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Comment by threatofrain | Hacker News Reader

> Google executives have been aware since at least May 2019 that the company was failing to comply with local laws in the UK, Europe and Asia that mandate temporary workers be paid equal rates to full-time employees performing similar work, internal Google documents and emails reviewed by the Guardian show.

> But rather than immediately correct the errors, the company dragged its feet for more than two years, the documents show, citing concern about the increased cost to departments that rely heavily on temporary workers, potential exposure to legal claims, and fear of negative press attention.

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As I keep saying: there’s nothing more dangerous than a company (or department in this case) that was once wildly profitable and is now merely profitable.

It’s absurd that even at places like Google, which has effectively infinite money, there’s still this present attitude of not being able to afford paying workers. Nuts.

It's not that they don't think they can afford to pay fairly. It's that the decision makers are incentivized to cut every possible cost and are rewarded for it with multimillion dollar bonuses.

Yes, you’re right. I worded my post for the sake of glibness and not clarity.

I think what’s particularly fascinating is not the relentless drive for more profits, that’s been hashed to death and I have nothing original to offer here, but how the internal narrative of “we can’t afford to pay them” holds in cases where it’s transparent bullshit. Of course Google can afford to pay its temp workers a fair wage, and of course they don’t want to. It’s just surprising that the story they tell themselves is so trivially falsifiable.

Its not really "dangerous" only because that wording implies another state of possible affairs that could be safer.

unfortunately, ceteris paribus, the tendency of a rate of profit to ultimately slow is one of the costs of a free market, there is not really a way out of it long term!

Where is this thing called "Free Market"?

Competition from Facebook and now Amazon ad businesses eating away at profit margins

I was recently reminded that Milton Friedman -- profit, err, prophet of Freedom Markets™ -- actively eschewed empiricism.

It's not that these sages didn't understand. They refused. They actively rejected understanding.

Our epistemological crisis, where we don't even have a shared reality, has ancient roots.

> Its not really "dangerous" only because that wording implies another state of possible affairs that could be safer.

I generally use this phrase in the context of companies being willing to do anything to get back to being wildly profitable. And in that case, yes, there is quite a bit of danger towards basically everyone else.

Maybe you were talking about other companies. Google is still wildly profitable.

> the company just set an all-time record revenue of $61.9 billion this quarter, and record profits for the fourth quarter in a row at $18.5 billion.

From https://www.theverge.com/2021/7/27/22596592/google-q2-2021-r...

“Or department”

Regardless, the fear of marginally reducing profits drives companies to do a bunch of things that are fundamentally pretty gross.

Wow, at what point do their profits balloon enough that Google's moat is no longer intimidating enough to fend off a gold rush of people willing to pour heaps of money and ingenuity into outdoing their search product? I've been searching with Google since the beginning and it definitely feels worse than in the days of yore, yet they make more money than ever...

They don't make money at search, they make money on advertising.

Yes, a moat is not a profit centre, it is a cost centre. You appear to have misunderstood the point you replied to.

Who has access to the amount of data that Google does? Microsoft and Apple come to mind, but they are already profitable for their own reasons so may not want to risk their current profit centers doing the "shady" work Google is known for (not necessarily saying Google is evil/shady, but their products have a reputation).

Microsoft pretty clearly does "shady" stuff with all the Windows desktop telemetry and ads.

You know what they say, though... you don't get infinite money by cutting a lot of checks.

Google is wildly profitable.

It's understandable that a company, crunched for cash, ends up in odd situations.

It's not acceptable when you're sitting on mountains of cash - and - claim to have some kind of moral situation in commerce.

They are profitable exactly because they don't pay workers the worth they produce. Profit is literally that.

Profit is the difference between the cost to produce a good or service and the revenue generated from it. Cost of labour is just one aspect of the cost to produce a good or service.

Google is exploitative because they don't fully compensate the value of labour used in production. This is wrong and damnable and illegal in any reasonable jurisdiction. Google is profitable. This is not wrong and commendable in most places. The concepts should not be conflated.

The crux is that one needs to be willing to pierce through the pretend veil of separation:

> “the correct outcome from a compliance perspective” and could place the staffing companies it contracts with “in a difficult position, legally and ethically”.

The systemic abuse of subcontracting companies to undermine the rule of law by these large corporations needs to stop. But it only will if executives at Google would face the same consequences as executives at the subcontractors (which tend to escape criminal punishments as well by hiding behind multiple shells and false ids).

In Korea subcontractors with limited liability for workplace accidents was a huge problem in construction. The law now holds contractors and subcontractors equally liable for workplace safety violations.

What is the mechanism by which an entity that has the resources to spend on wrist-slaps is prevented from just continuing the behavior forever? I notice this a lot, and it feels like there are these opportunities everywhere that are exploited by corporations who know they'll skate every time with minimal financial impact.

The "wrist slaps" will make up for the entire amount that the offending party short-changed the workers and penalties on top of that not to mention the cost associated with litigation.

So it's not economical for the offending parties to continue such behavior.

> So it's not economical for the offending parties to continue such behavior.

Of course it is. The only needed change is to take adequate care to not leave incriminating evidence such as emails around.

This assumes a 100% success rate of catching such behavior.

Penalties just have to be set correctly.

If I don’t pay a parking meter I’m likely to lose up to 100x as much as I saved… if Google doesn’t pay its employees…

High potential punishment has never worked.

If your city has exactly 0 'meter maids' what does the 100x fine do to deter you? Nothing.

If your city is patrolling its meters with a frequency that guarantees you will be caught 100% of the time you will definitely not do it ever (if you knew or after being caught multiple times in a row) and the expenses for meter maid salaries would be exorbitant. No more money coming in.

Theres probably a hard to attain sweet spot where having the patrols brings in enough money to offset enough of the salaries and which also gives you the feeling of 'always getting caught' thus not making it worth your while.

shrug i’ve usually got caught unless parking for a very short time, i think with computerized meters they must have some automatic systems that flag cars just by driving past with an enforcement vehicle, only do that during busy times and you have pretty decent enforcement and parking meters doing what they were designed to do

So then tell me if you've got caught nearly 100% of the time, are the fines just a slap on the wrist or why do you keep doing it?

(what I didn't say is that if all you get is 'you bad boy but please don't do it again' then 100% enforcement doesn't help either. That should be obvious)

Well the last parking ticket I got was a result of putting the wrong space number in the machine, I got them more frequently when I was younger and stupid or forgetful. (I had a bit of a problem with sleep and would park somewhere and take an unplanned nap and get a ticket).

In the cheaper ticket city I would freely not pay the meter more or less breaking even on cost, and now in a more expensive city I do unless i’m only intending to park for a few minutes.

> High potential punishment has never worked.

And then you talk about meter maids. What do meter maids have to do with Google not breaking labor laws?

This is something called an analogy. In particular I chose a "car analogy", which is a common technique. Sometimes when a non car analogy is used people smirkingly ask for or make up a car analogy even.

I could use a different one that would stir up much more controversial debate. What if stealing office supplies carried the death sentence? If you are guaranteed never to be caught how much of a deterrent would it be? If you get caught 100% of the time for that but all they do is to make you pay 10x what the supplies were worth?

Basically what I was trying to show that it's all about a combination of percentage of getting caught and the sentence. Only upping the possible sentence does not act as the deterrent people commonly attribute to it.

Probability of the potential turning into reality. A high potential punishment in the parking ticket analogy is very unlikely with few or no "meter maids".

Their point is that high potential punishment alone isn't sufficient, but that it must be likely or inevitable as well.

the mechanism is turning the heat up to 11. Whatever money they saved, 20x it and fine them. Do it for every minor infraction until they comply. Drag their executives in front of a camera and make them issue a public apology. What are they gonna do, drop out of the entire European or Asian market?

The problem is just lack of political willingness to reign them in, nothing else.

Agreed. Executives need to start getting personal punishment if we want corporate behavior to change.

Alternatively, start issuing fines such that it’s X percent of revenue plus Y percent of salary from all employees. Even a fine of 1% of annual pay would light a big angry fire under most employees, and perhaps incentivize them to stand up to the execs and refuse to follow illegal or unethical decisions.

The gdpr fine system has seemingly been very effective and convincing corporations to comply with laws. Maximum of 20% in revenue fines, enough to cause many businesses to recapitalize - wiping out shareholders and executives.

You want to directly fine low level employees for the actions of execs? My god, no. That's such an evil idea.

They're fined indirectly with stock prices already, but man is your idea really bad.

All employees would include execs obviously. I admit it's unorthodox and might feel a little unfair, but I imagine for these big tech companies that are so often guilty of just ignoring the law and paying fines to make their problems "go away," having the employees be furious at the bosses would be a far, far more effective punishment.

In terms of dollars, I don't think it would take much to make the point. Suppose you set the fine to 0.5% of salary from all employees. Someone in an entry level job earning $40k would only owe $200. But they'd be really flipping mad and might quit over it. That scales up pretty well - a middle-manager at Facebook who makes $600k would owe $3k. Not enough to really affect their life, but enough to make them really pissed off and potentially bail on the company.

In the end, if we as society want corporations to follow the law, we have to start recognizing that corporations are made up of regular humans following incentives, and if the corporate shield means the people who work in the company and carry out its actions feel no personal consequences of illegal actions, then it's not surprising they'll ignore the law.

But what does fining the low level employees accomplish? They can't really change the direction of the company in many cases.

Thats not really true. The middle and lower layers of the company is where the actual work happens, and if the people carrying out the work suddenly perceive there’s a personal risk to doing illegal things - even if it’s just a small fine - they’re much more likely to push back or quit. Meanwhile upper management may not care about a billion dollar fine that their spreadsheet says is “worth it,” but their life will be miserable if all the employees underneath them are pissed off, 10% quit, and nobody wants to work there. It’s a much, much bigger risk to upper management to infuriate their workforce than it is to write a check.

That’s the thing I think most people don’t understand about large companies. Money is just a number, they’re playing a game with it. If the company pays a huge fine, all those folks are still rich and nothing bad happens to them, they just have a few different numbers on their spreadsheet. That’s why they don’t care. It’s not like a normal person getting fined, who then loses the opportunity to use their money for things that matter to them.

If we want to hold corporations accountable, we have to issue punishments to corporations that actually hurt their leaders.

That’s a fantastic way to make any employee shut up immediately the moment any form of inspector enters the building.

A fair point, but doesn't this happen already? My experience working in a large corporation is that there's a pervasive "us vs. them" mentality when it comes to outside auditors, inspectors, etc., as well as a mindset that "they're just here to make our life harder," via imposed red tape, controls, etc. If this was really an issue perhaps there could be a whistleblower provision stating that anyone who assists with an audit or investigation is exempt from any personal fines that may result.

I think my problem is that while I may be happy to throw my bosses boss under the bus (he has it coming), Jim from accounting has a family with 5 kids, and he really needs the money. So I’ll just keep quiet about everything.

I do agree there’s an us/them mentality, but that breaks down when people feel like they can air out their grievances against senior management without sinking the company itself.

That’s fair but this is why I’m suggesting token penalties. Like parking ticket sized. People are extremely loss averse, so that’s enough to really bother them (thus deter behavior) while it shouldn’t be enough to genuinely hurt Jim in accounting.

Penalize the owners of the company. Make 10% of all stock disappear into a legal black pit. The executives (many of whom are usually shareholders) will receive corrective action in good order. Word to the owners: make sure your capital is working ethically, or be prepared to pay the price.

Penalties should be high enough, that even if 10% of the cases are uncovered, the fines become more expensive than actually working within all rules.

Also, a lot would be solved if responsible people would get punished too, especially if they knew about the illegal stuff, and didn't do anything.

The mechanism is by assigning visible but not devastating (despite the public demand for schadenfreude) punishments to executives found culpable. The goal is to maximize reporting and to change the culture.

If the punishments are set too high, individual loyalties begin to dissuade reporting. You might not love your boss, but you might not want to see his kids lose their father. So executing executives has its downsides.

However, the sanctions must be visible so as to decrease the tendency for offenders to defend each other and entrench corruption. This is difficult because it means that people will still be employed (in less powerful roles) after being sanctioned for offenses many people find morally repulsive.

It's a difficult balancing act. Cultural factors play about as big of a role as incentives. Rick Scott's Medicare fraud is infamous but it didn't stop him from winning three statewide elections in Florida.

I think the important thing about the penalties is that any potential gains (and then some) are negated.

If someone does not pay their contractors enough, knocking them down a peg to the level of those contractors seems like an appropriate punishment.

They can work their way up again.

One mechanism is to fine the CEOs in units of time rather than dollar. For example, the punishment can include 18 hour compulsory training for the Cxx executives that they have to attend in person over 3 days (6hr per day) so that they understand how to comply with the regulations.

Great idea! This should definitely require physical attendance in order to avoid loopholes.

Honestly, underpaying employees should be viewed no differently than any other for of theft, and executives willfully allowing it to happen ought to be facing time behind bars for it.

Wage theft is the largest form of theft

nothing will change until high level executives start getting thrown in jail

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