Why hasn't economic progress lowered work hours more? (2016) [video]
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Employers, especially those that pay benefits, want you working as much as possible. Anything less is money on the table.
(I'm not an employer.)
It's good for an employer if you work overtime, all he has to pay is time, or time and a half, or nothing if you're salaried. He doesn't have to pay more benefits, as he would with an additional employee. Of course an employer wants to get as much work out of you as possible for benefits paid.
As an employee, working overtime only gets you more cash (or even none). Working less makes your benefits more valuable.
Even if employment is strictly for money, with no benefits at all, there's an administrative overhead to hiring and managing more employees.
As long as we are employed by employers, and especially if we get health insurance through our employer, there will always be pressure to work more, not less.
Working more is a short term solution to increase the productivity of a team, but on the long term the benefits of doing so aren’t that obvious.
> Underlying Germany’s surplus is a decades-old accord between business and unions in favour of wage restraint to keep export industries competitive. Such moderation served Germany’s export-led economy well through its postwar recovery and beyond. It is an instinct that helps explain Germany’s transformation since the late 1990s from Europe’s sick man to today’s muscle-bound champion.
This isn’t a problem for the US states sharing a currency because they have the federal budget spending balances most of this out.
We've got a bunch of perverse incentives where it's cheaper for the patient to choose the option that's more expensive for the payer. Straightening those out would be a small first step, but complexities of the system and incumbent powers have made it pretty difficult.
I can sympathize with this because I remember needing a medical procedure that I was forced to travel to a different country to solve, it wasn't even about the money but a case where I the patient was given poor information and then ignored, I actually took the doctor to the board over it in the end, and they ultimately provided a correct solution but it was easier in the end just to travel abroad to fix it.
Law is meaningless if workers don't make it happen.
They are also designed in ways which makes people end up resenting unions. I register a lot of union hatred in the US which simply doesn't exist in Norway. Part of the reason seems to be from how unions function in the US.
You are either a union shop or you are not. People are forced to join the union or they are forced to not join it. People don't like being made to do things. In Norway it has always been free choice to join a union. There is no such thing as a "union shop".
Unions in the US also don't seem to hold much power except in its ability to sabotage the company, and so that seems to be what they do. In Germany and Norway unions are more like partners with management. They are on the company boards. They can't be ignored as easily as in the US. To be heard in the US, it seems like unions have to cause trouble. I think this creates a very unhealthy union environment and creates a bad reputation for unions.
Unions in Norway form hierarchies so that you huge national unions which together with representatives for employers negotiate work life in Norway on regular basis.
The other part I think is that Norway and Germany has quite extensive welfare systems, so unions are not as actively protecting particular jobs as they are trying to protect people. Losing your job in Norway or Germany is not the same catastrophe as in the US. So people are more accepting towards it. Instead what people want to see is things like job training and aid to help you get a new job.
My point is that law is only part of the equation, people need to fight for keeping it relevant.
I never said it was easy to do so.
Forming a union is never easy, even in Norway.
Some of it is probably due to startup culture but people seem to work at insane hours.
Lots of commits during the night or the weekend, or even now during the Christmas break.
In general, the culture in the US seems way more pro employers and companies and anti-employees and consumers.
That’s exactly Marx’s point when he discusses his theory of Surplus Value. I know that that theory has been “debunked” and “proven” to be false, but I’m just reading now about it in its “Grundrisse” (I had read its Capital I some years ago) and it’s frightening about how right he was about subjects reguarding capitalism way back in the 1850s (in this particular case about capitalists’ dependence on their workers’, well, surplus work; if you look at the issue under this light it makes perfect sense why capitalists would insist on their workers not decreasing the number of hours they spend working). I’m no socialist nor marxist (even though I think he’s one of the best social and political thinkers ever) but if we want to really understand how things reguarding humans work we should not be blind-sided by political allegiances.
Looking at it with modern eyes, it would be easy to make said machinery operate like an amplifier of labor. Meaning that for each unit of labor used to operate the machine, the owner would get a multiple of said labor out.
Marx instead tried to reason that machines were simple stores of labor, never giving more out than was used to make the machine in the first place.
He still managed to make some observations that i will claim still holds to this day.
While in volume one he focused on the industrial labor side, as a way to lay the foundation of his other commentary, his later volumes pulls in finance and lending.
From that he concluded that it would actually be in the best interest of industrial capital to collaborate with labor in a common front against finance, but that sadly they would side with finance capital until it was too late.
I agree with this, but trying to look at the issue with Marx's eyes I think he saw the subject like this (I'm no Marxist, nor an economist, just making an educated guess): Of course that the machines help their owners (the capitalists) make more money in absolute terms (the amplifier of labor you mention), but at the end of the day what matters for a capitalist (and is one of the essences of capitalism, I think) is that he should make more money compared to the other capitalists.
Now, I think Marx says that all capitalists (as a class) can have access to the same machines -> they can all enjoy the same returns caused by said newer, better machines -> so technology/science progress is no differentiator in the long run between capitalists, because the new, better machines bring them the same rate of profits (of course a company or two can go bankrupt if they haven't modernized fast enough, but we're talking about more general stuff). What I think Marx is saying is that the main (and in his view the only one that counts) differentiator between capitalists consists in how well they can "squeeze" out labor out of the, well, labor-classes (industrial workers back in Marx's time). And if you look at the economic history of the past 25 years (give or take) you can see that the grand winner of this period, China, is actually a capitalist country (I'm ignoring its one-party rule thing) that knew pretty damn well how to squeeze out labor out of its citizens/workers, and also that the United States has had a better economic run compared to Europe also because it treats its workers worse (and unfortunately people over here in Europe have started noticing this and have started copying the US).
> From that he concluded that it would actually be in the best interest of industrial capital to collaborate with labor in a common front against finance, but that sadly they would side with finance capital until it was too late.
That sounds pretty interesting, I've never got to read his Capital II and III, I guess I'll give them a try.
Marx's microeconomic theory is even more wobbly than many of his more capitalistic contemporaries at the best of times, but his writings on the lengthening of working days at mills is particularly irrelevant to modern service-based Western societies and even wealthy programmers and lawyers still working more hours a week than they would prefer. There's a kernel of truth in the idea that employers will tend to profit from people working longer than they're contracted to work, but you don't need to read Kapital to understand people like getting more than they originally asked for.
Dude this sounds incredibly close the experience of American retail workers nowadays.
Control and keeping high turnover is an objective in retail management. It’s usually cheaper and more efficient to have full time staff, but it’s easier to skimp 5% of labor hours and force the salaried manager to fill the breach.
This is the law of unintended consequences as applied to the ACA. If they give you more hours care their costs go up dramatically unless they're already offering health.
https://www.npr.org/sections/health-shots/2014/09/16/3489562...
It’s not just health care. Intrusive regulation like requiring a nominal amount of paid sick leave is mandated in my state over a certain number of hours. (32 iirc)
Workers can only change income by applying for more jobs, or by having exceptional skills. (Which may or may not be genuinely high-value, but do have to be perceived as high-value.)
Since most workers don't have high value skills, that means most people have to work multiple jobs to survive. From the Marxist point of view, it's completely irrelevant if someone is working two shifts for two employers or one very long shift for one employer.
What matters is the loss of personal freedom and opportunity for the worker, who not only gives up personal time, but also lacks both the finance and the time - never mind the energy - to develop any independent small business prospects.
The political reality is that there by the end of the 19th century there were aggressive anti-capitalist movements working hard to limit hours and raise pay against very aggressive - sometimes criminal and murderous - pressures in the other direction.
These movements were less successful in the US than in most other countries, but they still had some influence - which had mostly faded by the end of the 20th century, and has now reverted back to the 19th century ultra-exploitative model for most of the working population.
The shocking thing about the US is the extent to which these movements have been written out of history. Instead of an accurate historical account of what happened, US economic and business history seems to have been rewritten entirely by propagandists who not only ignore the influence of worker movements on pay, social mobility, and working hours, but also use spurious pseudo-economic arguments to pretend that the oppressive policies that benefit the ownership caste also benefit the rest of the country.
And not just retail workers, they are only one of the canaries in the coal mine.
>Why hasn't economic progress lowered work hours more?
Because lowering the work hours of laborers who provide more profit by more hours worked, over the short run or the long run, was not the intention of allowing economic progress to begin with.
The ones employing those workers are supposed to benefit by increased leisure time for themselves, not reduced hours for the workers, even when financial rewards are more liberally dispensed across the board as economic progress occurs.
The purpose of the US Federal Reserve was to better control economic progress not for the benefit of workers or the general citizenry, but for the bankers themselves, largely those in the Northeast with the oldest money. This was particularly important to them after major deposits of precious metals were discovered and exploited in the west. (Which is one of the major reasons why SV is where it is.) Hard currency or especially gold when the dollar was based on it could not have been allowed to continue to be held by working citizens or the potential power shift could have been too much to enable the growth of their capital gains to continue to outpace labor.
Before the Federal Reserve took control, economic progress was much more out-of-control in a way that was not was as bad for workers who in bad times could still always work for subsistence, compared to pure capitalists who were subject to non-increasing gains, reduced gains, or gasp actual losses even when they were in what was supposed to be the least risky investments.
After decades of control and supposedly harmless gradually increasing financial incentive for laborers, union power became too great anyway by the early '70's so Nixon & the Fed put a stop to it by inflating the currency in a way that would never had been possible if citizens had been allowed to retain gold or hard currency. Gold was for banks only for decades up until that time.
Gold could only be re-allowed to the public after it was fully decoupled from the dollar.
They don't want you to work for mere subsistence (especially on your own farm or business) nor allow enough collective wealth to accumulate among the workers, since either extreme reduces the incentive to put in as many of the hours which lead to Wall Street profits.
This trickles down right through SV to any new company whose ultimate outcome is an IPO through a Northeastern stock exchange.
Actually, no. This has nothing to do with Marx "surplus value". And his idea of "surplus value" was wrong by several reasons. The funny thing about Marx is that he failed to understand capitalism as much as good ol' Ludwig von Mises.
In order for people to work less hours at their job there would have to be strong local communities and a kind of socio-economic framework to support constructive, productive and satisfying activities outside of their day job. Things like improving or fixing up the neighborhood or your own household, political activism, caregiving, teaching, citizen science are all examples of things that one could do not for money but for the benefit of the community or the betterment of society. But due to the capitalist mode of production people are alienated from each other and the product of their labor so much that they think of work as a commodity to be traded for money only. And rather than doing these things as a way of finding fulfillment and building communities, people contract others to do it for them for money.
In the real world there's nothing mysterious about employers preferring to get as many hours out of employees as possible. There are fixed costs per FTE that don't scale with the number of hours worked - everything from training to health care to the size of the parking lot.
It doesn't work that way. Many people in the US believe so, though, making companies get away with paying too little.
Higher wages may also support more smaller/domestically owned businesses, which tend to treat their employees more humanely than huge corporations.
I’m curious what you base that statement on, as I’ve generally not found it to be true during my career.
This includes IT related jobs.
If people on US and other countries want these benefits, choose to get strong instead of demonizing unions.
There's a saying you should be careful with what you wish for, you might as well get it.
(I deliberately didn't pick SV/NYC. Dallas and Berlin are very similar cost of living wise.)
(free healthcare doesn't count as the US amount usually includes insurance)
How about 35hour work weeks and the fact that overtime is paid? If you factor that into account and add to the healthcare and extra vacation days I'm pretty sure those fictional $40k/yearly fade out rather quickly.
And by the way, average income means jack shit when the income distribution is so lopsided, particularly when discussing issuez linked to poverty and the lack of basic services.
There is probably a point in there about shorter work days and legally mandated overtime pay, but it doesn't add up to 40k per year.
Honestly, the more I look at this, the more it seems like there are hidden mechanisms that keep pay below market value in many European countries. E.g. wage collusion and the like. I am almost certain that this is part of the picture, although there are also other factors at play. (Smaller, less homogenous markets than the US, more restrictive laws around business ownership, fewer gargantous and profitable companies that compete for talent, etc).
The High-Tech Employee Anti-Trust Litigation looks very curious to my Norwegian eyes. Cold-calling employees at competitors for recruiting is widely considered inappropriate behavior. I would not be surprised to find out that there are eerily similar unwritten agreements between large employers here.
Income taxes in Texas for 95k amounts to about 27%. Income tax in Berlin for $60k (30y, no children, left other options on defaults) amounts to 33%. The after tax difference is about $30k then.
Tuition in UT Dallas, 4y engineering bachelor degree, is $45k. Free in DE, but you pay that in less than two years with the difference in salary.
Public transport? In US the TCO is estimated at $8500 yearly. In Berlin you can get an annual tickets for $1100. It's not directly comparable but you get the picture. For better perspective, NYC 30d passes sets you back at $1450 per year.
Texas:
$95k pre-tax falls into the marginal 28% bracket, but after subtracting 401k + IRA deferral ($18k + $5.5k), $95k falls to AGI of $71.5k. Then after subtracting standard deduction ($6.35k for single 30y, no children), personal exemption ($4.05k), taxable income falls to $61.1k. For this, the tax calculation is:
0-9325: 10%x9325 = 932.5
9325-37950: 15%x28624 = 4293.6
37950-61100: 25%x23150 = 5787.5
Total tax: 11013.6
Post-tax income: 84k
Income Tax rate: 11.6% since no income tax in Texas.
Social security+Medicare: 7.65%
Post-tax and post-SS: $76.7k
Berlin:
Pre-tax: $60k USD x 1 Euro/$1.19 USD = 50240 Euro
I entered this number into a German tax estimator [1], which gave me the following output for the tax bracket calculations:
Total tax: 9.908,56 Euro
Post-tax income: 40331 Euro
Income Tax rate: 19.7%
Obligatory Pension: 9.35%
UI+Health Insurance+Disability: 8.4%+1.5%+1.425% = 11.325%
Post-tax and everything: $35.8k USD
The difference becomes $40.9k. If you amortize the 4y engineering bachelor degree over 4 years, I think the difference in income is quite significant.
Of course, there's both deductions and non-income taxes also, which complicate the issue. In Norway, the total tax pressure is significantly greater than 50% for most people. (VAT at 25% always deducted from already-taxed income, long-term capital gains at 30%, pre-salary employer tax at 14%, company profits taxed at 24%, salary taxed at ~33% on average, fuel tax ~30%, wealth tax 0.85% of net assets after deductions +++).
If we do have shareholder lobby groups, they certainly do not have any impact on policy. Capital gains tax increases one percentage point to 31% next year, up from 27% five years ago. In addition, there is the 0.85% wealth tax on net assets above ~180,000 USD. There is no deduction for long term capital gains.
It isn’t easy to compare apples to apples but generally I’d guess in Europe highly paid professions are subsidizing the poor relative to the US.
There is also non-cash compensation that doesn't get reported in "average" salary. For example, my telecom engineer friend in Germany has a benefit of having a car leased for him by the company. The level of the car depends on the position, so he has 3-series (only German cars can be leased, of course). The reason for this it's more profitable for the company tax-wise to lease cars for employees than to pay same amount in cash.
1. The cost of living in Dallas is roughly equal to the cost of living in Berlin.
2. The cost of living like you're in Berlin in Dallas is much higher than the cost of living in Berlin.
Not only is Germany poorer than the US, but Berlin is among the poorer cities in Germany. Hence I don't think it says much about the results of unions.
Norway has equally strong unions as Germany and close to 80% of Norwegian workers are unionized.
I am pretty sure that if you compared to developer salaries in a richer country such as Switzerland you would also find much higher software developer salaries.
And then there are national peculiarities. E.g. more developers in Germany than in many other European countries might be associated with manufacturing industry which doesn't necessarily value software developers as high as a more startup like scene.
I checked and dev salary in the rest of Germany. Not very different from Berlin.
Switzerland does pay handsomely. But, unlike neighbors, unions have quite minor role. And labor laws are way more lax than France or DE.
About prevalece of manufacturing in Germany, France has similar salaries despite being a more services oriented economy.
[1]https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
[2] https://www.glassdoor.com/Salaries/oslo-software-engineer-sa...
Also I am in doubt about how many Norwegians report to these web pages. It would be more accurate to look at statistics gathered by NITO among its members.
One aspect you have to consider with respect to the US and Europe in general is that Europeans work a lot fewer hours. A lot of difference between US and European software developer salaries could simply be down to difference in hours worked.
I make about $97 000 at current exchange as a software developer in Norway. But I work only 37.5 hours per week. I got 5 weeks vacation per year. In addition to a lot more public holidays than in the US. I haven't worked overtime in over 10 years. While judging from accounts from Europeans working in the US, it is quite normal with very long work weeks and overtime.
Oslo living expenses will look extra high because we are most likely at at the top of a property bubble. We never had a downturn in 2008 for the housing market.
Also living expenses in Norway is usually hard to compare with other countries since food prices and recently housing costs are quite high. However health care, education, child care etc is quite cheap. Many consumer goods are also relatively cheap. E.g. food is much cheaper in Spain than in Norway but buying a TV is cheaper in Norway.
Engineers and software developers are if anything members of what could be more called trade groups. These groups don't negotiate or push for salaries on behalf of members, nor do they do things like organize strikes.
To test you hypothesis I think you have to look at several countries in Europe at similar GDP number and compare salaries. Then you'd have to compare between those of different GDP numbers and see whether GDP or unionization rate correlates most with salaries.
I got to point out however that such a task is momentously difficult, because differences in how things are recorded and rated. As an example I just remembered several other factors in addition to the previous mention that I forgot.
1) The salary quoted in Norway, is the money workers get after special income tax is deducted by the employer. This is about 14%. So a 65k salary is more like 75k if you consider this tax.
2) High living expenses in Norway is heavily influenced by a very high VAT tax of 25%.
Sure that doesn't mean the money is suddenly in your pocket but it means it doesn't just disappear. It goes to cover extensive welfare services, which e.g. Americans would have to pay for out of pocket.
In essence it is hard to compare very high tax regimes with extensive welfare benefits to one with low taxes and few benefits.
It ia worth every penny I get less than Dallas, life is not always about money.
You see those kinds of adjustments with female employees: there's a decent amount part-time work and no-overtime in that segment, especially at families with decent income.
But not so with males. And often, for males with the privilege to work less, their job is their identity. So it's natural they like going to work.
But if the stats of this Gallup survey[1] are correct, that 70% of Americans hate their job, the reason clearly isn't love, but necessity.
[1]http://www.nydailynews.com/life-style/majority-u-s-workers-n...
Many people now are spending almost 50% of their pre-tax income on housing, and most of that is the price of land and goes to landlords. It seems that landlords inevitably capture a big chunk of people's salary increases.
Additionally in the US your health insurance is generally tied to your job; even after Obamacare you probably have to work to pay for your monthly insurance.
If housing costs went way down and health insurance were universal, I suspect many people would feel much less need to work so many hours.
Edit: Added links
> For homeowners in Chicago, the average increase is 10 percent. https://rebootillinois.com/2017/06/13/big-property-tax-hike-...
> Summary over past couple of decades
https://d2dv7hze646xr.cloudfront.net/wp-content/uploads/2015...
This is how we want it. The three blocks in every direction surrounding a middle school shouldn’t be populated by 80 year old retirees.
Chicago used hike this year to fund pensions
This graph is a good summary
https://d2dv7hze646xr.cloudfront.net/wp-content/uploads/2015...
> Illinoisans’ residential property-tax burden – as a percentage of median household income – has risen 76 percent.
https://www.illinoispolicy.org/reports/growing-out-of-contro...
Other factors should have a bigger effect. For instance if crime halved overnight, the city could reduce its policing budget and lower property taxes, regardless of property value changes.
Housing costs are directly related to the area per person and the location. If people expect to live in much larger flats or houses compared to e.g. the 19th century and in expensive urban areas, they will have to pay the price.
Buying a house has always been the preferred investment. When you make that easier, it's only natural prices will rise.
IMO, the only feasible way to minimize this trend is economic decentralization.
Your comment could only make sense if you believed housing prices were dictated by construction costs. They aren't. Prices are set based on what is the highest price tag sellers are able to force upon the customers. Buyers also wanto to push the value down but sellers, due to the nature of real estate properties and taxes, profit more by simply sitting on their investment and waiting out for someone opening fheir wallet and offering the asking price.
1) That's really not a countrywide thing
2) It's not specifically the landlords, it's whoever was already there. A landlord who bought in just recently is not rolling in dough. The people who capture the gains are the people who got in fifty years ago and sold & moved, or the landlords who got in fifty years ago and are still renting the property.
3) But, yes, from the worker's perspective his salary increases will tend to go towards housing/land. This is a natural state in a competitive housing market. He must compete in the market for the space to live so that he can live near his job. The power of the market will continually optimize for those who make the most money (i.e. hypothetically produce the most economic value) to live in the most desirable housing (e.g. the closest to work)
Yes. Silicon Valley's land baron is John Arrillaga, who bought Silicon Valley farmland in the 1960s. He owns about a square kilometer of office space.
This doesn't happen in Germany for instance. Rent in Berlin and Hamburg (1st and 2nd largest cities) is quite reasonable. Reason is economic activity in Germany is quite decentralized.
- Contemporary economy has surprising amount of internal inefficiency causing most of the value to be wasted.
- Value that is not squandered is distributed unevenly, so most people aren't that much better off.
- Status spending doesn't deliver more value with higher economic output. Status is always scarce. The same goes for several other "resources".
- Mate competition, gender roles, and divorces create separate earners and spenders. Earners have little control over spending and they are thus unable to cut back on work. They are often legally required to work under threat of imprisonment.
- Widespread debt means most people cannot stop working without risking default. Credit availability further encourages irrational spending.
- Most people don't get to choose their working hours. Businesses have the leverage and they choose to max out hours to the legal limit. Governments have little incentive to shorten the work week, because small change won't matter and big change would kill the economy.
- People can retire early or they can take breaks between jobs, but this doesn't work for two reasons: people dislike large swings in their lifestyle and people grow dependent on their income through irrational spending.
Author is right about one thing: the elderly are the winners here. That's where governments can focus their effort. Earlier retirement can be introduced incrementally and it has the smallest impact on economy, because on average older people are less productive anyway.
If your society doesn't allow that state to come about then it is because it has been deliberately designed to have fewer work opportunities than there are people that want them. If you construct society so that there are always more work opportunities than people who want work then competition and automation automatically gets rid of the crap jobs.
And yes there are people in factories that love their jobs. It takes all sorts to make a world.
You seem to be imagining distant future when people just work on things they enjoy. Even if such utopia can be built, it doesn't change anything about the present situation. The vast majority of people would quit their jobs if they didn't need the money.
This is the point “Efficiency Cult Capitalists” seem to miss. They think market forces will drive conpanies to be more efficient, but they don’t reliably do so except in the very long term (larger timescales than a typical human career length.)
As a startup your costs are high relative to your income and so you have an incentive to use labor efficiently (VC incentive warping aside.) The only way you can grow profits is by using labor to grow production or marketing.
But one you have an established share of the market, the equation reversed and you have lots of revenues and relatively smaller costs. In addition you have a new production-neutral way to create value: you can use labor to build a moat that will prevent competitors from springing up in your wake.
This decreases labor efficiency, because you’re doing more labor and not increasing production at all. But it creates value by stalling depreciation on your previous capital expensitures.
It’s not clear to me what incentives decide how much companies invest in production vs moat building. In the case of software companies I’ve seen it seems to be that moat maintenance is typically at least half of the labor. I have no idea how that gets established. I would be interested if anyone has ideas on how that balance gets struck.
Of course inefficiency is opportunity. And so high rollers can use a bunch of cash to crash over someone’s moat, and then compete with them on efficiency. However, the market incentive here is that once you are over the moat you just split the market. Both companies save the cost of actually investing resources in efficiency, the moat buster gets a return for their effort.
However, I do think there is another opportunity: if you can get over the moat, and then instead of trying to own the market yourself (at which point you are competing on level terms with the incumbent) if you can create a private market (like Lyft, AdWords, etc) then you invite a thousand smaller companies to compete on efficiency... this allows you to marshal a larger volume of management resources than a CEO could direct, which gives you an advantage against the incumbent. You will shrink the overall profit pool (due to increased efficiency) and you have to share that pool with your contractors, BUT you have a shot at taking the entire market, so that could be worth more than the cabal spoils you’d get coordinating with the incumbent.
80 years ago your worked more hours, and you could not slack at work.
Today, you work not only less, but half of the people in the offices I go to don't work their full shift. They go to facebook, send text messages, take long breaks, do their shopping and watch porno (yep), etc.
Also, an hour of work doesn't have the same value.
When your work is moving boxes, an hour is an hour.
But in an office work, there are plenty of opportunities to be busy without being productive. I'd say 30% of the work I see in offices is at best useless, at worst harmful.
So we have more office jobs, which have less hours, during which we work less, said hours being worth less.
And this is very uneven, because a nurse probably works more now than before. But all in all, office jobs are talking over in rich countries.
First, employee don't want less money and fake it. Employers want the employee to be on site because they paid for it.
Second, society praises people for working. You will look better if say you are busy.
Third, our systems would collapse if people were actually paid to their real value. You would see the total unfairness of it, and also how truly brilliant or useless people are.
Fourth, laws, syndicates, medias and logistics come in the way. And with a big inertia.
Fifth, humans are not rational and don't do "the right thing" according to the intellectual or displayed objectives. And they have all their own agenda.
The other problem is that if you measured people purely by output, 10x developers (assuming you believe in such a concept) would be able to work 1/10th as much and would very visibly be missing much of the rest of the time. This would lead to a lot of resentment from people who are less productive and would be having it rubbed in their faces.
To get to a place where people are judged purely on output we would need to change society such that the notion of equality was essentially never mentioned or thought about at all. Because people's productivity is wildly, wildly unequal.
But last year, 2 of my friends fire their 5 employees and started again, them alone. They made the calculation: there productivity ratio was better with only them 2, than with the 5 part time workers they had that they were paying full time + benefits. And their team was "good" in my book. Most teams I meet are not, and I travel from companies to companies all the time.
If this were really the problem, it would be pretty easy to solve... (HINT: this isn't really the problem!)
These factors are irrelevant when compared with the fact that the active population essentially doubled since WW2 with women entering the workforce.
I have worked at a job you describe where people do not do much, but I would hardly say that is the norm.
Especially for people on the lower end of the pay scale. In my experience they typically work more than they are paid for (forced to work off the clock) than there are people just sitting around on facebook.
That's great for you that your life is so comfortable but do not assume it applies universally.
You really think the working poor in this country who have 2 or 3 jobs are just on facebook all day? This has to be one of the most out of touch comments I have ever read on HN.
Disregarding the quality of the work, the most obvious solution to the ubiquitous presence of overtime in the industry would be to hire more people, but there doesn’t seem to be enough money to go around - especially if you want to do something even slightly outside the norm.
I'm an independent contractor, I just go from company to company. I just witness it, it doesn't apply to my life.
> I have worked at a job you describe where people do not do much, but I would hardly say that is the norm.
You stay very long at the same company. I don't. My job involve dev and training, and hence I go from company to company. There is a trend in what I see.
Hardly. My job consist in dev and training. I go to those companies, and I'm paid because they can't get things done. Then I go to another one, rinse and repeat.
This situation plays very much in my favor.
My whole working life, I've never used an alarm clock, and I never stayed late unless I was late on a commitment that I made. (This is not the same as some artificial deadline dreamed up by someone else.)
I come in late, go home early, sometimes I don't even show up—whatever.
If you do this consistently, and deliver in your role of course, people will get used to it and they'll stop bothering you about it.
For some folks this kind of flexibility is eminently attainable, for others it juts isn't possible.
When things get busy, I don't hestitate to pull some weekends for my boss because we have a mutual understanding. I get paid almost twice as the going salary for Silicon Valley and I happily work my ass off for the company. It's win win for everyone
It depends what you sign up for.
There are 'availability' jobs and 'ability' jobs.
The more you try to find a job tailored to your ability, the less people tend to demand your availability.
They will try to demand it anyway, but if you're good you can get them to overlook it.
For now I'm lucky enough that I can live this way and still make customers happy.
Most jobs do not function like this, to think otherwise is delusional. At every single employer I've ever worked for, if you left early or came in late despite accomplishing all your work, you would get in trouble. I have seen it happen over and over again.
Typically, they will claim that you could have accomplished more work if you were only there for the extra time, regardless of the reality of the situation. Your time outside of work is worthless to the company, and they would rather waste your time so that they can (possibly) squeeze another drop from you.
A minimum wage job would have set hours - clock in and clock out - so his comment (strategy) would not be applicable.
People believing in effective markets would of course protest and claim such enormous inefficiency can't possibly exist. Somebody will simply start a company without bullshit jobs.
However I think there is a good explanation why this doesn't happen: https://medium.com/@Jernfrost/why-do-bullshit-jobs-exist-4f5...
In short, in any complex organization bullshit work will start accruing and there is no good mechanism to week out such jobs, because the people doing those jobs will have zero incentive to tell their managers that their job in pointless and not needed.
I've tried researching this on reddit and seen that a lot of work people do could have been automated. The people doing those jobs also frequently see this. However they have no economic incentive to do so.
This has lead me to contemplate that guaranteed minimum income has merits, because it would remove the disincentive to make yourself redundant, to some extent. Of course not in the case where your bullshit jobs is very highly paid, which is frequently the case.
We might ask ourselves what "leading economic indicators" might look like when this was happening...
A lot of this is really just need because we live in a free market economy where we need to sell stuff to people. We can't just give it to them if they need it. OTOH how would be allocated resources effectively if we did not have the market.
The soviet approach seems to have been a big failure. Although I suppose wit the internet, computer, crypto currencies etc, there might be other ways of organizing labour and allocating resources.
At least I wish people would acknowledge something is fundamentally wrong with how we organize society today. Unless we do it is hard to pour resources into finding alternative ways of doing things.
TL;DR: Firms are not people and can't strive for efficiency. Only individuals can. Once the financial incentives of individuals are misaligned with the financial incentives of the firm, the firm is going to lose (and pay for useless jobs).
I probably disagree with the notion that people actively seek to create bullshit work for themselves, initially. I think a lot of bullshit jobs is something people realize they are doing after the fact when it is hard to change careers or find another job. They then engage in a sort of cover up operation to avoid losing that bullshit job.
Of course there are a lot of bullshit jobs which exist due to regulations and red tape. People might seek a lot of bullshit jobs simply because they have high status and pay. E.g. it is well paid to be a lawyer and high status, despite the fact that a lot of lawyer work, is just bullshit.
I also think everybody could have been employed despite removing bullshit jobs, it is just that people would simply need to work a lot fewer hours. This assumes of course a gradual change. If we removed all bullshit jobs tomorrow, there would for structural reasons be a lot of people who can't change to other activities easily.
I also think that a lot of bullshit work, isn't 100% bullshit. There are perhaps 10 hours worth of work to be done each week. However workers have no incentive to expose that, because otherwise they could not excuse the pay they get. Also people are proud and don't want to look like they are lazy or working less than others. So in a sense people end up doing bullshit to simply not look worse.
So part of the solution is also to stop valuing work so dam high. We have a tendency to glorify work. I personally think people would end up doing useful things for the most part if given the choice. People are unnecessarily concerned with others being lazy.
It's a matter of rationalization IMO. You have no job. Then you get an offer. The job seems to suck and be useless so you come up with reasons why it matters. That way you can both put food on the table and keep self-esteem.
> So part of the solution is also to stop valuing work so dam high.
That may be already happening:
"Beginning in 1973, the GSS showed a card to the person being interviewed and asked, “Would you please look at this card and tell me which one thing on this list you would most prefer in a job?” The card had these choices:
* High income * No danger of being fired * Chances for advancement * Working hours are short; lots of free time * Work important and gives a feeling of accomplishment
"After the subject gave his first priority, the interviewer ascertained which were his second, third, fourth, and last priorities. The item was given in almost every survey from 1973 through 1994. Then the GSS dropped it for the next twelve years, perhaps because the answers had been so consistent. Among prime-age whites, the most popular first choice was always work that “gives a feeling of accomplishment,” getting an average of 58 percent of the votes in each decade. The two least-chosen first choices were always short work hours (averaging 4 percent) and no danger of being fired (6 percent).
"In 2006, the GSS resurrected the question, and the results were startling. The 58 percent that had always voted first place to work that “gives a feeling of accomplishment” was down to 43 percent. First-place votes for short working hours more than doubled to 9 percent. “No danger of being fired” doubled to 12 percent, with another 13 percent ranking it in second place.
Working more hours is a way to increase your rank. Thus it becomes an arms race between the employees. You work 40 hours, I increase to 45, then you increase to 50.
So, to some extent, hours worked don't correspond to hours needed to be worked for productivity purposes.
consumption is high because marketing is that good. go read any of the popular brand subs on reddit and you will see people making stupid purchasing decisions daily and many seek justification. Its really scary when people are trying to save fifty or less on a one to two thousand dollar purchase because it then costs too much; the clue that indicates the purchase at the lower amount is too much escapes them
Consider also that a large portion of consumer goods spending is on cars, which are basically just a substitute for living on more central/expensive land. In the end it all comes down to real estate.
I think it would be more fair to look at, how much does it cost to build a house, and divide that cost on the time it may be used. We should not really add the price of property to the equation.
If one does this I will bet that consumer goods make up a much bigger part of the economy than you think.
Instead it is more like the producers create their own demand by emotional manipulation of the consumers.
Turns out globalization is good or bad depending on who you are and where you are.
You may be correct, but it's hard to trust this sentence without a proper source.
https://www.economist.com/news/international/21719790-going-...
OK, let me make (part of) my point explicit: Inequality is frequently posed as a causal factor for a lot of things in ways that make no sense or when something else is actually meant. Such as:
1. Using inequality in place of poverty. The paper you link to explicitly excludes the simpler poverty hypothesis, but most argument I encounter on the internet doesn't bother to. (And then there's the tendency to jump to inequality as primary explanation when there's clearly something else going on screwing things up...)
2. In some cases inequality is posed as a causal factor in cases where the relation is clearly logical or compositional, not causal. People make statements basically analogous to "all-cause mortality causes murder". You could say the causation is backwards there, but in truth there's no causation at all -- it's a logical relation, not a causal one.
3. To use what's discussed in this paper as an example, sickness, like poverty, is fundamentally local; if you look at it at the group level you're simply aggregating what's going on with individuals. By contrast inequality only makes sense at the group level; it's fundamentally nonlocal, in a sense. The authors of this paper you link address this, noting that they're not committing an ecological fallacy because they're only looking at health outcomes at the group level. Nonetheless health outcomes at the group level are fundamentally an aggregate of individual health outcomes, so the question remains how individual health outcomes are affected. The authors provide some plausible speculation on this point; on the whole I think they've supported their point pretty well. But I think in general we should be quite skeptical of such explanations without a good reason to the contrary, because causation is fundamentally local; if you need to look at a property of the whole group when discussing individual outcomes, that's a point where you should stop and ask if that's really what's going on here, or whether there's a simpler explanation.
Worth noting is that the paper you link to, though it mostly discusses this nonlocal measure of inequality, when it comes time to talk about a mechanism, about "biological plausability", they talk about local gradients in social status. And if that's the real explanation then I think talking about this in terms of "income inequality" is misleading. (The authors get around this, as I noted above, by saying they're only going to focus on the group outcome, not individual outcomes. But for the reason I said above, to my mind that's just evading the problem, or solving an easier problem in place of the real one.) Because then it's not nonlocal inequality that's causal, but rather local inequality, and not inequality of income but of social status. Which is not the thing the authors are discussing in most of the paper! The thing the authors are claiming is causal, is not the same thing they actually posit as a mechanism. One needs to be careful here. These details matter.
Consumer capitalism however not only created productivity gains and satisfied all demands (for which should be rightly praised) but also created new demands (like better healthcare, education, technology items, vanity items etc.).
It is however characteristic of money economy (urban economy) that there is nothing limiting human need to accumulate capital and consume.
In subsistence economy (non-monetary) whenever there is a surplus people rather stop working then trying to accumulate more and they tend to focus on accumulating social capital.
[1] https://www.theatlantic.com/business/archive/2016/01/inequal...
[2] https://www.theguardian.com/business/2008/sep/01/economics
That does not change the fact that wages/salary have been relatively flat in the US for decades but wages/salary + health insurance has very much not been flat.
How exactly can you live better than your parents, assuming they had a house, a car or two, phones, TV, computers, access to supermarkets of all kinds, enough money for living expenses and a hobby or yearly vacation...
If you are thinking of things like the cost of college don’t forget to factor in how many people go to college today versus back then. If you are thinking about the cost of housing, we still have the same land and a growing population. I’m city centers the demand has multiplied significantly since then so we expect relative cost of the land to multiply.
Even if material wealth has improved, economic insecurity is worse. People feel worse off as a result.
Well, that's my point: I'd compare them to the lower-middle or "working" class. Your grandparents had a lower inflation-adjusted income (speaking in general here; obviously there will be exceptions) than truck drivers and part-time factory workers today (though today's need a high school diploma whereas your grandparents didn't).
That's why I mentioned the house size: they owned a house that -- in most cases -- would be so small that it couldn't sell on today's market. They owned a car without air conditioning or an entertainment system. You can own a tiny house and a featureless car for very little money today. But people aren't satisfied with the standard of living that satisfied your grandparents.
That's rather unlikely. The average new home size in 1960 was less than 1000 sq ft (it's over 2500 sq ft today), and pretty much all existing stock at that point was under 1000 sq ft. Meanwhile, most urban apartments were SROs or what would today be called studios. Over the decades, the houses got additions and the apartments had interior walls knocked out and got combined. Our obsession with floorspace is one of the big drivers of housing being so expensive.
In tech stuff, we definitely have more stuff. A phone+plan for every person over 13. Laptops for most people. But, you can't function without these. It's not really a discretionary spending. A student (for example) is at a disadvantage without those things. In fact, the student is also consuming more education then in Keynes' day. That's also a competitive consumption, that you must buy in order to participate in the job market to a greater extent then before. Housing in a lot of urban or semi-urban areas is also competitive. Median house prices in these cities is a multiple of median salary, and prices don't scale well below the median.
So... I think the statement is true in an almost tautological sense. But, very little is discretionary spending. Most of it is competitive and in a competition the median person is still the median person.
> you can't function without [a phone
> + plan once you're 13yo, and laptop].
> It's not really a discretionary
> spending.
Yes you might need a smartphone and a laptop for school, but those are going to cost at most $200 used, but people conflate the need for these devices with the fashion statement of owning the latest iPhone or MacBook.
This would obviously be good because we would be valuing things closer to the actual benefit that they bring, but its not the case that we can ALL just have dirt-cheap few-year-old laptops.
In any case, I think, with respect, that you're postulating an absurd hypothetical scenario that's never going to happen. There's always going to be some people who buy new and others who buy used, think used cars, clothes etc.
Phones & laptops are now a mature technology, the days when you need a new computer to run spreadsheets or browse the Internet are over. Nowadays a 5 year old computer is just as good for pretty much any application except AAA games.
The GP was mentioning students as needing phones & laptops. I'm pointing out that students in particular think nothing of buying say used clothes because they don't have a lot of money, but for some reason a lot more people have expensive new gadgets they don't need.
...yes we are. Thankfully, nowadays more and more people "drop out" of "traditional media exposed society" and the brainwashing is starting to wear off. Too bad we're at the end of Homo Sapiens' days and there will not be any benefit to anyone though anyway (or maybe too good, a species as miserable as ours deservs being accelerated into extinction anyway)
Everyone else is browsing reddit or instagram all day in the office. Just ask any redditor.
You'll find this in Adam Smith:
[I]n every part of Europe, twenty workmen serve under a master for one that is independent; and the wages of labour are everywhere understood to be, what they usually are, when the labourer is one person, and the owner of the stock which employs him another.
What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen....
https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...
Ricardo, rent vs. wages, as well.
Wealthier males work more because they have access to better paid, more fulfilling and more prestigious kind of work. Poor males work less due to the fact that they have access only to shitty jobs with shitty pays and no prestige, so, for a lot of poor people, working may actually degrade your quality of life, since you won't be able to match or improve upon the lifestyle your parents provided you.
Women work more because they need to, either because they have children to take care off by themselves or because they've grown up watching the suffering of their mothers due to the oppression on females in society, and they sure as hell don't want that for themselves.
People mostly buy stuff to show off, and then lie to themselves that it is because they like the stuff they bought, illusion of power. Being well off doesn't really matter socially if people don't know about it, bragging is seen as offensive so people do it in an indirect way, by purchasing expensive stupid shit, so that they can feel they're not just bragging, they have "good taste".
People don't want to be well, they want to be better than others, and they'll seek to achieve that in the way that is easier and more convenient, which is vulgar display of power, since hitting people in the face usually leads to problems, that is now achieved through the purchase of excessively expensive items just to show you they can.
UBI will arrive slowly, incrementally and by the time it or an equivalent is finally here nobody will celebrate because it won't seem like a big deal. It'll just be the result of welfare and other services getting better and better over time, with more and more lightweight "bullshit" jobs that require essentially no exertion or risk and lower and lower hours until one day people find that the benefits system is so generous that having a job has become a lifestyle choice.
But we have a long way to go to get there. It won't happen in our lifetimes. Almost all increases in wealth at the moment seem to be absorbed by healthcare and social care costs. UBI makes no sense whilst people are being bankrupted by health costs. Priorities people!
Do that and competition inevitably creates what we have - long hours miles from home for a pittance.
However after watching I think is only a way of life vs way people view others.We would soon notice something we want to notice
The more resources we have - especially necessities such as food and water - the more children can be born. And eventually the population is large enough that the amount per person goes back to what it was before.
That doesn't necessarily mean everyone has to work. But in the current economy, where you have to work to afford the rent, many people work long hours.
However, once you factor in the growing unemployment, you can see that, in fact, there is less work to go around. But people still need to pay the rent, eat and drink water!
You are expected to work 60 to 80 hours a week, or else you get bad performance reviews and fired.
In most at will employment states the company can fire you for any reason not related to civil rights law. They don't like your tie, fired. They don't like the way you walk or smile, fired. Someone accuses you of something they have no evidence or proof of, like being rude, you are fired.
This is done to avoid civil suits, fired for no reason, or fired for a petty reason not related to civil rights. Say you have 25 years in IT, you are African-American, but in your older age things change. You wear your tie differently because you found a new tie knot style. They can't fire you for your race or age, so they Instead fire you for not tying your tie the same way everyone else does.
I wrote about this problem before and nobody took it seriously.
Would be a dream to work just 40 hours per week.
1. Achieve maximum employment
2. Maintain stable prices
Both of which are counter productive to the goals of automation.
This seems like the root of the problem to me, as the Fed is a "super admin" of the economy.
Ok that only works for people who are not struggling around the minimum wage.
So why do all these shitty jobs and hamster wheels exist? To give all those "great-men" the ilusion of importance.
Savings have been systematically eroded for 50+ years. Total taxation is now 40+% of GDP. Private sector workforce participation is dropping. Regulatory burden dramatically increases health care, housing, and transportation costs.
All of these policies have worked to keep you in the office.
Practically all savings give returns above the inflation. Interests respond to changes in inflation. If you look at the real returns, you can see that they are surprisingly stable.
Fixation with nominal valuations is a sign of financial illiteracy.
http://www.taxpolicycenter.org/briefing-book/how-do-us-taxes...
Those numbers seem very low for Ireland. I'm willing to be wrong but something seems very off here.