Hacker News Reader

Comment by 1024core | Hacker News Reader

I fear that this is the future of the country: vast majority of the people barely getting by, and a very small minority leading cushy lives. I see more and more people living in RVs, just making ends meet. On the other hand, if you're in the right line of work and in the right place, you're making out like a bandit. I've seen 25-year-olds making in high 6-digits, and 72-year-olds collecting shopping carts at the local grocery store.

I have a feeling of dread about an upcoming large-scale social upheaval, but I can't quite put my finger on it. I think Trump's election is a symptom of the trying times we live in.

View on HN

Without being all doom and gloom, we really are on the cusp of a massive economic change that will happen over the next 10 - 20 years

- Loss of jobs from automation - Large scale commercial real estate bust - large scale US municipal bankruptcy resulting largely from underfunded pensions (the states of Illinois and New jersey will both run out of reserves by 2030, probably sooner) - Most importantly, neoliberal economic policy rests in part on a natural inflation rate. With shrinking populations, their is no natural inflation rate. Absent immigration, Europe and America would largely be flat or shrinking. No guarantee the immigration rates can continue to make up for declining birth rates.

I'd say that Chicago goes bust before Illinois does as their situation is more dire, and there's no way that the state would be able to take on their pension debt.

How is this any different than the loss of jobs due to automation from the industrial revolution, or the cotton gin?

The US has 13 million millionaires and 30 million "hundred thousandaires."[1] If you count everyone in the households that are sustained by those incomes, you'd find that it is not just a small minority leading cushy lives. All this doom and gloom around the US really needs to be put in check. And this is coming from someone who's not even a US citizen, just someone who has bothered to check the numbers.

[1] http://www.cleveland.com/business/index.ssf/2016/03/us_milli...

It's far better than that. The US median has done extremely well, with substantial progression upward instead of what this thread would have you believe (downward).

A few minutes researching the matter makes it rather blatant.

eg:

http://reason.com/blog/2016/06/27/myth-of-the-declining-midd...

http://reason.com/blog/2015/12/10/the-middle-class-is-shrink...

https://www.forbes.com/sites/timworstall/2016/06/21/sure-the...

http://www.aei.org/publication/yes-americas-middle-class-has...

And a few dozen other media stories on this fact from the last few years.

You really need to qualify your statement with a time period bracket. Very few people are saying that Americans are no better off today than they were in the 70s (most of your links use mid 2010s vs. late 1970s data points). Rather, the issue is that over the last 10-20 years things have gotten stagnant, whereas before that they were improving quite rapidly. A quick look at median income trend charts will show this quite clearly [1].

[1] https://en.wikipedia.org/wiki/Household_income_in_the_United...

Someone getting $1000 a month from Social Security +$400 in other benefits, while living in their car in Los Angeles has an interesting set of priorities. If they lived in a small town in rural Ohio with $1000 a month, they would have a much higher standard of living.

...and the Ohio town would be happy to have the steady influx of income.

This has always been the case in times of great change, because relatively few people a.) recognize the change as important and b.) are able to adapt their skillset to take advantage of it quickly. I remember going to college in the early 2000s, post dot-com crash and during the height of globalization, and hearing that computer programmers were the new serfs and financiers or war profiteers would all be living their cushy lives on our backs. Similar periods have existed throughout history, eg. during the 1930s everyone in an industry connected to the automobile (UAW, parts suppliers, road builders, even gas station attendants) made out like bandits while small independent farmers basically starved.

We may yet see social upheaval, but ultimately the last holdouts in old industries will realize that resistance is futile and retrain in new industries. That in turn will increase the supply of labor in those profitable fields, which will drive wages down to a more normal level, and equilibrium will be restored. Until the next technological revolution, at least.

The difference is, in the past, there was always something to retrain to, because other industries had opportunities that ultimately balanced everything out. I don't think all the jobs lost to automation are going to have replacements, though, because there will just be less need for employees in general, so the total number of jobs is going to decrease over time.

We've been here before too. The Long Depression of 1873-1896 featured similar persistent unemployment and similar secular changes between industries. It happened when the industries of railroads, textiles, mass production, steel, oil, shipping, meat-packing, and mechanized agriculture were growing fast, and in the process completely killing the old trade guilds & professions of coachmen, weavers, artisans, blacksmiths, whalers, sailors, longshoremen, shopkeepers, butchers, and farmers.

What we didn't realize then is that all of the great 20th century industries - airlines, airplanes, automobiles, trucking, radio, television, department stores, plastics, household appliances, department stores, electronics, computers - had yet to be invented. They couldn't be, until enough labor had been freed up from their previous jobs that they were ready & willing to take up jobs building new things.

We're at a similar point in history now: the new technology has eaten the old, but hasn't yet invented the world that we will live in afterwards. It's a dangerous & turbulent time to be in, because most people don't deal well with change, but historically, predictions of the end of history have always been false.

But many (most?) of the jobs created by airlines, radio, etc, have a low barrier to entry and are easily replaceable. I could be wrong since I don't know what technological breakthroughs will come in the next few decades, but my educated guess is that the new wave of job opportunities will be much more specialized and require higher levels of education, like engineers and scientists. And aside from the sheer difficulty of transitioning into that kind of a career without prior education/experience in the relevant field(s), it's unlikely that the market will need as many people to fill those shoes. So even if everyone that holds an obsolete job now could make the transition, there wouldn't be enough market demand for all of them to find jobs.

Again, this is all speculative, but I just don't see a likely scenario in which enough low-level jobs are created to replace the ones that are lost to technology and automation.

I just had a terrifying vision of a post-automation, dystopian society where the non-specialized humans are relegated to selling the only thing they have left. I'm picturing various occupations such as jacking in your neural shunt so that a portion of your brain activity can be crowdsourced for altcoin mining, or Dune style Axlotl tanks birthing organ replacements.

To paraphrase Bertrand Russell, a turkey can think the farmer is its best friend for months, until Thanksgiving comes along.

We already live in a society that is anomalous compared to the long stretch of history that came before it, with tech progress starting to look like an exponential curve. On this basis, it seems pretty bold to reason by induction like the delicious turkey mentioned above.

Perhaps predictions of the end of history have always been false, but it only takes one instance. Even if it doesn't happen, there can still be a massive wave of human misery to deal with.

How much value does the collecting of shopping carts gain a corporation, versus some employee in their mid-20s working on a core component of their company's machine learning offering? Depends on a number of factors, but generally speaking it's safe to say the latter provides substantially more value to the bottom line.

Saying there's no correlation to the value you provide your employer, and your pay is patently absurd, and simply pointing to some outliers (like CEOs) doesn't make this a binary function. If you provide great value, you will make a lot more than someone who fulfills functions a 15 year old can be trained to do in 30 minutes, and likewise, you'll be that much more difficult to replace.

I hope you remember your comment when you're 72 years old collecting those shopping carts.

How do you know they're not doing it because they're not ready to retire? Why does everyone instantly believe someone working a remedial job in their 70s hates it? I strongly suspect by 70 I won't want to do what I'm doing now, too much stress, and if I'm not ready to retire it'd likely be low-key, undemanding work.

Perfect, the shopping carts await.

All's for the best in this, the best of all possible worlds.

Are we advocating for a proletariat uprising now? This is (within a rounding error) how capitalism always works. We got rid of the flophouse but not the people who need one.

> Saying there's no correlation to the value you provide your employer, and your pay is patently absurd

I don't think anyone here is saying that, are they? The parent comment is simply making the point that the gap between the two types of jobs is widening. I would go further and say that a lot of those jobs with a low barrier to entry are disappearing entirely due to automation and other factors.

Tldr; Free market and Darwinism. Move on.

> I fear that this is the future of the country: vast majority of the people barely getting by

This entire thread is filled with emotion, feelings instead of facts.

It must be tough having one of the highest median incomes on the planet, with ~330 million people. A median income so high, the British median income by comparison barely qualifies as equivalent to the 50th poorest state.

In the last ~15/30/50 years more middle class people have moved up into the the upper classes economically, than have moved down. [1]

[1] https://www.washingtonpost.com/opinions/is-the-middle-class-...

[1a] http://money.cnn.com/2016/06/21/news/economy/upper-middle-cl...

[1b] http://www.aei.org/publication/yes-americas-middle-class-has...

>vast majority of the people barely getting by

"Vast majority"? I doubt that. I think the vast majority is doing okay, with a relatively small minority barely getting by, and exactly how small that minority is really depends on how you define it.

60% of Americans have less than $500 saved [1]. IMO that qualifies as the vast majority barely getting by.

[1] http://www.pbs.org/newshour/making-sense/can-you-guess-how-m...

I would view that more as people living outside their means than "barely getting by".

I know I was in this situation post-university: earning a good salary but with low savings because it took time for me to learn how to budget/control spending.

That's largely a self-imposed problem. People don't save even when they have the ability, they just buy more shit

Totally depends on their lifestyle.

That is almost entirely related to lifestyle decisions rather than whether or not one is "barely getting bye"

Holding money is generally not a good idea except to cover emergencies (and for that there's always debt)

Even if it's value wasn't decreasing you're still taking a loss due to opertunity cost.

Do you have less than $500 saved? What would you do if you suddenly needed a car or home repair that cost $1000 and wasn't covered by insurance?

There are a lot of people follow the "holding money is generally not a good idea" life plan and then become unable or unwilling to work. Sure would be nice to have some savings at that point.

Thanks, that's one of the things that shocked me when I first read it.

A lot of the replies to you are basically saying the same: it's their own fault. So I'll just reply to them here: but the problem is: it doesn't matter how they got there, but they are there now! What are we going to do about it? Do you want to just ignore them and let them die on the streets? Of course not. (Well, I'll assume most people will not like that). So it does end up being "our" problem, even if it's because of bad decisions someone else made in their lives.

This equation changes entirely if you have kids. Or a medical problem.

This mentality of blaming societal problems on the individual ("I didn't have this problem, therefore anyone who does got there because of a character flaw") has to stop.

As does the mentality of blaming individual problems on society.

It matters to me how they got there. There's a limit to what I'm prepared to do to rescue someone from his own bad decisions.

Besides, this was a point on language. If you make a lot of money but blow it all on expensive cars and travel, you're not "barely getting by".

Highly reminiscent of a late stage USSR. Similar parallels across many other empire-in-decline eras throughout history as well.

what is with the negativity in this thread. Its unbelievable.

"The world is ending, give us money" has been a great scam for the last 2000 years at least. This thread has the first part covered, they're just trying to figure out how to get money out of it :)

Why is someone's age relevant? Whether you are 25 or 72, how much you earn is based on how much value you provide. A 72 year old has 47 more years of life to have potentially capitalized on.

>how much you earn is based on how much value you provide

This is objectively false, and part of the myth of a meritocracy.

You make what you can manage to manipulate the system into paying you, nothing more or less. That has precious little to do with value provided many times.

It does a much better job at explaining how a CEO of a company going bankrupt can take home 7 or 8 digit bonuses, while a great teacher at a school might be struggling to make ends meet.

Of course with your explanation we can sit secure in the knowledge that there is nothing wrong with how things work, and there is justice in it, people get what they deserve right?

This. The richest people made their money by letting their money do the work. How can a person compete with a dollar? The concept of increasing your wealth = delivering value died a long time ago. See also: HFT

> This is objectively false, and part of the myth of a meritocracy.

But that's not what meritocracy is about at first place.

That's exactly the issue. These people have no value to provide modern society, because they're either not smart enough, or dont have the requisite quals to go into white collar work. Their 72 years of life experience were working hard in a plant and being loyal to a buiness, which then shutdown or outsourced their jobs

Historically, there were places for these people. Manufacturing, truck driving, etc. White collar people are working on automating them out of existence.. So now they deserve to starve ? Because they're hard workers, honest, loyal, decent people, but just can't cut it in the modern professions that provide value? That's the Crux of it. That explains Trump to me

> These people have no value to provide modern society, because they're either not smart enough, or dont have the requisite quals to go into white collar work.

Or you have something on your SE history that makes you totally unsuitable for hire, according to the muckity-mucks in charge.

EXACTLY. Someone made a mistake at some point like we all do.

>Historically, there were places for these people. Manufacturing, etc. White collar people are working on automating them out of existence..

Trade agreements and austerity != robots

They don't deserve to starve for their lack of skills.

But it is very difficult to be sympathetic to the plight of the very people whose anti-intellectualism and moral ambiguity have caused so much damage to the country and the world.

You're lumping one group of people (people who's earing ability is diminishing over time) in with a different one (non-Clinton voters) and making the two a 1:1 correlation. That's incorrect.

Also, flip it around and it works equally on the other side: 'it is very difficult to be sympathetic to the very people who's intellectualism and morality policing have caused so much damage to rural areas and the working classes'.

> You're lumping one group of people (people who's earing ability is diminishing over time) in with a different one (non-Clinton voters) and making the two a 1:1 correlation. That's incorrect.

No, because the damage I'm referring to has been done over decades, due to support for the Republican policies, foreign and domestic, and at the state and federal level.

>Also, flip it around and it works equally on the other side: 'it is very difficult to be sympathetic to the very people who's intellectualism and morality policing have caused so much damage to rural areas and the working classes'.

Except that makes no sense at all - it's dissembly.

Intellectualism has not hurt the rural demographic, while their refutation of it certainly has.

And, it's laughable to suggest that they have been hurt by morality policing. Moreover, the bulk of the actual, legislated morality policing has come from the right, and is being driven by the hate and intolerance of, you guessed it, those same voters.

> how much you earn is based on how much value you provide

This is laughable, not to mention naive. The easiest counterexample being a bank robber. But even if we stay in the purview of the law, we have the crash of 2008, where bankers -- the very institutions that dropped the proverbial ball -- were bailed out.

This reminds me of an episode of Always Sunny in Philadelphia where Charlie tries to understand what Frank's company makes:

   C: What does Atwater make?
   F: Whaddya mean, like how much money does Atwater make?
   C: Uh, no, I mean, *what* do we make?
   F: I don't follow. We make money.
   C: No, I know we make money, I mean, what do we create?
   F: We create wealth.
   C: No, no, no, I mean, what do we build? What do we design? Because I have some ideas that could really help the company...
   F: Charlie, Charlie, we don't build anything. Leave that to the Chinks!

This dialogue is awfully reminiscent of a certain talk about Oracle.

I realize the guy is getting downvoted for being so callous, but I agree with the sentiment. You earn what people are willing to pay you, and generally people only pay for things if they get something in return.

In theory the bank literally provided so much value to the country that when the citizens could not pay to keep the institution going the government stepped in and paid to keep them in business.

Also I'd argue the original point was that "earn" means someone is willing paying you, meaning the bank robber example doesn't apply.

/2cents

You should really do some more reading on what exactly transpired leading up to, and during, the bank meltdowns in 2008-2009.

The banks "provided value" like a person with a gun to your head is "providing life".

"earn what people are willing to pay you, and generally people only pay for things if they get something in return"

I'm sorry, no: this is taking some Econ 101 assumptions about supply and demand curves, and turning them around and claiming them as obvious empirical truths.

In my experience, people are also willing to pay whatever other people are willing to pay for something. It's not always rational, and cartels and monopolies are major, perhaps dominant, parts of our economic system.

> how much you earn is based on how much value you provide

define value and define to whom.

Value? What someone is willing to pay. To whom? To whomever is willing to pay for it. That's the way value is decided in a free market economy.

Nope. Value and cost can be completely different. The gap is often called "consumer surplus", though of course the consumer may be an employer. And since the labour market has more competition that almost any other, the gap can be quite wide.

The value provided is the ceiling on the cost (barring various inefficiencies like the principal-agent problem). They're not unrelated.

"how much you earn is based on how much value you provide"

I think a better way to put that is, how much you earn is based on how much it costs to replace you. It is very difficult to replace a doctor (you can't just grab any person off the street and put them into the surgery suite), but it is quite easy to replace a cashier or janitor.

Likewise it is a lot easier to replace a developer than a CEO. How many people are qualified to step into a CEO role? There are a lot more people qualified to step into a developer role, so developers make less than CEOs.

I think a better way to put this is the good old free market - there's a limited supply of CEOs countering a bigger demand while there's a much bigger supply of developers.

Unless you invented the Haber-Bosch process it's unlikely you've contributed anything appreciable.

All of us are scions of thousands of years of human progress without which it wouldn't matter how smart or motivated you were because you'd just be a member of a small hunter gatherer band.

Capitalism is great because it strokes our need to feel like we contribute but that's all. Humans don't like to be freeloaders or cheats and markets are a very good way to use that predilection, but it's important not to go cargo culting over the belief that individuals add any appreciable value to society.

> how much you earn is based on how much value you provide.

Sadly, 20+ years in the tech industry has cured me of this belief.

I was at Yahoo at one time. There were quite a few "Friends of Jerry" floating around, making 6 figures, doing absolutely nothing (no offense to Jerry). Eventually they all drifted away, but not before they had accumulated a good amount of cash.

I have an acquaintance who befriended a founder of a major company that went public, now valued into the 10s of Bs of dollars. For 5 years he worked there, from the beginning. No one knew what the hell he did there, but he was just floating around the CEO. He left the company recently, and bought a 5M+ pad in SF. Till today, you'd be hard pressed to find someone who can describe what he did there for 5 years.

Look at many of the CEOs of companies. I could argue that for many of them, what value they provide to the company is negligible. The company runs mostly by itself, and they just hang around playing golf, collecting multi-million dollar paychecks. Terry Semel of Yahoo collected 100s of millions of dollars in stocks, but fumbled the Google deal, Facebook, etc. The man couldn't even use the Yahoo search engine properly!

Of course that happens, but most of the time it doesnt, simply because its not sustainable. There is no difference for a CEO to be generous with stock to an employee than handing over the cash to his own son.

A more valuable employee is going to tend to have better wages.

> A more valuable employee is going to tend to have better wages.

I disagree. Wages are a proxy for your value, but not a very accurate one. Among my circle of friends, I've seen 2 of them get significantly different offers for doing very similar jobs. One can negotiate very well; the other is a total nerd. Both are comparable in ability. The negotiator makes nearly 2x as much as the other guy.

There is a lot more to compensation than just your "value to the company".

One expects that if this thread hangs around long enough, we'll eventually see claims that negotiating well against the firm is actually of some sort of value to the firm.

I'd answer: who are you to measure the value of your friends?

And also, if you have a hotdog stand, you cant pay Elon Musk a lot more than you would pay any highschool kid.

You say they have similar jobs, I'll say they aren't , one way or another. If they truly are similar jobs, then one of your friends is getting above his value, or the other below, with the consequences that come from that situation.

Value is truly a complicated thing to measure, and it has many axis where it can easily go "out of whack".

>Of course that happens, but most of the time it doesnt, simply because its not sustainable.

I laughed out loud at this comment. You're cute.

You really think things are less likely to happen just because they're unsustainable?

Reply on news.ycombinator.com