'The Gig Economy' Is the New Term for Serfdom
truthdig.com
truthdig.com
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"The ruling capitalists will be as vicious as they were in the past. Nothing enrages the rich more than having to part with a fraction of their obscene wealth. Consumed by greed, rendered numb to human suffering by a life of hedonism and extravagance, devoid of empathy, incapable of self-criticism or self-sacrifice, surrounded by sycophants and leeches who cater to their wishes, appetites and demands, able to use their wealth to ignore the law and destroy critics and opponents, they are among the most repugnant of the human species."
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This article is just individual anecdotes mixed in with rants taken straight out of a socialist recruitment pamphlet. I'm open to different political opinions, but this is just ridiculous. Can anyone really take this seriously?
Additionally, I'm not convinced that regulating Uber and Lyft as heavily as we regulate taxi companies is a good idea. Taxis are a very entrenched industry buried in red tape, which is part of why they were so expensive and inconvenient. Uber and Lyft have been so successful because there was a desperate need for a ride-hailing solution that didn't suck.
https://www.nbcnews.com/business/consumer/most-jobs-created-...
* more like serfdom than having several bosses you can replace as needed
* historically more of an anomaly than juggling a few side hustles like fishing and delivering mail and giving boat tours
Besides, it seems like employment law is more to blame for the lack of full time jobs. At least more to blame than companies that hire part time workers. If, economically, we want more full time employment, it needs to be more attractive to workers and employers than lots of part time employment.
Maybe companies have to pay into a health-care tax for part-time workers that would get covered by medicaid, plus a part-time worker fee/tax.
I wonder what the unintended ramifications of this would be. People end up working as full-timers for a contracting company that gigs out its individuals like current employment agencies? Companies try to classify everyone as a 1099 contractor? Probably not...
Translation: steal more aggressively from people choosing to work less, than we steal from full time wage slaves.
I love my gigs and the freedom of doing freelance web, software, uber driving and also small sales.
I only work 20-30 hours per week as I see fit and can choose who I report to and when I take time off.
Why should the government steal more from me for that?
I do agree though that a tax system that punishes people who for working less hours is essentially a regressive tax and thus a poor idea.
The history of taxation is one of tolls, robbery, piracy and skullduggery. Source: https://mises.org/library/taxation-robbery
The word I should have used is Robbery. Not theft.
Readthe founding father's of US constitution for their thoughts on this kind of income tax.
In fact, Income Tax was promised to be temporary to fund war efforts. Liars.
Any compulsory demand to give up your labor and property at the threat of being locked in a cage, or killed is straight up robbery.
Also, your comment is Statist because we do not have a relationship to the "government". We have a relationship to the men with guns that show up at your door when you do not compulsorily give up 40% of your labor and property.
When you put that aside, it's a different beast.
In the UK, DPD, who are Amazon's outsourced delivery drivers, recently killed someone because they fine "contractors" who are ill and he worked himself to death[1]. We have employment laws that protect against this that are being circumvented by 'disruptors' to kill people for minor savings.
The worst part about this, if you follow things like what happens after minimum wages are introduced, price increase are miniscule, sales don't drop. So if you look at the inverse, the misery these 'disruptions' are causing give little to consumers and are extremely damaging to society.
[1]https://www.theguardian.com/business/2018/feb/05/courier-who...
Replacing one problematic system with another that rearranges and changes what the problems are isn't always a net win.
Assuming that any capitalist enterprise's goals will align with and optimize for the long term general health of society is frankly ludicrous.
Additionally, plenty of expanding companies are subsidized by investor money. You could say the same of Netflix and, until recently, Amazon. The point is that investors see potential for them to become more profitable down the road - the same is true of Uber and Lyft.
Of course, you're right that Uber and Lyft are not run by saints and they will have their own problems. But so far I see it as a net gain over the old taxi system.
More cabs would likely do the same.
Not everyone gains by having lower fares if you need to get to work during a busy hour, as mentioned in the article. Surge pricing and weird pricing schemes makes it difficult to plan when money is tight.
And they do mention that Uber drivers aren't exactly better off. "not as good of a living" is one thing. Poverty and homelessness is quite another, and seems to be happening on both sides of this.
Want competition? Fine. Make sure folks are playing by the same rules and regulations.
Surge pricing makes sense. It encourages people to choose different hours to travel and drivers to drive more during those times, which in the long run can lead to a much better experience for most users as it ensures that more people can use the service.
Yes, it may hurt some people that would prefer a constant price, but overall it seems like a net benefit to me.
You can plan on having more cabs during busy hours and fewer during less busy hours. Buses often have more busses on the routes during busy times of day. Not everywhere has these choices, though. Outside of larger cities, Uber or Lyft might be the closest you have to public transportation.
If you want choice in such things, it takes more than surge pricing. Cooperation between workplaces and so on to stagger start/end times, for example.
But this is exactly the problem that surge pricing solves, other people that can choose when to travel will already be traveling at other times, which means you'll have a car available instead of having 0 because everyone else is trying to travel at the same time.
Making the price constant doesn't guarantee that you'll be able to travel when you need, only that if you can get a car, you'll pay a certain price. If you want both that seems like something that is solved by both surge pricing and insurance.
> You can plan on having more cabs during busy hours and fewer during less busy hours. Buses often have more busses on the routes during busy times of day.
That means higher infrastructure costs (need more cars, more maintenance, more/bigger roads) which will lead to higher prices.
> If you want choice in such things, it takes more than surge pricing. Cooperation between workplaces and so on to stagger start/end times, for example.
Yes, but surge pricing can nudge that cooperation into existence. Maybe not by itself, but in conjunction with surge pricing in other areas as well.
Our societies have to deal with extra costs because of the man-made rush-hour: "Everyone" showers at the same time, turns on their toasters at the same time, occupies the roads/buses at the same time, etc. Turn those costs into real dollars instead of subsidizing them with higher prices on the low hours and watch businesses start to fix it by themselves.
This psychological shift toward delusional megalomania seems to happen to many if not most human beings when given incredibly high status and rendered largely immune to consequences. In authoritarian socialist systems it happens to the ruling party elite and bureaucrats.
I believe that he's harping on CEOs of ride-hailing companies, because they're the obvious example that everyone is familiar with. His overall statement, as I read it, is closer to:
>humans in general with unchecked power can become dictatorial maniacs.
And, I think that's the salient point. Others have hit on it, but if a society is too Capitalistic or too Socialistic, the power-hungry people (who always have and, presumably, always will exist) will take advantage of the imbalance, and the people (general population) will suffer as a result. On a large scale, it shouldn't matter how evil/greedy any CEO or politician is, because their power should be limited. The problem, of course, is finding the right balance.
Most people's objections to socialism are exactly what socialism is attempting to remove. Lenin, Stalin etc. did a terrible job.
I'm open to being wrong, but I don't think anyone can do a good job.
No one has yet invented a way of distributing resources more efficiently than markets. I'm not sure if socialism can be real socialism if markets are involved, but I know there's no existing solution to feed and clothe people without them. You might argue for Ptolemaic Egypt, but they had a huge advantage with the Nile, and starvation was rampant in drier years. Every 20th Century example of trying to eliminate markets either led to mass starvation or a quick return to markets once it was clear you couldn't grow an economy without them.
Sweden, Denmark, Norway and most other big government countries socialists like to point out still rely on markets to provide the economic growth needed to pay the taxes for their social programs. They also have the advantage of strong allies and needing to spend only a small fraction of their tax revenues on defense.
Technology should be used to free humanity not further constrict it. The topic of this thread is exactly the latter: how the "gig economy" is putting most people in worse positions than ever before
Rolling my eyes pretty hard at that one. Can you elaborate? Do you really think the whole system would have failed without slave labor? How was the capitalist economy different back then, such that free labor was absolutely necessary for it to be sustained?
"There is such an ahistorical bend to anti-socialist rhetoric"
I would say the same about pro-socialist rhetoric. The whole "let's ignore what happened the last dozen times a country tried full socialism, and try it again" rhetoric is pretty selectively ignorant of history, wouldn't you say?
My point is that people ignore the ugly history of capitalism but only want to talk about the ugly side of socialism. I'm sure there's equally biased pro-socialist rhetoric but since we live in a capitalist society the scale is not even remotely the same.
The last thing I want to do is ignore what has happened when countries have tried socialism. I want to be clear that horrible things have happened in socialist countries, but I don't think that is sufficient reason to throw out all of the ideas and philosophy behind socialism.
I think that's because people tend to blame the uglyof capitalism on particular businesses, like Triangle Shirtwaist, or individuals like the golden age robber barons, without considering them as components of a whole flawed system.
On the other hand, socialist systems get treated as flaws in the entire system. Yes, the governments have more control, but the ugly parts of capitalist systems also come about due to government action or inaction.
Regardless, I do think the past failures of socialist states are very important to consider, as they present concrete evidence for different ways it can go wrong. And I would make the argument that, given all that evidence, it does speak to flaws in the philosophy itself. Because in order for full socialism to occur, it necessitates an authoritarian takeover of the economy by the state. The state is supposed to represent the people, of course, but once they seize power to start managing property and the economy, well, now they're authoritarian bureaucrats with too much power. "Absolute power corrupts absolutely" and all that. To me it's no wonder that dictators take control of socialist states so easily.
Then, even if the state does avoid becoming despotic, you still have to deal with the problem of a centrally planned economy being incredibly inefficient at creating wealth when compared to a capitalist market economy. The adage "you don't make the poor richer, you just make everyone poorer" in regards to full socialism seems pretty spot-on in my observation. Just look at Venezuela for a live example. In 2013 they were hailed as an economic miracle [1] and now, well, we can all see for ourselves how it went [2].
To me, the most prosperous economic model we've come up with is free market capitalism with some government protections in place, like anti-trust and consumer protection laws, and a basic social safety net. I'm open to debate, though. Are there any socialist economies you would point to as a success? What parts of socialist philosophy in particular do you see as being effective and worth pursuing?
1. https://www.salon.com/2013/03/06/hugo_chavezs_economic_mirac...
2. http://www.euronews.com/2018/03/26/colombia-s-venezuelan-mig...
As for what that means exactly, I don't have a good answer for you. I'm trying to find answers myself. Maybe every business needs to be a worker-owned co-op. Maybe we should have a "National fund" that replaces private banks and investments in which every member of society would have equal ownership of. Maybe we should all live in communes in the woods.
I guess I should explain why I think this is even necessary. If the only issue was poverty, we could probably just make do with the social-democratic, Scandinavian style economy. However, to really challenge climate change and automation I think we might need more radical solutions.
"I don't think that socialism has to mean large-centralized government. I look at it more like extending democracy to include the workplace and the economy."
And therein lies the problem. It seems nobody can agree on what socialism actually means these days. I think it does necessitate state control of the economy by definition, like the USSR back in the day or Venezuela more recently. That's more in line with what Marx originally advocated for and how a lot of countries have tried to implement it.
However, if we scrap that definition, then it's anybody's guess. I have no problem with socialism on a small scale - by all means, start a co-op or go live in a commune. As long as it's your choice to do so. My problem with large-scale socialism is that it's "an idea so good, it's mandatory." There's no "opt-out" when the government seizes control of the economy under the guise of promoting equality. So that's what I worry about when people promote socialism. Like you said, there's a fear of authoritarianism in any system, but I can't help but notice socialist countries are historically much more likely to become despotic dictatorships than capitalist countries are.
In terms of combating climate change and automation, that's a much broader issue for sure. But I'm optimistic that modifying our current system can help rather than overhauling it completely with an ideology that has proven so difficult to successfully implement.
Although I have not read it, I think Eric Williams's Capitalism and Slavery is an influential work well known for forcefully arguing for a link between the eponymous phenomena (of course not everyone agrees with its claims).
There is a reason why that anti-socialist rhetoric exists.
Russia was the only real attempt. The 1917 revolution was about it, and then the coup by Stalin to overthrow Lenin and Trotsky threw out any shred of attempt to reach any kind of utopia and just turned the country into a dictatorship with a globalist coat of paint.
Russia itself can absolutely be used as an example of the failings of Marxism and Communism, but I don't think any other country can, for the sole reason that once the Soviet Union was established and the Cold War underway neither side was going to let an ideological uprising happen anywhere on Earth in isolation. Every single socialist / communist state from the Eastern Bloc countries that were conquered by Russia to puppet states in the Middle East to sponsored uprisings in South America and Southeast Asia were all done with Soviet support to create Stalin style dictatorships. I don't think for a second that Mao ever thought China would become some stateless utopia where everyone owns everything in public. Mao took power to be a king, in the same way Fidel did, in the same way Kim Il Sung did. And they all did it with Soviet support financially and militarily.
The US were well documented kingmakers in that era too. It is why most of the Middle East has such deeply instilled hatred of the US that they are willing to give their lives to attack the US. The difference is that the Soviets demanded loyalty by labeling yourself a Peoples Republic and modeling your government after Stalin's - the US just wanted puppet states that did what the US said, be they democratic or totalitarian, it didn't really matter to Washington.
But that isn't something that is going to change, either. Revolutions without foreign support always degrade into dictatorships to fill power vacuums when the unorganized hoard of revolutionaries dissipates - France, Russia, and more recently Egypt all demonstrate what happens in those circumstances. The US had a successful revolution only because it was the elite casting off a foreign power with the support of another, and without Frances help or the support of the American aristocracy the US would have never been founded. Internal wars for revolution fail, revolutions without international support fail, and new governments post-revolution that are too "different" from the global status quo also fail because the world powers will cut you off if you don't play by their rules in international trade. And you can be sure almost every government on Earth today with few exceptions function and exist with the blessings of the United States. If anyone tried to overthrow those "for the people" like the Iranian people did to their Shah you can bet the US will have nothing nice to say about the pursuit of liberty if its against American economic interests.
So no, communism doesn't work, but its not because of some tautology that you can never reach this post-state utopia, but more because nobody can change their government in isolation - the influence of foreign actors will always either push you towards their favored ideology or sabotage your attempt. The world is too interconnected now for an upstart band of ideologues to depose the king and try something new.
Communism does (well, can...) work just fine. Just not with the actual, real people that exist in this world.
So to paraphrase, there has never been a successful socialist state.
I made a longer argument about that here, probably better to link it than reiterate it: https://news.ycombinator.com/item?id=16689969
"His medallion, once worth $1.1 million, had plummeted in value to $180,000. The dramatic drop in the value of the medallion, which he had hoped to lease for $3,000 a month or sell to finance his retirement, wiped out his economic security. He faced financial ruin and poverty. And he was not alone."
The medalions are stupid and shouldn't exist. Relying on their "value" for retirement is crazy. And like another commenter has said - if it was worth 1.1 million, why not sell it and retire, perhaps doing a less stressful job than driving a taxi for 12 hours in turns with your wife? It sounds like he gambled - that he could keep working, keep the medallion, and retire while leasing the medallion for $3000/month(!!!!!!!!!!) - and like all gambles, this one had a possibility of failing - and it did.
Seems like an odd emotional link. That we’re supposed to support this person’s edge retirement plan by making hailing cabs suck for users.
What if someone invested in Exxon. Spent $1.1M and was relying on the dividend yield (4.6% btw-http://www.dividend.com/dividend-stocks/basic-materials/majo...). And in twenty years renewables make Exxon tank.
Would we feel sympathy? I would, a little as people losing their life’s savings is sad.
But investing your whole nest egg in one thing is bad. Investing it in a thing that causes misery is even worse. Investing in a thing with artificial scarcity is further worse.
Putting a million into medallions because they’ve risen in value for 80 years is dumb. The article is also disingenuous as there were lots of investment firms buying these. Why only show this one example of a single owner.
This guy’s firm owned 500 in 2005, valued at $200M. https://www.nysun.com/business/new-york-citys-biggest-owner-...
This was a $5B market back then if all 13,605 medallions were worth $400k each. These weren’t mostly owned by mom and pop individual owners.
It also means the medallion yields a paltry 0.11 percentage points more than a 30-year Treasury [1]. Which means one is judging it to be just a tad bit riskier than the U.S. government. And safer than Apple [2]. And Stanford [3]. And MIT [4].
[1] https://www.treasury.gov/resource-center/data-chart-center/i...
[2] http://finra-markets.morningstar.com/BondCenter/BondDetail.j...
[3] http://finra-markets.morningstar.com/BondCenter/BondDetail.j...
[4] http://finra-markets.morningstar.com/BondCenter/BondDetail.j...
Maybe he was betting on the price of taxi medallions to increase considerably.
> Putting a million into medallions because they’ve risen in value for 80 years is dumb.
It's the basis of investing in a lot of assets - like NYC real estate. Limit supply will protect your investment and it will always increase. This is also the basis of dollar cost averaging into an index. The assumption is that the markets/indices will always increase in value over the long term even if it may fluctuate up and down over the short term.
> These weren’t mostly owned by mom and pop individual owners.
Yep. Regulations and limit supply will do that. Just like most of the farm subsidies benefit the mega corporations, not the small farms.
Once they became a significant investment, taxi medallions should never have been owned by taxi drivers.
But going back a level, should we really expect sophisticated financial planning by taxi drivers? He's basically a victim of capitalism.
The gov't sets ups a system, tells you the rules and says "if you buy an expensive medallion, you can drive a cab and make a living". The value of the medallion is purely based on the gov't promise to maintain the system.
So you buy one (or many) and a few years later someone does a work around and the gov't says "oh well, I'm not going to try to enforce the medallion system any more."
That sucks.
PanAm went bust because they banked on price fixed airline tickets.
USPS benefited from national mail logistics only being available to government level endeavors.
DeBeers is about to get crushed by artificial diamonds which are both cheaper and "better diamonds" than the massive stockpile they've accumulated.
The rocket industry has long labored under the delusion that massive government contracts underwriting their $100m launch prices keep them safe. But their bubble is popping one $60m Falcon 9 launch at a time.
And finally, the government will support whatever brings in the most taxes and f̶r̶e̶e̶ ̶s̶p̶e̶c̶i̶a̶l̶-̶i̶n̶t̶e̶r̶e̶s̶t̶ lobbyist dinners.
What Kool-Aid are you drinking? The Post Office didn't benefit from anything, it was mandated because no such service yet existed.
Prior to the Office of the Postmaster General being established, postal service was disjointed and limited at best in the colonies. In the 1600s you had 2 routes in the colonies, Boston to England and Boston to New York City. It was prohibitively expensive and limited largely to business and government communications. In the 1700s the Imperial Postal Service was extended to the colonies with fixed rates and taxes included, and it was incredibly unreliable.
The Post Office was born out of frustration, one of the founding fathers ran a news paper and the Imperial Post couldn't even deliver papers reliably. The Post Office was mandated by the founding fathers under the principle that everyone has the right to secure, efficient, reliable, and affordable mail service.
With the advent of the Interstate Highway System and many other technological advances over the prevailing 200 years, the Post Office was actually able to reduce costs and turn a profit.
During the civil rights movements of the 50s and 60s, the postal workers began protesting and striking because work conditions and compensation. They eventually won the right to unionized. In response to unionization the Postal Reorganization Act (PRA) of 1970 abolished the Post Office Department and turned the Post Office into an independent agency that was excluded from the US Budget.
One could argue that the PRA was the start of union busting tactics employed by the conservative government in power to bankrupt the post office. It doesn't help that every conservative government since then has enacted some sort of constraint upon the USPS that isn't mandated on private services. The most recent being the Postal Accountability and Enhancement Act of 2006 which required the USPS to switch from a Pay-As-You-Go to a Pre-Funded model for it's retirement plans. That's akin to your mortgage company calling you up and saying you'll need to pay off 100% of your principal next year.
Which of course points to one of the many problems the USPS has which is that they're expected to be self sustaining but have almost no control over their business model (and yet miraculously they manage to make it work for the most part).
The founders would not have talked about postal service as a "right". A good idea? Yes. Stupid to not have one? Yes. A right? No.
>The most recent being the Postal Accountability and Enhancement Act of 2006 which required the USPS to switch from a Pay-As-You-Go to a Pre-Funded model for it's retirement plans.
Congress saw the writing on the wall—that the Postal Service was probably going to suffer permanently declining revenue in the long run. They took steps to make sure that the financial burden of paying for unfunded pension liabilities did not fall on the taxpayers.
Sure, but not the steps you'd take if you wanted a functioning public postal system. They set an extremely short timeframe to fund the pension account, then cut postage prices right as it neared full funding.
A lot of Congress very openly wants to end the public postal system. Pre-funding the pension system was a reasonable move in principle, but like most changes to the USPS it's structured in a way designed to create a failing system to privatize.
Much more interesting to a politician is supporting the policies of well-organized trade/association groups that have the power, through their PACs or membership, to invest the resources necessary to make a difference in a campaign.
Never? Money are based on artificial scarcity as well.
Money used to be backed by naturally scarce resources. An ounce of gold is an ounce is an immutable portion of some finite limit of gold until we get alchemy rolling.
But yes, fiat currencies based on the promise of government protection are very susceptible to being popped.
I can see why they needed the system though, to prevent a flooding of taxi drivers. And they were proven right, because now with gig economy drivers, the floodgates have been opened and the market has been flooded with drivers in a race to the bottom.
Probably also because for a lot of people there's no other work. This is in part because of the local economy, and in part by the US education system, which is (from an outsider's perspective) a system that ensures highly educated / rich families stay rich, and prevents social mobility - unless someone expresses some special ability and gets a scholarship, probably from a commercial party e.g. sports.
I'm not convinced this is true, except in the short term. Plenty of service industries maintain a reasonable number of providers, and many even pay reasonable wages to a lot of those providers.
Uber flooded the market as part of an attempt to break through artificial scarcity; they needed on-demand service to attract customers, and massive scale to fight regulators. And they got their flood of drivers by burning VC money to ensure that the basic "rider -> driver" transaction happens at unsustainably low prices. So what we're seeing isn't a race to the bottom - it's a race to well below the bottom.
Uber rides can't stay so cheap forever; either prices go up and riders leave, or prices stay low and drivers leave. The taxi/driver market in Cleveland or Omaha isn't going to be destroyed by a lack of artificial scarcity.
There is a secondary problem, where even rational markets for services don't function in expensive cities. It may be that rides normal people can afford simply aren't viable in NYC or SF. But that's not a problem with market rates, it's a problem with housing prices that make lots of totally normal jobs unlivable.
I think there's plenty of market for an Uber-like experience at $1.00-$1.75/mile. That's well above covering the all-in cost of the car and well within the range of what riders will pay. I see no reason to think that Uber can't make a profitable business, where drivers are also making a profit, and riders are willing to pay in a range of amounts near the current rates.
I wouldn't be surprised if Uber is already profitable in cities where they have achieved scale.
The unique mechanics of ride-hailing apps, like having a demand-responsive workforce and not relying on dedicated vehicles, seem like basically sustainable cost reductions.
The non-unique mechanics like having a good app are also sustainable, but Uber has already provoked most taxi companies to catch up on that. And we'll see how the regulatory bit shakes out - either crackdowns on ride hailing drive prices back up, or cabs lose out because they've got much higher government-imposed costs.
"Medallions are good because they keep wages high" is a position I thoroughly disagree with, but "medallions are justified as a traffic control system by the people who own the roads" is much better. Congestion and road wear aren't meaningfully priced into taxi fares, and it's possible that the socially-optimal number of cabs in circulation is well below the number a driver/rider market would generate.
Already we see a lot of complaints about Uber drivers circling blocks and stopping in traffic, especially since they're most active in high-demand areas. (This also justifies the gap between low-density cities without medallions and high-density ones with them.)
I still object to the medallion system. It's inflexible, doesn't scale automatically to demand, and creates ludicrously overpriced bearer instruments - with predictable consequences whenever supply increases.
But I can definitely accept that cities have a good reason to keep the cab count lower than consumer demand would. I just wish they'd do it by taxing rides or something similar. We've got perfectly good tools for fighting externalities that scale with demand, so why are we still using medallions?
Another way we might handle this is just to convince these people to cut their losses and default - the banks should have better weighed the risk of deregulation - and give the cabbies themselves reimbursement up to some fixed amount (under $10K) for the inconvenience of reregistering themselves with rideshares, or any livery cab companies.
There was never a government promise or guarantee to maintain the system as was. There was nothing more than a hope that they would.
How is that any better than building your business around assuming Google was never going to change or improve their search algorithms pre Panda/Penguin? Or betting on newspaper classified ads never going away. Or a thousand other examples like that from the last century. One of the more common requirements of staying in business, is managing to adapt with change.
The only alternative is for the government to try to freeze technological progress for the benefit of a few and at the expense of the many. Except that's impossible, the rest of the global economy will destroy you, leaving you in the stone age.
With Uber it’s a bit different as rideshare is different than hailed cab, so the city didn’t actually take an action that resulted in value.
Was the medallion system bad? Yes. Creating good jobs by enforcing random scarcity in a handful of markets is a ridiculous system.
But the people who bought these medallions didn't implement that system - they wanted to provide a service, and likely would have driven outside the medallion system if they could. Now they can, but they're broke because they happened to be in business while the government stopped screwing up their industry. They're victims of stupid regulation, not perpetrators.
>Relying on their "value" for retirement is crazy. And like another commenter has said - if it was worth 1.1 million, why not sell it and retire
Because he took out a loan of 1.1 million to buy it. It's not that he bought it for next to nothing and it rose to that price, it was always a stable asset. Because regulation didn't allow non-medallion taxis in the city. Until Uber came and they just allowed it.
>like all gambles, this one had a possibility of failing - and it did.
We're not talking about the smartest people here. Something that had a stable (and slowly rising) value for 100 years didn't seem like a gamble until the lobbyists came in and convinced the lawmakers to allow unfair competition.
I think medallions are stupid, but as long as the system exist, everybody needs to adhere by it, otherwise it's just f*ing over the working poor.
This is not right. It was a bubble. Prices rose from ~$250K in 2001 to over $1.2 million in 2013 [1, 2]. That's a 13% growth rate.
It was obviously a bubble. Yet people were jumping on it, taking out big loans to buy more medallions. It had to burst at some point. Uber was the trigger, but this had to blow up at some point. The sooner the better.
[1] https://www.bloomberg.com/features/2015-taxi-medallion-king/
[2] http://www.nyc.gov/html/tlc/downloads/pdf/march_2013_medalli...
The medallions were required to be able to pick up street hails. Uber does not and never has accepted street hails. They operate more like the other car services where you request a car from a central dispatcher, and then that car comes and picks you up at a location that you requested.
Apps like Uber let people effectively "street hail" while sidestepping the legalities, which were written before mobile phones became available.
Capitalism requires bankruptcy.
In fact it was not a stable asset. Medallion values had increased dramatically in a relatively short amount of time. They went up in price by four fold in ten years for both corporate and individual. [1]
Is it rational to buy something after an extreme price appreciation like that, with the assumption that it couldn't possibly go back down?
With uber they're still not picking people up that are physically hailing them. They are relying on technology aka smartphones to get around this.
Found this out while waiting an hour for an uber driver - three others drove by and responded to my waving them down to see if they were my uber, and offered to take me (looking back, I should have taken them up on the offer).
This, ironically, turned me on to the taxi system in NY. They were just more reliable at the time.
- to keep traffic down
- to ensure a minimum standard of vehicle
- to ensure safe, well-trained and responsible taxi drivers.
- to ensure a fair level of income
- etc.
However the main problem with the medallion system is that they can be traded, speculated on, and used to extract "rent" from workers further down the chain. This benefits nobody.
Surely there could be a happy middle way between the libertarian nightmare, banned-in-half-of-Europe Uber model; and the old-skool union cartel medallion model.
- to keep traffic down I don't know if limiting taxis actually ends up limiting cars, but limiting cars is certainly the definition of keeping traffic down. - to ensure a minimum standard of vehicle I've actually been surprised but the people driving Uber X usually have nicer vehicles than most taxis I have taken. - to ensure safe, well-trained and responsible taxi drivers. Licensing drivers provides responsible taxi drivers? Yes, tell that to the people that have to pay cash because the credit card machine is 'broken'. - to ensure a fair level of income As far as the fair level of income, taxi companies are taking their cut. How much do the drivers actually end up with?
The medallion is meant to artificially constrain supply. NYCTLC tried and failed to block Uber in order to protect their value, i.e., enforce a closed shop, and this was what the cabbie was upset about - losing his exclusionary license to do business. His complaint could hardly be more ANTI "gig-economy" against Uber's drivers flooding the market, which is what tanked his asset's value.
Same goes people who bought ridiculously priced homes in the run-up to 2008... Guess what? Thinking that $600,000 3-bedroom home in the desert near Phoenix, AZ was a good retirement vehicle was not a good choice.
And to a lesser extent, this is another example, a sad one, of people choosing to avoid diversifying their sources of wealth and income. There's simply too much risk by having ALL of your eggs in a single basket.
It's on the one hand easy to sympathize with this case but on the other, I don't think there is anything due him economically.
I don't think his idea was such a massive gamble when he paid that money for the medallion.
You can argue about the system as such. But I don't think his idea was unreasonable.
I'm not trying to minimize their loss or how hard that would be, but if we think people should have the freedom to make decisions on how to invest their retirement money, then we have to accept that some people will invest it all in a company where they will eventually lose it.
That is exactly what Enron's in-house financial advisers did. They went to jail for it, but that's cold comfort to the people whose 401k's got wiped out.
So I feel the article has very valid points... and I am on the "ruling capitalists" side of my little world.
In order to sleep at night, I am just trying not to be an asshole, and to be decent in the way I pay and behave. But as a society, we cannot rely just on goodwill.
In the age of globalization, and as a firm believer in the efficiency of market economy and capitalism, I think it is still time to reintroduce a new sort of new, rebranded "International Socialism" where "workers/people of the world, unite!" for everyone's good.
The goal would be that people can have access to enough food, decent accommodation, healthcare, and retirement, so that on top of this base, we can use the efficiency of a globalized market economy.
Not sure where to start...
I don't think I am individually wrong to pay market rate for their work, and keep the surplus, but the bigger question is, while nobody is wrong, including AI, where are we going as a society? What will be the consequences?
I know socialism is a dirty word (especially around here) but I think as a society we need to be open to the possibility of an economy that is fundamentally different from capitalism.
If you remove the market economy and ability for people to make money, take initiative and be rewarded for it, and go instead to a pure socialist model/goal, that goes so much against so many human instincts, that it will be hard to have people buying into it. As history shows. And it won't remove AI.
What new system do we propose, or how do we modify the current one, in a globalized, AI-powered world?
Should I pay $15/hr all over the world? Is it fair to pay those lucky ones an extra $5-7/hr for no particular reason, or to give that $5 to their respective country via taxes that all can share (healthcare, education, retirement)? Or should I increase my profits, and give it back to the US people through more taxes?
And when AI can do their job, then what? I keep them busy for no reason? Who makes the extra money, only me?
It's almost as though if you've been to Stanford and are backed by well-connected VC's, you're able to recklessly break the law in the name of "disruptive" technology. But I wouldn't place the blame on these people. It's the whole system, which appears to be getting exponentially more rotten as each day passes.
Established big businesses flout the law in service of profit too, but often they're using lobbyists to get the law bent to their benefit.
Whoever has the gold makes the rules as it were.
You don't even need to break the law to gain a business advantage. Just making a large pile of money can be sufficient to start dominating a market.
Take for example Uber-eats. Small restaurant owners suddenly had to give up control over their sales channel to a big player, and are now forced to pay a large monthly fee just to stay in business, where the benefits don't outweigh the costs.
As long as the revenue from delivery exceeds the food cost (marginal cost of preparing an order) it is beneficial for restaurants to be on AS MANY of these delivery services as possible. This is why you'll walk into some places and see 5 iPads next to the register - they're working with not only UberEats, but DoorDash, Eat24, Postmates, GrubHub, etc.
I do have many issues with these food delivery services, but the restaurants aren't getting the short end of the stick here - the drivers are.
Exactly. Drivers are getting the short end of the stick. Restaurants are affected but given the exposure they get, it might be worth it.
a) The current players would refuse to cooperate. Making web services accessible to end-users but impossible to scrape efficiently is a solved problem.
b) You're hungry and tired and you're about to spend $30-$50 on takeout food rather than cook yourself. Do you care that much about a $.50-$1 saving that you search for food search engines on your meta food search engine search engine?
In insurance, a market where people are much more price conscious, there are several different price comparison sites which all aggregate slightly different subsets of the insurers.
This is not about the gig economy but simply about a lot of jobs becoming commodities before being automated away completely. Anyone with decent navigation solution in their car can compete with whatever awesome skills this medallion used to represent in terms of geographical knowledge. It's an outdated concept that dates back to the days that actually taxis were horse & carriage and it was kind of helpful to have some guarantees that the driver knew where to go. Not a thing any more.
1) You enter into perhaps the most capital-intensive business of all time and buy a fleet of these new self-driving cars. This would be a humongous cash raise; NYC alone would likely need $1B in vehicles to match current coverage levels. You'd also need service and maintenance facilities (or pay for someone else to handle it)
2) You wait for enough of these vehicles to be bought by consumers to create a ride share network akin to the current one, except without the drivers
Option 1 is likely a non-starter. Uber-style businesses are popular with investors precisely because they avoid this business model. Buying the vehicles and facilities to maintain current US coverage would probably run $100B or more. That's not really feasible.
Option 2 saves Uber from that awful capital raise, but means they're waiting for self-driving cars to reach high enough saturation within the broader vehicle fleet that they can use as rideshares during owners idle periods. Based on what Google suggests for a typical car upgrade cycle, this would be 5 years or more. It also probably doesn't improve their margins enormously, because they're still licensing the car from an owner who will demand a cut of fares (whether it be directly or as an hourly lease fee). The assumption is that fee is materially lower than what drivers want for their car and time, but there's no reason to believe that's true (especially given, as many studies have suggested, drivers in most markets currently lose money on a per-mile basis). During the initial period of self-driving adoption, owners fees will be higher, as there are fewer of these vehicles available and owners will have better bargaining power via their scarcity.
But while Uber waits for adoption in scenario 2, their first-mover advantage in rideshare erodes. If you're GM or Mercedes, this looks like a pretty high-margin business, and it looks really tempting to use the self-driving tech you're already putting into these vehicles to spin-up a competitor, and right now there's nothing on the books saying you can't simply lock Uber out of it.
Long-term, that's my expectation: that self-driving cars will exist and Uber will die to competition from OEMs (or some kind of alliance between OEMs and Waymo).
[e]fixed some formatting.
As the tech becomes cheaper and more available, some people do end up owning an autonomous car. They'll own them mainly for keeping a clean vehicle with their supplies packed into them. But in urban areas, most people chose to rent, which is a pretty tricky business: it's an unsupervised $50k asset you're renting at $5-$10 a pop without a deposit. Very few people are going to want to touch that business, especially when first mover already has a rating on everyone - meaning your first "customers" are the ones uber identified as troublemakers and already banned.
Uber's current business:
Uber is the middleman in a two-sided marketplace. It connects drivers with passengers, and takes a cut for this service.
Uber's competitive advantage is that it had the capital to attract drivers - with lots of drivers on its network, costs & wait times are lower for passengers, so passengers use Uber. And so on and so forth, flywheel metaphor, etc.
Self-driving:
Assuming self-driving car saturation, Uber's competitive advantage completely disappears. As a passenger, all I care about is getting from point A to point B safely, quickly, and cheaply.
As a manufacturer of self-driving cars, why would I sell or lease them to a middleman (or if we're getting extreme, even to consumers!) to take the profits in this space? As Tesla, GM, etc. I am going to pump out a fleet of self-driving cars and have consumers pay for a subscription plan (X number of minutes / miles per month on my fleet). Because this is a very capital-intensive business, the government will then grant local monopolies to different providers and regulate the prices, much as it does today with telecoms.
Uber provides no value in this scenario unless it can figure out how to develop the best self-driving software that is installed in these cars (and that seems extremely unlikely). The winners in this space are going to be car manufacturers and the developers of the self-driving tech that get legal approval. I'd imagine these software companies negotiate a great licensing deal to the car manufacturers.
I suppose since the rollout of self-driving tech will be slow, Uber can continue to operate in a hybrid space with some self-driving cars and some drivers. Whether or not it will be profitable is a different question altogether. But I have no faith in the long-term viability of Uber's business model once we reach a saturation point of self-driving cars. We are going to look back on this time in 20 years and talk about how VCs subsidized a lot of cab rides.
Tycho took control of agricultural planning, requiring the peasants to cultivate twice as much as they had done before, and he also exacted corvée labor from the peasants for the construction of his new castle. The peasants complained about Brahe's excessive taxation and took him to court. The court established Tycho's right to levy taxes and labor, and the result was a contract detailing the mutual obligations of lord and peasants on the island. Source Wikipedia
Serfs have rights under the law. Gig workers have none. The only thing they can do in order to earn rights is to sue to be treated as an employee.
The article gets it wrong. Traditional employment is an evolution on the master-serf relationship. Gig employment is lower status, akin to wandering laborers with no land or family. Gig workers wish they could be serfs.
I do gig work. My experience of it has been positive. It has allowed me to work when I choose to and to relocate someplace cheaper so I could get back into housing. It has allowed me latitude about some things that you typically only see in very privileged groups, like the Jet Set or well off retirees.
I know this isn't true for a great many gig workers. But I wish we would focus on ways to make it a positive for most workers rather than just talking about it in damning terms as if it can't be a positive.
See also my thoughts here: https://news.ycombinator.com/item?id=16689589
That is, wage labor is a way of moving the conditions of reproducing labor onto the laborers themselves, and the gig economy is just another step in that same process.
I have only a base understanding of the history and a very inconsistent and loose mode of thinking about it, so I'd be stoked to get some better picture of the mechanisms.
As I understand it, serfs have rights, and in addition the feudal system itself (the owning class) had to value the reproduction of labor as part of the work. So, in order to extract value from serfs, you have to feed and care for them, or at least take that care into calculations as part of production.
Under the conditions of early capitalism the domestic labor that goes into reproducing labor is pushed from the system into the individual families, so once we have wage labor things like "feeding the workers" and "caring for children" is the responsibility of labor and no longer a concern of the people who are employing that labor.
Thus a "gig economy" is just the next iteration of the same process of externalizing as much of the process of doing work to the laborers. The end goal is to have the laborer take all the responsibility for production and the owners have no investment, only pure exploitive profit, and the gig economy is an advancement of a wage economy, which is an advancement of a serf economy, which is itself an advancement over slavery.
I write "advancement", but I only mean that from the point of view of the extracting/ owning class: if "slavery" means racist chattel slavery then that's truly a horror without end; if enslavement just means that you're working for a specific household which you're integrated within and you don't have a free hand in just up and moving to another household (as it seems to operate outside of capitalism) then the gig economy seems far more exploitive than slavery as practiced in pre-capitalist civilizations.
But like I say, I don't have a great understanding, and I'd be interested to hear where I'm wrong in terms of history or logic.
Ruling classes were limited in just how much they could take from the surrounding areas. Localities developed cultures and social institutions like English common law, and the ruling classes universally realized that it was more useful to work within those traditions than it was to impose your own on them. Where they conflicted, religious authorities were there to mediate disputes. Out of this reality, feudalism arose and developed for hundreds of years. Local people didn't have the means or inclination to do foreign policy or state building, for the most part. Lords were the necessary evil they accepted so that they could get left alone.
Naval technology changed all that and created a new merchant class. It became economical to move large quantities of goods over water and the people that did that quickly became rich. The original merchants were royally chartered, but there soon was enough of a manufacturing base in naval tech that anyone could start speculating in commodities.
Thus began colonialism. The old land lords lost power and prestige to the new merchants and slavery, which had been gone in Europe since the Roman Empire fell, started to serve the new colonial masters, who were far away from the old systems of social control, church and state. Wealth became liquid in a way that it never had been before.
It wasn't so much the forced work that was the problem, but the transportation away from home communities and the treatment of people as commodities. Britain proper long abhored the slave trade even as British citizens participated in it. International law had to be wrapped around the seas, and the British slowly brought a stop to the slave trade, at great expense. Slavery in her former colony took a civil war to end.
Forced labor can make individuals rich and powerful, but it's free people and institutions and the deals they make and the social contract that provide for the advancement of nations. Slavery was an existing part of the social contract under the Romans, then it didn't make sense anymore, until technology made it possible to bring it under the yoke of individuals.
As a nation, we're slowly coming to terms with the need for new social contracts to provide for the common welfare. Gig work allows individuals to be economically useful that wouldn't otherwise be, but is very close to the bottom of that barrel. Americans haven't come around to acceptance of the European welfare state, and it probably never will if you ask me. Gig workers will be left to their own devices and are the beginning of a new underclass. They're not quite slaves, not quite serfs, and lack the means to improve their lot. Like serfs, though, they will create their own internal rules and morals and institutions, and the business world will adapt around them.
I'm in the middle of reading "Caliban and the Witch" and it's nice to have additional ideas about the motion from feudalism to the newer systems.
https://www.amazon.com/Servants-Downstairs-History-Britain-N...
Most gig workers are going to job to job in isolation because they don't want to be homeless. They always live with other people, but its not a relatable cohabitation and they arne't working together to ease one anothers burdens. Its a rat race designed to abuse and exhaust its participants while keeping them isolated and vulnerable to the exploitation.
> “Horses in Central Park are regulated,” he pointed out. “There’s 150 of them. They make a great living there, the guys on the horse and buggies. Say Uber comes in and says, ‘We want to bring in Uber horses. And we want to add 100,000.’ And let’s see how the market will handle it. We know what’s going to happen. No one will make money. They’re all around Central Park. And now no one can go anywhere because there are now 100,000 horses in Central Park. It would be considered madness to do that. They wouldn’t do it. Yet when it comes to the yellow cab industry, for 50 years all we could have was 13,000 cabs, and then within a year or two we’re going to add 100,000. Let’s see how the market works on that! We know how the market works.”
I understand what that quote is saying, but I feel it's a false equivalency. There are already cars on the road in NYC. It's not like adding 10,000 horses to Central Park. Overall, the regulations on the taxi industry are the reason Uber and Lyft have been so successful - because they skirted the regulations, they were able to provide a much better user experience.
We need to take a look at which regulations are actually helpful and which are expensive and unnecessary.
I’m a believer in mobility: if life isn’t working in NYC, then perhaps move to another place with fewer drivers and a lower cost of living. Just because you like a place and have roots there doesn’t mean life should be affordable and lovely. Much of human history is the story of leaving one place for another, in search of better living conditions.
It seems that they—like publishers were!—are mentally stuck in an old paradigm. Transportation has changed; adapt or move on.
That said, I doubt the VC money will dry up. Companies can operate in the red, sustained by VC money, for a long time before becoming profitable. Look at Netflix, for example. Or Amazon until recently.
One could make the argument / defense that the driver chose to, nobody made him, and that he has nothing else though. In which case anything is better than nothing. Both are IMO regulatory problems, which a government should do something about.
See, that's the part I take issue with. That's pure assumption. Lots of my drivers have been college students working part-time for some extra cash on the side, not full-time workers trying to support themselves. I usually tip my drivers too since I know the base price isn't much.
That said, I know it's not a perfect system and it has its own problems. Still, I do view it as a voluntary arrangement, and often driving is a better option for people than working at a fast food joint or a similar minimum-wage job.
What type of regulations on Uber and Lyft would you propose?
Let's say you worked for ride-shaes the same hours as a serf, something like sunrise to sunset. If you drove an Uber in my city for that long, you'd probably make at least $100 pre-tax, and your overall income would be enough to support yourself in a far higher quality of life than even the greatest kings who ruled over the serfs.
Aside from being particularly banal, the assertion that employees partaking in a gig economy can reasonably choose their own hours is provably false. People relying on gigs to make a living are effectively obligated to follow demand; choosing your own hours is only an option when the revenue is no longer necessary for sustenance.
Don't take my word for it -- this stuff is all actively being litigated, regulated, and decided, and generally not favorably for Uber:
https://www.usatoday.com/story/news/world/2017/11/10/british...
https://www.swissinfo.ch/eng/wage-dumping-_swiss-authorities...
https://www.bna.com/massachusetts-uber-drivers-n57982089498/
https://www.independent.co.uk/news/business/news/uber-driver...
https://www.independent.co.uk/news/business/news/uber-suprem...
etc.
Having talked with a number of Uber drivers, I know that many of them like Uber specifically because they can choose their own hours. Of all the things they have told me they DON'T like, choosing their own hours is the one thing they all DO say that they like.
Some take off when their kid has a baseball game. Others like working new years eve because it pays well. Others don't like dealing with drunks on new years eve so they don't think it is worth it to them to work it and take the evening off even though they have to work more hours on other days to make the same amount of money.
Surge wouldn't be a thing if Uber really subscribed to the idea of letting drivers choose their own hours.
As an aside: your example is in theory no different than what unlimited leave allows you to do, but we know how broken that system is in the bay.
The only data point I have is a sample of about 200 drivers in the US. I have not heard a single one say that they can't choose their own hours and everyone that has said anything about choosing their hours has said they like their ability to choose when they work. (One did say that he has to be careful not to be lazy since he can decide if he goes to work that day or not.)
There were articles a few years ago where people had to work two or three jobs just to make ends meet - if at all. Nowadays they still do, but the jobs no longer exist and they're being replaced with gigs. At least the jobs had some guarantee of number of hours people could work.
And I mean look at me - I'm already claiming the previous shitty situation of 16 hour work days was better! It really isn't. A 40 hour work week should be possible and enough to live above the poverty line for everyone. Preferably put them comfortably in the middle class.
Other families send their kids to school hungry, but yet have money to spend on lots of other recreational uses (both legal and non-legal). I personally know a family that didn't have enough money for food because they had just spent hundreds of dollars on a new dog and dog food.
If you give people the right to spend their resources as they see fit, some people will spend those resources in ways that prioritize purchases other than food. In other words, if everyone is food secure then it means at least some people are not deciding how to spend their resources for themselves. If you think people should be able to make their own decisions, then you have to accept that some people are going to run out of money for food from time to time.
That isn't to say that there isn't anyone in the US with hard situations that are out of their control, but I have yet to find a family who consistently has no food where it isn't directly related to how they are prioritizing what they do have. I'm not saying they don't exist, but they are a very very small fraction of the numbers you are citing.
The relevant statistic is that there are simply not enough jobs paying living wages relative to the number of people that need them. Flipping burgers is not a livable job in 90% of the places where corporations want burgers flipped (ie fast food joints in cities where cost of living is astronomical).
I agree that the working conditions of workers should improve but I never understand the comparison to the value of CEOs. Travis Kalanick isn't sleeping on $4.8 billion, it's in the economy.
Instead you can keep it in stocks of companies you believe in, like startups and interesting moonshots.
It all ends up with the question - do you want the economy to decide where to focus the value (the diffusion) or do you want to decide yourself?
But if you have this amount of money in the first place, you are statistically in the better place to decide than the economy.
This is how progress in society is made. See a problem in the world and try to make it better. I don't think we need to have people working such degrading jobs to have technological progress, but you need it to have this many billionaires running around.
Admittedly people like me have a larger proportion of our wealth pinned down in things like real-estate, but it's not like most of us stuff cash in shoe boxes around house. Once you discount accommodation and personal cars, most of us have the rest "in the economy".
HN is a gathering place for people who start businesses. Yes, we need a remedy for the current abuses. But whatever Uber or Lyft or other existing companies are doing, you can be the architect of a better future by starting a company and not being a greedy bastard who feels they need billions while entry level employees don't make enough to support themselves.
The other thing that would help would be if we developed some guidelines for gig work done right.
Another thing that could help would be advocacy groups or informational sources.
I do my part by blogging about gig work that has the potential to become a middle class income and promoting businesses that do this well and are not tyrant overlords. It's a small thing and I don't have much reach. But we can choose to foster the success of gig businesses that treat workers well instead of merely labeling gig work the new serfdom and essentially assuming it cannot be otherwise.
Given my positive experience of gig work, I hate seeing the issue framed this way. I feel it throws the baby out with the bath water.
That's not to say the article doesn't have merit. There are a ton of other industries ripe for disruption by the gig economy. Platform providers need to think deeply about how this could affect the lives of those relying on them for work. Hopefully, going so far as to ensure a decent live wage, and plausible options for health and other benefits.
The internet was partially built to facilitate these types of working relationships. It is up to us to define how these relationships should play out in practice, to ensure everyone involved is able to live an acceptable quality of life.
You can expect a regular salary and defined benefits.
The gig economy very much uppends those facts massively and gig economy can be profitable because they externalise the real costs.
To summarize: I don't disagree that too miuch concentrated ownership is a bad thing, but disagree with your conclusion that it's not specific to the gig economy.
Wow. Why not sell the medallion immediately and retire to some place with low cost of living instead of working 12 hour night shifts and never seeing your spouse because she works the day shift?
Such jobs should be replaced by technology / gigs / something else. Being displaced by the technology is painful for the folks affected, but we should focus on minimizing transition pain for those affected (money, training, relocation, other help), not on blasting companies challenging this insanity.
Under the classic hacker ethic, this is a good thing; humans shouldn't be forced to perform menial tasks. Of course, people currently performing those tasks for a living might not appreciate that. In the long term, however I think the safety advantage will be compelling.
With regard to human labor in particular, people have said of nearly every major breakthrough in mechanization or automation that it would destroy all the jobs, and every time, it has done no such thing. There are people saying "this time is different", but heuristically speaking, betting against a long historical track record is probably not a good bet.
Homelessness is an issue largely because of a dearth of affordable housing. This is essentially unrelated to the Gig Economy (or other work issues, like automation) and substantially predates it.
https://www.geekwire.com/2018/every-100-families-living-pove...
These people needed to embrace change, reinvent themselves, and adapt to the new economy /s
How many Americans are there (or just American adults)? 325M / 250M
What's those two figures multiplied together? 9.8T / 7.5T
What's the total federal tax revenues in 2016? 3.5T
To what multiple would we need to raise taxes to pay for such a program? Raise to 3.8x current taxation levels / raise to 3.1x current taxation levels.
All that assumes that basic prices wouldn't rise in an environment where money metaphorically fell like manna. (That $30K would have the same purchasing power as it does today, which seems unlikely.)
Adjust the assumptions as you like; IMO, there's no mathematically viable solution to a "living wage before the first hour of work".
Recognize that most people are going to be put off from the bare minimum arrangement, and that you don't have to pay people making above some arbitrary line, something like 6-7x the UBI.
Many of the social programs currently running could be shut down with UBI.
And all of these are based on the assumption that automation will continue to increase efficiency. Right now, it would be nearly impossible, especially with the legislation that exists. It's dependent on taxing the owners of businesses with high automation, recognizing that we're not far out from some truly massive automated systems, the most immediate being logistics and transport.
I agree with you (and would support an even lower UBI if it meant it had a chance for the math to work out). The "fight for $15" people probably disagree, though.
Also, surely some percentage of taxpayers would stop working if they didn't need to work to live, so taxes would have to be raised even further.
And the higher the taxes go, the less point there seems to be in working. This could lead to more people dropping out of the workforce, which requires higher taxes on the remainder, and the cycle continues.
I don't know that it would happen this way, but if it did, it would destroy the economy.
Also automation, and taxes on automatically earned productivity.
And in fact, that money is likely to be more economically useful in the hands of ex-poor-now-comfortable people (who will use it to study and start their dream small businesses) than being frittered or sat upon by the very wealthy.
The rich would still get $30k, like everyone else. It's just that their increase in taxes would be bigger than that.
Most of the burden would fall on even richer people. There aren't many of these, but they make a lot of money.
But UBI would replace a lot of things currently funded mainly by rich people through either tax or philanthropy. Not just the whole welfare bill, lots of healthcare and law enforcement spending, but things like grants for the arts. Artists, musicians, etc would either live off their basic income or only require small payments for things like orchestral performances, commissions. Research where the cost of wages is a significant part of the cost (mathematics rather than rocket science) would enjoy a similar subsidy.
Many rich people spend a lot of time and money trying to either improve society or assuage their guilt for becoming rich in various anti-social ways. It might be somewhat worth it to them to have a society which they feel more positive about, but also have fewer threats to their well-being, such as from crime or populist politics.
You would expect some inflation, but tax receipts/GDP would also rise in line with inflation.
Some things would become much cheaper. For example, lots of people don't particularly want to live in run-down apartments in New Jersey. But they have to, because New York is where the work is. Those people might go and live much more cheaply elsewhere and have reduced housing costs.
The cost of artistic work would plummet, in line with the reduced demands of artists for money. (There are probably enough people who would want to make video games if they didn't have a day job that you could spend the rest of your life playing video games you enjoy for free.)
There wouldn't necessarily be much increased consumption of many things. If everyone eats dinner everyday, they would probably go on eating one dinner rather than three. If some people can't afford dinner currently, consumption and therefore prices, should rise. But some people not having food seems like a problem we should fix anyway.
Some things definitely would go up in price a lot. Things which have a high cost component of labour, and the people doing that labour don't particularly enjoy it. So you would have to pay people a lot to wait tables, and the cost of restaurants would reflect that. But there still might be lots of people who wanted to be maitre d's or helicopter pilots, at least for part of their lives. The flipside is that if you enjoy cheap food delivery, restaurants and taxis, you are currently being subsidized by welfare and other social care services which allow people to do crappy jobs for less money than it takes to live.
But the job they'd walk onto instead, is quite likely to be a return to personal food, retail, etc.
Like, Amazon might have trouble finding warehouse workers, but owner-operated bookshops would boom. McDonalds would have to go robot, but the cooks would be working at Mom's Diner.
And make it a pull tax system. Tax take = cost of UBI. Tax sources = income, financial transactions, static wealth and savings, land value, job-replacing automation.
It's some weird Star Trek utopic vision, but I don't see it working. Not at scale. Especially not in the US, because to make it work you need tax money, and the US is tax-averse.
Lack of wage growth incentivizes people to find new, more value-producing work. Subsidizing low-income work is self-destructive.
Lack of wage growth also limits business creation. Most of us need some kind of reserve to start something. You can't start from absolutely zero while struggling to survive.
We can all be solo business owners.
new business generation is way, way down.
the reason why is precariousness. if you don't have a margin large enough to risk starting a new business, a new business isn't started.
I mean what does Uber etc do when a driver gets into an accident during a ride? Outside of a ride? If it was a taxi company, insurance would kick in and there'd be no problem. In the gig economy, the risk is entirely for the driver.
The people currently driving for Uber/Lyft will be in the same boat when automation comes. Driving a car requires a pulse and peripheral vision. It’s ripe for a race to the bottom.