Hacker News Reader

Comment by kevmo | Hacker News Reader

We don't need more big data studies to figure out what is causing poverty or how to fix it. Poverty in America is caused by:

- real wages decreasing since 1980

- the commoditizing of labor (e.g. janitorial companies, the "sharing economy")

- ever-decreasing investment in infrastructure

- tying wealth to real estate prices

- an educational system that leaves many young people mired in debt

- tying healthcare to employment and the price of healthcare in general. The first kills labor mobility. The second either bankrupts or kills you.

- mass incarceration destroying families and individuals

- regulatory capture allowing big businesses to beat down all the small ones

- a monoculture that tremendously decreases resiliency

View on HN

I disagree with the comment below you claiming there's no evidence to support your claims.

You don't have citations in your post, that's because it's a summary. There are huge amounts of evidence backing up your claim.

A bigger issue than the uselessness of this initiative by facebook is the empty, bald-faced PR "Hey, look over here!" distraction that they're using to cover their callous complicity in disinformation campaigns.

That bothers me more.

Thank you: I too found the post a simple summary of obvious things. And I too am skeptical of Facebook's motives here: though part of it must surely be 'let's find causes for poverty that allow us to continue to be Facebook, and allow internet 'unicorns' to continue to be unregulated industry-devouring titans'.

Basically, Facebook needs to find a solution to poverty that ends with them consuming and disseminating the data of billions of people who happen to not be desperately poor. In many ways their best case is all the better if their data is of solvent people.

You’re completely right. This belongs in the same class of disgusting PR moves to grow userbase as Zuckerberg offering for Xie to name his firstborn son.

> cover their callous complicity in disinformation campaigns.

They've been on the defensive for years now. Recall how vehemently they downplayed Russian attempts to influence via Facebook ad buys and troll accounts

But to the general point, we've known how to fix the problems for decades but actually attacking issues of income and wealth disparity is asking for the people who are currently benefitting most from the system to give something back. And if history tells us anything, it may take violent revolution to see a real fix.

Not necessarily. William Barber and others are resurrecting Martin King's "Poor People's Campaign", and it probably follows that non-violent resistance of some sort can work, and is the best path both practically and on principle.

Also I believe in empathy as an intellectual response, i.e. in some sense the "enemy" can't help the way they are and should be given complete amnesty after they lose.

The claim of the OP is "We don't need more big data studies to figure out what is causing poverty or how to fix it." Then a list of other things that have nothing to do with that. If the OP wanted to prove his/her assertion about the lack of need for further studies then they should have explained why there is no need for further studies. Their post says nothing about that, just makes a bunch of statements about "settled claims."

I never once claimed there was no evidence for the list of claims about inequality made above. In fact I agree with most of them. But they have nothing to do with the main claim that "We don't need more big data studies to figure out what is causing poverty or how to fix it." That's a controversial statement if you ask me, but the OP managed to distract everyone from it by posting a bunch of generally agreed-upon claims about inequality. (Which arguably will be re-enforced by more data driven studies.) It's a pretty good rhetorical technique for getting people to implicitly agree with you about something you actually disagree on: say something that is controversial and then quickly say a bunch of stuff the other person agrees with.

Along the way guess what, now everyone is implicitly defending the claim that there should be no further research on inequality. If the OP's post consisted entirely of "We don't need more big data studies to figure out what is causing poverty or how to fix it" then they'd have people disagreeing with them, but you should note they've literally said just that, since they have provided no evidence to support it.

Could you please tell me how amazing Facebook's big data will help to deal with Comcast and butchered net neutrality, for-profit prisons, incredibly criminalized society, insurance/out of network healthcare prices and a gig economy slowly taking the job market over?

Where did I claim that? I think using Facebook's data for social studies is a stupid idea. Again that has nothing to do with the OP's post.

It's interesting how you list a bunch of hypotheses about the source of inequality, with no evidence, and yet also claim no data driven research is needed to validate them. Perhaps your comment needs citations and you should focus on why the existing evidence for your claims is so overwhelming that they are beyond being disproven by further understanding.

Edit: I should note that I think performing social science on Facebook data is creepy and weird and potentially unethical.

Precisely so.

The essence of the scientific method is taking what you think is true and proving it with a higher degree of accuracy.

This is why studies are repeated by other people, to see if the results match up.

I personally believe there is a lot more truth to this list than a "well researched" study backed by statistics that you can make say whatever you want (as an alert person may notice when reading the news).

I'd even go so far as arguing that in-depth studies with their typical bias (to use a nice term) is what has made so many young, highly educated "evidence based" thinkers genuinely believe straightforward & consistent-with-observable-reality explanations like this are literally incorrect.

All of these claims are well-trod and have mountains of evidence. It's not necessary to cite references every time you say something on the internet, and it's not a meaningful rebuttal to point out the lack thereof.

I was not asking him to justify the claims about inequality, but to justify the primary claim that no further investigation is needed. When responding to an article about using data to draw conclusions about inequality, and claiming no further research is needed, then obviously any constructive comment should explain why no further research is needed.

Accurate breakdown. If you looked at my life as a 14 year old, you wouldn't have been able to picture me as a 28 year old. If you looked at me as a 28 year old, you wouldn't have been able to picture me as a 33 year old. In the last 5 years I found the top of my game where people didn't want a poor person there; got knocked down and it's been interesting adjusting to being chronically impoverished with issues increasingly piling up--relatives now comparing me to my cousins who can't hold down dish washing jobs. Meanwhile the tech giants are still trying to recruit me, and I know when I start work I'll be knocked out again because, like my last several high salary jobs in the BA, I've entered $1000s in debt with several years of poverty, causing rejection by coworkers (poor attire, untraveled). Crazy... miracle or relocation seem to be needed. I'm optimistic these last years will be a hilarious memory that toughened me up (in typical ign'nt American fashion, temporarily embarrassed millionaire).

I recommend a capsule wardrobe. Buy a decent set of monochrome shirts/pants and mix them around --> many good outfits!

https://en.m.wikipedia.org/wiki/Capsule_wardrobe

What industry, may I ask?

Yup. I'm an entrepreneur who ran a sole proprietorship software business since 2007 or so. I've been at the top of my game to the point where I now enjoy a reputation as a key DSP guy in my industry (pro audio, recording studios etc) but I watched the income of my business collapse over the years, and got knocked down by that.

I observed that my troubles exactly tracked the Labor Share of wages as tracked by the Fed: I was impoverished to the exact proportion that the country (and the world: I did and do a lot of export) didn't itself have money. If labor boomed, so did I: if labor took a downturn, so did I.

I retained such a high reputation that I was able to withstand a switch over to Patreon when my payment processor went out of business owing me months of payments: from my observation if you transition to a patron model it literally decimates your earnings, but they become steady and may grow.

I am also typically American in that I figure if I double down and work ten times harder and don't die, it'll all work out, and I'm getting up to what would be minimum wage for a factory worker (this is 97th percentile of Patreon accounts, by the way: I'm in the top 3% of all Patreon and trying to get into ITS 'one percent') and doing things like releasing all my existing products for LinuxVST and methodically open-sourcing it all under the MIT license.

I figure even as an open-sourcer I will not succeed unless I can be ruthlessly exploited for my work, and even as a patron-supported person I'm still subject to the power-law factor of 2018 life where unless I'm exploding in success, I'm failing. So my motivation can only be: exploit and crush the world, or out-give the most generous people AS IF I was already that millionaire, a Bill Gates just looking for ways to give it away again.

So I'm doing the latter, and we'll see whether I literally live to do more of it. Any little financial thing crushes me and breaks my spirit for a while, costing me valuable work time. My only recourse is to charge off entreprenurially into new prospects and hope for the best. The funny thing is, that's the same recipe for if I was trying to prosper with new commercial products, and I do free everything now (increasingly including ideas).

In an America with a saner Gini coefficient, I would probably still be close to broke, but I'd have a much huger cash flow and would probably be employing people. I know I can't do everything I envision, and I would absolutely be hiring if that was remotely possible.

Hang in there man. You're going to be competing with me for the top spot on Patreon ;). I've been setting up the same style operation. Willing to live in car if I need to, the stuff I experienced in the workplace actually had me walk off my last two jobs ($150k range). For personal reasons I refuse to tolerate mistreatment, so I've 'dug my own grave' so to speak... although I really see light in this new economic model. Personally I'm shooting to form a B corporation.

I think you can do better on licensing. I'm doing AGPL, holding my power to individually licensee as necessary (with some pieces under more/fully permissive licenses where it makes sense--not cents :). I've got cool demos online, can track me down pretty easily. Indeed, studying all the Machiavellian stuff I can, given it's clearly being used at higher levels. I just want to be excellent to each other and make cool stuff, and eat.

Hey, uh. I'm an electrical engineering student looking to go into audio DSP. I'm not sure how much we have in common, but hey, solidarity on the broken spirits bit. I've been having a really emotional day today. Wanted to comment, even if I'm not sure what I intend to accomplish by doing so.

Am I reading this correctly in that you're getting hired by large tech companies, presumably for large tech company salaries, and then getting fired because of your attire and that you haven't traveled?

These seem likely to me as well, but isn't the point of the study to actually check that's the case rather than assuming it? It'd be terrible if later on we figured out there's another underlying cause which we could have been tackling instead.

Your bullet points these may well be immediate causes, but if you say something like 'real wages decreasing' well then you need to ask, what's the cause of that? And what's the cause of whatever caused that?

Many studies have already checked and confirmed these things. There is a wealth of research on poverty and inequality, which is why I say we don't need more studies to figure it out -- we already know.

Now is the time for action in response to the findings.

Please provide some sources for these 'many studies'.

Dude, go find your own studies. The OP content is now at the level of "Sun is bright and hot" level of having been studied.

At some point, it stops becoming on us to link to studies for well-documented stuff, and on you to show the intellectual curiosity to find it on your own (and intellectual honesty to accept it).

Regarding the claim that “real wages have decreased” — yet I have studied that show such claims ignore the dramatically lower prices for consumer goods and the dramatic increase in non-wage benefits.

I am not arguing that wages are up or down, but there is enough reasonable doubt that such statements aren’t in the realm of “the sun is hot.”

Science should be continually challenging assumptions — especially social science where there is huge opportunity for bias and inconsistently.

Begin with looking at U-6 as the actual unemployment rate, combine that with the gradual increase in labor force participation rate since the 70s (as people are compelled to work in two-income households to survive, etc) which has been collapsing in spite of the pressure only increasing further (disability? people becoming too broken to work anymore?) and the decline of real wages in lower percentiles against inflation and productivity gains.

To people in the real world all this is simply lived experience rather than abstractions. It's tangibly, obviously real.

https://www.cnbc.com/2016/04/01/charts-whats-the-real-unempl... http://www.epi.org/publication/charting-wage-stagnation/

> Your bullet points these may well be immediate causes, but if you say something like 'real wages decreasing' well then you need to ask, what's the cause of that? And what's the cause of whatever caused that?

The root cause isn't a known thing to my knowledge.

Robert Putnam (Harvard prof who has advised several presidents) has been looking at this for a while now. I had the privilege of hearing him talk about it a couple of years back.

His objective is to identify the mechanisms through which economic inequality interacts with things like social cohesion, examining hundreds of indicators over the past century and further, such as the frequency of bipartisan bills, the incidence of social club membership, unions, incidence of interracial relationships, etc.

I recall a few notable points; Firstly social cohesion had a low around the turn of the century (1900) and peaked around the mid 1960s and is currently dropping. Secondly, economic inequality indicators follow the same pattern, but trail social cohesion indicators by 5-10 years if I remember correctly. Thirdly, the effect is noticable in the US (and to a lesser extent the UK) but varies a lot internationally.

(I don't have links, this was all verbal. He said he was considering putting it in a book, which to my knowledge is not yet published)

OK, but how does lack of social cohesion cause a drop in real wages? There are a few mechanisms I can think of, and probably multiple are operating, but one way is that an atomized electorate does not have the ability to resist changes in the law that are detrimental to their broad interests. Thus, you get massive pro-corporate/shareholder legal changes that create increased competition for labor.

What's changed is that when a businessman needs some work done, the first thing he is going to look at is if the job can be automated. The second is that he'll look for lower cost offshore labor, made possible by cheap shipping and telecommunications, but also free trade agreements. The third is that he'll look to hire a legal or illegal immigrant who will take a lower wage. The fourth is that he'll look to move from a northern state to a southern right to work state, made possible by Taft-Hartley and its successors, and pliable Southern legislatures, where he can hire non-union labor who will take a lower wage. With so much new competition for labor, much of it government created, it's not surprising that economic growth is not flowing to labor.

Interesting. That sounds like what helped income inequality was recognizing that other person as one of "us", whom you could not treat as just someone to exploit as severely as possible.

Doing more studies reminds me of the behavior of the tobacco companies for a long time. They always wanted more studies and bought more time that way.

Good list. I would add a decade of low interest rates dramatically increasing the cost of college tuition and rent in major cities.

What's the mechanism whereby low interest rates cause high rents?

Maybe cheap money has caused increased wealth to those closer to the 'watering hole' ( capital flows ), thereby inflating rents in metropolitan areas close to said 'watering holes'. If you're 'in' you can afford it.

There are of course other major, possibly greater, factors like, NIMBY housing policies ( incl. rent-seeking boomers ).

In my experience, you have more people renting homes that are 100% leveraged, so your paying their crappy mortgage, with some "upkeep" costs on top. If interest is higher, more people are renting houses with more equity tied up in the house, so their costs are lower and they rent cheaper.

Here is a good article on the subject :

https://www.investopedia.com/articles/mortgages-real-estate/...

Would imagine low interest rates increase housing prices as more people can afford a mortgage, higher housing prices increases rents

The more people who can afford a mortgage, the fewer people that need to rent in a given market.

It seems obvious that low interest rates would drive up property prices. It's less clear whether that would drive up or down rents.

It would tend to drive up rents by: requiring landlords to tie up more capital in new purchases of buildings (decreasing their marginal propensity/ability to put new buildings online for tenants), decreasing the number of people buying [increasing the number renting] due to fear of bubbly real estate market or inability to save down payment.

It would tend to drive down rents by: lower returns in other passive investments might drive investment towards rental real estate chasing income (increasing supply), steadily increasing property values might encourage marginal buyers to buy, reducing demand on rental units in an area, foreign buyers might be more inclined to "park money" in USD real estate, some of which could be rented to offset the cash flow.

> It's less clear whether that would drive up or down rents.

Rental properties are convertible to condos. If you make money available to buy property then exactly that happens, which reduces the supply of rental properties available to the people who can't afford to buy even with the mortgage subsidies, thereby increasing rents.

> It would tend to drive down rents by: lower returns in other passive investments might drive investment towards rental real estate chasing income (increasing supply), steadily increasing property values might encourage marginal buyers to buy, reducing demand on rental units in an area, foreign buyers might be more inclined to "park money" in USD real estate, some of which could be rented to offset the cash flow.

Rents are directly related to property values. If property values are higher it takes more capital to purchase a property in order to rent it out, which requires higher rents to justify someone doing that instead of allowing the property to be sold to a resident.

In theory mortgage interest subsidies might not increase property values if the market responded to the demand by increasing the housing supply. But then zoning laws prevent that from happening, so they do.

And there is no reason for someone who buys housing for speculation to rent it out at below market rates. Moreover, it has been a major problem that many of those people don't rent it out at all because at scale not renting it increases housing prices (which is what they want as speculators), leading to a large amount of unoccupied housing in the midst of a supply shortage.

I agree with much of what you posted, but there is a lot of individual incentive to “defect” and rent your speculative/parked real estate. There is no need to rent “below market” for such supply to move the market clearing rent. Merely bringing more supply online tends to change the clearing price.

> I agree with much of what you posted, but there is a lot of individual incentive to “defect” and rent your speculative/parked real estate.

Yeah, I don't really understand their justification either. But they are actually doing it for some reason.

>but there is a lot of individual incentive to “defect” and rent your speculative/parked real estate.

Ah, look it's someone that has never rented property before.

a) You rent your house in a city in California. You figure out your renter is trash, and is trashing your house. You can't move them out for months and they do tens of thousands of property damage in the meantime.

b) You live in a city with rent price fixing.

c) You don't have time to manage the property, but have been burned by poor rental management companies.

Your background investigation on me is flawed. I have rental property experience, mostly good but some including trashed by scum of the earth tenants.

I think you forgot, on your list, a massively de-regulated banking system which since the 80s has been destabilizing the economy and at times even going as far as to profit from it's downfall. This has had the effect of removing real wealth from average people and consolidating it into the hands of a few.

Exactly my thoughts. I don't understand what this kind of study would achieve. Inequality at a society-level is not caused by "individual behavior" which is the only thing the Facebook study will be able to research. It's caused by politics, in general, and it could be fixed through politics.

I don't think that by studying Facebook profiles, you'll be able to understand why politicians take corporate money and try to help only the rich to get richer, or other stuff like that.

Thank you for the mostly common sense. To me, the root cause is:

- Central planners in government who think they're able to positively control and shape society ( because they know better than 'we' do )

This directly contradicts the parent post, which suggested that the root cause was neoliberal economic reforms and divestment from the public sector.

I think parent comment was being ironic.

It's so interesting how two people can see the same list and read it so differently. This was the list:

> real wages decreasing since 1980

This is the problematic outcome itself, not one of the specific causes.

> the commoditizing of labor (e.g. janitorial companies, the "sharing economy")

Caused by labor laws that make hiring full time employees more expensive (e.g. employer-provided healthcare mandates, see below), pushing businesses to hire temporary contractors from contracting companies that take a cut of the wages rather than forming stable long-term employment relationships directly with specific individuals.

> ever-decreasing investment in infrastructure

This is obviously a call for more government spending on infrastructure, which I would agree with personally, but there is actually a "this is still the government's fault" Libertarian position on this -- the government provides crumbling-but-free infrastructure which destroys the private market for providing the same things. If they didn't provide it at all then the market would invest more in it, so the theory goes.

> tying wealth to real estate prices

Unambiguous case of government regulations (zoning laws, loan interest subsidies) screwing things up.

> an educational system that leaves many young people mired in debt

Federal loan interest subsidies again.

> tying healthcare to employment and the price of healthcare in general.

More bad regulations: Tax subsidies and regulatory requirements for employer-provided healthcare, laws that encourage "health insurance" that covers everyday medicine rather than actual insurance against atypically large costs, which inhibits consumers from being price sensitive and thereby inflates healthcare costs.

> mass incarceration destroying families and individuals

Obvious case of "repeal the laws" as the solution.

> regulatory capture allowing big businesses to beat down all the small ones

Large companies control the regulatory bodies for their industry and purposely have rules enacted that favor large scale entities. Remove the rules, restore competition.

> a monoculture that tremendously decreases resiliency

Outcome of bad regulations again -- regulatory capture producing monopolies/oligopolies, regulations mandating specific solutions instead of facilitating multiple alternative solutions, high regulatory compliance costs destroying small businesses, monoculture of federal programs themselves that displace diverse programs operated by localities or private industry, etc.

There is a completely valid position that eliminating regulations could solve all of these.

Every single one of those could be rephrased as "government not doing enough because the free-market hasn't fixed it or is making it worse despite government" So I'd argue that both interpretations make sense in the context of the original list, depending on how you view it. Or what your particular political leaning is.

I think you make some good points, but in many cases it feels like it's just blindly in the opposite direction of the parent comment.

What you cite as problematic regulation is interesting. I'm not sure regulation is to blame for megacorp monopolies. When you have so much money that you can bury any competition, and buy up all the regulators, regulation is effectively useless.

It seems having too much money/power is the real problem. Regulation can only stop bad behavior if regulators have more power than the regulated. That can lead to a stagnation of innovation though.

I kind of feel like we need more monetary checks and balances. Currently, the court system is extremely skewed in favor of the wealthy. Most people can't afford to go to court to protect their interests, so those with more money can just walk all over whoever they want.

> I'm not sure regulation is to blame for megacorp monopolies. When you have so much money that you can bury any competition, and buy up all the regulators, regulation is effectively useless.

It's not just useless, it's actively harmful. The regulations are created at the behest of the megacorp to harm prospective competitors.

The problem is we can sit here and agree that we need better regulations, and call Congress and tell them to pass better regulations, and then a 5000 page bill comes up for a vote. Normal people don't have time to understand what's in it, but megacorp's lawyers do. So if it's something they like it sails right through and if it's something they hate they pay for a truckload of sand to be poured into the gears so it never goes anywhere.

So the alternatives are A) "have megacorp's preferred regulations" or B) "stop federally regulating that thing" and there is no third option on the table. Which do you choose?

"Get a third option" would be great, if anybody knew how to actually do that. But every time anybody has claimed they're going to do it in the last century or so we just end up with option A instead.

It'd be great if we still had Teddy Roosevelt in there, but we don't, and he's not even on the ballot.

> It seems having too much money/power is the real problem. Regulation can only stop bad behavior if regulators have more power than the regulated. That can lead to a stagnation of innovation though.

Fixing this tends to have counterintuitive solutions.

People are always talking about "the 1%" as if the problem is people, but the main problem is really corporations. There is no natural person with more money than Apple Inc.

And the biggest reason for that is that we have a tax system that rewards huge multinational corporations hoarding cash. The only reason the shareholders don't demand their take of the profits is that they know that actually taking them causes a large amount of taxes to be due to both the company and the shareholder. So they take their gains as share price appreciation, which has preferential tax treatment but leaves the huge pile of money inside the corporation.

There are two main things needed to fix that. The first is to replace corporate income tax with VAT, so there is no more incentive for corporations to hold money offshore. And the second is to defer taxes when dividends or capital gains are immediately reinvested, so that an investor who takes profits from a megacorp and invests them in a small or medium business doesn't immediately owe a bunch of taxes, when leaving the cash in the megacorp wouldn't.

The problem is both of these policies will inevitably get characterized as helping the rich, even though their effect is to eliminate the relative costs of moving profits from megacorps to smaller businesses.

Yeah that sounds reasonable. I think you're totally right honestly. I think the hardest part of the problem is that everyone's talking in circles rather than getting to the root of the problem. "Tax the rich" is a vague and easy talking point, but it doesn't get at the true nature of things. What amount of wealth is rich? How did they earn it? How are they currently taxed? etc.

From my experience, it feels like there are so many pitfalls and financial traps designed to catch people moving from the middle class on up. Once you make it to 10 Million +, you can coast from there with no financial burdens, but until then there is always something to get you.

Can you point me to the downhill path to middle class?

AMT for one. If you get a sudden windfall in the form of stock options, the IRS requires you pay tax UP FRONT for the full amount. Even if those stocks are not liquid at all. So say you worked at google in the early days and spent 10k of your savings to exercise your stock options. Those stocks are worth 100 million dollars, but google is a private company and you are still uncertain of it's future.

The IRS will demand you pay tax on 100 million dollars right that minute. Obviously, this would be impossible since you cannot sell your stock, and it's value is only based on speculative appraisals.

Say you somehow got a loan to pay that tax up front. Say the tax was 20 million dollars. Then google goes belly up and your stock becomes worthless.

Too bad so sad! You are on the hook for paying back that 20 million dollars.

My comment was not ironic. If anything a bit hyperbolic. Regardless, I'm on your wavelength with this. Peace

I appreciate that your first bullet point was about real wages decreasing. I wonder how many people know what that means.

Can you explain your last bullet point?

I wondered the same.

>"- ever-decreasing investment in infrastructure"

I understand lack of infrastructure investment is a problem but how exactly does that cause poverty?

infrastructure projects have traditionally been a reliable form of mass non-minimum-wage employment.

Also a reliable form of siphoning public money into well-connected private pockets.

Not saying that the employment benefits aren't real, but the other problem needs to be solved to get the best benefit.

+ bad infrastructure is not evenly distributed and its effects are more likely to impact poorer parts.

And not just that - transportation and communication are pillars of any economy. When you stop investing in them, you are kneecapping growth in general.

I generates high quality blue collar jobs. It spreads the gov money for all the society with clean water, good roads and better transport.

I remember working at a phone company around 1999-2001. Some folks were just getting landlines. I'm pretty sure the same folks are slow to get decent quality internet and decent cell service. Even then, finding a job without telephone service was difficult. Similar situations occur without proper communication now.

Similar problems exist when folks lack sanitary conditions or mass transit proves to be completely inadequate or doesn't exist. At best, the sanitation easily means folks become sick more easily - which can push folks into poverty because the health care infrastructure and care isn't where it should be.

Now, I don't have facts to back these up, but they aren't exactly insane ideas either.

How do janitorial companies cause poverty?

A janitor no longer is an employee of a large corp with their pension plans, stock options, etc. He/She is just a commodity, they can have "on call".

It's not the janitorial companies, it's the laws and regulations that make it cheaper to hire a company to perform janitorial services than hiring a janitor.

It's purely tax law with very broad implications.

To put it in a nutshell, with the way I understand it. Hiring, keeping an employee employed, dealing with labor-law issues, paying for harassment/dispute lawsuits, difficulty in firing misbehaving or under-performing employees are all costs. Costs that a company would not necessarily be able to burden.

So what happens is that all that risk, red-tape, etc gets consolidated in the form of an employment intermediary (for lack of a better term). So they consolidate, optimize and package all that risk and cost into a single figure which is both cheaper (due to economies of scale and concentrated knowledge) and easier to deal with and monetarily quantify. Companies then save money by rather hiring the employment intermediary instead of the actual employee.

I clearly see it immensely in South Africa. Even in the software-development industry, where software-development firms are called "body-shops" because all they do is re-sell developer-hours rather than working on projects. The client explicitly interviews, selects and has the developer sit in their offices under their management team with their hardware, etc. It's made worse in South Africa because there is no at-will employment, and the government has made it ridiculously difficult to dismiss/fire employees even for perfectly reasonable and straightforward reasons.

> So what happens is that all that risk, red-tape, etc gets consolidated in the form of an employment intermediary (for lack of a better term). So they consolidate, optimize and package all that risk and cost into a single figure which is both cheaper (due to economies of scale and concentrated knowledge) and easier to deal with and monetarily quantify. Companies then save money by rather hiring the employment intermediary instead of the actual employee.

Which is good for everyone. It's good for the first company, because they're saving money and can either deliver more profit to shareholders or they have more money to reinvest into the company. It's good for the janitorial company because that entire company wouldn't have existed before. Everyone there not scrubbing floors has a job because that company exists. It's good for the janitors because more janitors can be employed (again through economies of scale).

Also, wealth hoarding/tax evasion.

Even if some or all of the items on this list are true, to present them as obvious and unquestionable, without any supporting evidence, belays a shocking amount of arrogance that I'm surprised and embarrassed the HN community has deemed worthy to merit with top comment status.

It's a conversation, not an essay.

Why not smash one of the points with data if you think that is the way that everything should proceed?

Especially when the article was mostly about social mobility, rather than poverty per se.

This list isn't really anything different than your standard Democratic talking points and doesn't even directly relate to the article. Not sure what it's doing as a top comment here.

You're inferring that poverty and inequality are the same. Though very connected on many layers they are distinct categories.

For instance I am above the poverty line, yet can be far outranked in monetary scale by a reasonable 40% of society in my country. I could be seen as having income inequality for the value I contribute to society and yet not fall onto the scale of poverty or even lower income.

Technically the arguement could be made that the difference between the top 5% and 0.5% of society have a far greater inequality between themselves than the rest of us. Poverty is absent in this context.

Reply on news.ycombinator.com