth by force from someone, whom i have paid before for a great service. That does not compute for me. It feels like a not justifiable punishment.
So for me the question is rather, what are the alternatives. Am i happy with AWS? Of course not. Do i want people to deliver packages and get paid badly? No. Do i find automatic package delivery attractive? Yes. But then driver lose their jobs. How to deal with that.
How to create wealth on the new foundations, where more people can participate? And dont i already see signs of it?
And, skilled labour is always wanted. All the non-computer, but crafty people do well. Everyone who can build something, that others want and cant build it, bcs... they do other things for others.
Ah, but its a useless rant.
Maybe the US is doing the right thing, bringing back the production side of things back home, so this kind of margin will be closed. Maybe it will increase then even more the productivity to make up for it. Who knows.
We've spent the past 50 years tearing down our ability to do so, why would we possibly reverse course?
> I always find myself in the weird position, that i
> think, i have to defend this kind of wealth.
To continue using Bezos as an example: sure, he built a logistical empire that can deliver cat litter to my home in under 48hrs, and a computing empire that's surprisingly well used despite being absolutely obtuse.
If that's all he did, and everyone who worked for Amazon was treated well, made middle-class salaries without overworking themselves, and had world-class healthcare? Sure. I got no complaints.
But that isn't what's happening. Wealth inequality isn't "I'm jealous of someone" or "I'm opposed to this just because" -- it's recognizing that it only seems to happen when the folks on the bottom of the org chart suffer.
If Jeff Bezos quit Amazon in 1998 after the IPO and we were here today at the same > $3000 per share price of Amazon, Jeff Bezos would still be worth over $100 billion and would have had nothing to do with Amazon for the last 22 years. So I don't see how you can draw the conclusion that Jeff Bezos can't be worth $100 billion unless they're mistreating their workers. Those things don't have to be connected.
Now should Jeff Bezos be worth that much? Probably not. But he's worth that much because he owned a large stake in Amazon. Anyone could have purchased Amazon at IPO and would have been up over 2000x right now. If you put $500k into Amazon at IPO you'd also be a billionaire right now, does that mean that Amazon is mistreating their employees because of you?
For this to be true, Amazon's profits would have to have no effect on its share price.
> So I don't see how you can draw the conclusion that
> Jeff Bezos can't be worth $100 billion unless they're
> mistreating their workers. Those things don't have to
> be connected.
Bezos is not just a large shareholder of AMZN, he's also it's CEO. He is responsible for every decision, ultimately, such as warehouse worker count and compensation. If they make less, he can put what he would have paid them into other product lines, thereby increasing AMZN stock price and his personal wealth.
Jeff Bezos could choose to pay his employees a living wage and treat them with dignity, but that may impact AMZN's bottom line or its share prices, so he doesn't.
> If you put $500k into Amazon at IPO you'd also be a
> billionaire right now, does that mean that Amazon is
> mistreating their employees because of you?
Stop defending billionaires. They won't defend you.
It's not compensation in the "the company paid for my time" sense, but it sure affects the decisions that he makes as CEO.
(But yeah, for the original point about compensation, Bezos perhaps was a poor choice. I'm rolling with that decision.)
how strange, I think it's misleading to not call equity compensation "getting paid" and the IRS seems to agree? When my company grants me vested shares, a whole bunch go right to the IRS instead. Because it's "income".
I would say that compensating an employee with a financial instrument of known value is in fact the exact same thing as getting paid.
If the executives received no salary they could pay the drivers an extra 0.2% or so. If the executives received no compensation whatsoever they could pay the drivers an extra 1-2%.
[1] https://investor.uber.com/news-events/news/press-release-det...
The better goal is to say that everyone deserves an income sufficient to make it possible to buy the things they need in life, even if they aren't employed. The best way to do this is with a robust welfare state, or a UBI. If you could survive just fine in perpetuity without a job, many people would choose to stay home and play videogames unless the jobs available to them made it truly worth their while.
I mean generally speaking, through which mechanism are you proposing telling people that they no longer have the right to make more money, even though people want to buy goods and services from them. Is it a hard cap? Some kind of ratio (which will surely be gamed to hell), is it case by case? Who sets the cap or ratio? Who is the minister of punishing rich people who decides that 5 billion isn't really a problem but 40 billion is just where to draw the line. Or is it because some guy bought a boat that was just a little too ostentatious (maybe he can send it back to the boat yard to have it trimmed up by 10 meters and evade the ruling). Do you see where this gets silly and is ripe for abuse?
Let's say you miraculously manage to pull this off, then you'd have to wait the entire 10 minutes until Bezos Zuck and Buffett, shift half of their stock into a trust owned by family members that amazingly keeps them all just under the cap for long enough for them to do the same to redistribute to their heirs. Like, do you thing those guys are just going to call it quits because of this? They have all the money they need. Zuck probably doesn't wake up in the morning motivated by making another billion. He's playing a different meta-game.
Also, it's very hard for me to imagine a version of the process for implementing this that does not look like some political theater McCarthy hearingesque which-hunt.
Finally, whether you are reasonable or not, I know many people who would love to set these caps at absurd points. The coworking space I work at has the local chapter of Maoists who meet up every week on Wednesdays. I doubt you'd make it to six figures before they set their line. Do you really want this to be up to a vote?.
Meanwhile amazon payed negative corporate taxes if I recall correctly a few years ago, and has cities fighting hand over fist to optionally hand tax payer money back to them in lump sums as bribes to get HQ2. We have all sorts of other regressive taxes. Our whole tax code is designed to benefit huge corporations who can hire millions of dollars worth of lawyers to find loopholes at the expense of being totally unmanageable to small business owners who cover the difference. So yes, our system has a lot of problems and a lot of them aren't as emotionally gratifying as complaining about some rich guys 3rd helicopter, but many of them, if people took the time to learn about them could actually meaningfully changed these situations going forward as opposed to punishing a handful of people who profited off of the current backwards system.
The other end of the spectrum is of course capital gains for shareholders, but any of the wealth taxes proposed recently would help make that more stable.
We are at French Revolution levels of inequality, with a pandemic, a president that despises the majority of US citizens but runs clubs where power-seeking wealthy people pay for admission, and we are not even building enough housing for an entire generation that's growing up. If we don't start addressing this inequality in substantial ways, we will see much greater unrest.
of the whole country or that specific region ?
It is a number that can be calculated for any distribution.
42 million for the CEO strikes me as extravagant, but that alone is a drop in the bucket compared to the amount required to give every driver a noticeable boost in income.
Intuitively, it feels like the only sustainable way to do that is to raise the cost of every ride. Why they don't do that...probably comes down to a spreadsheet that tells them it will lose them money in the long term.
One thing of note: I lived in a semi-rural college town in the USA, with very few uber drivers but a fairly active "beeper" group organized on facebook--born of a designated driver system that expanded into general use--where people would manually post that they were available to drive or needed a driver.
The infrastructure wasn't very good, and there's no real reputation system aside from word of mouth, but it stands as a proof of concept. In theory, now that the idea's in the air, just about anyone could just slap a front-end on a routing system and cut Uber's take out entirely, as long as they're willing to deal with the responsibility (or absence) of things like payment processing and liability for things that transpire on their system.
So, let's assume that there were 1m Uver drivers in US in 2019 and set aside all other counries' markets. If we split $42m + $11m + $71m between them instead of top managers, they will get ~$10/month.
Will you feel better with this change of Uber expenses structure?
[0] https://hedgescompany.com/blog/2018/10/number-of-licensed-dr...
A quick googling says that 3 million people "drive for Uber." Paying them what the high-flying executives make would mean a few dollars per person.
I completely understand the impulse to question the huge disparity in salaries, but for the most part, executives that get paid that much work at gigantic companies, where hundreds of millions of dollars is an almost irrelevant pay increase when distributed across all of the employees.
Let's radically simplify Uber's stakeholder into five classes: executives, investors, engineers, full-time drivers and occasional drivers.
Each of these five classes of stakeholders have contributed to create Uber's market valuation of $55 billion.
The first three classes are already well compensated because executives, investors and engineers have negotiating leverage.
But the full-time drivers are the one stakeholder class that created much of Uber's value yet receive very little of the value they created.
Maybe they're 10% of the total driver base, or 300,000 workers. How much of Uber's value do they deserve?
The school is ethically wrong here.
I think you make an excellent point that Uber wouldn't exist without drivers, but I feel like the inverse is also true? How much would a driver make just posting on FB or wherever that they were willing to drive people around for what they make driving for Uber? I feel like the vast majority of them would make basically nothing, otherwise there would be a lot more people doing that.
Are you sure it's not because their marginal product is higher? Are you implying that collectively those groups managed to finagle a situation where the marginal worker is paid more than their marginal value, persistently and across multiple rounds of hiring? If it's not that, I think the more correct thing to say is they're paid higher because they're worth more to the company, not because they have "better negotiating power".
What about the car manufacturers? The reliability and availability of the cars has "generated value" in an analogous way for Uber as well. Should they be compensated or should the cars be priced at what people are willing to pay for them?
This is not a true statement. Uber is not worth $55b because they have performed a lot of driving work. Uber is worth $55b because they have constructed a system in which driving work can be easily scheduled and allocated.
The value is the system and the system was not created by drivers.
The system was created to serve drivers and riders together.
"yet receive very little of the value they created."
They have received all of the value from the driving work they performed, in the form of a 1099 paycheck. There is a fairly clear market rate for driving work.
They did not contribute to the construction of the $55b system.
"How much of Uber's value do they deserve? "
None.
It is damn easy to declare someone is underpaid or overpaid. Especially when you don't have to write the check. Far too many assume they can do the job of the over paid because they truly understand all the aspects of the job.
Sports stars, movie stars, state leadership positions, and more, all follow the same trend. So what is your point exactly? Seriously go look up what some county managers make and get back to me, here is a hint, it is not uncommon for many to make over a hundred thousand and quite a few approach a quarter million or more and you can damn well bet there are people working in your local government earning minimum wage. Why aren't people here bitching about overpaying government employees? Upper admin in any government is big bucks but that school cafeteria worker certainly isn't seeing a fair share are they?
As in, all work is not equal nor does it deserve equal pay. Never has, never will. Would you accept the same pay especially if it had to be lowered to insure the receptionist earns similar to you? What about the cafeteria worker? Yes I am going there. Why not. If we are going to declare a CEO makes to much then we cannot stop there after all we would be hypocritical. If anything the owners, be it shareholders or individuals, decide what is paid our and theoretically could take every dollar after what was decided as fair compensation was achieved
So do we task Congress with figuring out the correct compensation for every worker in the US?
Or do we just greatly increase taxes on those high earning executives and distribute to those most in need?
As another commenter said, if employees want the profits of shareholders they should also risk a total loss of their investment. Now, I do think more companies should pay with (generous) equity and the government should do far more to support this model. Such as supporting earlier liquidity, less accredited investor rules, mandatory public listings above a certain valuation etc.
But look at it from a different perspective: A bunch of jobs can theoretically be automated or otherwise designed to require no individual human to do the job. Some jobs can't be automated but aren't really necessary either; the total value add for society is quite low, and it is not necessary (defining 'necessary' as: If nobody does it, some good or service price will skyrocket and soon the wage for this job will go up considerably, possibly via a workaround, such as pressuring government to increase a budget for something).
Minimum wage (or, at least, that 'baseline quality of life and benefits' you mentioned, which includes more than just a wage, but also working conditions and safety) is society's baseline for: Below this line, automate it, and if you can't, don't.
One argument is that you should let each individual choose for themselves what job is beneath them, but it's not actually a fully free market unless you go out, find homeless people and shoot them, or, when someone breaks out their back doing low-pay menial work, that we just let them wallow in pain. Which no sane society ever would or should, which highlights that we don't treat fellow humans as cattle. If they are a drag on society and it costs society considerable resources just to support them.. society does pay that cost, or ought to.
The flipside of that is the existence of jobs which are 'net negative' value for society: The cost of supporting the human that does it will, in the long run, cost more than the job gives society. However, because more or less by design there are externalities involved in caring for our fellow humans, the job may seem net-positive to an employer even if it is not. Society is nevertheless attempting to make sure these jobs do not exist.
Minimum wage is, perhaps, a very blunt instrument to make this happen. One can imagine a completely 'safe' job (both mentally and physically) that pays half of minimum wage, and that would be better to allow that if you combine it with a social safety net _and_ the job unemployment rate is sufficient that the only real alternative is no job at all. But I don't think it is feasible to legislate a complicated 'chart' matching working conditions against allowed minimal salaries.
- We collectively have created an economy that has generated spectacular amounts of wealth.
- A small group of people is hoarding the majority of that wealth.
- This is harmful to our society and needs to change.
- Arguments that we can't reduce inequality without destroying that wealth are factually and historically incorrect.
That like saying the winners of the football league have hoarded all the points and therefore nobody can now score goals.
It's the playing of the game that matters. Not who owns the pitches.
We just alter the rules and carry on issuing points as required.
If you can imagine showing up to play a friendly football game against a rival high school and noticing they have 5,340,322 points already on the board because their families had been playing the game for decades, then you’ll start to really get it.
Every accounting period starts from zero. It's the flow that matters for this accounting period. Not how much you amassed from previous ones.
Football teams keep their players from previous seasons. They don't all go into a big hat and get redistributed to other teams just because they happened to be champions.
But we can change the rules and increase the handicaps.
You can't add points in a football game either. But the referee can.
Where do you think our tax revenue is coming from? the 12% tax bracket of someone making 20k a year in government-subsidized housing, or the 37% tax bracket from someone making $10million a year paying property taxes on their 20 million dollar house?
a serious, informed discussion starts with an honest recognition of reality. if you think taxes need to change thats fine, but acting like billionaires and successful companies pay no taxes when they represent the overwhelming majority of tax revenue, you sound like a blind ideologue rather than someone who knows what theyre talking about.
https://taxfoundation.org/summary-latest-federal-income-tax-...
The numbers in the linked article are for high-income earners who, yes, paid the majority of Federal Income Taxes.
My understanding is that the wealthiest people in the United States pay relatively little tax because their wealth accrues largely through investments not income. In addition to being taxed at a much lower rate than income, such investments also qualify for deductions which often reduce and/or eliminate any final tax obligation.
> In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%.
Well, it was in reference to general inequality. It absolutely creates wealth inequality. If you are born to poor parents, and your buddy Steve inherits a $1M San Francisco apartment from his family, well, Steve has a big head start over you.
That directly translates into income equality too, as inherited investments yield 7% returns invested in the S&P, or that $1M apartment generates $3-4000 per month in rent for Steve, while you have nothing.
You know what they say, time in the market beats timing the market -- the sooner you have money the more money you will have thanks to geometric returns.
Had Steve's family donated that money before they shuffled off this mortal coil, or the state collected it in taxes, that wealth could have been used to raise the minimum standard of living for everyone in the next generation -- not just Steve.
> It has not been easy for me. And you know I started off in Brooklyn, my father gave me a small loan of a million dollars.
Makes it a bit easier to start a business when you can just ask your parents for a million dollars. Imagine growing up with the idea that a million dollars is a "small loan."
Maybe that's the cause of wealth inequality and we should examine that. It seems like income taxation and social subsidies O(t) are unlikely to outcompete exponential processes as ameliorations for the root problem.
On the other hand, if you start at the parabolic upward portion of the geometric return curve, having demonstrated no value of your own, you've destroyed meritocratic rewards.
The founding fathers were historically against generational wealth, after all, they fled such a system in Europe.
> It seems like income taxation and social subsidies O(t) are unlikely to outcompete exponential processes as ameliorations for the root problem.
Taxation can absolutely outcompete potential exponential processes, that's why we have progressive taxation. Progressive taxation is exponential in dollar terms.
Progressive wealth taxation is another way of approaching this, but so is an estate tax. That short-circuits the whole process.
To be clear, I believe in wealth inequality, and I believe in income inequality, so long as it's coupled with social mobility (i.e. everyone has the ability to reach higher tiers), and so long as the minimum standard is a decent existence, not death.
I believe in wealth and income in equality.
How do you define "fair" and how do you define "value creation"? And how do I get to be the administrator who gets to make those calls, so that I can make sure that my friends and family's "value creation" classes are put before everyone else's?
There are tons of loopholes when rates were 90%. When rates were dropped, loopholes were closed.
The percentage of total taxes paid by high income earners has increased over time, not decreased.
Do you have a link or article that shows this? I believe it, I'd just like to see numbers to support it.
https://taxfoundation.org/top-1-percent-tax-rate/
Top rate went from 50% to 28%, then back up, then down, then up, but percentage of all federal taxes paid has been slowly rising from 26% to 37%.
It’s higher now despite the rate being lower now (because there were many more ways to avoid tax back then).
1945-1970 is ranging from 35% to 45% -- and it definitely won't average to 45%, which it only reaches once
2000-2017(?) is ranging from 30% to 42%
You've basically taken the high point of range 1 and compared it to the low point of range 2 -- and "a bit higher" doesn't really cut it when you're talking about what looks to be about 37% for the latest datapoint... about half the distance between your cherries.
It’s just ridiculous that C-suites and their direct entourage get paid billions (and can afford to buy mansions that used to be the final reward to a successful career with what amounts to pocket money to them) for funneling more and more taxation to tax havens.
Plenty of companies live off government subsidy and refuse to pay their share; costing government revenue and forcing it to cut services and squeeze the suckers that don’t have the resources to hide their stash.
And seriously, you Americans should ditch company paid health insurance and switch to any of the systems here in Europe...
We don't choose to stratify our wealth based on any intelligence or merit or skill. For every doctor, lawyer, scientist, or business executive making serious money, they aren't there because they crossed some intelligence bar; there would be 1000x as many of these positions if intelligence were the only bar. These knowledge workers we value so much and idolize in society were simply born in the right place at the right time, and opportunities snowballed from there. This is a land of blind luck, highly influenced by who your parents were and what color your skin is.
This gigantic exaggeration is the crux of your point, around which all else crumbles. Most of Amazon's workers are badly treated and either actually in poverty or less than a month's pay away from it. There are other companies that are well regarded for employing low to no skill workers en masse, like Lidl, which nobody is complaining about.
Most people also do not believe it's corporations who are responsible for this living baseline, but the state, so yet another either outright lie or exaggeration around which all of those points crumble.
Overall, it's disheartening to see such a flawed comment at the top here in hn.
The median US based pay at Amazon is $36,640. That is not a poverty level wage except in a few urban centres.
https://www.seattletimes.com/business/amazon/amazon-disclose...
Just because the elites are paid insane sums, doesn't mean the majority are making anything reasonable.
Edit: I miss read and you have median. Fair enough. 35k usd is still terrible pay though, and I'd rather work somewhere that doesn't have 12 hour shifts for that semi ok pay. Can work elsewhere half as hard for the same money or better. Won't pass out from heat exhaustion, won't he fired for trying to unionize, won't have covid pay taken back, won't be denied safe working conditions in a pandemic, etc.
Unless more than half of Amazon's employees are highly paid developers and executives, that number represents a normal employee.
Or as every other first-world country calls it, "the minimum standard we provide for our citizens."
The problem is the bottom line isn't good enough. The truth is every single one of those workers would be better off in practically any other OECD country. Anywhere in Europe, anywhere in Canada, they'd be better off. That's not okay for the greatest country in the world. America can do better.
But even with the new goalposts: comparing Amazon workers to the median worker in other OECD nations, it is objectively untrue that Amazon's group health insurance plan is worse than that of public health insurance in other developed countries. America's problem isn't that workers of rich corporations have inadequate healthcare, it's that you have to work for a rich corporation to have adequate healthcare.
You have to keep in mind that healthcare isn't 100% free in most of the world, there's still co-insurance, co-pays, etc. With that in mind, I work in insurance, and I can tell you right now that the health insurance plans afforded to software engineers of most of the big tech companies are on average more generous than those of most European countries in terms of total out-of-pocket expenditure. At Amazon, the US warehouse workers are given the same health insurance as their company-mates sitting in the cubicles.
The reason houses are more expensive on average now is they're twice as big. People's expectations have changed.
I mention this because there were no cheap housing periods.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
Often low-income families would live in smaller houses for less money if they had the choice, but building smaller and more dense housing has since been restricted by planning codes, often with the intent of excluding poor people.
I'm conservative-minded on regulation for exactly this reason; my parents and grandparents were allowed to live poor yet we're obligated to pay substantially more in housing because of restrictions and requirements that purportedly address safety concerns that I'm willing to risk.
This seems to simplistic an analyze. It does not consider different areas of the country changing at different rates. And to compare two different medians seems fishy: they are not even the same house.
The contradiction (higher productivity = fewer jobs) has been an issues since the industrial revolution at least, but we’ve seem to have gotten by so far with creating new kinds of jobs coupled with a increasing social safety net. The next step might be some kind of UBI, but we should avoid the other routes (de-focusing on higher productivity, or directly paying people more without higher productivity) as unsustainable in the long term. Some mechanisms, like a rising minimum wage, imply higher productivity with each increase, so those work out as well (though increase the need for social safety nets as some people are forced out of the work force).
100 families eat tonight vs 10 families eating really well.
One example is when people pushed for a ban on industries using child labor in SEA without first ensuring there was some fall back safety net that would help those children. The end result was children ending up working far worse jobs than the ones that the western industries were providing. Overall, there seems to be a judgment that any employment of a child is to be judged in isolation and not relative to what other options they have. Society has deemed it is ethically better for me to do nothing despite a child experiencing the ravages of extreme poverty than to intervene in a way that is better for the child but not good enough to meet our expected levels of treatment of children.
Another, more IT centric example, is that it is better to not fix any bugs in a known broken part of the system than to touch it and fix one bug, because you assume responsibility for all the bugs you don't fix. Not every place has this mentality, but I've seen enough which do.
So telling me that society deems it more ethical to offer a worker no option than to offer them a below satisfactory offer doesn't not surprise me at all, despite the outcome of such behavior being too painfully obvious.
Though if we were to invert this, I wonder the outcome because the world over there are enough people experiencing extremely harmful situations where even being offered what we would consider a nightmare is better than leaving them in their current situation. Consider if I wanted someone to be a 24/7 live in maid/butler(cook/cleaner/gardener/etc.) and their pay was $5 a day along with a room, food, basic clothing needed for the job, and access to a computer with internet when they have free time. There are people in situations where this would be a significant improvement in their quality of life, yet I'm not sure any one reading this would approve of me having such a live in maid/butler regardless of what sort of situation they were in before I made the offer.
Its not fair we have Walmart employees on welfare for example.
What you are hinting at has a name, and it's called socialism.
Some people in those European countries do complain about high taxes. But in general, as a country, most are happy with our "social safety net" which includes universal healthcare, "almost free" education system (including University), reasonable minimal wages and "liveable" unemployment benefits.
Socialism seem like a dirty word in the US. It isn't one where I'm from (Belgium).
Whenever I read this I translate it to "I don't want poor people to live near me." That's fine, but let's not feign nobility about it. The global median income is $10k/yr. Nearly half the planet lives on less than $5/day. 1/3 of people on the planet do not have access to clean drinking water. What, exactly, do you mean when you say it's incumbent upon you to provide a baseline quality of life and benefits? And are you really willing to bring yourself down to that baseline so that others can be brought up to it? These Amazon warehouse workers you're so concerned about are quite rich by global standards.
I disagree.
On a macro level I think that's a good thing. We create more value with less labour. And eventually yes we'd have to address that and figure out how to move to true post-scarcity society.
But it's not a 100% either or. You can recognise the need for a better social security net while also wanting to regulate corporations into giving labour their fair share of the output.
So they take their only logical move, they pump out a bunch of ethics marketing statements they don't believe in, but also importantly that they know the public doesn't believe that they believe in, but that give them plausible deniability and keep them out of the spot light for wrong speak and out of the news cycle.
Meanwhile, they do exactly what they are incentivezed to do which is to keep head count low and make sure almost everybody is a contractor.
some responsibility should lie with the public, but to capture the diversity of benefits and needs of every single employee with a centralised program is impossible, and it would also be an unprecedented amount of power transferred to the federal government.
Not everyone requires the same benefits or same training and this is why corporations do need to have some responsibility, decentralisation of benefits is necessary.
This sort of technocratic dream of taking all responsibility away from business which then functions in pure form while all social responsibility is transferred to bureaucrats who hand out benefits (but also can cut them at any point), is volatile and essentially has one single point of failure.
Not to mention it completely ignores the messy reality that we can't simply "tax the billionaires and upper middle class" because of the complications of real world politics.
The US is already way too dependent on this logic of having an all powerful government bail out citizens and unaccountable business. It was one of the lessons of the financial crisis and right now during the pandemic it is failing again. Yes, the government can write trillion dollar checks, but it does nothing to combat the mass unemployment and dysfunction that is the result of having no responsibility or organisational capacity within firms, who ought to be the first line of defense.
The issue is that the US government is unable to effectively do anything, really, as far as public welfare is concerned. We spend a ton already - our public Healthcare spend, for instance is in line with European public health but we don't get nearly as much for it. Our programs are, dollar per citizen, expensive.
We then task employers with something impossible. No one, therefore, wants to be in the position of employing low skilled workers.
I don't know where the real solution lies but expecting the federal government to spend effectively seems out of the question.
Quality of life is subjective. The US constitution guarantees the freedom to make of life what you will but not that it will be subjectively 'good'.
They (and dito Walmart and other such employers) are not paying middle class wages though. Usually it should be possible to feed a family upon a single worker's wage to call it "middle class"... but the harsh reality is that many of the workers, especially those working for subcontractors in fulfillment, are nowhere close to such wages - or to working conditions that are usually associated with "middle class", like being allowed to go on a real toilet and not piss in bottles.
Big companies don't want to be shamed? Then they should not let their employees work in shameful conditions!
US median household income is $61,937.
When exactly do these two people take holiday or sick leave?
That is what we do but it doesn't reduce the mess. We have a safety net and a minimum wage, and still you see the "gig economy" type loopholes trying to get labor for even less than that.
It makes zero sense. Eliminate that one thing and it would be the single largest tax increase in history. That tells me that people making $150k/year or more can live without being social security tax free every year after earning X amount
Similar to how the UAW pension was stuff full of unsecured bonds from GM, and they went crying to the government for a handout after decades of idiot-level decision making.
Social Security has never been used as the general welfare fund, and it has better budget balance when there wasn't a large demographic bulge in retirement age.
Because, duh.
There are exactly 3 ways to get Social Security: retirement, survivorship, and disability. The first two were part of the original implementation, the last was added in 1956. Whether or not you consider adding disability benefits (which have a separate trust fund) to have transformed SS into a “general welfare” fund, the addition of retirement benefits doesn’t correlate with SS’s troubles, but Boomers reaching advanced age does. The Disability Insurance trust fund is actually projected to be solvent for 31 years longer than the Old Age and Survivors Insurance Trust Fund (2065 vs. 2034), so it's weird to blame it for the problems.
Think about what you're actually saying here. You're saying we should shift the "quality of life" compensation burden of THEIR EMPLOYEES away from businesses (who are making boatloads of money), and attempt to spread it out across a few subsets of the population. Taxing corporations or billionaires never works out as planned[1][2][3]....so how does it many any sense that the upper-middle-class gets stuck paying this bill? This is exactly why the middle class is disappearing....which is good for no one.
[1] - https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-... [2] - https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.... [3] - https://www.icij.org/investigations/panama-papers/
"They pretend to pay us. We pretend to work."
Challenging to put together the kind of MMT jobs program you described. One possibility to explore is find the smallest grouping of Dunbar's number-quantity groups that can independently deliver some core set of livable quality standards, with a core set of raw material and energy inputs. This only works if the emergent redundancy is encoded as a national security policy. The redundancy is interwoven into the defense posture, making it extremely tough to hurt the nation economically or militarily. In the worst case, individual groups revert to independently supplying their own needs at a "good enough" level as long as specific raw materials and energy are nationally available.
Then individual members can be voted in or out of such groups. As long as you're in such a group, the core living standard is supplied without monetary exchange. But piss off enough members and you get voted out, and you're on your own unless you can find another co-operative to accept you (with a blockchain registry of rejected members, you'll have to be pretty convincing), and you'll have to enter the more conventional monetary exchange system we're familiar with today. Basically, the vote is an evaluation of whether you fit within that specific high-trust environment.
Also, "Yeah everybody that gets replaced by a machine can just found a startup" is probably the most irrealistic and oblivious thing I've read all week.
We can and do have laws and ethics about what is not permitted to do to people. That’s fantastic and I support that.
For children, I would say they aren’t yet potentially self sufficient, so as a society we should all share the responsibility that they have what they need to grow and develop healthily.
But no, I don’t ‘deserve’ the things you mentioned. I’m an adult human who needs to go try to manifest those things for myself. Including basics like food and water.
- US Population 2000: 280 Million - US Population 2020: 320 Million - +15% increase in population
- Tax revenues 2000: $2.03 trillion - Tax revenues 2019: $3.50 trillion - +75% increase in tax revenue
Population grew 15% and tax revenue grew 75% and yet we still can't solve any of the real problems we had since 2000. So what is increasing taxes going to do if we already collect 75% more and can't make a dent.
Now let's say you tax the billionaires: - Jeff - $200B - Larry & Sergey - $130B - Bill Gates - $120B - Zuck - $100B - Warren Buffet - $80B - Larry Ellison - 71B - Elon Musk - $70B That's $770 Billion - let's say we double this for the remainder of billionaires to $1.5 trillion and add in a 70% tax.
$1.5 trillion in wealth = $1.05 trillion in year 1
Now what about the following year? Well you reduced their wealth substantially so now you only have $500B and that would only yield $350B in tax revenue the following year.
$350B in tax revenue year 2.
And there after it basically trickles down to nothing.
So you end up with a total of $1.5 trillion and then nothing. Well that $1.5 trillion is 42% increase over what we have today, but remember that tax revenue already increased 75% and we still couldn't get anything right.
So while it may sound good to say tax the billionaires the reality is if we couldn't figure out how to spend the additional $1.5 trillion from taxes between 2000 and 2020 a one-time 2 year increase of $1.5 trillion won't do much because the underlying system is broken.
The problem isn't just that the ultrarich have too much money. It's that they get this money by doing things that make the lives of everyone else measurably worse. Selling us poor-quality products, paying low wages to work in stores selling those products, treating real estate like an investment instead of a human need, overcharging for healthcare, invading our privacy to find ways to more efficiently get us to buy their garbage, etc.
Without the incentive for the ultrarich to rip us off coming and going, we have a chance to improve our quality of life and change the things that are wrong in society, without leaving it to the rich to "fix".
Neither one of these is getting fixed by simply increasing tax revenue alone.
When I goto the hospital and get an MRI and get billed through insurance and the cost is $2,000 and out of pocket I can pay $200 for the same procedure that looks like legalized fraud.
The same can be said for education. When the majority of student loans are given in such a way that a student can't default out of it, it reduces the risk on the lending party and so they give out a ton of cash and prefer the interest payments later on which raises the price of education.
Property taxes are also inherently low and should be raised and redistributed to lower income neighborhoods especially when so much property is already in the hands of the wealthy.
I would love to see higher property taxes because I have more faith in local governments than the larger bureaucracy.
Think of it like this if I'm in an industry and polluting the river. Do you want to raise taxes on me so that I stop polluting, or do you want to just make that illegal?
When there are things that completely don't make sense I don't think taxes are the solution.
If I can buy a house which costs more than education in a lot of cases with a mortgage and then declare bankruptcy and not have the mortgage follow me for the rest of my life why can't I do the same with a student loan? Taxing the student loan companies won't solve that.
Similarly for the large disparity in prices for healthcare for out of pocket vs through insurance.
Well, I think that it mostly is illegal right now, but the penalties are either so insignificant as to be considered just an inevitable cost of doing business; and the companies with an incentive to save costs by polluting will support legislation and lawmakers who will do things like dismantle the EPA or eliminate fines for these destructive acts.
I don't think taxes per se are the way to change behavior permanently. I just think it is the easiest way right now to make it so that it is difficult or impossible to make ungodly amounts of money by hurting people and the environment. Ideally we could solve all of these problems without things like taxes or laws but my utopia isn't quite here yet.
The problem is, once you're rich enough, you can start paying off congressmen to pass the laws that remove regulations and make the thing legal again. Look at the US gov't for the past 3 decades...
The only solution is preventing any one person from having so much power over others -- power which comes solely from their wealth.
Because the lender can at least recover the house you secured the mortgage against.
[1] https://medianism.org/2018/03/31/occupational-licensing-is-t...
Tesla's $7b in taxpayer subsidies.
The armies of lobbyists who LITERARILY write legislation.
The regulatory capture affecting certain professions - https://www.npr.org/transcripts/592376568
This point relies on a false premise. The ultra-wealthy aren't taking money from you. They're mostly creating wealth that didn't previously exist.
For example let’s consider a hypothetical world where I control the food supply due to some artificial monopoly and there is $100 in circulation.
Food is required for everyone to survive so I could more or less charge what I want, up until there is incentive for insurrection.
Now the “value” I provide is really just extortion by using my power to control the food supply rather than purely positively providing “value” in way such as just making the food.
So your false assumption is that everyone is using their power to create value when in reality some people leverage their power to simply get a bigger share of money.
You're right. They only take a small fraction of the wealth that they create.
> For example let’s consider a hypothetical world where I control the food supply due to some artificial monopoly and there is $100 in circulation.
Sure, these are called monopoly profits. This is a well known and well understood problem that mostly doesn't apply to the billionaires of today. The billionaires of today mostly exploit a more subtle thing: network effects and returns to scale.
We are still trying to figure out how exactly to regulate this form of rent extraction, and I don't think we have good answers yet, because traditionally our standard has been "consumer harm", but it's not clear that consumers are being materially harmed in this context.
> So your false assumption is that everyone is using their power to create value when in reality some people leverage their power to simply get a bigger share of money.
I realize that some people get rich via rent extraction, but the people being discussed in this thread are mostly tech billionaires. Those people made their money primarily by creating wealth that didn't previously exist.
Yes, most of the wealth of the ultra-wealthy comes from the growth of share prices. But that growth didn't just materialize out of thin air.
It comes from other wealthy people and institutions (primarily the large banks) gambling on how successful the corporations the ultra-wealth own and run are going to be at generating profits.
Profits are the difference in the cost to produce goods and services and the revenues generated in selling them.
The production costs are a combination of the machines necessary to produce them and the labor necessary to run those machines - in a physical factory setting. In a knowledge setting, it is almost entirely the labor of the knowledge workers.
Notice how most of the billionaires come from the knowledge economy?
That wealth is literally generated by wealthy people and institutions judging that the ultra-wealthy will be ultra-successful at squeezing profits out of the people who did the work of creating their companies products by paying them less to create those products than they can generate by selling said products. And by squeezing money out of the rest of us by charging us more to use said products than it cost to create them.
It is literally generated by taking money from everyone else involved. That's what "profit" is and it's profit, or the expectation of future profit, that generates the wealth.
If I am a shoe maker and I make one shoe per day, and you invent a new process that makes 10 shoes per day, and my customers start buying shoes from you instead of me, have you "taken" my money? What about all the value you've created for your customers? Economists call this factor a 'consumer surplus', and it's much larger than the amount that I have lost, so the net wealth creation in the world is positive when you invent your 10-shoes-per-day process.
No. But if you are a shoe-maker who employs 10 people to make shoes, and you pay them less than their skills are worth or take money for yourself beyond what is required to run the business, you are taking their money.
If you get a machine to make the shoes and fire the workers, and continue to charge me the same price for the shoes which now cost you less to make, now you are taking my money.
How do we determine what someone's skills are 'worth'? You seem to be espousing something called the Labor Theory of Value. The labor theory of value has a ton of problems, that you can read about here:
https://en.wikipedia.org/wiki/Criticisms_of_the_labour_theor...
Almost no economists believe it in anymore, although it was popular a long time ago. It just isn't consistent with a lot of real world problems.
> If you get a machine to make the shoes and fire the workers, and continue to charge me the same price for the shoes which now cost you less to make, now you are taking my money.
How, exactly? Are you entitled to my shoes at their marginal cost of production? Where in that interaction does the 'taking' happen?
So 175%/150% => 116%, or 16% increase in tax revenue for a 15% increase in population.
Which means inflation adjusted tax revenue/capita has not meaningfully changed from 2000 to 2020.
[0] https://www.in2013dollars.com/us/inflation/2000?amount=1#:~:....
The founders of the country would shudder at at the size, scope and over-reach of the government...
Also remember, income tax was introduced as a "temporary" measure... the country had roads, hospitals, and orphanages before that.
Which government? What is the threshold for “poor allocation”?
Seems like the free market misallocates a lot of capital to me. WeWork was allocated over a billion dollars of investment, and $47 billion in value, that could be easily argued would have be better used elsewhere.
The Pentagon has spent 20 years and hundreds of millions of dollars in building systems to just try to account for its waste, highly recommend this long read from Rolling Stone: https://www.rollingstone.com/politics/politics-features/pent... and http://nebraskansforpeace.org/pentagon_accounting_fraud
The stuff about government people spending 15 year careers entering phony numbers is just insane: https://www.businessinsider.com/pentagon-accounting-conceals...
I don't think they would (not all of them). Jefferson would for sure, but this is basically Alexander Hamilton's utopian dream. The world he wanted to create. Congrats Alex, you won, everybody else lost.
I agree w/ you that the govt is wasteful. I wish we had where states provide all the citizen benefits and also received the majority of tax revenues, and the fed was a lot smaller and even states managed their own armies and the fed just borrowed soldiers from states for international purposes. Basically their own countries just unionized over interstate commerce and such.
It's like when leftists talk about raising the inheritance tax. Almost no one with money lets their money go through probate! The wealth is held in trusts and common property. When two people own a bank account, and one passes away, the other person gains full ownership but there's no inheritance and no taxation. Trusts are more or less a sophisticated version of the same thing.
What we have seen over the past few decades is increasing productivity without increasing wages, and that's because returns to equity are so high. That is what is imbalanced in our economy.
It wouldn't go through probate, but it would still subject to estate tax. Similarly, any withdrawals before death would be subject to gift tax. Other forms of common property would just be subject to gift tax immediately upon naming the co-owner.
Relevant bits of §25.2511-1(h):
> If A creates a joint bank account for himself and B (or a similar type of ownership by which A can regain the entire fund without B's consent), there is a gift to B when B draws upon the account for his own benefit, to the extent of the amount drawn without any obligation to account for a part of the proceeds to A.
> If A with his own funds purchases property and has the title conveyed to himself and B as joint owners, with rights of survivorship (other than a joint ownership described in example (4) but which rights may be defeated by either party severing his interest, there is a gift to B in the amount of half the value of the property.
§25.2511-1(h) of what? It's better to include full references; not everyone on HN is in the USA.
In the spouse scenario, technically the withdrawals would be subject to gift tax, but the entire amount can be deducted if the spouse is a U.S. citizen. And the gift tax paperwork (Form 709) doesn't actually have to be filed (unless there were other gifts).
We need more people paying taxes, not fewer people paying more taxes. The other thing is that if we have a “strong” social safety net, that will then incentivize more low wage jobs that don’t pay enough to actually support the person (sort of how Walmart paid low wages, but many of its employees were on food stamps.)
Government should be less involved. Having food stamps available for low wage workers means they can accept a job for lower pay than they would have been able to accept otherwise. (I am not saying to get rid of food stamps, only to illustrate how “safety nets” actually perpetuate the very problems they are ostensibly attempting to solve.) Why should I be subsidizing Walmart workers? If we lowered costs to businesses by reducing taxes but also simultaneously reducing “safety nets,” the market would then require higher wages for a given job or the job wouldn’t get done. Right now it’s sort of some Keynesian system were I pay low prices at Walmart, but those low prices are subsidized by my tax dollars that pay safety nets that then allow Walmart to pay lower wages. So my “low prices” are really the result of a government subsidy that I pay for in taxes.
You also see this in agriculture: we pay lower prices for vegetables, but due to the number of illegal alien employees who are paid less than minimum wage. The costs of a vegetable should reflect the actual cost of picking it, not a cost subsidized by illegal/below cost workers. (Just to be clear, I don’t care about the documentation of a worker, what I care about is businesses leveraging below market labor as a cost savings that really just passes the societal costs of that labor to taxpayers.)
So I don’t agree that business should be taxed more, but that we eliminate the perverse incentives to pay workers less than a truly free market would support.
We should, of course, have safety nets for the truly destitute, but they shouldn’t be a replacement for actual wages.. and that’s what we see in places like Walmart. Safety nets shouldn’t be generational. They should provide temporary help, not as a perpetual subsidy to businesses.
That's not what Amazon is getting shamed for - as you are perfectly aware.
See: Canada's free health system, or UK's NHS, or literally any other single payer system.
Err...is it? Some income is better than no income. The more the company pays, the less the worker's life has to be subsidized. Any pay at all reduces the necessary subsidy, not including say, unpaid transportation costs. The pay must at least match the cost of being at work, but no employee would accept payment less than the cost of getting to work.
1) GDP-Per-Capita has grown steadily and is at an all-time high https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?location...
2) Real wages per capita have stagnated since the 70s https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
So in general, productivity per worker has increased. Amazon can move more products direct to your home with fewer people than was possible in 1970. Greater and greater value is being generated in the economy due to these increasing efficiencies.
Yet the suggestion that businesses should pay their workers who enable this value proportionately gets responses that we will be squashing economic potential, dragging these enterprises down, etc.
Instead Walmart, Amazon, etc. use these great efficiencies of scale to compete on lower prices. Which totally does have economic benefits, but it also pushes out competition. Local stores can't compete with an international megacorp's productivity leverage, so we end up with a Walmart in every town and Amazon boxes on our doorstep. Is that truly an economic plus? It sure is nice in some ways, but are all those warehouse workers Amazon employs really new jobs? Or are they replacing a similar or greater number of jobs that were previously providing those same goods and services in a decentralized manor?
This is very unclear and it depends on what measurements you look at. Lots of economists claim we've had historically low productivity growth in the last two decades - eg Total-Factor Productivity growth has been very low (~0.5%/year) every year since ~2005.
If I need to find something at Home Depot or Target or Lowes, I don’t need a person to help me anymore. I go to their website and it tells me exactly where the item is.
All of these little efficiencies add up to me needing fewer other people to help me.
I've been fleeced buying junk online, from amazon or even less shady places, too many times for whatever price efficiencies online offers to work itself above actually handling the product before you put money down and own it. Running to fedex to print and ship my amazon return is a cost to bear if you have a busy life.
https://en.wikipedia.org/wiki/Workforce_productivity#/media/...
This is not how socially ethical societies operate.
1) Consumers want the product which provides them with the most value given the item's cost.
2) Workers and companies want the most value per their capital expenditure (whether personal labor or funds).
I don't see any problem with that, both can be maximized at the same time and work as a balance. One issue is that we've become much better at optimizing #1, and have become worse at optimizing especially the worker part of #2. Workers still relatively rarely switch jobs, which eliminates a good amount of upward pressure on wages.
Stuff like the employer-paid health insurance tax deduction is detrimental to this liquidity. Give the deduction to individuals, not employers.
I don't think americans want corporations to solve this either I think they want people to have the ability for people to solve it for themselves for better or worse.
i think ideally, this is what everyone wants, but like with anything
1. you can only do as well as the system lets you (fairness, opportunity, education, livelyhood, available free-time, paperwork, insurance, healthcare etc)
2. some people can cope with things better than others... these are personality traits, physical issues (endurance, headaches, anxiety, digestive issues etc)
(1 and 2) can be helped with more universal access to (to help them stand on thier own) such as heathcare, transportation, job opportunites for when the economy goes down, minimal sheltering, cheap postal services (free even for those who dont have an address), free counceling services etc
There are a bunch of other problems with the implied claim that workers are no better off today than in the 1970's: There have been major demographic shifts. Non-wage benefits make up a much larger fraction of total compensation today. Comparing against the mid-'70s is effectively cherry-picking due to the massive (and unseen since) run-up in inflation over the next decade. Trying to compare inflation-adjusted figures over decades is perilous because even small errors in producing "equivalent" classes of goods to compare will compound over time: This is the "cars are safer / houses are bigger / phones are now SciFI devices" argument ...
In the past, college, room & board was payable with the part time work of a college student working low end jobs. You cannot do that today.
Single income households were a common occurrence, since dual income households competing for housing were not out competing single income houses. And I don't mean this in a crypto conservative way, even Elizabeth Warren wrote a book about it: https://en.wikipedia.org/wiki/The_Two-Income_Trap
Could you buy a 1970s level of service health plan today and expect a similar cost profile? No.
The non-essential extras that didn't consume much of the budget in the past anyway being nicer or cheaper, such as clothing, entertainment and so on? Cold comfort. After you have 10 shirts, 10 more cheap t-shirts have little utility. HD video is nicer, but TBH, old SD TVs also give you %80 of the entertainment value. 2500 sqft of house is nice, but 1500 sqft of house is still giving you %80 of the benefit and so on. There is diminishing marginal value to these improvements.
While I agree with much of your comment, healthcare in particular is very hard to compare across different times. The quality of healthcare has improved dramatically, as has the qualifications of those providing healthcare.
Does a doctors visit for a flu in 1960 cost more even inflation adjusted in 2020? Probably. But the doctor is probably more educated, and the healthcare providers are more equipped and able to handle more complicated diagnoses. Current costs might not be in line with the increase in level of care, but the product offered in the 1960s is different to the product offered today.
There's also been significant changes to liability for healthcare providers since the 1960s that are tough to take into account comparison wise.
Also many other developed countries deliver modern health care for significantly cheaper prices than the US does.
I haven't read the book, but her speech a decade ago is really eye opening.
Such a view would suggest that any increase in labor hampers wages.
What actually happens is that increased worker participation itself grows GDP, which increases demand of inputs, including labor. Unlike a short-term supply and demand curve, the economy operates on long-term shifts of aggregate labor supply and demand, in which an increase of aggregate supply of labor causes an aggregate increase in demand for labor (by modifying the overall demand curve of goods - consumption goes up), ending in a place where increased labor force participation may actually result in a higher price of labor than before.
In other words, women joining the workforce enhances per capita income. This is also why xenophobia can be damaging: immigration does not actually suppress wages, as would be suggested by a simplistic econ 101 static supply and demand curve; in most cases it grows per capita GDP and has a similar income-enhancing effect as was seen from women joining the workforce.
I do agree with some of your other points re: the difficulty in calculating improvement in quality of goods, and the basket substitution effect problem of calculating CPI. Accurately comparing wages from the 1970s to now is very difficult.
Of course it does, if the supply of workers exceeds the demand, there would be a drop in wages. 10 people competing for 1 job is going to have a lower wage than 1 person competing for 1 job.
This is obviously, clearly wrong. Re-read what you responded to, especially the part about the longer term effect of increased consumption and GDP from higher participation rates.
What you say is only true in a very short-term, micro view (labor supply in a small town over a matter of days, for example), not in the macro timeframe that is the context of this discussion.
This is a well-studied area of economics and the field is not in consensus with your statement.
2x the people might mean 2x the revenue for Amazon, but there is no guarantee that it'll trickle down. Maybe Amazon can, due to automation, satisfy the 2x in demand with only 1.9x in manual labor.
In that case, work supply and consumption both grow by 2x. But salaries for the workes will go down while salaries for Amazon management go up. So the total salary average might remain the same, but it'll increase inequality nonetheless.
Absolutely, that's one of many reasons why it is a terrific trend that should be celebrated.
My point was that there's every reason to believe an expanding work force in a static population would not grow average wages at the same rate as per capita GDP, which was the comparison made by OP.
EDIT: A simple example to make this clearer:
A city has 50,000 men and 50,000 women. Men are forbidden to work, and the women make an average of $50,000 each while producing an average of $80,000 worth of stuff, the surplus being retained by the greedy capitalists. Average wages are $50k, per capita GDP is $40k.
The law against male employment is lifted, and the men jump immediately to equal the women. Given how much surplus the average worker is producing, there's no trouble giving them all jobs. Average wages "stagnate" at $50k, but per capita GDP is now $80k: The economy has doubled in size!
/u/mediaman is right that in an economy that's suddenly 2X bigger, it would be shocking if the demand of all those newly paid men and newly even-more-wealthy capitalists didn't push wages up. But even without that happening, it's not clear that anything has gone horribly wrong: The women are still working for wages they considered fair, and men now are also able to choose how to put their labor to the use they consider the most rewarding.
There are two problems here. The first is that not all goods have elastic supply and the second is that it's assuming the conclusion because you can't get an increase in demand if the initial decline in wages exceeds the increase in workforce participation.
In the first case, for example, you go from a one income household to a two income household with no increase in housing supply and housing prices just increase to eat the difference.
In the second case, if the increase in labor availability causes wages to decline from $60,000 to $30,000, there being twice as many people making half as much money doesn't lead to an increase in consumption. In theory it could even be worse than this because there is no requirement that the relationship be linear. Doubling labor availability could cause short-term wages to decline only from $60,000 to $55,000 or from $100,000 to $20,000. It depends on the supply and demand curves at the time.
And all of this is industry specific, so how it affects you depends on the work you're qualified to do.
Another issue in this context is that we're just completely disregarding the value of the household labor that had been occurring in the alternative. If someone goes from being a homemaker to working a $35,000/year job, but then as a result loses $35,000 to taxes, childcare, commuting expenses, restaurants, a housekeeper and so on, from a GDP perspective it gets counted as net increases all around even though it's really just breaking even. Or worse than breaking even after the effects of the two income trap increasing the cost of supply-inelastic products like housing.
Improving base pay and benefits could help, but it also doesn't help if there's no specific wage-paying job for every potential worker anymore.
However, my cynicism goes a level deeper. It is in Uber's best interests for laws to change and make the scene more complicated, so that all operators in this space - including Uber - have to pay more to their workers and have more encumbrances.
Why? Well, Uber is an established operator. They have made their bucketloads of money off the back of underpaying their workers, got themselves out of startup status in a way that - if they play their cards right - no other gig operator will be able to replicate. Less competition, less disruption.
I think there is an argument that says that "gig economy" should be enveloped in laws that protect the gig worker rights and ensure fair pay and a safety net, without introducing laws that enforce restrictions on the workers. Governments should work to simplify the burdens on individuals, without creating new loopholes for the wealthy. "It's hard" is a valid statement, but not a reason to reject the concept.
But I would continue to be fully cynical of any solution that has the top gig economy CEO's seal of approval.
Either way, it’s a very common tactic, and undoubtedly part of the motivation.
Better to control the narrative than just wait.
That's... wishful thinking. Such a reckoning will certainly not come under Trump, I agree; but it's not a given that it will happen under Biden. In fact, I'd be willing to bet that it will not, at least for the first 4 years.
To my knowledge, the US has never used unemployment to provide benefits to non-employees. UI is an insurance based program and always has been -- the business model is to loan money to the state programs during an uptick, which then gets recovered through UI premiums.
Chances are, changes are coming that will erode the free ride that "employers" of Uber have been enjoying. The states are broke and facing big increases of UI premiums. Once the door opens, it's hard to close. People will start looking at things and asking awkward questions about things like Medicaid and SNAP expenses associated with gig workers, etc.
You can make it difficult for everyone at the "national" level of operation, but then how does a smaller company ever get there from a "local" start?
What even constitutes a "small business" when it comes to gig economy? Most of the workers don't even count as employees.
There's going to have to be a -lot- of legal changes to constitute something worth while. And legal stuff moves slow on purpose (so that it doesn't bork things before they're understood... and also, it's just slow).
It is among the many issues that are the contributing causes of why residential broadband sucks in many parts of the USA, and why consumers are dissatisfied.
By the time everybody catches on, the damage is done.
We need a better way to internalise social and environmental costs. Just because human society has been able to adapt to past technological and social upheavals is not an indication that it will be able to continue to do so.
I think Uber is much more efficient and better overall for society than what it is replacing. Not a great job by any means, but far better than a taxi company. And when I look back 10 years ago Uber/Lyft are probably top 3 things that have made the world better. It opened up an enormous amount of flexibility when going out at night and eliminated concerns around drunk driving.
Also, there is a chance that sole riders would actually be increasing their carbon footprint compared to driving, as the Uber driver is also involved in your trip. Unless Uber is proven to cut car ownership and vehicular use, it is very possible that it is worse for society and the environment than the previous status quo.
You can argue buses and trains also need space, but you can fit way more people into a bus or a train before you need to make square footage available for a second bus or a train.
If they are so mismanaged that they can't offer drastically lower prices, then driving them out of business and replacing them with better management seems like a great idea.
Really? A car service in your opinion is in the top 3 of what made the world measurably better in the last 10 years?
- polio cases worldwide have dropped to well below 100 per year since 2010 (except last year, 175)
- same sex marriage if you want to focus on the us
- Sharp drop in air travel with the corresponding benefits on global warming. Recent, but analysts seem to agree that business travel will permanently drop to between 1/2 and 1/3 of what it was before now that the world has discovered video conferencing is a thing.
I don't mean to downplay these accomplishments, but I think the impact of Uber/Lyft is greater than these on a simple per capita basis. Maybe that's a American-centric view but it's far more realistic for many Americans than "no polio cases"
I agree with your broader point, but Uber lost some 8.5 billion USD last year. They're not (yet, at least) making bucketloads of money, despite paying their workers badly.
Raw capitalism should drive companies like Uber out of business as a billion-dollar company. They can always be undercut by a group of drivers in a locality starting a new app and stealing the local regulars (identical service, lower cost because no Uber premium) leaving Uber with only non-local traffic. Apps are not expensive.
When the company's business model is this transparently an elaborate scheme to sell dollar bills for $0.75, though, focusing on revenue starts to seem like either committing or being taken in by a very elaborate version of lying by omission.
And by relaxing the regulations they will be making that job for smaller startups only easier.
I do not understand what they spend well over 8.5 billion on.
Their software for riders and drivers is quite good and certainly tons of engineer-hours have been poured into the front and back ends.
Are they paying their drivers more than they're charging riders? Or have all the billions gone into their moonshot projects like self-driving cars? Both?
Because otherwise, to me it's almost like, how do you not turn a profit on rides? Once they've got their app and infrastructure going (again, no small expense) then any rides they arrange should be profit.
Clearly, I am misunderstanding something about their business to an astronomical degree but I don't think I'm alone.
https://www.theguardian.com/technology/2020/jul/08/uber-to-l...
https://observer.com/2019/09/uber-ceo-dara-khosrowshahi-tech...
Politicians do victory laps, big business get their position in the marketplace protected by law, and everyone else loses.
The capitalist solution to the 2008 financial meltdown would be to let new banks bump the old banks. Despite all the Fintech innovation, the old banks are more entrenched than ever. With Dodd-Frank, Barney Frank gave them one more gift on the way out of office.
It costs around $100,000[1] to be allowed (by the city) to drive a taxi in New York ($1.3MM in 2014), for a job that pays on average $43,000[2] per year - which involves driving an average of 70,000 miles per year - which at an average speed of 4.7mph[3] works out to $3/hr (not counting waiting time).
It's still not a living wage, but making $9/hr[4] just by owning a decent car seems like progress.
[1] https://citylimits.org/2019/11/30/need-to-know-taxi-medallio...
[2] https://www.salary.com/research/salary/benchmark/taxi-driver...
[3] https://www.latimes.com/nation/la-na-new-york-traffic-manhat...
[4] https://www.thestreet.com/personal-finance/education/how-muc...
Update for clarity:
I guess my bigger question is: what really changed? Customers became more comfortable and the business side became more reasonable, but competition and workers still get the shaft.
Maybe app based hire cars were an inevitable product of smart phones. If not Uber, then someone else. But certainly Uber's business model was incredibly disruptive of that industry. From my perspective it had a really strong effect on how my generation lived in the city.
Sure, some cabs would be finishing jobs taking people home from Shoreditch and soho, but you'd just have to walk to a main road and hope you bumped in to one. Along with anyone else doing the same thing...
The fact that I don't have to stress and figure out a new taxi system every new city I visit is a big plus. On the flip-side, the taxi system quirks of new cities could also be charming in a way. Double edged sword I guess.
Prior to their arrival on the scene, getting a taxicab in SF was nigh on impossible for there were far too few drivers, the cabs were often unsanitary, often took up to an hour to arrive when called, the drivers often tried to argue against taking card, often falsely claiming the machine was broken. The complaints stacked up on the SFMTA’s website and the SFMTA did basically nothing.
Uber and Lyft were disruptive, they were disruptive to the benefit of their customers. I have my complaints about Uber the company, but I would take this band of psychopaths over what we had prior to their arrival on the scene.
All that garbage is gone with Uber and Lyft.
As soon as apps existed, "calling an uber" became a thing within a few months -- for getting to and from restaurants and bars; for getting to work when you're late, etc.
Labor laws are much harder to ignore than taxi boards.
The solution is protections and to break up uber.
It's the same reason Facebook advocates for data protection laws in the US - they're going to happen either way, Facebook wants them to suit them and makes it harder for competition.
Uber has yet to make a profit. Some shareholders have made profits by selling stock, but the business is losing money hand over fist.
There is no great option in between full employment and a contractor. There is a trade-off for both employers and employees in both agreements. Different people want different degree of benefits. It seems to me that everybody would win if there was more flexibility here, and this is what the article seem to be suggesting. Seems reasonable.
The fact that we have millions who just lost health care during a time when they need it most should be the nail in the coffin of our current system.
It’s been hugely flawed for years, and now it’s just a joke. Some problems have very simple, but very big and different from American status quo solutions.
People who love markets would still be able to pay a premium for what they want, just like they do now with all the care providers who have totally bailed on taking even the best insurance.
This begs the question of why there should be an option between those two things.
I'm not sure why there should be, except that employers don't like supporting employees and aren't allowed to treat contractors the same way.
So I posit that we have separate categories for very clear and simple historical reasons: we have "employees" because a set of laws came into being to push back against employer abuses, and to improve conditions for workers generally. "Employees" are not "slaves," is the primary distinction there.
But if I own a company and hire another company to provide services, I'm not hiring an employee, I'm establishing a contract, so a different set of laws comes into play to attempt to ensure fair dealing. But what if the "company" I hire to provide services is a single-person company? Is that just a fiction I'm employing to get around those laws that protect workers? Could be, so the courts have established a series of ways to determine the difference.
A contractor, for example, usually provides services to more than one company. I've done this as a software developer. So Uber might claim that because drivers can work for Uber or Lyft or other ride-sharing services, that makes their drivers contractors. Drivers claim that doing this results in serious disadvantages compared to drivers who exclusively stay with one company, so it doesn't really feel like a choice they can make.
A contractor usually has control over their own hours. If I hire a cleaning company to clean my office, I can't really tell them that they have to come at exactly 2am and work until exactly 3:30am; I give them my business hours and ask them to work outside of those. They have other offices they clean, so they choose the hours they allot to each. Uber, again, might claim that drivers can sign on or off as they will, but there is a very strong effect that has on ratings and compensation, so drivers have claimed it doesn't really seem like a choice, but a requirement.
Again, the reason for this distinction, historically, is to protect workers from mistreatment by employers while still providing the freedom to workers to have more than one client, control their own hours, etc.
The debate here is over whether gig workers really control their own hours, really work independently, really have the benefits of being contractors, or whether that's a legal fiction used by companies to avoid treating their workers well.
If there's a need for a third category, what would be the point of that? Would this third category result in workers being treated better than they are now as contractors? What advantage for employers would there be over treating workers as contractors? The general argument from the companies to date seems to be reasonably summarized as "our business model doesn't support treating our employees as employees," which is not an argument that anyone should actually care about. If there are good arguments why people who drive full-time for Uber should not be treated as full-time employees, with all of the benefits associated with that, Uber has failed to make a good case for this in court to date.
>>Sadly, it turns out, the law commits the Noncentral Fallacy by acting as if everyone [is] fully in one category or the other... A better way would be to require more [safety net]-type benefits as someone becomes increasingly “employee-like"...
I'm pretty sure I agree... and would like to further develop my opinion about ~this stuff.
It's so dumb for an individual to go bankrupt from a random health issue and/or pay a ton of money each month for "insurance" that is basically useless; and also dumb for an employer to be responsible or in control of anything having to do with an individual's health care decisions.
Riiiiight.
I'm not sure what the alternative is here, other than becoming a social purpose company.
Yeah, we all for those poor people but only if it doesn't cost us much.
But it seems like this is a broader issue regarding exploitation within modern capitalism. Not just limited to Uber.
In other words: if we allow it, it will happen. If not by Mr. Khosrowshahi, then someone else.
These people like to pretend they are poor empathetic souls but with no power, which is bullshit. If their ass is on the line or their business has an existencial threat, all of a sudden they know how to make the right phone calls and make things happen.
I buy what he's trying to paint, but I don't buy his hypocrisy.
If the $655M is pitched in terms of "This will save us from lawsuits that could cost billions, go some way towards shining up our tarnished image, increase driver retention and keep the money rolling in", then I imagine it may go down better. Particularly if it can be seen as a way to head off legislation that could cost them more.
Personally I hope they get spanked and have to recognise that their drivers are employees with flexible hours, not some new category of conveniently cheap labour that doesn't have to be properly remunerated.
"I know we drove everyone that offered better pay and conditions out of the market, but now that we've done that we'd like the law tightened up so that same thing can't happen to us"
Everyone already knows the public policy pundit's perspective, everyone already knows the gig economy worker's perspective.
And yet, this platform is going to be much more elevated.
There is something more to do than focus on the irony or vilify hypocrisy. Protectionist tactics are going to overlap with this, whoop de do.
I think talking about the challenges have merit.
I 100% support this... Laws are what keeps business an even playing field. We as people shouldn't hesitate to put laws in place to get what we want. We also shouldn't hesitate to get rid of laws when their purpose becomes less clear.
We shouldn't lobby companies to improve working conditions or look after the environment - we should put laws in place to force them to.
Sure, I agree that's a good thing to aim for.
> We shouldn't lobby companies to improve working conditions or look after the environment - we should put laws in place to force them to.
I disagree with this though. Law is slow moving and imprecise, we absolutely should expect companies to behave like decent human beings and honest actors in society, rather than rapacious sharks, probing for legal weaknesses to exploit in the name of the holy profit.
The 'innovation' at Uber was really a willingness to push at the edges of employment law, and by doing so dodge costs that other companies who thought they were already on an even playing field had to cover. I think it's perfectly valid to call them out for crappy behaviour and hope the law gets clarified.
What the Uber CEO is asking for here is the creation of a new category of worker that legitimises their bad practices, and he's dressing it up as some sort of virtue while also stating he's not going to do anything about it. It's moral posturing, not ethical behaviour.
That wasn't the innovation. Uber was able to create a fleet from rented capital and made billions because they did it so well, but it wasn't just the business model. On the consumer side, Uber made hailing a ride-share much cheaper, easier and safer than ever before, and it got rid of the old practice of taxi cabs refusing fares from certain neighborhoods. Uber also broke the taxi monopolies that had taken over municipal policies and hindered public transport.
There was no monopoly in many of the markets they entered.
I'm curious if the salary for an Uber driver was significantly (or even at all) below the salary of a cab driver. It isn't like cabbies were rolling in the cash if they were employed by the cab company.
Also, is the salary significantly different if you compare it to independent cabbies (who owned a medalion).
Quick googling shows that the salaries are comparable: https://www.forbes.com/sites/niallmccarthy/2016/11/28/fare-d...
>by dodging taxes
Hold on a second here. Let's not play fast and loose with words. Minimizing taxes is not illegal and everyone does it..
>for their disguised employees.
Employment has certain characteristics. It is much easier to make a case that Uber drivers are not employees rather than they are.
But in their case may not have been, as in some places (California?) it's looking like employment rules, and therefore related taxes, should probably have been in place from the beginning.
It's a very grey area here, and a part of how they were able to undercut. The other part being VC subsidy of course.
It's not a grey area. The default position is not regulation and government permission. If it's not illegal, it's not illegal. If I'm starting a business, and that business does not violate existing regulations, why do I need to wait for government permission?
No. WE as people should hesitate to put laws in place. Every law and regulation has a intrinsic cost (to implement, follow and enforce) that takes away from economic growth and opportunity ... and when all is said and done, government laws do not create prosperity. Economic prosperity only comes from the market.
Laws and regulations are necessary but WE should be judicious with what WE choose to regulate.
>We shouldn't lobby companies to improve working conditions or look after the environment - we should put laws in place to force them to.
This is a very naive view of laws and regulations. If it was so easy to do things with policy, the most corrupt nations could simply pass laws to make corruption illegal and be done with it. Poor nations could simply legislate economic prosperity!! Why doesn't that work?
He is in fact arguing for reducing economic opportunity of few and/or corporations explicitly to the benefit of society on a number of non-monetary axes like environment, workers wellbeing, etc.
This is intentional, not a naive attempt to have cake and eat it too but rather to assert what should be a balance between market forces and the good of society.
Not a strawman, just a qualification. Their statement was ambiguous and could be compatible with what I argued.
>He is in fact arguing for reducing economic opportunity of few
I don't disagree with that. Every law and regulation reduces economic opportunity and increases costs, but that's not an argument to not have any laws and regulations. It's an argument to be careful and measured when you do and understand that there is a cost to those policies even if they are necessary for societal well-being. That was my argument (or qualification) in response to OP, who was suggesting we should liberally apply laws and regulations. That I certainly disagreed with.
To be clear, I'm not advocating for anarcho-capitalist economy. I think a mixed economy with a free market foundation, reasonable regulations and taxation and reasonable welfare policies is the best we can expect. One of the things I'm really worried about from the modern left is that there is little to no acknowledgement of the necessity of having an market-based economy.
>This is intentional, not a naive attempt to have cake and eat it too but rather to assert what should be a balance between market forces and the good of society.
Full agreement.
But what? The only thing I can think of is to pay adherence to the letter of some other employment contract (which is probably a problem with that contract and possibly isn't enforceable? and adhering to the letter and not spirit is silly). What else?
There is a separate argument for if this is actually true for Uber/Lyft/etc (as in do those companies exert too much control over their contractors for them to actually be considered contractors and not employees) but in principal this is why you might want -not- to be employed.
It's important to remember that companies will always take the maximum they can get away with for the least compensation.
In the current situation that is asserting some control over the drivers to disincentivize them declining jobs but fairly little else because to exert more control would invalidate their claim their drivers are independent contractors. This is beneficial to Uber as they don't need to pay payroll taxes and provide health benefits etc that are tied to employment in US. i.e the overall cost to Uber per km driven is probably lowest this way.
The moment their drivers become employees there is no benefit to them not exerting all the control they can under an employment agreement. For instance there will no longer need to be a system for surge pricing because there won't be a need for surge compensation for drivers to increase supply because now the drivers are employees you can schedule shifts to ensure demand is met with sufficient supply.
Will it lead to a large portion of Uber drivers no longer being able to drive for Uber? Most likely. Will the drivers that remain be better off? Most likely as they were probably already full-time but not receiving benefits. Will ride prices go up? Most likely. Would this be better overall? Maybe, it's not as clear cut as a lot of people are making it out to be.
https://www.ehealthinsurance.com/resources/small-business/of...
The calculation is ridiculous. According to his example, if someone had been working almost full time for a year, they would have accumulated enough funds for a whopping 2 weeks of paid leave OR medical insurance -- but not both! And they couldn't have done it any other way because they wouldn't be so big otherwise.
Further, his central argument revolves around the fact that since Uber recruited drivers as gig workers promising them flexibility, their survey shows, unsurprisingly, that their drivers want... flexibility. Proof that nobody needs benefits, for sure.
Mr. Khosrowshahi isn't even trying to sound convincing.
This is what a lot of folks had been saying from the start was a huge negative - you're using a get-out of employment rights to undercut other companies!
I'm sure there must be a way to have both employment rights and flexibility over hours worked. That has to have been done before.
> But America needs to change
He's not here to make a case for what Uber should do to make it better. He's asking for America to change the frame of reference so they can look better without actually changing a thing.
> you're using a get-out of employment rights to undercut other companies!
Uber and the media branded this as "disruption". Uber played by their own rules to get big. With that goal achieved and with no more need to keep running afoul, they're asking for their rules to become the official standard.
Doing nothing while sounding like you're trying to do something will maybe be a little more sustainable for Uber than doing nothing while putting on a pair a of sunglasses and yelling "This is capitalism, baby!" with a big grin, which would be my summary of the previous tactic.
The end goal remains to do nothing, of course, but maybe they've accepted that they need to send more people to more meetings with the Government and pay for a ghost-written whiny NYT opinion piece once in a while.
As far as I can remember, "This is capitalism, baby!" didn't play quite so well with the latter crowd.
Then again, free trade and outsourcing did. So maybe Uber's new plan is to complain about the cost of US workers and hire remote drivers in lower CoL nations?
There is one thing that never changes in their behaviour; Problems are not solved by acknowledging their underlying root causes (usually erosion of regulation, civil liberties or other social contracts), but by 'inventin' our way out of the problem. Usually to the financial gain of the elite in question.
As someone currently living in a country with strong unions and regulatory agencies, I have a hard time imagining how the U.S society could have eroded to this degree over time without the general populace taking notice and standing their ground against it.
https://www.amazon.com/Gangster-Capitalism-United-Globalizat...
Person with part-time job wants to make some extra money. Registers for Doordash, Lyft, Uber. When their (part-time) work ends midday, they log onto Doordash, as it's lunchtime. Deliver a few meals. Now it's the afternoon, food delivery doesn't pay, so they switch to Lyft. Do two rides, but things slow down. They log onto Uber and finish the day like this.
I am not saying everyone uses the apps like this, but this is also a use case. So who should pay and how much in holiday pay, sick leave? Clearly, this person can't be (and doesn't want to be) a full-time employee of either of the companies. Yet they work with all three.
The proposal made in this article is not a far fetched one: and it gives a possible solution for exactly this setup.
And if you eliminate that and things like 401k, what else are you asking the employer to provide that you couldn't get for yourself with your money you earned?
But let's assume that universal medical and retirement are off the table. Why should the employee pony up for that stuff when you're only committing to a dozen hours a week with them, instead of 40? In other words, why should the company commit more than the employee does?
The article seems to be saying that the company should commit proportionally to the work from the employee. Well, isn't that what a paycheck is already? If paying them the agreed wages is "letting them fend for themselves", then the solution is obvious: Pay them properly instead, so that they can help themselves.
And what about all the people who already work 3 part-time jobs to get by. How is that any different, and why weren't we previously worried about that, but we are for "gig workers"?
[0] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
[1] https://www.engadget.com/2019/12/30/uber-and-postmates-sue-c...
https://en.wikipedia.org/wiki/California_Assembly_Bill_5_(20...
Times have changed. People don't want stable jobs anymore. That's why the industries where workers have a modicum of power (law, medicine, finance, tech) are dominated by "flexible" work schedules.
Talk to an Uber driver. If they aren't scared that you are a spy from corporate, they will tell you what they really think.
The ability to earn some money with zero notice is awesome. The minute you start requiring contracts and working hours, and qualifications, and exclusivity, it has suddenly made life dull. Suddenly you're a drone wearing a suit working 9-5 for 50 years then retiring when you're too old to fulfil your dreams. No thanks!
It really saved me back then, and if somebody had tried to tell me that they wanted to prohibit me from doing that, because the work I was doing didn’t meet their standards, I would have told them to take a hike. What happens when you try to forcibly impose those standards isn’t that everybody’s working conditions/arrangements magically improve. What happens is the price of labor goes up, the demand for labor goes down, and you end up taking work away from people that were happy to do it, and leaving them with no work at all.
As far as I can tell, no one is talking about prohibiting temporary contract work.
What most people seem to be saying is, you shouldn't be able to pretend that people are temporary contract workers when they really aren't.
Do you think that:
(a) It is self-evident that Uber and Walmart workers are reasonably compensated, because they agreed to their wages in a market transaction; or
(b) There are structural forces that compel Uber and Walmart workers to capture as income an unreasonably low fraction of the benefit they provide the market; or
(c) Something else
Your point b also invokes that reasonableness opinion, but makes a further mistake of presuming that remuneration is determined by value provided (by whatever metric it is that you think that should be judged). Wages are set by supply and demand, for a price to be high there needs to be more people wanting to buy something than there is people wanting to sell it. That is why unskilled labor is worth so little. It’s also why oxygen (incredibly valuable) is free, and why some bureaucrats (incredibly not valuable) can end up being paid quite a lot.
But you’re right. That is not a relevant question. What you’re talking about is taking jobs away from people, and replacing them with nothing.
The anti-contractor laws don’t just affect low paid jobs either. Which is why every Vox journalist in California was so surprised to see themselves laid off after AB5 passed. Thankfully I don’t live in a jurisdiction that’s considering such legislation, but if I did, I would leave. I’ve been on an endlessly revolving short term contract with the same organisation for nearly 3 years now. They would love it if I didn’t have the option to contract, because I earn at least 3x what an equivalent permanent team member would. I’m sure they would be very grateful if somebody were to prohibit me from engaging in such an arrangement with them.
>They would love it if I didn’t have the option to contract, because I earn at least 3x what an equivalent permanent team member would. //
Who is suggesting you can't contract work? If the law stated that contract workers total pay could not be less than the gross business cost of employee workers (+ a percentage?) would that somehow affect you negatively?
That aside: You're seriously going to argue people who can't afford basic healthcare shouldn't be helped financially because you might lose your 3x good income (~$300,000 would be triple the median California programmers wage, apparently)?
Of course people would choose a stable, easier, and better paying job opposed to gig work. That job doesn't exist for everyone.
They give them flextime because (a) it costs them nothing (b) it has no impact on the quality of the work done (c) flextime workers are just as if not more likely to overwork and (d) it costs them nothing.
Read that as "grueling". I take that's what you meant.
Citation needed; while I do agree / believe that people want more flexibility in their work (choose how many hours / week, when, etc to work around things like child care, avoid traffic, etc), they still want stability. People (read: I) want a max 5 day / week, max 40 hour / week contract that covers cost of living + luxuries, not a "maybe you'll do 10 hours this week, we'll let you know when you can come in" kinda deal.
The gig economy is telling people that their income depends on how much rides they do, basically forcing them to work 12+ hour, 7 day work weeks to make ends meet. You can claim that's their choice, but if a 'regular' work week doesn't cover the cost, it's not a feasible job.
The gig economy is an extension of what seemed to become the new norm in the US, working multiple jobs to make ends meet. This should not be necessary. If a 40 hour work week is not enough, wages are too low and / or cost of living is too high.
It's entirely possible to break down the different pros/cons of each type of employment and repackage them. It's really just about whether that should happen and what should/shouldn't be included. Flexibility and the option to choose when they will work is pretty core to these types of jobs. What would be traded away to make that happen?
Most tech companies give stock / options so there is some connection.
I agree with this, just think it's missing important context. People don't want "stable jobs" because nominally "stable" jobs are anything but stable anymore and most of the other benefits have been eroded.
Income stability benefits workers, because when their income is stable (same amount in each paycheck, paychecks in regular intervals) it is much easier to make a budget. There is less worry about, "Will I get enough hours this week to pay my rent?"
Process stability often benefits employers over workers, but sometimes it doesn't benefit either employers or workers. Flexible schedules are generally an acknowledgment by employers that they're not losing much (and may even see productivity gains) by allowing workers to have some wiggle room in their hours -- but workers gain a lot from this flexibility.
Whoa whoa whoa. Whoa.
That's a heck of a generalisation.
Sure they do.
> That's why the industries where workers have a modicum of power (law, medicine, finance, tech) are dominated by "flexible" work schedules.
Flexible work schedules and stable jobs are orthogonal concerns. Flexible work schedule is “employee has some freedom to set working schedule without adverse consequence”, stable job is “employee has relative security against loss of income, benefits, and employment”.
People absolutely still want stable jobs (though they are much harder to find), whether or not they also want flexible work schedules.
What has changed is that traditional employment in the private sector isn't nearly as secure as it used to be, which makes the gig-work vs. traditional employment calculus favor the former more than it would have in the past, since the choice is between insecure work without flexibility and slightly more insecure work with flexibility, rather than secure work without flexibility and unsecure work with flexibility.
Also, for many, it's the choice between no work and insecure work, and whether or not people want stable work, they definitely are compelled by our economic system to generally prefer some work over no work.
EDIT: by benefits, I'm was intending to refer to health insurance
I don't know that this is something I can agree with. Benefits as value-adds from employers stems from what's effectively collective bargaining power. This is the thing most people can't articulate about their desire for benefits tied to employment - they know how much more expensive it'll be for individuals to negotiate the same rates regardless of how much more they might make directly.
I think he was referring to public health care systems. Dependence on employers for access to healthcare is the opposite of collective bargaining power. Every year, half a million Americans [1] file for bankruptcy due to medical issues. It's a lot easier to quit or switch your job when your family's financial future is not on the line.
[1] https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most...
That said, I can't help but read this op piece as: "please raise a regulatory moat around us because we are now safely inside the citadel".
This strategy is so common lately (read Facebook, Google, etc) that I wonder if these incumbents should pay a price (of being broken up) whenever substantial regulatory changes happen.
Exactly. Competition is probably the best way to make sure that drivers get the most total compensation (regardless of whether it is coming in the form of salary or benefits). What is being described here would really limit other companies ability to compete with Uber on the terms that Uber used to compete with taxi services.
So Nike is the next best to child prostitution, i get it :)
But you are right, the next big question is, should a company have the right to do stuff like that. Witch would be illegal in the country where they have the HQ.
Switzerland has a really interesting discussion about that ATM:
https://www.bj.admin.ch/bj/de/home/wirtschaft/gesetzgebung/k...
EDIT: Sorry no English version available to translate use:
From what I gathered, the initiative calls for companies to companies to respect internationally recognized human rights and environmental standards.
I don't think this means that the supply chain must comply with swiss standards an regulations. For example, paying swiss minimum wage in Vietnam would be crazy.
I think there is a big disconnect when people judge the working conditions in other countries by local expectations.
I have met Uber drivers in Brazil that told me that their job got easier and their pay higher since they started working for Uber. And the CEO is wright that I would prefer renting a car when travelling if Uber would get more expensive.
Also, cheap drives has made it so even poor people take an Uber, whereas taxis are only for the rich. Uber prices go up, poor people stop using Uber. I'll stop using Uber.
From what I’ve seen in India, the drivers have to work really hard and do 50-69 hour days to get a decent living.
With Uber taking a 30% cut, and the driver themselves having to cough up the repairs, etc - it does not amount to a huge jump in income.
Wow you've seen a lot to see a 50 hour day.
I prefer advocating for Uber getting less % than forcing Uber to hire everyone and destroying cheap and convenient transportation
Cut Uber profits but don't force outdated labor rules on something that relies on cheapness to thrive
Driving for Uber isn't a career and shouldn't be legislated as one
This isn't about what Uber can or should do, it's what everyone else should do so Uber can be in a better light without actually changing anything.
Drivers (well, I can’t speak for everyone) enjoy the flexibility of driving. We also hate the prospect of not driving and not being able to pay bills. It’s truly a catch-22 situation.
However, as someone who admires tech, I find that Uber’s biggest problem is not in the way it treats her contractual drivers (that’s a symptom of a larger cultural problem) But in the way Uber handles technology.
The teams that handle the driver and the rider apps are totally separate. Each of the apps have slightly different nomenclature within the apps and extremely different interfaces. This makes it difficult from the get go to pick up passengers and to safely get them where they are going.
If Uber focused more on creating a great user experience and did the right things to ensure that both riders and drivers were on the same page they would begin to increase in market share.
“ A good name is to be chosen rather than great riches, and favor is better than silver or gold. “ -Hebrew Proverb
Uber has failed publicly to protect itself with bizarre scandals and shortermist business practices. They’ve failed to distinguish themselves from Lyft.
In 5 years I don’t think Uber will be in the rideshare business.
Nah, my mind is just pretty wild. Sorry if it was kinda hard to read, bro. GPT-3 is for suckers.
I collapsed the first parent comment and there's no other to read as the entire discussion now is based on that parent comment.
I think collapsing comments after a limit of replies or votes is reached will help with the contribution of new perspective to the discourse instead of everyone else following the train of thought of a single parent comment.
https://www.svenssonstiftelsen.com/post/victory-for-foodora-...
So why doesn't CEO Dara Khosrowshahi lead by example and start paying benefits for Uber drivers immediately instead of writing an Op-Ed about it? Why not actually implement the benefits program and then write an Op Ed about why you did it?
>"I’m proposing that gig economy companies be required to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off. Independent workers in any state that passes this law could take money out for every hour of work they put in. All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps."
Again you're the CEO Dara Khosrowshahi. Why not be a leader and lead by example? Start the fund for your Uber drivers and use that as your inflection point and build consensus based on some action you actually took.
>"Had this been the law in all 50 states, Uber would have contributed $655 million to benefits funds last year alone."
This is patently absurd. Rephrased - "had we been forced to do the thing that I believe is the right thing this would have been the outcome"
This is the definition of an over-engineered solution. Just cut the damn link between employment and basic benefits like healthcare and this manufactured “problem” goes away.
What a glorious day!
Ok, now to start pulling up the ladder behind us.
At what point exactly can we state the problem as "Uber is not able to build a sustainable model".
I am all for disrupting taxis and have little love for medallions but if the alternative needs a salary level you can not live on, maybe it is just not a good model.
This is just the....dumb version of that same argument.
But maybe this is intentional, because arguing for yet another insurance pool is "non partisan", while arguing for universal heal care will make it harder to lobby both parties.
You equate extracting value by underpaying employees to doctors curing sick people. Please man, get a grip.
Literally every business is about extracting value. The question is whether or not that value existed before the business did.
They're a virtual taxi rank. They need to do basic testing of fitness of drivers - health, driving ability, criminal record; they need to do basic testing of vehicles for roadworthy-ness - monthly on-ramp vehicle certification; they need to maintain the app and servers.
I'd imagine 10-20% take of gross would be a reasonable range.
How much of that are they doing?
Does any country do similar as part of their transport infrastructure?
Source (random cities in US): https://www.uber.com/us/en/drive/charlottesville/inspections...
All this colossal damage, for a VC subsidize enterprise that never proved it can actually turn a profit.
https://twitter.com/neilanalien/status/627873374505562112?la...
Maybe some business models aren't economically viable. Maybe Uber is one of those businesses.
People who can create systems and automation still have value but the economic machinery will optimize us out of the picture eventually. We're literally training our replacements with ML.
There's no rich CEOs or politicians to blame; we're part of an optimization process designed and evolved to find and exploit efficiencies and loopholes in the existing protective framework of government and cultural/social values.
The solution is to work together as humans to correct and augment the incentives of the current economic system. Economic growth and activity is only a shadowy proxy of human happiness and satisfaction.
There are multiple forces at work. One aspect is the actual long-term debt cycle which people don't realize puts pressure on everything. The other thing is the effective de-regulation and loosening of employee protections.
Another part is tech monopolization.
We actually need an entirely new high tech global economic paradigm. We need to re-invent money and government with advanced distributed protocols. That will allow us to holistically and locally track and regulate resources with a universal basic income (or hopefully even a bit more than basic) while we scale-up deployment of automation.
I think the article was well written. And I wonder what the comments would look like if this article was by the CEO of Lyft.
Step 2: keep the money for labour costs in your pocket and become a unicorn because people with cash want to bet on the removal of worker rights.
Step 3: profit
Step 4: do some lame PR, still keep the cash. Change nothing. Because others have to do that. Just not you. All you needed was the money.
Companies following that model should not have a high valuation because they exist on borrowed time. Extorting money from a system does not make your business profitable at all, it just prolongs death.
Also... is it just me or does Uber seem highly ineffective in operations considering the amount of engineers needed for running the business?
This can’t be true.
Uber replaced a poorly run system that actually covered most places and employed it’s labor force.
If Uber and other car services were forced to recognize their workforce as employees, there would be market incentives to support doing so.
Uber mentions the subsidized cost of their health plan. This is very creatively failing to mention that the American taxpayers pay this difference. Your ride may seem cheap, but you pay for it in your tax bill.
Maybe Uber thinks PR pieces like this one will convince us not to regulate them. I hope we’re not that slow.
The solutions thus far are obviously not optimal. The solutions being proposed also probably have issues yet to be discovered.
What really needs to happen is a fire needs to be lit under legislators' butts TBH. I think the end result is going to be a problem either way if we end up with something that (regardless of outcomes) won't be changed again for another decade.
"Google’s Sundar Pichai: Privacy Should Not Be a Luxury Good" [1]
"I Am the C.E.O. of Uber. Gig Workers Deserve Better."
[1] https://www.nytimes.com/2019/05/07/opinion/google-sundar-pic...
Cherio suckers
Whenever a company says "we support regulation" there's always an unstated suffix phrase: "that makes it easy for us to do what we want to do and hard for our competitors to do what we want to do."
Critics may argue Uber is still non-compliant even with the changes, but that's probably for a court to decide.
...shall be considered an employee unless the hiring entity demonstrates that all of the following conditions are satisfied:
(1) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(2) The person performs work that is outside the usual course of the hiring entity’s business.
(3) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Uber tries to argue that they're not in the business of selling rides, they're just a matching service. That's to escape (2). Neither customers nor drivers nor courts believe this.
My feeling is (2) is overreach and has caused unnecessary collateral damage to many non-rideshare businesses. As a non-rideshare business owner myself, I hope (2) gets struck from the law as a result of the rideshare legal battles.
My favorite quote:
>Many of our critics, ..., believe that Uber and our gig economy peers have failed drivers by treating them as contractors, and that we will do anything to avoid the cost of employee benefits like health insurance. Given our company’s history, I can understand why they think that.
Pray tell, what is this company history you're talking about? Come on, be specific. And did those policies get you the market-share you have now?
Winners from classifying gig workers as employees:
- Full-time taxi drivers who happen to get a job from Uber
- Well-intentioned people who believe that society improves when there is an appearance of fairer labor treatment
Losers from classifying gig workers as employees:
- Full-time taxi drivers who don't get a job from Uber because labor laws force Uber to shrink
- Part-time taxi drivers who cannot work for Uber as full-time employees
- Part-time taxi drivers who can increase their hours but don't get a job from Uber because labor laws force the company to shrink
- Part-time taxi drivers who increase their hours and get a job but despise the new, inflexible work arrangement - and their kids, if they have kids
- Millions of Uber customers who get worse service for a higher price
- Prospective Uber customers who cannot afford the new service and make poorer transportation decisions (slower, less safe)
- Foregone business and consumer opportunities due to people not being where they want to be when they want to be there
- Gig businesses that never get started, gig economy innovation that never happens, and society at large
If the government provides a better safety net, then people will benefit from it no matter the job and no matter the particularities of their work arrangement (self-employed, part-time, full-time, single employer, multiple employers, unemployed...). I chose to study the California Dynamex gig worker case for a business law class and there's really no way around the terrible tradeoffs.
That would assuage people skeptical about marketplace dynamics for new startups.
Or, get off your moral high horse from which you claim that everybody should be obligated to treat people fairly, and until they won't, you won't either. This is morally bankrupt leadership.
Oh, and before someone says they are beholden to their shareholders. I realize that, and it doesn't mean companies need to strip mine the land in the name of profit. Doing the right thing is sustainable, and over a long enough time horizon, the most beneficial action on behalf of shareholders.
Even his opening premise is flagrantly false: the problem is not that Uber has "failed drivers by treating them as contractors". The problem is that Uber has arrogated to itself all the benefits of an employee-style relationship without incurring any of the burdens.
They can't have it both ways. But their business depends on it. Switching to food delivery does not give them a way out of the pain machine. Which is why they have to spend so much money working the refs.
Luckily we have the average hacker news commenter to come in and fill us in on why billionaires aren't actually so bad after all. I just don't know what I'd do without this website sometimes!
"Hey guys, I'm the CEO of Uber! We have problems, our drivers are miserable. But u know what, lets fix everyone's problem first and then we fix ours, ok?"