New Study Confirms That American Workers Are Getting Ripped Off | Hacker News Reader

New Study Confirms That American Workers Are Getting Ripped Off

nymag.com

67 pointsclumsysmurf46 comments

My thought here is that there is a significant lack of outrage in weak wage growth and income disparities because the data is not relatable enough. There's certainly some protest at the most abhorrent levels of minimum wage meeting acceptable levels for a living, but shouldn't everyone from the upper to lower class be up in arms if there is such a favoritism toward executives and shareholders? Maybe something along the lines as showing what normal wage growth in tangible quality of live areas (e.g. this is the home you could afford) would look like for certain income levels might be a better way to explain this.

"shouldn't everyone from the upper to lower class be up in arms if there is such a favoritism toward executives and shareholders?"

Most people are just too tired, too busy with their own lives, too disillusioned with idealistic promises of change, and too fearful of repercussions to try to rock the boat unless they're starving and have nothing to lose.

As long as they've got their bread and circuses, nothing will substantively change.

Even if/when it does change, history shows that we'll probably just wind up with a new boss who's the same as the old boss.

> Even if/when it does change, history shows that we'll probably just wind up with a new boss who's the same as the old boss.

But history doesn’t show anything of the sort? History instead shows a clear path to how Europe ended up with the bottom 50% ending up with a much larger portion of wealth than the top 1%.

What’s remarkable here is not how impossible change is, but how Americans have utterly resigned themselves to the supposed unchanging inevitability of their current situation despite clear evidence that alternative modes of operating aren’t just possible but clearly exist right now.

America’s primary problem with change seems first and foremost to be its own fatalistic delusion that being any other way is impossible.

> History instead shows a clear path to how Europe ended up with the bottom 50% ending up with a much larger portion of wealth than the top 1%.

I'm convinced that this was mostly due to the war. Indiscriminate destruction and injury is a great leveller. It also triggered the end of colonialism in the 70s, which was critical to egalitarianism.

This almost happened in America, but it's difficult to trace the exact point of failure. Possibly Carter's failed Iran rescue and subsequent non re election?

Europe went heavily in on trade unions after the war, partially as an antidote to fascism and occasionally with direct US support for strengthening them (as in post-War Germany). Domestically, however, the US significantly weakened unions first by strongly opposing efforts for unions to receive a seat on corporate board of directors (which they had supported in Germany), and via Red Scare union busting tactics.

The long term hostility toward unions essentially won in the ‘80s when Regan broke the air traffic controllers, and the rapid rise in wealth inequality from the ‘80s onwards seems a very direct result.

> But history doesn’t show anything of the sort?

Depends on the timescale, but it looks a lot more like the hierarchies re-establish in a similar fashion. Often from the same lineages, over time!

s/bottom 1%/top 1%/ ?

Otherwise that's trivially true for all countries, no?

Whoops, top, yeah.

I agree.

Personify these things so people can internalize them, better understand what they are experiencing and why.

Most will find it unacceptable, as they should.

Honestly, most of this is a priority problem. And informed people will be a higher priority than uninformed ones are.

Part of what Trump was successful at doing was to channel some of that latent rage. But rather than at companies or rent-seeking individuals (like himself), he made it about immigrants.

That's not entirely true. He's openly opposed to Amazon and to companies that outsource to factories abroad.

He's opposed to Amazon in no small part because Jeff Bezos owns the Washington Post, which publishes stuff like

https://www.washingtonpost.com/news/fact-checker/wp/2018/06/...

A lot of his and his daughter's clothes and other stuff is manufactured abroad - he doesn't really have a problem with that.

http://thehill.com/homenews/campaign/395557-chinese-factory-...

I sometimes ask people how their employer justifies operating a bus service to take them to and from work, but not the additional real-estate cost of giving you a bit of personal space in the workplace.

I'm guessing that they do this because it is "easy" to take away lifestyle benefits if the numbers aren't working but it is "hard" to reconfigure real estate to stuff more people into the same space.

High end, class A office space is $10/sq foot per month in Silicon Valley. An open office plan allocates roughly 15 square feet to each employee ($150/month or $1,800/year). That employee is typically generating more than $10,000 of net income per year to the bottom line for all of the top tech companies). It took Ford nearly 100 people to develop a new automobile feature that could differentiate their cars in the market, it takes Facebook about three. And Ford gave every engineer in that group of 100 an office of their own to work in.

So yeah, times have changed and the employees aren't benefiting as much as they used to. The only question is whether or not they will do anything about it.

Yeah, this is beyond me as well.

Back around the turn of the century, when I was a junior developer, I was making peanuts for salary but I had my own office and was super productive. I discussed things with my coworkers when necessary but I altavistaed[1] trivial questions instead of blurting them straight out, the way everyone does where I work now. Despite the lousy salary, I loved it because I was able to spend hours in flow each day.

OTOH where I work now, when I cost my company a lot more, they put me in a huge open office where I'm effectively prevented from being productive in any way. Sure I could use my NC headphones but then I would miss out on a lot of impromptu discussions/decisions and besides whenever I put them on someone starts waving in my direction... :( I think I've spent less time in flow in total (during 1½ yrs) at my current employer than I spent in a day back when I had my own office. Needless to say, I'm in the process of switching jobs..

[1] For those to young to remember, altavistaing was much harder than googling because it required some heuristics on your own part to find what you wanted: "Hmm, for this search term, do I expect the number of garbage pages to be 10, 15 or 20?" The golden nuggets were often hidden in between.

That employee is typically generating more than $10,000 of net income per year to the bottom line for all of the top tech companies

I think your math is a little off: http://www.businessinsider.com/revenue-per-employee-at-apple...

...even if you're only talking about profits: http://www.businessinsider.com/apple-facebook-alphabet-most-...

Not to promote Business Insider, they were just the top hits with the charts.

Apple is pretty extreme and yes, I was trying to focus on just net revenue so after everything else, free cash flow on a standard accounting basis.

It just makes the argument stronger in my opinion, if you're bringing the company more than $1M/year in free cash flow why can't they build you an office everyone can enjoy working in?

Absolutely.

As a partial rebuttal to the article’s points about income inequality, it seems worthwhile to quote one of PG’s better-known essays [0]:

>Variation in wealth can be a sign of variation in productivity. (In a society of one, they're identical.) And that is almost certainly a good thing: if your society has no variation in productivity, it's probably not because everyone is Thomas Edison. It's probably because you have no Thomas Edisons.

>In a low-tech society you don't see much variation in productivity. If you have a tribe of nomads collecting sticks for a fire, how much more productive is the best stick gatherer going to be than the worst? A factor of two? Whereas when you hand people a complex tool like a computer, the variation in what they can do with it is enormous.

Now, the middle-class and upper-middle-class do subsidize the wealthiest Americans as a result of the US’s tax structure, and that’s a problem. But aside from that, the fact that the top quantiles in the US are wealthier than their equivalents elsewhere is not fundamentally a bad thing.

[0] http://www.paulgraham.com/gh.html

I am surprised by how infrequently I see the arbitrary progressive tax bracket levels being brought up in these debates. The fact that you are considered ultra wealthy and paying at about the top bracket at ~200k per year is absurd. Meanwhile there is no progressive taxation for capital gains. The highest brackets should be stretched into the tens of millions (or even in the hundreds), and taxes should be significantly lower for the upper middle class (for whom it is increasingly difficult to become upper class through hard, good work and a somewhat standard career directory).

Better yet, tax wealth instead of income. The value derived from government services is more closely proportional to wealth than to income, and income-based taxation is inherently regressive compared to wealth-based taxation. The only significant wealth-based tax in the US is property tax, and even that is somewhat regressive because the share of income and wealth spent on housing decrease as income and wealth increase.

I disagree with wealth taxation -- wealth can be tied up in illiquid assets (longtime family home, grandma's jewels, etc.) and even more importantly, a tax on wealth kind of makes it like you don't really own property, you are just leasing property rights from the government. Not a hallmark of a free society in my opinion (land taxes are questionable for the same reason), whereas a tax on economic activity made possible by a government that enforces a market structure / the rule of law seems far more amenable.

However, I will add that I could maybe get behind minor wealth adjustments for income taxation, if the incentives could be figured out. For example, a lower bracket person / new college grad with no wealth who had a really good year financially by consulting or something might pay a slightly lower amount than a longtime VP who has accumulated significant wealth, but had the same income for the year. This encourages people to spend, not save, though, and it still is indirectly taxing property rights. Perhaps a better way would be to adjust based on the moving average of previous incomes.

Inflation is the tax on wealth, and much easier to administer and harder to avoid than a wealth tax program would.

Inflation is a tax on cash, not wealth

Inflation is more a tax on wage income than existing wealth, because investments will inflate in addition to their productive growth returns.

buy property, rent it out, raise rents above the inflation rate. simple.

That wouldn't work have you not heard of splits :-) ie trusts / funds designed with separate classes of share one gives income one gives capital gain.

> there is no progressive taxation for capital gains

(I know this is not your main point, but) short-term capital gains are taxed at the same rate as ordinary income, and long-term gains have three brackets (0%, 15%, and 20%).

Goes up to 23.8% federal due to ACA, along with 13.3% CA state tax for long term capital gains.

Just about the highest in the developed world IIRC.

The lower brackets need work too. If the poor are doing what the wealthy say they should be doing and picking themselves up by the bootstraps, they eventually hit that tax cliff from 12 to 22% where a raise can actually penalize them.

"Hi poor people! Welcome to making money, here let me take 10% more of it away from you. Can't let ya catch up too fast, now can I!?"

That's not how tax brackets work. The new bracket applies only to income in that bracket, entering the 22% bracket means that income above that threshold is taxed at 22%, your income below that is still taxed at 12%.

The higher tax bracket only applies to the additional dollars earned, so mathematically it can't penalize you when you make more money (I'm assuming you are using "penalize" to mean "you take home less overall pay"). And you have to make about 50K (factoring in the 12K standard deduction) for that to happen. At that point, you should be using some of the extra money to dump into a 401(k) plan, which comes "off the top" for tax purposes. So 10% in 401(k) means you have to hit 55K before the additional funds start to diminish returns.

Nobody disputes that more productive people should get more reward. But with inequality increasing I have my doubts that the top x % are increasingly more productive than the rest. Or are today's CEOs who make for example 200 times the average workers salary 10 times better than the CEOs in the 50s who made 20 times as much as their workers?

I'd like to see us address the magnitude of wealth & income inequality, but it isn't necessary for us to end up at a uniform distribution, some inequality in income distribution helps to spur growth in under-served or high risk vocations... but we've reached a rather ridiculous extreme at this point and for some reason we're still retaining strongly regressive taxes (i.e. payroll, and various complex loop holes that allow percentage savings while having mostly fixed costs to exploit)

I completely agree - my point is that the posted article’s metrics aren’t effective at illustrating these points. It would be more meaningful to look at, say, the share of productivity gains that has flowed to capital as opposed to labor (~100% in the US) or at the volume and distribution of various transfers and cross-subsidies over time.

The broader truth is that inequality as such is not an indication of injustice or, as it seems to be presented, an injustice itself. There's a huge difference in wealthy between Bill Gates and a member of the upper middle class, but few people worry about that, expect the envious.

Poverty is a problem, and corrupt uses of enormous wealth to hijack politics and exert power in unjust and immoral ways are problems, but not the wealth as such.

I think of it this way.

Say we are CEO and our enterprise makes 60 billion a year. Bankable.

Now, if we fund better lives, we make 58 billion a year.

(Just randomish numbers)

What is the priority and why?

> Variation in wealth can be a sign of variation in productivity

Yes, Jeff Bezos is 2 million times more productive than the average person.

Maybe we shouldn't listen to the guy worth, at least, hundreds of millions when it comes to wealth inequality.

> Yes, Jeff Bezos is 2 million times more productive than the average person.

That is true to some extent. I think the average person could live out 2 million lifetimes and not once achieve the success he's gotten.

>Further, the OECD finds that only Turkey, Lithuania, and South Korea have lower unionization rates than the United States, a fact that can be attributed to the myriad ways American policymakers have undermined organized labor since the Second World War. And a government that discourages unionization — and alternative forms of collective bargaining — is one that has decided to cultivate an exceptionally large population of “low income” workers, and an exceptionally low labor-share of national income.

I continue to wonder why technology workers (some of whom write article after article about how poorly they're treated) approach unionization with such a sour attitude and instead magically expect things to improve.

because they can negotiate a better deal despite the illegal no poaching agreements.

Yet, American workers keep voting for the people that rip them off. If you never learn, things will never change.

Time to trot out my favorite quote: "Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires." - Ronald White, paraphrasing John Steinbeck.

The prideful are painfully easy to rip off. But just like any con, a little vigilance goes a long way. It's not hard to see rising trends, and the trend has been towards the trades for at least a decade now. It's not hard for plumbers to make more than lawyers these days.

The middle classes process information. It makes sense that blue collar workers will ultimately earn higher wages than them. It has already occurred in some cases but it's going to become a general pattern. Computer automation is similar to inflation I expect - it will creep up on people and before you know it most university graduates will be poor and the blue collar workers with their act together will be prospering.

Not a popular message I realize.

I wanted to create a new party called the middle. As the poor and the rich are arguing over who gets what the middle class is getting gutted.

I always thought that the 99 percenters should become the democrat counter to the republican tea party.

That's why I consider Socialist types to be ultra-pride-ridden. Enjoy those breadlines.

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