Unfit for work
apps.npr.org
apps.npr.org
The only long term solution is a basic income system, which rewards consumption and allows the market to continuously reward innovation and efficiency. Without a redistribution mechanism to fuel consumption, the market collapses entirely as wealth is further concentrated.
Further reading:
1. http://www.naturalfinance.net/2013/02/nearly-all-of-us-suppo...
It seems to me that the more globalized, specialized and efficient the world becomes, a few hubs will produce pretty much everything. If in the past every town within a 100 mile radius had it's own carpenters making furniture, today there's one big Ikea in the middle of them all taking all that business away.
Consider where the money to pay the plumber comes from. Will hundreds of people from other towns call on that plumber? Or on their own plumbers?
What I'm trying to say is that at some point, someone, not necessarily the plumber, but someone has to bring money into the town.
As the population grows, more people buy more stuff. Local woodworkers and cabinet makers cannot possibly fulfill demand using locally sourced materials and hand tools. If everyone is to get chairs and tables and cabinets, production must be automated. Once automated, production can scale, which usually reduces both quality and cost. Instead of local wood, wood is imported and turned into particle board because its dimensions make automation easier. But now a nightstand can be turned out in less than an hour, where a traditional artisan might spend a week or more, driving up labor costs.
In other words, it isn't that people need to "rethink" what's valuable. They have already done the thinking, and they value more affordable, lower quality goods over limited, expensive ones. And I don't blame them.
Sure, the coffee table you paid $30 for at Wal-Mart is almost certainly inferior in every way but one (price!) to something you'd find yourself paying $400 (or $4000) for at [locally-produced furniture company]. But you could probably spend $200 and get something made in China or Vietnam that is just as good as anything you could buy locally-produced.
However, over the long term, the situation of a third-world craftsperson earning in a month the amount of money a minimum wage worker in Europe or the US makes in a day or two is just not going to last in the long run. Either the influx of money from foreign trade and investment will raise wages in places like Vietnam or China to where their physical labor is no cheaper than a first-world nation, or it will pay for automation that will displace laborers just like it has in Europe or the US, and the costs of production in those nations will depend less and less on unskilled labor.
A purely libertarian way of dealing with the problem this article brings up would be to tighten up disability or abolish it and eliminate minimum wage. That way those workers would have to compete against the global labor market to survive. That's not going to work because our society is not going to accept it, and things are so expensive here, they probably couldn't compete even with starvation level wages. I'm not saying the ideal is possible, I'm just trying to figure out if there is any way society can reap whatever contributions can come from people who are currently on disability for marginal reasons without the nuclear option of forcing them to complete against $80 a month wages overseas? It's no good for people to sit around and do nothing all day, either for the individual or society. Idle hands are the Devil's tools.
I can't believe I'm saying this, but maybe a government program? Since the government is paying for them anyway? Something like the old WPA in the US? I don't have much confidence that will work though. Realistically, government programs rarely accomplish their stated goals, and they rarely go away if they do.
It's completely unlikely anyway. We're barely hanging on to some of the existing meager social benefits in this political climate, let alone creating new benefits.
Economics is subtle and much more complicated than what you describe. We are not heading to Mega City 1.
Gutted, I need a Chopper style surf board!
Agriculture sounds innocent enough but living in such an environment I know it's not that simple. It's seasonal which is at the moment a huge problem the Canadian government has with seasonal workers in isolated areas. People get government assistance aka employment insurance or "EI" in Canadian-ese but the government has closed down the offices people go to apply and made it web based, baffling non-techy 60 year-olds. Now "EI cops" are making unannounced visits to these rural areas to make sure they people on EI are looking for work...but where?!
Anyway it's an age-old situation, the people make our food live in the middle of nowhere get pennies per ton and when they need money the government and city dwellers sneer at them.
http://www.census.gov/compendia/statab/cats/agriculture/farm...
826, "Farms by Size and Type of Organization" is probably the more interesting report.
There is some room at the top for your cartoon owners there, but the typical farm, by acreage and number, is a medium sized place (still hundreds of acres) that is closely held by a family.
NAFTA supposedly has wording about subsidies but the US often denies it I am just going by what I hear since living in an agricultural region you hear this stuff since birth even if you're not a farmer or fisherman.
Instead of thinking, "I must not know something", you think "these places don't produce anything of value".
Your comment said very little about economics and a great deal about you.
And then the extra cash will turn into custom furniture because all the neighbors have IKEA and they want to be different.
The long-term, progressive solution is to train people up. Give them the resources and autonomy to learn the skills they need to rise to a higher level of work. If this is done, then we break out of the zero-sum labor regime, people graduate to more creative, high-yield work, and we can all be happy.
But... someone has to pay for these people to survive while they learn, which takes far away from our original-sin (work, or don't eat) economy and closer to the basic income concept.
The unpaid internship phenomenon is not there to skirt minimum wage laws, but to avoid an uncanny valley. The actual economic worth of a publishing intern is nonzero (and probably above the minimum) but unsavory. No middle-class college-educated person will work for $9.50 an hour-- it's a pride thing-- so the wage is reduced to a flat zero and the job type is redefined as a "learning experience". To be fair, it's not totally dishonest bullshit. If the pay is zero, the power dynamic is different. So it is a different kind of experience (I'm just not sure how much of one it really is).
I actually think that a basic income is good insofar as it removes the need for the minimum wage. Minimum wage is essentially a clumsy minimum-income program where the bill is paid by low-end employers, who respond by cutting low-end jobs, creating unemployment. In theory, without a minimum wage, we'd have zero unemployment (except for the beneficial, intrinsic kind). Add that to basic income, and the (theoretical) result still holds: full employment. Most capable people would work, for economic reasons, but the option not to work would give employees more leverage and be better, on the whole, for society. As much or more work would be getting done, since it's unambiguously bad for people to be economically disenfranchised (1930s proved that fucker true).
It's probably one of those things that happens, but is more isolated than it seems.
Wow -- that's pretty far removed from reality, at least as I've seen it. I know plenty of people with undergraduate degrees who work for that or less, because they can't find jobs related to their field. They would definitely work paid internships that were minimum wage, if it was part of the career path.
In fact, that's about on par with what I get from teaching classes as an adjunct!
I think some degree of discretionary income is useful, if only from a complexity-reducing standpoint (better to give the person funds than to regulate "how much phone" is necessary to get jobs and what is a luxury).
At any rate, I don't worry about the parasites we might have at the bottom of society if we're more compassionate. The costs they induce are a rounding error. We lose a lot more to the parasites we already have at the top of society.
I've always thought the basic income idea is interesting, but I'm not sure how it could be made to work. If everyone receives a basic income, then those who earn more must pay back enough in taxes to cover their own basic income and then some. How this is really different than what we have today? People who receive government benefits get them mostly in the form of discretionary income. The argument goes back to "who" and "how much."
In current situation, if you start working - you are losing your welfare/disability benefits.
I've been curious for awhile: in the USA, if you took Social Security, Medicare, Medicaid, food stamps, student loans, welfare and rolled them all up into one fund that was evenly divided to each person, how much would you have given out? Turns out the number is about $6-7k per capita. That's... not enough, but a pretty decent start. The economics suggest it would increase overall productivity, which would bring in a bit more tax revenue by itself. But taxes would have to be raised significantly--but not an obscene amount--to make it work.
Did you read the article?
People at the Social Security Administration, which runs the federal disability programs, say we cannot afford this. The reserves in the disability insurance program are on track to run out in 2016, Steve Goss, the chief actuary at Social Security, told me.
Goss is confident that Congress will act to keep disability payments flowing, probably by taking money from the Social Security retirement fund. Of course, the retirement fund itself is on track to run out of money by 2035.
Goss and his colleagues have worked out a temporary fix under which the retirement and disability funds will both run out of money by 2033. He says he hopes the country will have come up with a better plan by then.
Does it sound like a rounding error to you? It doesn't to me.
And the big screen could easily double as a second monitor for doing work on a laptop.
The worst that happens is someone has more than they need. And then what happens?
One of two things:
1: It sits in the bank, where it's lent out for investment
2: It's spent, possibly on something optional but still legitimately useful and non-frivolous, in which case it flows back out into the economy
I don't see a bad outcome. The vast majority of people want to have the self-esteem boost of fulfilling employment, and will seek it out once they're not stuck in the welfare trap. There's even a solid chance this will bring civilization to a point where no one needs a minimum income.
I'm probably just preaching to the choir, so you can have the last word if you want it.
One of two things:
1: It sits in the bank, where it's lent out for investment
2: It's spent, possibly on something optional but still legitimately useful and non-frivolous, in which case it flows back out into the economy
I don't see a bad outcome..!
The problem with your suggestion is that it would necessarily create runaway inflation, because there's no way to square that payout with government tax income.
You can have redistribution of wealth without runaway inflation, there are a number of existence proofs of this.
A phone is peanuts in comparison to the things that really matter.
How? At what price? 10 hours per week even at $10/hour is still $100/week, minus some taxes - you're at... say, $80/week = max $400/month. How on earth can someone earning $400/month afford 'small luxuries' like a $200 tv? And the 'big screen tv' that was mentioned - I've never seen any (new) under $450 (yet). Not sure where you're living, but for someone earning minimum wage working 10 hours per week these are simply unattainable. Or, let me rephrase that - should be unattainable, because there's nothing left for subsistence.
This would cost $40B a year, which comes out to roughly $400/year for each remaining household that chooses to carry the burden. To a lot of families, that's a lot of money. Is it moral to forcibly take it from them and give it to someone who is willfully idle? Also, would the idleness rate really be 1% as in this example? I think it would be much, much higher.
consider this: there is a factory. it employs 100 workers, generates some amount of value which is split between worker salaries and profits for the owner. now someone invents a robot which can replace 90 of those workers, and cost the less to run and maintain than those workers' salaries. should the factory owner make the switch? of course he should, it's insane to make humans work when a machine can do their jobs. but now what about the people who were working there? they could be forced to retrain and find new jobs (not always possible). they could be kicked out to fend for themselves (what happens now). or the government could tax the means of production highly enough that it could pay them in welfare what they were making in salaries. the factory owner would be no worse off, the workers would be better off, and the government would have corrected for the fact that wealth tends to pool in the hands of the people who already have it, because they are the only ones who can afford to acquire the means of passively generating income.
in terms of morality it seems better than making person A "forcibly"[0] labour for person B simply because person B happened to start out with a lot more money.
[0] no one is putting a gun to his head, but if it's either work or starve you cannot call it uncoerced.
but then it wouldn't be $400 per family...
there's a lot of money pooled at the top, where it's pretty much doing nothing.
In real life, we've been shifting ever-more-steadily towards a rentier economy as actual production grows more and more efficient.
I really don't believe this strategy will accomplish any of these objectives in the way you intend. I don't mean to pick on your example or opinion; apologies if I come off as harsh.
the bugbear of international competition simply means that everyone involved gets caught up in a race to the bottom; the fact is that this would simply be a progressive tax on leveraged ways of making money. there's always an incentive to make more at a lower cost and effort, whether some of that more is taxed or not. i would go as far as to say that it's a basic human drive. the sticking point is, once you have a setup so productive that you do not need other people to contribute to it, what happens to the displaced people?
the current model seems geared towards "deserving" the means to acquire necessities and luxuries, by contributing something to the system, whether the system needs them to or not. however that leads to very strong inequities where the rich get richer and the poor lead lives of ever-increasing desperation, including the need to perform menial jobs at a "loss" (i.e. getting less for them than the human cost of doing them).
i also do not believe my scheme would destroy wealth, for the following reason: $100 would let a poor person eat better, a middle-class person buy a better cellphone, and a rich person tip his blackjack dealer. my contention is that the $100 is therefore worth strictly more in the hands of the poor person, and that "destroying wealth" is an illusion caused by the fallacy that $100 is $100 regardless.
This is just false. As computers begin to become capable of more and more jobs, the demand for human labor will decline. Automation is qualitatively different from mechanization. Education is a thin gilding on an impressive but non-optimal brain architecture. To say education will cure the ills of automation is a bit like saying fitness training could have saved workhorses from obsolescence. Workers of the world, you're fucked.
People often expect that Singularity-causing AI will have a set of pre-programmed guidelines about what to do (human happiness is good, killing all humans is bad, etc). It seems far more likely that we'll just use it to make money. If that happens, the Friendly AI Problem is exactly the Friendly Economics Problem.
So inevitably, the only thing humans will have to contribute to the economy will be consumption. Can AI be a consumer?
This is a critical step, politically. What we do now to the "useless" members of society will eventually be done to all of humanity.
But in my thinking, it's a bit more complicated than you make it out to be. Consumption doesn't really contribute to the economy in the relavent way; labor does. The only reason consumption matters now is that it returns the value of the labor's output to the capitalists. Then they can use the money to buy yachts and private planes and so on. Basically, consumption is a way of turning labor into general-purpose money. That's a fine model until you don't need the labor because you have all these fancy machines that can make everything (and design everything and clean everything and so on). So you lay everyone off. And then there's no reason you want the consumers because no one has given them any money to give back to you. You just make the private airplanes and swap them with the guy who makes yachts and call it day. And you're richer than ever before because you're massively more productive.
Now a few different things can happen: one is that everyone else just starts new businesses that employ the labor so that they can benefit from it, as sort of a second-tier economy, which exists until its elite accrue enough capital to build their own automation and the cycle repeats. That doesn't seem too likely. What seems much more likely is that everyone gets really mad that the current system doesn't provide for them anymore and demand a cut of all these robots' output. Maybe that happens voluntarily on the part of the capitalists (I think this is more likely, on reflection, than it sounds) or maybe it involves some government-sponsored coercion or a populist revolution. I don't really know.
Here's the core issue: "economics" or "the economy" or basically any ideological, rule-based mode of controlling human conduct is all really just a massively-parallel distributed computation/program running on meatware substrate-nodes. The Unfriendly AI is already here, it's called capitalism, it already rules the world, and it runs on us.
The computer is unfriendly, and we are the computer. This is why it has become a political act to remind people that they actually do value things other than capital accumulation.
Yes, AI can be programmed to consume. See Lem's novels as examples.
Of course, you can easily get nonsensical results.
Maybe the Objectivists are right – we need to program our AI to be selfish.
Big technology disruptions have happened before. The market adjusted and something new came along for people to do.
I like to argue: There were about one million working horses in the UK in 1900 but only 20k by 1914. No one found new jobs for those horses... [1]
[1] http://en.wikipedia.org/wiki/History_of_the_horse_in_Britain
/s
The attitude that everyone else is lazy and abusing the system seems most common in poor rural regions that depend the most on benefits. It usually has racial, anti-urban overtones that imply "we're only suffering because of THOSE people who don't look like us." It's a form of scapegoating.
The reasoning is usually along the lines of "oh he's just talking about those other people on benefits who don't deserve them. Not good hard-nonworking folks like us"
Poorer regions that more benefits do tend to vote for people to cut those benefits. But as Andrew Gelman has demonstrated, it's not really the people getting the benefits who want to cut them: it's the professional and ruling class in the area who do.
Nearly everywhere the lower classes do want more benefits, but the big difference between regions is what the powerful people want.
http://www.nber.org/papers/w17234
> Why do low-income individuals often oppose redistribution? We hypothesize that an aversion to being in "last place" undercuts support for redistribution, with low-income individuals punishing those slightly below themselves to keep someone "beneath" them. In laboratory experiments, we find support for "last-place aversion" in the contexts of risk aversion and redistributive preferences. Participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution. Similarly, in money- transfer games, those randomly placed in second-to-last place are the least likely to costlessly give money to the player one rank below. Last-place aversion predicts that those earning just above the minimum wage will be most likely to oppose minimum-wage increases as they would no longer have a lower-wage group beneath them, a prediction we confirm using survey data.
We need some serious educational reform . . .
Take a glance at the comments - apart from the usual anti-lawyer screeds, the other main theme is that it'll be way too expensive and they're not worth it. There are some impressively nasty opinions, and a regrettably large number of people who think that way.
There's no stigma involved in buying or using condoms or other means of avoiding pregnancy, although there is with abortion.
The service wave of disruptions moved manual labor to communications labor.
This wave of disruption is moving both of these to intellectual labor. Do I think that we have vast resources of unexploited intellectual labor? Yes. The issue is that the more people I meet the more I begin to believe the key to intellectual success is intellectual culture. Unfortunately, I don't think we have a very intellectual culture and culture changes slowly -- far slower than technology.
This route still works out to considerably cheaper than a traditional college education, takes less time than college, and has the potential for immediate employment once qualifications and prerequisites have been met. Last time I checked, every company wants to hire a "rock star" if they could only find one...
I hear a lot of people say this here, but that's not true for most jobs in the industry. For big companies good luck even getting past the HR without a degree.
Most of the people I know who do hiring, including some in Fortune 100 companies, very frequently identify through networking, not HR. Yeah, if the company hasn't heard of you until you hit the HR front door filtering process, your going to have trouble without a degree, but if you are coming in that way, you are already behind the curve.
Not everyone has the specific skills needed to do the job, either: to be maximally employable, those are both things that you would do well to develop (I'm much better at the skill side than the connections side myself, but that doesn't stop me from recognizing the fact that connections matter a lot.)
Yes, there was pressure to have a degree. But I knew several when I was there whose highest degree was high school.
The people who know the most and, moreover, learn the best, tend to be those who love to know and learn. It is that which is so rare in our society. The Tweet, the press release, the short pithy blog post; these are consumption disguised as learning. I come to HN to learn -- unfortunately even here I suspect that maybe a tenth of the articles teach me something.
But we have kind of hit a tipping point though. Both in technology getting more efficient at automating even difficult work. As well as economic growth at least domestically is no longer as strong as it has been in the past.
Humans can do so many, many things that if one is undervalued, they will look at others.
Some maybe we should stop saying that we are factory workers and must stay factory workers -- it just doesn't work that way, and truly never has.
Surely someone could find new uses for old horses, after all they are organic and adaptable in a way that machines aren't.
And somebody did find new jobs for those horses! 2% of them, at least. The balance got slaughtered.
You can wave your hands and argue that the jobs are out there or will appear given sufficient creativity, but the market simply doesn't care about the faith you have placed in it. Your optimism doesn't control the unemployment level. We have to prepare for the eventuality that the jobs don't materialize, and we have to do it in a way that doesn't heap perverse incentives onto the unemployed while choking off the very consumption that fuels the economy in the first place.
I do not think this was as much of a slaughterhouse as that makes it look. Today, horses typically live for 20-30 years or so. In 1900, I would think working horses would be lucky to reach 20 years; as they became older and less productive, they would be sold of and slaughtered.
With an average 'working career' of 10-15 years or a horse, just stopping buying replacement horses would be enough for most of that decline in the number of working horses.
I'm trying to figure out where I got it from--do you happen to know its provenance?
That's because most of them were killed on the battlefields of WWI. Here's the source of that part of the Wikipedia article:
The war used horses in great numbers for non-cavalry
purposes. It is estimated that some six million horses
served and substantial numbers of these were killed. By
1914, the British had only 20,000 horses and the United
States was called upon to supply the allied forces with
remounts. In the four years of the war, the United States
exported nearly a million horses to Europe. This seriously
depleted the number of horses in America. When the
American Expeditionary Force entered the war, it took with
it an additional 182,000 horses. Of these, 60,000 were
killed and only a scant 200 were returned to the United
States.
I just read Storm of Steel -- which is, by the way, The Best First-hand Account of World War One -- and it does seem like you can't go two pages without running into a dead horse.
And from a numbers standpoint, if 6 million died in a 4-year war, it doesn't seem far-fetched that 980k would be killed in 6 months, especially since for an appreciable chunk of the war the Germans hunkered down behind the Siegfried line to conserve forces for a 2-front war.
Remember -- the war in 1914 was a war of movement. Which meant that men were charging across open fields to attack the enemy. The Germans wore leather helmets, the other armies wore cloth caps, and the French wore red trousers. Yet the armies had modern rifles and artillery. This was a deadly combination.
Battles in 1915-1918 racked up higher total casualties, largely because they lasted longer. The Battle of the Somme lasted four months -- because they kept fighting over the same piece of land. Whereas in early 1914, the armies were still fighting a war of movement, so they'd fight in ten different towns, and the casualties would be spread out over ten different battles.
The Christmas Truce was not a question of numbers -- for a lot of men had already been killed or wounded -- but attitudes. The soldiers still felt that their opponents were fighting honorably. Poison gas, the British starvation blockade of Germany, unrestricted submarine warfare -- that would all come later.
"Over the course of the war, Britain lost over 484,000 horses, one horse for every two men" http://en.wikipedia.org/wiki/Horses_in_World_War_I#Casualtie...
Here's a clearer example with humans instead of horses: 200 years ago, Shoemaking was one of the world's largest industries. Today, it represents a very small fraction of the world economy and almost all shoemakers have been replaced by machines.
What happened?
As shoemaking machines became commonplace, shoemakers were suddenly unable to compete. Some of them found other jobs, some of them became destitute. Most were probably able to keep shoemaking until they retired, as the shoemaking machines took a while to roll out.
However, the Shoemakers' children and other children in that generation were perfectly aware that shoemaking was no longer a viable industry. No one born after the popularization of shoemaking machines studied to become a shoemaker.
What is the result?
First, we now have less expensive, higher-quality shoes. This is not always an effect of mechanization, but it usually is. Second, we don't have mass unemployment.
Why do we not have mass unemployment? Because when you replace workers with less expensive machines, one of two things happen; either the factory owner makes more money, or shoes start to cost less. If the factory owner makes more money, they spend it on a yacht or something. If the shoes cost less, the consumers have more money to spend on food or books or whatever.
So, there are now very few people employed in the shoemaking industry, but all the shoemakers' children can now go into the expanding yacht-making or food-cooking or book-printing industries.
Recap: Mechanization does not cause long-term unemployment. At worst, it causes unemployment for a single generation of workers. Ultimately, decreasing costs in one industry contribute to the growth of other industries (either via increased profits for the wealthy or decreased costs for the non-wealthy), so there is not a significant net change in employment.
That means we won't have to worry about employment. It will be an outdated concept.
But in the mean time, we also have nothing worry about, for the reasons I mentioned.
The scenario I see is solar-powered space mining.
Most likely something like 10.
So I'm not really sure what you're getting at. Are you complaining that we get to work so little and have so much?
The primary means of generating wealth has shifted to controlling capital from adding value, and that's not a good thing either. Those horses died off, we can't count on people to do the same.
As a country and society we will of course find new things to do, hopefully even replacing our manufacturing loss with even better technologies and methods. However, we will always have a huge discontinuity produced by globalization and automation that abandoned a significant portion of the population without the skills or the hope to catch on to the new fields.
We already have basic income (guaranteed income/'living wage'/whatever buzzword you want to use) in the US, it's called... welfare and disability.
Are you saying that welfare income is not taxed, but when you earn the minimum amount required in order to be denied welfare, it's less than the welfare check / also taxed?
I am not sure that's the same as 'taxed greater than 100%' -- that would mean that you've earned $10, so pay $13 in taxes. The math might work if you had actually been earning welfare; if you mean something else than what I'm saying, please explain.
That being said, my experience is that among the poor there are very few that are not interested in working but I know of at least one person who did pull out of the workforce after finding that they were further behind with a job. Make of it what you will, I think it is a condemnation of low-skill labor rates, not of the welfare state.
To entice people to work, you'd probably do it so that it takes a bit more than a dollar of private income to remove one dollar of minimum income, so that you're always better off if you work, and if you properly set up your tax rates, there will never be a point where you are a cent worse off for earning an extra dollar.
That's really hard to avoid when you do have conditional benefits that phase out with higher income. To "properly set up your tax rates" amounts to not having conditional benefits, which is a basic income under another name.
The first thing: when reporting wages, you had to report the untaxed amount to unemployment, even though I never saw that. I only received 87% of what I was paid.
Second: I now have wonderful costs, like driving to work, wear and tear, and other costs associated to working. This lowers my effective 87% even lower.
Third, I was on foodstamps. The moment I touched a job, which reduced my benefit by amount before taxes, I also had deducted from my foodstamp balance. I'm now down, by 2:1.
So, I did what many do in my situation: dump the job and go to school. I have less of a problem with myself with taking public assistance if I better myself.
Lots of productive professionals are probably willing to pay $8-10/hour to have their homes cleaned, meals cooked, and errands run. I certainly am.
The robots don't do that stuff yet. Yet there are millions of people who claim they can't find work. Something doesn't add up.
ie - The people we are talking about... you probably wouldn't hire.
http://www.bloomberg.com/news/2011-04-28/mcdonald-s-hires-62...
Obviously there are some subsets that mostly work at this price level (cleaning, landscaping, etc.) but there's a reason personal assistants are expensive.
Which, I remind you, is a significant portion--probably the majority--of humanity. To make a world that I'd want to live in, you're going to have to find a place for them besides the glue factory.
Perhaps lower class Indians are simply superior to lower class Americans? Or perhaps the incentives are merely different?
Ignoring frictions, you expect that even the worst of those employed as live-in maids, cooks, or servants are probably comparable to the best of the 10% of Indians currently unemployed. And the burgeoning Indian middle class has collectively decided that those currently unemployed Indians are too expensive to employ as help (or anything else). So they don't get employed.
As labor becomes more and more capital reliant, management costs are going to increase. At some point those management costs will exceed the costs of substituting labor with capital. That labor will then be replaced with capital. And just as companies have to be effectively bribed to employ the mentally retarded today, there's a class growing ever larger whose cost of employment exceeds the amount of value they generate.
In contrast, there are plenty of jobs in the US that could be profitably done by a human at $9.25/hour - domestic services are just one example. This begs the question - why don't unemployed Americans fill these jobs like Indians do?
Finding somebody you would trust to have in your home is difficult. The paperwork involved for payroll and taxes can be complex and time consuming. Above all, domestic service just doesn't add enough value to make it worthwhile. I can drive my own car, cook my own meals and clean my own house, all without it seeming like an undue burden.
The situation is probably different for a family with two career-oriented parents and school-aged children. But it's unlikely that displaced factory workers have the skills and temperament necessary to take up work as an au pere.
Perhaps most importantly, it seems like a huge step backwards to re-establish a menial serving class.
You can also say the same thing about people from a lot of third-world or poorer countries: China, Mexico, small eastern europe countries, etc etc.
Hmm, maybe that is the case?
Dodging the issue of different cultures entirely, I could see such a situation arising if we assume that in the recent past India has been less of a meritocracy than America. Competent workers, therefore having less social mobility than their counterparts in the relatively more meritocratic country, would tend to stay in the lower class more frequently, seeding the lower class population with more competent workers. Meanwhile competent workers in the meritocracy would move upwards, draining the lower class of competent workers.
I have no idea if it is fair to say that India has been more or less of a meritocracy in the past than America.
Its the same problem as with lots of other jobs though. Clients want to hire people with experience, not just anyone. Cleaning services get most of the work, since they can often pay to replace belongings that might get broken or ruined.
You're not just discovering a new area of possible employment. The people who can afford to pay to have their houses cleaned, their errands run, their yardwork done, have long done so. If you aren't currently employing anyone and are bringing in a nice income, you're the exception.
Who exactly is unwilling to work as domestic help?
Pretty much anyone, at $10-12/hour.
People who can afford to pay $35-40/hour have their houses cleaned by a maid, but there is nothing special about this price point. If we have a lot of un-utilized labor who are willing to clean houses for less than $35/hour, prices should fall.
Since prices have not fallen, we must conclude that our unemployed are unwilling to clean houses except for high wages.
(Or possibly demand for domestic services is completely inelastic, but that's unlikely. I'd certainly have my house cleaned more often if it were cheaper, and I know many people who can't afford it at $35/hour but could at $10/hour.)
Coincidentally, the "fee-and-dividend" plan proposed by James Hansen calls for taxing carbon emissions by the ton, and distributing all the money to citizens, equal amount per capita.
That sounds a lot like basic income. Maybe we can kill two birds with one stone here.
As long as it's implemented in a way that there is still an incentive to make more money, I think it could be a decent solution to our problems.
Earners are driven by envy and competition.
https://fairtaxer.files.wordpress.com/2011/11/prebate-chart-...
Hayek's main argument was that a society based on autonomous individuals, rather than collectivist groups, is more likely if everyone is guaranteed at least a minimum safety net, because otherwise people are forced to cling to birth-related groups (ethnic groups, clans, clannish religious groups, etc.) for their safety net. A short snippet: http://www.kmjn.org/snippets/hayek79_minimumincome.html
Elsewhere he discusses it in relation to choice as well: above a subsistence floor, he opposes much government intervention because he thinks markets made up of individuals making free choices can make decisions better. But below that floor, when people are desperate, you have things that are closer to "I'm going to make you an offer you can't refuse" than an economy driven by free choices. It's unclear from my memory if his worry there is primarily an ethical one, or relating to proper functioning of markets, though it could be both.
BTW, it's not being means-based that causes the existing system to have perverse incentives; the NIT is also means-based by definition. The difference is mathematical: whether the subsidy is a step function of income, or a linear function. Step-function subsidies always create perverse incentives. Unfortunately, they are ubiquitous. I dream of the day when our legislators have sufficient mathematical ability and understanding to select appropriate linear functions instead.
Anyway, I came across a paper explaining why the NIT is a non-starter, politically, in the US. The basic problem seems to be that there are too many people -- especially young single men -- who currently receive no subsidy yet would be entitled to one under the NIT. This group would make the program too expensive.
We still have 3 people for each open job in the country. That number may never get to parity again; the faster we can get those who cannot do anything out of the labor force, and onto a society-provided income, the better. There'll be less competition for the remaining jobs, and these people will not have to live lives of constant degradation.
If this is the road to guaranteed income, so be it. We need to get there one way or another.
More on Zero Marginal Product workers:
http://marginalrevolution.com/marginalrevolution/2010/07/zer...
http://marginalrevolution.com/marginalrevolution/2012/02/the...
Firstly, pay people to go to school. Any subject, useful or not, for as long as they like. The education and mental fitness of the populace is a deep reservoir of Real Wealth.
Secondly, pay (more) people to do community service work: visiting the elderly, cleaning up parks, tutoring kids, etc.
And last, those people still work in the few remaining market jobs: have them work fewer hours! There will always be those who want 40+ hour weeks, but for everybody else, distribute up the same workload over a larger number of people with 20-32 hour work weeks. More people employed, who are less stressed, and a healthier society due to more time to self-improve and spend with family.
Income is only one part of the sociological phenomenon called "jobs". People also want to feel useful.
What you're describing is very similar to the "full employment" of Soviet bloc countries.
But today most jobs that aren't just physical labor benefit from having employees around more often. They stay up to date more easily, they can communicate what they learn more quickly, they can code for hours straight without the interruption of leaving at 2pm (not to mention all the interruptions due to meetings that would have to be compressed into shorter workdays to keep them up to date).
There are also economic benefits of longer work days. A smaller fraction of a person's time is spent commuting (in aggreggate, cleaning up the roads and reducing carbon emissions due to fewer workers per company). And in the US, where we have decided to couple a person's insurance and benefits with his or her employer, the non-salary costs associated with an employee are a very significant component of the total cost of that employee, companies have a big disincentive to hire a large number of people, even when the work can be evenly divided into small chunks.
This is true. I would propose that we are, or will become, wealthy enough to absorb any inefficiency.
> There are also economic benefits of longer work days.
I agree with this as well. In fact, I think we'd be much better off with norms of 3x8, 3x10, 4x8, etc. A work week of 5 half-days would be deeply sub-optimal. (Maybe these are just my own biases.) :)
I've also wondered why there aren't more people participating in those sorts of community service activities spontaneously - clearly it is difficult being unemployed, but surely doing something of value is more rewarding than watching television?
What do you mean by "rewards consumption"? Consumption is the reward for labor.
In the United States this is particularly and sometimes painfully obvious, when people who do not wish participate in certain forms of consumption are sanctioned in various forms. This sanctioning can be overt "You'll need to wear a suit and tie if you're you want this job." or covert, "That guy rides a bike to work, wonder if he got a DUII?" Keeping up with the Joneses is the job you have when you aren't at work.
One of the surprising things about social status in America is how often certain forms of consumption are effectively mandatory to signal ones class membership. Go looking for a CEO of a publicly traded company who chooses not to own a car for instance. Or a partner at a major law firm who does not have more than one residence. Those are only gross examples, one that is more familiar is the prevalence of electronic gadgets, especially those by Apple as symbols of membership in the digital worker class.
The truth is that our choices in those matters are socially constructed, and that social construction happens in response to needs that are historically contingent rather than deterministic in nature. True a certain amount of consumption, of food, shelter and medical care is biologically determined; the rest is cultural.
I was like, "fuck that shit."
The two things I really don't like about the ultimate safety net are these: First, that type of mechanism actually seems to be oppressive (based solely on my own observations, which are limited, but I'll explain below). Second, having the safety net from on high actively discourages people in a community from helping each other directly. Instead, they turn to the authority, saying that the basic wage is good enough, so why should I bother?
The observations I mentioned were over a period of about a year when I lived in a neighborhood that was almost entirely composed of people living on some form of assistance. They were not evil, bad, or leeches, and I'm not going to make that claim. However, as best I could determine, they had found a strategy that was "good enough" that they didn't feel the need to improve their standing in life. In other words, they had elected to live in near-poverty because it was effortless. I knew several of them to varying degrees, and they were intelligent, able people. The effect of the safety net on their lives was extremely negative (in my opinion), even though they would certainly say otherwise. They did not want to be in better circumstances, and given the opportunity to learn a skill that would immediately improve their lives (trade skills like welding, or gardening even), most would refuse. I don't think that is a natural state for people, and it was frustrating for me to see it (especially for the kids involved, who had subsistence living as their primary model).
The other point, about passing off responsibility for helping neighbors, is something I've seen in two flavors. First, and by far the most common, is in the world of conflict resolution. It's typical for one neighbor to call the nuisance abatement or police on another rather than actually go knock on the door to solve a problem. This is because they can offload all of the discomfort of confrontation onto an authority figure. The unfortunate consequence is that it makes the neighbor hate them, and things get worse from there. The other flavor of this problem is when people who do work and pay taxes resent seeing people who don't work but could, who are living "on the dole." The feeling of resentment looking at someone who is, even to a tiny degree, living for free on the fruits of your labors gets in the way of actually wanting to help that person. It gets people thinking in terms of "Why should I help them? They already live for free on my back, and they're not trying to make any changes."
So what would I propose? Like I said, I'm not a fan of the "survival of the fittest" approach, and while many people seem to advocate that I don't think they actually want to see others suffer either. My main objection is that I see money going to causes that I think are directly harmful to the people they're supposed to be helping. What I would like is a way to direct the resources I spend on social support to causes that I think are actually beneficial (free education, skills training, apprenticeships, etc., maybe even with stipends and whatnot). I realize that everybody likely has a different view of what "helpful" means, so what I'd like to see is decentralization of social support into various forms that cater to different people's concepts of what actually works. You can make paying into it compulsory or not, but to me the real problem is that I don't like to see my money going to what ultimately seems to be an oppressive form of "help."
See also: Donglegate. This reflex is thoroughly ingrained at all levels of society.
Won't be pretty.
That's not in evidence: most programmers could work a month out of the year and have the amount of money provided by a basic income, but they choose to work much more than that. But I digress.
Immigration is one of the more interesting challenges for a BI, but I think it's overstated. As alluded to above, there's still all the incentive in the world to work even while receiving a basic income: which is to say, more income. You would want to make sure that you don't have a huge immediate influx of immigrants, but that's pretty simple: limit the number of immigrants in to a manageable amount (whatever that is), and only give citizenship to an immigrant once they've lived here for X years. At that point they'd have been working aplenty, paying taxes, and building skills: on citizenship and receiving the income, they'd have the same skills and incentives to continue working.
This is probably one of the key points the article could be making, but it's kinda glossed over. As the baby boom generation (the one born ~1946 –> ~1959) nears retirement, it makes a lot of sense. That generation - my parents' generation - really did a large portion of the work involved with building out the physical infrastructure that allows our economy to operate as it does today: buildings, roads, power lines, mining, machinery, warehouses, etc. Physical work tends to create more injuries and disabilities than sedentary work, and people who do that kind of work simply cannot do it for as long as people who do sedentary work. How can we forget there was an entire generation of people who turned the 1940's USA into the one of the 1970s?
I know I've mentioned this on here before but it's relevant: my dad hung sheetrock for living. He stopped going to school after 6th grade. There was no way he could have made to age 64 -- people thought he was crazy to be doing it until age 53 -- which is when he died, almost 10 years ago. From a combination of issues related to what his work did to his body.
But the sheer idiocy of the system which has rewarded and continues to reward neat-suit Realtors and loan officers and salesmen (those "educated" ones who tend to work the sedentary jobs) -- instead of the workers meant that he was left with no options for healthcare, retirement, or even being able to leave his children a dime.
It's not like none of them have a work ethic. . . many of them have worked long and hard already; they're just "prematurely" tired and worn out. Not to mention the system keeps trying to move the dangling carrot of retirement further and further away from their grasp by attempting to increase retirement age.
[edit -- apologies for the awry double pasted text in the original post]
I can understand the frustration you have and you make some thoughtful points, but I wonder how could you change "the system" to be any different? It's not as if these are government jobs. The prices are pretty much set by market forces so what can you do if the market doesn't deem the price high enough?
The EITC does not _directly_ address the retirement/disability problem, though.
they're just "prematurely" tired and worn out.
Were this still the norm, then the focus would still be on working life health checkups and realising we cannot lift into our 70s. I think perhaps we are missing something there.
I suspect it might be worth linking retirement payouts to total calories burnt over a working life. Sitting at a desk might not be such a good career move :-)
Please again - I saw your point about your father as noteworthy and I wanted to recognise that - no offense or other comment meant
Previous life expectancy levels were based on poor public health levels and tended to be solved by improvements in public health. It is entirely reasonable to claim someone dying at fifty today is dying prematurely due being overworked.
See:
http://en.wikipedia.org/wiki/Life_expectancy#Life_expectancy...
"Life expectancy increases with age as the individual
survives the higher mortality rates associated with
childhood. For instance, the table above listed life
expectancy at birth in Medieval Britain at 30. A male
member of the English aristocracy at the same period
could expect to live, having survived until the age of
21
1200-1300 C.E.: 43 years (to age 64)
1300-1400 C.E.: 34 years (to age 55)
(due to the impact of the Black Death)
1400-1500 C.E.: 48 years (to age 69)
1500-1550 C.E.: 50 years (to age 71)."Interesting table though thank you
Its more than the type of work you do, that simply adds risk - some you see and some you don't. If anything it can be all the idle time shift workers have off work that kills them faster. Inactivity doesn't help the body age. I am quite sure a good number of people I work with will not live to a ripe old age and all they do is sit at a desk... and then go home and sit on a sofa or desk again
Physical labor can become debilitating when there is injury that is not allowed to heal completely or when there are excessive hours compounded by stress. Aside from that, it's probably very good for you.
I think your math is a little off. The one born in 1946 would have been 24 years old by 1970... And the one born in 1959 would have been 11 years old. Those kids definitely did NOT build all of the infrastructure.. that was their parents.
> How can we forget there was an entire generation of people who turned the 1940's USA into the one of the 1970s?
The baby boomers were just entering the work force in the 1970s. You are conflating two generations.
Everywhere in the US that I am well familiar with (Portland Oregon, Minneapolis, Southwest VA, San Jose CA, greater Los Angeles) built most of their infrastructure between 1945 and 1970(schools, roads, highways, bridges).
Anecdotally speaking, the infrastructure that came after 1970 consists of strip malls, suburban housing and airports. some highways were built in LA and San Jose. The 85 is the only one i can think of off the top of my head though. Lots of road projects to widen, adjust and fix earlier mistakes though.
That's not an anecdote at all, you're just apologizing for arguing from your experience and then doing it anyway.
Nitpick maybe, but I'm tired of this "anecdotes don't matter" when clearly they're important enough that we keep relying on them.
Over half of the current Congress are baby boomers.
What a bizarre claim. By every measurable standard, the U.S. was a far, far better, richer place in 2000 than in 1970, and occupied a more significant and more secure position in the world.
I sometimes worry that the demographic of places like HN is shifting young enough that statements like yours can actually seem authoritative. Even someone merely old enough to have been paying attention from 1990 to 2000 would realize that "general decline" is an absurd description.
And frankly, 1990 had a lot going for it over 1980, too.
The War on (some) Drugs (aka war on blacks/mexicans/chinese) really stepped up in the 1960-1990 period, so crime stats and general urban hell was at a peak during that period, and improved 1990-2010. It's unclear how much blame for that is on baby boomers. The continuation of the War on Drugs is undeniably a boomer thing, though. That alone is more than enough reason to be angry.
"White Flight" to the suburbs was mostly the parents of Boomers, so they were only indirectly involved, although they did also continue it through the 70s/80s/90s. Gen X and Gen Y are the dominant forces behind re-urbanization.
There are lots of awesome new technologies (I mean, even a 2013 car vs. a 2006 car is an improvement), but that's technological progress and relatively global, vs. US-specific. Yes, points for not actually causing global thermonuclear war or a collapse of the global economy. Microcomputers, cellphones, the Internet, medical advances, etc., all amazing.
The (re) emergence of China from ~1990, the end of the Cold War, and the rescue of India from socialism in the 1990s+ were undeniably great, but had little or nothing to do with US domestic policy. Reagan probably did accelerate things by up to a decade, but the 1990s were a case of mismanagement of the "peace dividend" and a bunch of emerging threats.
(1990 itself and 2000 are probably unfair years to pick, due to the bubble of 2000 -- 1991 vs. 2000 is a lot different from 1989 vs. 2001. I don't remember the exact details of the early-1990s recession or the early 1980s and which time periods were bad, but I do remember 1998-2001 and 2001-2003)
Women and racial/ethnic minorities did probably do better in the US fairly steadily year on year for the past 100 years. That's one big point.
On college -- look at the costs of MIT or UC-Berkeley in 1980, 1990, 2000, 2010, especially vs. a feasible income for an 18-22 year old.
The big thing is the rise of inequality -- essentially everyone in hn is one of the winners or is credibly likely to become one, but for the bottom...50%? of the US, the odds of having a better life are lower now than they were in the past.
http://www.businessinsider.com/us-household-incomes-a-42-yea...
And even without accounting for the difficulty in comparing like-to-like over 40 years of CPI indexing, or the change in the demographics of U.S. households, that median line still looks pretty good when you realize you're looking at a linear scale.
This is not unlike managers who come in, strip R&D budgets, point to big profits and split before the inevitable crash. All they did was milk the cash-cow. It really is a well established phenomenon.
I'm an Xer, so I get ignored in this mudflinging, but once I listed these things along with some others in an argument with a Y, talking about who had it harder growing up. Her response? Yeah, but we had peanut-butter bans in schools. It's hard not to succumb to the stereotype that Ys are self-centred when you never hear one giving boomers props for the good things they did.
Ending MAD was actually done by GI or Silent generation people (essentially, the last push in the 1980s), and the general implosion of the Soviet model. It's fair to give some credit for everyone who survived and didn't cause a war during MAD, but that's largely top political leaders (who remained older longer than the general population or most politicians, even) and top military leaders (who were probably 45-55 in the 1970s and 1980s, so kind of borderline as baby boomers). But a lot of the soldiers, engineers, etc. from 1970-1990 were undeniably baby boomers so they get credit for that.
There were plenty of good things done by the baby boomers (I'd say some environmental regulations, like clean air/clean water/ozone, have been incredibly good, and were largely a result of lobbying and organization by baby boomers in the 1970s). They didn't do as many good things per capita as would be expected, and they have done far more bad per capita than previous or subsequent generations.
Looking at data, it seems that the sedentary-jobbed have a life expectancy of 79.3 while the manual workers have a life expectancy of 75 years. So, there is a difference of 4.3 years (males, UK 2002-2005). It should also be noted that life expectancy for the manual group has gone up about 7 years since 1972-1976 (the sedentary saw a similar 7 year increase).
Governments aren't looking to increase the retirement age to dangle some carrot in front of people they consider too stupid to know better. If life expectancy is going up by 7 years, that means that a pension needs to provide income for more years. That means higher taxes, raising the retirement age, or putting more onus on the individual to save for retirement. There's a genuine question: where would the money come from to give someone a retirement at 50? To provide the average 50 year old male a $50,000 salary for the rest of their life costs over $1M - and that isn't $50,000 adjusted for inflation. What does that come out to per year? Assuming the kind of conservative planning that the government does, over $20,000 pear year. Essentially, we would need a tax of 40% for people to be able to retire at 50 and replace their income for life. Now, maybe 75% income replacement is ok and a 33% tax would do it. But then you have to think about providing inflation adjustments and healthcare for that period and it's just not good. Health costs are rising substantially faster than inflation. Should we lock people into the standard of care at the year of their retirement with newer, more expensive treatments unavailable to them?
There's just a big money issue when it comes to retirement age that's hard to ignore. Ideally, none of us would ever have to work. Unfortunately, that isn't our reality. Not to become too weird, but it's really tragic when you think about it. We're these biological beings trying to strive against what would happen to us if we stopped working to survive. And we've created some awesomeness to make our existence a lot better (medicine, for instance), but it's a thin veil over the harshness of what happens to us in the absence of working to survive. To come back down to earth, it's really crappy that we can't have the same retirement age that we used to have. However, I'm not sure how to go about talking about retirement ages without talking about the money we need to support it. Maybe it's time we raised social security taxes realizing that we don't care as much about iPhones as we do about our retirement. Ultimately, it isn't about governments trying to hurt people, but governments not having the money to offer it.
It should also be noted that a lot of these jobs pay better than similarly skilled jobs that are more sedentary. Construction salaries average $44,630. Office and administrative work averages $34,120. Sales $37,520. Personal Care $24,620. Part of the higher salary might be because of the nature of the work you speak of. The additional money per year could go toward providing an earlier retirement via individual means. I know that most people won't save and that's why I like social security. Maybe we should have a lower retirement age for certain professions along with higher social security and medicare taxes on jobs in those professions.
--
I can't imagine how hard it is to lose a parent so young. I'm sorry.
Well, you missed the point entirely. He argued from a historical standpoint--in particular the involvement of the whole demographic in making the transformation of 1950s America to 1970s America--that you touch on with only one (largely irrelevant) statistical 'anecdote.'
Well, it looks completely different if we take out the money from this situation.
Consider this: we have big unemployment, a lot of part-time workers, a lot of people not working because of disabilities, there are also millions of college and university students who are obviously not working full time. But the economy keeps going, it has no shortage of workforce, number of workplaces is limited and less than total number of people.
Then you propose to increase retirement age.
The number of workers will increase, but the number of workplaces is the same. Wages are decreasing, tax revenue is decreasing and we again have no money to pay welfare, pensions etc. So we don't need more workforce.
Redundant workers rely on disability pensions, unemployment payments, food stamps etc. All these welfare programs have obvious deficiencies, but we need to feed the people anyway. If these people were working it would be much better. But there is simple way to increase number of working people without extra resources.
We just need to limit working hours. And it is possible, because it was possible to introduce 40 hour work week. Now cut it to 35, and you get 12% increase of number of working people and unemployment completely disappears.
Unemployment is basically solved in 2014. Under employment on the other hand...
What you propose would reduce output; if it was optimal for firms to hire the unemployed, in place of those already employed, then they would do so - unless they are prevented from doing so by labour legislation, which doesn't seem to be the case the U.S.
That the unemployed are not hired might make sense when there are costs to hiring and training a new worker, which don't exist for a worker already in place. On an aggregate level, this policy would increase the cost of labour, and consequently reduce its demand, so less overall would be employed (though the rate of employment would probably stay about constant because you reduced the denominator by reducing the labour force).
Probably a better explanation here: http://www.economist.com/economics-a-to-z/l#node-21529454
A fair portion of the Western world's underemployment and unemployment problem derives directly from the overemployment of those who have the jobs. As people keep putting it, "Whatever happened to the 40-hour workweek?"
For example, among those sedentary professionals who can keep working for decades upon decades, most in the United States are classified as Fair Labor Standards Act exempt, and are therefore often made to work overtime. Health insurance is a fixed cost that needs to be driven down both through socializing medicine and, preferably, through requiring per-hour National Insurance taxes, but only the latter action would actually change the fact that firms find it cheaper to hire two professionals working 60 hours/week each than to hire three professionals for normal 40-hour workweeks.
And, here's the trick, neither of those two professionals actually receives overtime pay. The company is literally getting a 1/3 boost to their productivity-per-employee solely by using a legal loophole to not pay for all hours worked. This is not the lump-of-labor fallacy, it's straightforward exploitation.
To paraphrase many Hacker News-targeted blogposts, "Fuck companies, pay workers."
Attribution?
Payroll taxes definitely do work in that way (not as an outright barrier, but by acting as a market distortion which encourages investing in expanding production through expanding capital rather than doing so by expanding employment rolls when, before considering payroll tax costs, it would be equally or more efficient to expand production by expanding employment.)
Instead of France trying to reimburse its own public state debt they decided to move to 35 hours / week.
We can see the results now: Germany's economy is one of the best in the eurozone, they managed to stay at "only" 80% of public debt and are enjoying a modest GDP growth. Meanwhile France reached 100% public debt and is dangerously close to a disaster (youth unemployment is rising, the private sector isn't motivated anymore, austerity will need to kick in or France won't be able to re-finance itself on the markets).
The loss of competitivity of France is directly attributed to moving to 35 hours / week and is going to be the main reason why France is going to lose its status as the world's fifth biggest power. By 2017 Brazil's going to be in front of France. Heck, if Holland and the socialist gets re-elected there's a far from zero probability that France won't be part of the G8 anymore by 2022!
That is very concerning but, sadly, there's nothing else to hope from socialists who are spreading hatred of the entrepreneurial spirit and hatred of those who succeeded, in the name of the nanny state spraying loyal socialist voters with money inflating their sense of entitlement.
International economics is too complex to pin France's woes on one single factor, especially when they have a lower debt to GDP than the US which is famous for it's long working hours.
There is a lot wrong in the French economy. There is a lot uniquely wrong with every economy. I'd argue that as the huge populations of BRIC countries use modern productivity tools like automation to increase per capita GDP, it would be bizarre for France to hope to stay in the G8. And that's a win for everyone.
Yet! Seriously, lets just focus on building robots to do things like build roads and buildings, tend farms, drive vehicles, etc. etc. We could almost definitely pass human efficiency in the next 50 years, and nobody would ever have to do manual work again (although if that's something somebody likes doing they should totally have the option if that's what they want).
Also, I'm not convinced a job in construction is "similarly skilled" to office and admin work. But that's kind of beside the point, it's possible to earn a good living from either manual or sedentary work. Sure, the extremely high earners are exclusively sedentary workers (if they work in the traditional sense at all), but that speaks to the wider problem of wealth distribution, where the fabled top 1% have 20% of the countries total wealth.
Imagine one year, everyone spent all their income on stuff - earned and unearned. How much would an ipad cost? There is a limited capacity to raise ipad production - building new factories takes time. So the cost of an ipad would increase.
Right now, all that wealth is locked up in various markets, increasing the value of property and various past what is rational. If it suddenly came out to play, surely we'd see things people need to live increase more than the poorest can afford.
Is wealth that is never going to be spent really wealth?
If you took 50% of all the money out of the world, the money that was left would be worth twice as much.
http://www.data360.org/dsg.aspx?Data_Set_Group_Id=231
GNP (red line) tripled since 1970. That means, on average, every worker got three times more efficient. So why on earth do we have to talk about a lack of money when society's wealth has increased so fast?
http://current.com/shows/the-war-room/blog/what-you-need-to-...
Money is about power and is a zero sum game. If someone increases their share of the pie, then someone else necessarily loses out.
No it's not: https://en.wikipedia.org/wiki/Money_supply#United_States
> GNP (red line) tripled since 1970 [...] So why on earth do we have to talk about a lack of money when society's wealth has increased so fast? [... Link to income gap ... ]
It's less of a problem of income distribution than one of wealth distribution. The key issue is that people with lower incomes accumulate assets that cost them money (house, car, TV...) while those with higher income collect stocks, bonds, rentable real estate property, all of which generate more wealth.
Also, those investments, like stocks and rental properties, transfer wealth from the poor to the rich, generally.
Another is that the tax code incentivizes making your income through investments, something unattainable for people who aren't rich.
Right. Governments print money all the time, but the total value of all the money remains constant, thanks to inflation. It's just a measure of how much power someone has in a society compared to everyone else.
> It's less of a problem of income distribution than one of wealth distribution. The key issue is that people with lower incomes accumulate assets that cost them money (house, car, TV...) while those with higher income collect stocks, bonds, rentable real estate property, all of which generate more wealth.
That's not given by God. Stocks didn't use to be money making machines and there is nothing that says they have to be. Stocks have been doing amazingly well since about 1980's because during the same time period wages have gotten a smaller and smaller share of the gnp. The ugly truth of the stock market is that for every winner there is also a loser.
That's hardly the case. The only loser is someone who sell a stock for a loss (and even then considering dividends and the tax advantages it doesn't necessarily mean a net loss).
Inflation, by it's definition, is caused because more money is chasing the same goods & services...which drives the prices up. That's why loose monetary policy (i.e. the Fed printing money) often comes with lots of "concerns about inflation".
Also...if money was indeed constant as you suggest, and it's just a power tool, then why have we seen 2 phenemona in the last 100 years.
1. The greatest number of people are moving out of absolute poverty, than at any other time in recorded history (hundreds of millions if not 1 Billion+ by now) - meaning, more people (as a % of the global population) are earning enough income to move themselves out of an abject poverty state, at a faster rate than at any other time in recent recorded history.
2. The greatest income gaps between the top 1% of the top 1% and the rest.
If the money supply were constant, both of those would be mutually exclusive. But they are not.
Anybody can create wealth, likewise anyone can destroy wealth. Money is just the physical/tradable manifestation of wealth. It's just a proxy. That's all. No conspiracy to see here.
I am reminded of frequent stories of individuals with large incomes still being relatively poor - Doctors, Lawyers, etc. purchasing ever larger houses, ever more luxurious automobiles, etc. (all liabilities).
Or, as one individual who like to get peoples' attention puts it: "It's not how much money you make, but how much you keep."
Except this is plain wrong. I know a Wikipedia link may offend some people, but then again, calling economics a zero-sum game can, too: http://en.wikipedia.org/wiki/Zero%E2%80%93sum_game#Economics
In New York, the total value of benefits received by a disabled single mother with 2 kids is in excess of $55k. (One of the reasons why states like South Carolina encourage poor folk to migrate north) The old welfare system was replaced with "Temporary Assistance", but you still get disability, SSI, food stamps, basic cell phone, housing assistance and healthcare. Some counties will buy furniture and provide other goodies as well.
That's pretty close to what a drywall guy makes, except a drywall guy who isn't in a union has to save for retirement, operate a car, pay for healthcare, and pay market rents.
When a guy like your dad suffers a workplace injury or is worn out, he has to live with uncertainty for months or years while his case gets appealed, because the law judges are backed up handling the cases of people whose disability is being ignorant and lazy.
There are a lot of people who are capable of delivering economic value, but not on a typical employer's terms. The sad truth is that the demand for most labor is crashing.
The truth is that disability is a spectrum from 0 (no economic function) to 1 (full health). In 1950, there was high demand for labor and people at 0.7 could get full-time jobs with access to middle-class labor. Now, the 0.8's are unwanted and the 0.9's are trapped in secondary labor, unless they're extremely intelligent and can swing as free agents.
"Scott tried school for a while, but hated it. So he took the advice of the rogue staffer who told him to suck all the benefits he could out of the system. He had a heart attack after the mill closed and figured, "since I've had a bypass, maybe I can get on disability, and then I won't have worry about this stuff anymore." It worked; Scott is now on disability."
The disability program is supposed to be if you are medically unable to work, not if you can't find a job. Look at the charts in the article, there isn't an epidemic of disability in this country, disability is being used as a substitute for traditional welfare programs which have been eliminated.
It isn't that I have no sympathy for people caught in the cracks, but we shouldn't have government programs that are de facto open only to those willing to lie and cheat.
I agree with you 100%. We shouldn't have a minimum wage, food stamps, disability funds, or even 90% of the termination laws. In their lieu, we should have basic income, universal healthcare, free higher education for people with the ability, and affordable housing for everyone. Then, companies can hire and fire whoever they want, and the much simpler (if more radical) system is harder to game. But... the latter is not the world we live in, and we're not likely to see it in the contemporary US.
That said, there is a real problem here with unemployable people and it's only going to get worse. It's no wonder no politicians want to talk about it. It can't be summed up in a ten-second blurb.
Overall, the need for TARP was driven by the weak long term oversight allowing concentrated influence in overlarge companies. That's often viewed as a failure of government to remain independent from influence, but at the root of the problem I think it was a shift in economic philosophy across business schools and the business community. The long term fix in my view is putting new focus on defining what criteria lead to healthy, competitive markets. Businesses themselves should recognize that poor competitiveness, and short term focus in markets can lead to poor long term performance in the economy for everybody. Different mechanisms to discourage oversized companies should be introduced into legislation, but now I'm rambling....
Remember, command economies work so well when the leadership knows what they're doing that they make up the structure of every successful business in "market capitalist" countries.
Also, the failure to generate new economic activity (or supressing new activity) is a prevalent theme in failed companies. Furthermore, when you look at new innovative products coming out of large companies, you'll often spot a phase goes something like: "A small group of employees broke off and put together <widget> after hours or out of sight of the upper management, etc". The new activity or market areas often come in spite of the controls in big companies.
Scandinavian countries have put many of these ideas into place and they are hardly doomed. On the contrary they seem to be fairing pretty well.
But what he's proposing isn't a command economy, it's a default economy. The government isn't telling Factory A to make widgets and it's not telling Person B to work as a basketweaver. Instead everyone gets some minimum amount of capital to use every month.
In fact it sounds more market-driven than what we have now with welfare and disability where, again, centrally-managed plans are laid out and imposed on employers and employees saying what requirements you have, what you can and can't use the money on, etc. And don't you dare get a job and start accidentally making too much money!
It might even be beneficial to employers looking for talented employees: If people are safe to shift around looking for jobs they should move away from poor managers and bad companies to good managers at good companies (and if you're a good manager you'd suddenly have a lot more talent to find the gems out of). This is one of the same resaons governments take such an interest in education, is to ensure a competitive workforce in relation to other nations in the global economy.
I'm sure there's more to work out with the proposal but I like the spirit of the idea.
It is "gaming", in the same sense that every decision you make to optimize toward a desirable outcome is "gaming".
40 years he had a choice; go work at the mill for $25/hr, and come home tired and dirty, or stay home and be unemployed, and face the scorn of his peers.
Now he has a choice, either go to "retraining" that is run by for-profit corporations hungry to suck up government funds, and whose "graduates" are still unemployable, or go on disability. Given the world he lives in, he made the best choice.
Now his choice involved some meaure of dishonesty. But while I'd love to live in a world that rewarded honesty and integrity, that's not the world we live in. We live in a world that has no place for a unskilled but hard-working individual, so those people have to take welfare to survive, welfare that they would likely refuse if there were better options.
http://www.econtalk.org/archives/2012/04/autor_on_disabi.htm...
However, without exception, their disability was brought about by poor personal decisions and could be remedied fairly easily. The financial assistance gives them a strong incentive not to try.
I know of several people who spend all day sitting at home blogging or chatting on email because they're physically disabled. Yet I've employed multiple people as customer support techs who's job description is "sit at home and chat on email".
Our government is unwilling to tell people that they're free to either work or not work, but if they choose not to work, they won't get paid.
It's a collective action problem: no politician wants to be the first one to be "mean" and tell perfectly competent people that they can't live off of the stolen labor of others.
...so we continue to have "disability" for people who are entirely capable of working, albeit not at wages that they'd prefer to earn.
You mean like whole government, all government employees and everyone that is paid by or subsists on tax money?
In many cases we'd be better off paying people who currently work for the government to do nothing instead of what they are doing right now.
Realistically, those are the alternatives. A large subset of people have insufficient education or qualifications for a desk job. And note that "being old" is itself likely to disqualify you from a lot of jobs.
Remember, this amounts to $13,000/yr, which hardly qualifies as a sinecure, and health insurance. Do you think they're likely to be able to get a job which includes health insurance? Because otherwise "get a job" is a non-starter.
Even if you think "high blood pressure" isn't a disability, the set we're talking about is older and more likely to require expensive medical care.
I've tried thinking of jobs they could do, but I have had a hard time coming up with anything except recycling - something like sorting through residential trash picking out the recyclables. As it turns out, that industry is employing a lot of homeless people. And, you have to consider that recycling is subsidized by fees on bottles and cans.
I've also worked at a place were we hired a guy with some mental disability to clean up the cafe. He did OK, but not a really good job. If they offered $2 more an hour, they could have hired someone who'd clean AND fix things, easily saving more than the $4000 extra a year he'd cost.
And even so, the disincentive thing really isn't a macro-scale problem. During the boom years in the late 90's, for example, we came very (some might say perilously, heh) close to full employment. If this policy, which is broadly unchnaged from what it was 15 years ago, was really a drag on the labor economy, it would have been visible then. It really wasn't.
This seems like a false dilemma: Either they're on disability and consuming, or they're not on disability and destitute, with no middle ground. Grandparent's anecdote is about disability that "could be remedied fairly easily," with the implication that the "remedy" in this case might be "rent is due next week."
* Edit for clarity
My point isn't that it's a perfect system, just that it scales the way you want it to and we should be wary of changing it just to stick it to some lazy good for nothings. Right now, like it or not, disability backfills a lot of what a "welfare" or "guaranteed income" program would be doing, and mucking with it risks severe poverty for its users and economic damage to the rest of us.
I agree with you there, at least insofar as any change I can think of to stick it to them would also probably hurt the people the system was designed to help. I'd rather fund a few deadbeats than a genuinely disabled person go hungry, if given no other choice.
I guess I just fail to see how reducing the number of people on disability could, taken in isolation, result in economic damage to the rest of us.
If you add 4.8% people on well-fare, 2% convicts, some percentage of people that sustain themselves via petty crimes, and large number of government employees that don't do anything actually useful and also employees that are employed by private sector and their employer would like to fire them because they cost more then they are worth, but can't fire them due to various mass agreement, union restrictions and general PR ..... you end up with pretty high number number.
So it's their fault that they're disabled?
You have 2 candidates for a job. They are entirely similar, except one of them discloses a history of MH problems which they claim are well managed by medication and monthly meetings with a psychiatrist.
Which do you employ?
There have been posts on HN from people saying they'd feel anxious about employing women of child-bearing age, or people who have had MH problems.
Further, it is not legal to ask about medical status in an interview, other than job requirements (can you lift 40 pounds, can you stand on your feet for 4 hours).
The scary thing is that many employers would prefer a worse candidate over someone with a known MH illness.
a) I did think that people generally knew that disability claims go up during periods of economic dislocation.
b) I wouldn't call it 'gaming'. Toy example: Economy starts at equilibrium A where getting a job takes difficulty A. The economy slows down so now getting a job takes difficulty A + 10. It's obvious to state that the people who were at the margin, that could get a job at difficulty A but can't get a job a difficultly A + 10, will now be more likely to consider other options (including disability).
I'm sure there will be a bunch of comments to the effect that these people are malingerers but to me it's not black and white like that. IMO, it's unremarkable that a changed equilibrium is going to result in more disability claims.
Policywise, I think Minsky had some good ideas. The short form was limit transfer payments (i.e. payments where the recipient does nothing) and replace that with the government as employer of last resort.
Depends on your experience. We so a good bit of it after Katrina. The middle-class homeowners were completely at a loss when it came to applying to FEMA. The folks who live have lived of these federal programs for years were showing the engineers and lawyers how to fill out the papers. "No... don't check that box. That tells them you think you can afford food. Don't wanna do that."
The one type of systematic gaming he does see is parents pushing their kids onto disability; in that case it's just extra money.
I grew up on the other side of the tracks and it was common knowledge even to me over a decade ago. Quite a few of my friend who barely graduated school knew where they were headed in their future.
If you're a guy you practically don't qualify for any aid, period. So with no future prospectes you get a job doing intense manual labor; roofing and warehouse were particularly popular. Do that for a year then "develop"[1] a back problem. File for workman's comp. Now your unemployed so you get UI as well. The UI money eventually runs out so you file for disability, bring your workman's comp dossier as evidence.
I first started hearing about this in 2001 from some colleagues working in factory. They were actually looking forward to being injured. A lot of them were real schemers, too. So one of them told me that Clinton fucked them by changing the welfare laws. He put in a hard limit of 5 years and made it difficult to qualify. They took no joy in the factory but took the work serious because they needed at least 6 months to qualify for UI and workman's comp can be denied if you don't do follow procedures (ex. breaking your back by following off scaffolding and not wearing a harness or being clipped in).
I have friends who are coming back from both wars and they are really fucked up, physically and emotionally. I can't imagine if there numbers fall under SS disabilities or VA disabilities.
One reason SSDI has grown so much is because the rules changed in 1984; David Autor, who is quoted in the article, did an Econtalk interview about this: http://www.econtalk.org/archives/2012/04/autor_on_disabi.htm... :
continuing disability reviews (CDR). So, previously a CDR was essentially a de novo evaluation of the case. In other words, you start from scratch and try to reach a new decision or not. Congress said: Well, now, CDR, to terminate someone based on a disability review you must prove that they have recovered from whatever state they were in at the time they were given benefits. So, if they were given benefits by mistake, that's not sufficient. They have to have recovered from whatever that state was to lose benefits. It really raised the bar for the SSA to administer any awards it had made.
The whole podcast is worth listening to, and Autor's work worth following, if you're interested in the issue.
Autor has also found that much of the growth comes from people in their 50s or older who don't have a high school degree—in other words, older people with few employment opportunities. In such circumstances, SSDI often looks like a better alternative than basically being forced out of the labor market.
Remember this during your next NPR pledge drive :)
This type of long, scrollable design seems to be growing in popularity these days -- e.g. the NYTimes Tunnel Creek article [1] or AirBnB's annual report [2], and I think it's a good trend. Even though this NPR page has less special effects than those other two examples, it's still a fantastic reading experience, and I'll take it over a standard paginated article any day.
[1] http://www.nytimes.com/projects/2012/snow-fall/#/?part=tunne... [2] https://www.airbnb.com/annual/
As as counter-example, I continue to be baffled by expired pages here on HN. The parent comment is "below the fold" so I clicked on more comments, read a dozen comments, clicked on the AirBnB link, and by then--about 5 minutes, the Reply button (after typing in my comment, not the reply link below the parent) was expired. I had to back up to the first page of comments, click on more comments again, and then I was able to submit my reply.
It's not a bad thing: I'd rather have everyone being useful, but I'd rather pay someone for doing nothing than for doing an unnecessary job; at least in the latter case, we've got a honest view of the situation, we haven't broken the compass. A society where half the people are economically worthless and they don't even know it is doubly broken.
Jobs serve two purposes in our modern Western world: they produce wealth, and they're our way to redistribute that produced wealth. The latter is a convention, not a necessity. Exchanging wealth for work proportionally is an effective motivator for those able to produce actual wealth, but for the increasing masses who simply can't, it's a cruel joke, a game they're forced to play and doomed to lose humiliatingly.
So sure, they shouldn't get the same revenue as a heart surgeon; but if there's a robot which can flip burgers better than them, and thus make them economically worthless, I'd rather give them their minimum salary and let the robot do the flipping. My life is interesting enough that I don't need others to suffer in pointless jobs in order to endure mine.
Though, I think the more acceptable solution is to just drastically cut the hours of the uneducated grunt work that still isn't automated (while spending the time to automate it, because we are at the threshold of eliminating traditional labor and that is a good thing) and just divvy up the available work to the many, maybe even as little as an hour a day, or an 8 hour shift a week.
The problem is changing the entrenched century old agriculture / housing / trade industries to accept a lack of scarcity and dramatic price drops across the board. You want the income from that tiny work week to be the disposable income after providing food, warmth, shelter, and transportation, since it seems silly to even think of anyone living today unable to enjoy their life, when we have so much plenty.
.5 sec: Put bracket in tapping machine. .5 sec: Press Tap button. 4 sec: wait to Tap bracket. .25 sec: Air blows tapped part into crate --Goto Beginning until 120 parts are in crate Change Crate --Then Goto beginning.
Do this for 8-12 hours. Yes. a 5.25 second loop.
Other things in this job was if a part was in the crate that wasnt tapped properly (I found out Im also in charge of QC as well..)I would have to manually check the last day's work all by hand.
I was hired temp labor, at 8$ an hour. The machine that would replace me would cost $.5 million. That was one of the worst mind numbing jobs I had ever done. I figured once I started to contemplate suicide, I should probably get out of there.
The solution is probably to replace useless jobs with useful but unprofitable ones, but to keep people busy with almost-mandatory, socially useful activities. Without growing a management system comparable with the soviet one, in terms of ineffectiveness and corruptibility.
The adults supporting them no longer have triple the income to afford to pay for the lives of their children and their parents.
Part of what fueled the industrial revolution was the number of farming hands which went unemployed due to agricultural mechanization: they became industrial workers.
Between globalization, automation/technology, and "increased productivity" (aka working people like slaves), we just don't need as many U.S. workers. Yet the wealth is still flowing, corporations are realizing record profits, and more billionaires are being minted.
We here on HN tend to feel immune, due to our skillsets. And, while it is true that the shift currently most affects those with high school educations and/or in other sectors (manufacturing), our time is coming. With continued outsourcing, gains in automation (software writing software), and other shifts, we will all experience this. While the software and technology we here produce are helping to facilitate the shift for others, some day the focus will be on us as too costly or ineffecient.
So we will have wildly profitable corporations, an extremely wealthy investor/executive class, and an economy that produces all that the world needs while employing only a tiny fraction of the world's population.
Either these entitlement programs will continue to bloat to unprecedented levels or we will require a fundamental restructuring of society.
The issue is currently the most contentious of many welfare benefit reforms, I suspect in large part because discussing the issues raised in this article are almost totally taboo. Everyone knows perfectly well why disability rates are 10x higher in the poorest parts of the country, but there's a political taboo that prevents anyone from saying "Incapacity Benefit was used for decades by governments of both parties as an accounting trick to keep down the official unemployment figures".
I cant help think that business would rather keep the, er, difficult to employ out of the employment market.
Do employers really want to employ people with various disabilities and ailments? Do they really want the added grief, work, red tape, costs, etc?
Then we have the long term unemployed, the , er, useless manky scum who cant wash, dress or string a sentence together. Drunk, illiterate and on drugs? Do employers really want these people over and above nice educated suited "normal" people? Who wants Frank Gallagher on reception, as a sales rep, or stinking out out nice Google offices?
If the answer is yes, then hit the streets and employ a few. Go down where the "scum" are and offer them jobs and hope. Cheap, easy to find and plentiful.
If the answer is no, then lets stop begrudging the meagre social security they get. Lets happily pay our taxes to keep such people alive, comfortable and out of "our" way, so that we can get on with our businesses and work, and improve our lives.
Hows that for evil?
Things are just about ticking over now, imagine the shit storm that would occur if every unemployed person was told they're now competing with another 2 million people, keeping this a "secret" is as much in the governments interest as it is every person that votes. No good would come of this issue being out in the open now, it needs to come out when there are jobs available or proper support for the unemployed, neither of which is true at the moment. I could be missing an important factor (due to aforementioned shallow understanding of benefits) so please correct me if I'm wrong and there is an advantage or proper way this can be addressed.
I'm not saying there are a lot of disabled people in my city, but it shows the mentality. People want something for nothing and a lot more people that I would have thought don't mind pretending to be disabled.
My favorite is watching people pull up next to Lake Merritt to park, but before they get out they put up the placard, then proceed to walk 3+ miles around the lake.
My wife works in social services, and people are constantly trying to game the system by claiming disabilities.
On the flip side, our social safety net in the US is horrible and unemployment is very high. I don't really blame people to trying to use any means they can to live.
The bottom line is that if we had a real safety net that caught people slipping into poverty, there would be many fewer people claiming disabilities.
Simply cutting everyone a check would be far cheaper and equitable.
Nevermind that it's a sure path to continuing the cycle of poverty for one's family and their kids' families. Sigh.
This reflects that:
"Jahleel's mom wants him to do well in school. That is absolutely clear. But her livelihood depends on Jahleel struggling in school. This tension only increases as kids get older. One mother told me her teenage son wanted to work, but she didn't want him to get a job because if he did, the family would lose its disability check."
Being poor is not fun. Period. Can you imagine living on $20K, $30K, $40K, a year? Depending on where you are in the US that might just cover your living costs. There is a large segment of the population that will not get degrees, not work in jobs that are considered "careers".
In any demographic class there are people that abuse the system, but I wouldn't consider the poor in that category. These people are as or more hard working than the middle class.
Also, the government giving disability and welfare doesn't mean they are bringing in $100K a year in benefits. The government provides enough to live on.
For medical, it's a safe bet that many of those on disability go to the emergency room and never pay a dime.
Yes, because I have done it every year for the past decade. Having lived in several large metropolitan areas, I don't consider myself poor or even struggling.
I didn't feel poor until I had a bicycle accident and saw the hospital bill. If the insurance hadn't covered it, it would have taken me years to climb out of that hole of debt.
Where do you live that $30-40K a year is poor? The median personal income in the US is under $33,000 a year for employed workers, and still under $40k if you exclude part-time and seasonal workers (which is think is abusing the statistic).[0]
My father raised me and took care of my mother on barely $30k a year all throughout high school. It's not impossible to live on that or less, nor is it especially hard if people would stop acting like they deserve a new car, a big house and the latest toys.
[0] http://en.wikipedia.org/wiki/Personal_income_in_the_United_S...
Feeling poor is a mindset. Having a limited income is a reality. I use those numbers as ranges. You are right that you can live on a low income if you manage wants (and being in a low-cost area will definitely help).
The problem with low income is that there is hardly any breathing room. Medical, car or other types of unexpected expenses can make it difficult.
People that make a good income can afford to be more stupid with their money. Being stupid with money when the income is low is just asking for real trouble.
I'd venture that most employed people would feel that an income of $100,000/year is rich. While the definition of rich isn't exactly set in stone, $100,000 is nearly twice the national median household income. If you're making $100,000 a year, you're almost certainly rich.
Edit: And while those of us earning "average engineer salaries" might not be getting bailouts, I'd reckon we're at least more likely to feel the effects of them than a poor, or even "average" person. The financial services sector got bailouts -- they also buy a lot of software. Maybe we keep our jobs because of those bailouts.
Anyone who doesn't think $100k/yr is rich has never been poor… or even middle income. Sure, $100k/yr will only get you a small studio in Manhattan, but you're still rich. You live a life that someone who's making $30k can only imagine, you just decided to live in a relatively small place square footage wise. The closest most middle income people will ever get to the experience of being able to just walk down to the Guggenheim, or go out drinking fancy cocktails is watching someone else do it on TV. If they are lucky, they'll maybe get to experience that once in their life.
It's perplexing to me that people who are rich don't think they are just because they live in a small apartment. How you can be obtuse with respect to how he majority of people live? I see it all the time in New York and San Francisco. Single people making $100k pretending like they are somehow "middle class" because they live in a small apartment.
I didn't always think that. Possibly my perspective has changed because I'm starting a family, and spending time with relatives and friends at home is vastly more important to me than going out on the town. You spend that time at your house, and if your house is a tiny apartment it sucks. Then you realize that you can't afford a house in the city on your $100k salary and it feels bad.
Some middle-income joe in Nebraska might make 1/2 of my income, but I bet he can afford a sweet house with lots of bedrooms for all his kids - something I can't afford. Who's the rich one?
How do I do this? I live in rural Yorkshire, near Barnsley, in a very cheap area. I would say that in real terms, I'm 'richer' than someone earning twice as much as me, but living in a similar village 30 miles outside London. There are jobs in the capital with salaries far higher than mine, that I could likely have a shot at getting if I applied, but I don't apply because I don't want to live in crowded, expensive London.
I much prefer it this way, even if my bank account doesn't have as big a number next to it as someone else's. I'm happy!
(The fact that the FIRE sector, also known as the owners of land and large pools of money, can extract huge rents from the rest of the economy is probably America's chief economic problem today.)
This system is completely messed up.
But people hate the idea of giving people money when they "don't need it." So for each dollar someone makes that pushes them above bare sustenance, a dollar is taken away. In some perverse income ranges, more than a dollar is taken away.
The only way around it really is to either give people nothing, or to provide a basic income. Most people hate the idea of both of those: if you give people nothing, you in a very real sense end up starving people. You can pick and choose who gets aid, but that immediately adds a bunch of administrative overhead and encourages gaming the system. A basic income, though, gives Bill Gates free money from the taxpayers, and is very, very expensive.
All told, I prefer the BI, but that has a load of difficulties.
I have tried jobs before, got fired in a manufacturing job getting overwhelmed by the process - got fired in another job because i could not understand "shop talk". I don't like living off the system and one of the main reasons I'm really pursuing entrepreneurship is I see it as the only way I can get off the system.
I can also understand being overwhelmed. I don't have autism, but have done the programmer thing, and have trouble interacting with people so might be on the spectrum a little bit. I swear, if it weren't for our mechanized society with machines to repair and computers to fix and program, I'd be a poor dirt farmer.
I wish you the best of luck.
If you'd like to brainstorm possible jobs or business maybe we can talk on this thread.
This EconTalk is also interesting: http://www.econtalk.org/archives/2012/12/mulligan_on_red.htm... – the thing that really made me think is the observation that the marginal benefit of work is often negative for people on different assistance programs, and that comes up in the first interview too. To try to get ahead, to try to get off disability, will put you behind where you'd have otherwise been. I think it also offers something of a solution, to look at the entirety of the support systems and make sure that there's always a benefit to being more beneficial to society. I suspect that would largely mean increasing benefits for the not-quite-poor, or the almost-disabled, etc. But if a well managed slope of benefits is achieved, the incentives may lead to less total dependence.
It's also something that, in theory, could be supported by Republicans and Democrats, as analysis is based on ideas that are appealing to both sides.
Having benefits pulled out doesn't work, particularly health insurance.
Labor force participation has been declining the last few years, but at least some of that is aging population and massive recession. And despite the decline, the rate remains well within historical bounds. I'm glancing at Bureau of Labor Statistics charts, not seeing a massive hidden class of people that are somehow staying off all the books.
On the other hand, there's an MIT economist that totally disagrees with me, claims that disability DOES explain trends in other labor statistics, like participation rate: http://economics.mit.edu/faculty/dautor/papers/disability
Full disclosure: I am most definitely not nor have ever been "an MIT economist."
His paper from 2006 depicts some interesting trends.
(Wait, 2006? This guy has been forecasting disability armageddon for seven fucking years, when the real threat back then was the imminent housing bubble!? Now I'm skeptical again...)
====================
Data:
UPDATE Neat labor data infographic: http://newyorkfed.org/employment/
Scary labor force participation chart (with really narrow scale to heighten the effect): http://data.bls.gov/timeseries/LNS11300000
A million Census charts: http://www.census.gov/compendia/statab/cats/labor_force_empl...
Employment status, 1970+: http://www.census.gov/compendia/statab/2012/tables/12s0586.p...
A long article on unemployment rate, participation rate, etc., with some brilliant charts: http://www.calculatedriskblog.com/2012/02/graphs-unemploymen...
Autor and Duggan's 2006 piece I reference above: http://economics.mit.edu/files/597 [PDF]
However, I'm interested from a design perspective. Does anyone know if this was built by the "apps team" at NPR? IMO, it's very well done.
More from the NPR "apps team."
http://www.nytimes.com/projects/2012/snow-fall
I like it. The snowfall article is fancier, but they share an aesthetic, and I hope we see more of it.
Thinking about it, I'd be willing to pay for a regular stream of articles that are presented so nicely. (Well, assuming the content itself is also good). This is significant... I've never been willing to pay for news in my life.
I know some people on disability who have mental issues. Some had developmental problems, and some had strokes, and some have mental illness, and there are other situations in between. They aren't employable, at least not easily and full time. The reason is that as the economy has shifted to a service economy, the service jobs, which used to be considered "kick back" or basically low stress, have become high stress. When the profits of the business depend on the service workers, the stress falls on the service workers.
That stress is either around increasing production of mentally produced product (I'm sure programmers here know this), or of producing a positive psychological experience for someone else. For example, the people working in retail have to be nice. They can't be grouchy and talk shit to each other like people used to when they worked in factories.
Maybe Joffe-Walt hasn't really thought about this, but within the class of sit-down jobs, the ones she has are not the common kind. There's variety in the work, and a huge need to "think outside the box". Even the stressors have some variety to them.
Most service jobs are about forcing your mind into the box, and handling the same stressors over and over. These are easy on the muscles, but rough on the mind, and the mind, as we sometimes forget, is a manifestation of the brain, an organ in the body, subject to being overworked and injured.
The Wal-Mart there is doing great though, one of the most profitable in all of Washington state, according to friends that work there.
http://www.boston.com/news/health/articles/2010/12/13/follow...
Why am I not surprised that getting people on disability has become an industry. I very much believe that governments should look after people who need help but there seems to be a significant lack of accountability when it comes to disability.
Does anyone know the details American of politics of disability? Welfare, social security and health care are constantly in the political news but I do not recall seeing much about disability. As someone who regular consumer of political text I find this surprising. Especially given the size of the program.
Of course disability claims are going up - the economy is bad and people are using disability as an unemployment benefit. The unfortunate result of all of this is going to be lots of extra paperwork (and potential rejections) for people who really are too disabled to work.
He argues that the system is "broken" on purpose.
I dunno, maybe the difference is that you don't have a job where you have to STAND ALL DAY?
If you're in a wheel chair you can still do a desk job. Does that mean you're not disabled?
At some point we need to accept that an economy based around leisure is already here. The irony is that adapting people to that mindset is going to take education...
The bigger irony is that only the (rapidly becoming extinct) upper classes really know how to entertain themselves.
I think education is what should be provided free or subsidized.
Not related to the topic.. The site is really well designed and kudos to NPR for a splendid coverage and presentation as usual.
Holy cow. The working population in the USA is a little below 140 million; that's almost 10%.
Then people wouldnt complain about the big screen tvs, etc. that they think the poor spend the welfare money on.
As it turns out: it's better to just give people cash and let them make their own determinations and let the free market and substitution do its thing, than maintain a huge parallel infrastructure just to avoid hurt feelings over the idea that someone somewhere may buy a non-necessity with welfare dollars.
It costs the taxpayer less, people get better results, they have a better opportunity to learn and improve, etc. Some will abuse it, but some sold their government cheese and food stamps to buy non-essentials as well.
People complaining about the big screen TVs are flat-out disingenuous. They're either outright ignorant of history and/or of the specifics at hand [1], or they're lying to effect a policy change they couldn't justify with the truth.
[1] Studies have been done. The "welfare queen" and "strapping young bucks buying steak dinners" do not actually exist. Exceptions do, but they've never amounted to significant quantities of waste. And we already do search for, and ferret these people out.
In economic terms giving anything but money is less efficient, but in practice it would save massive amounts of money, prevent starving people in the streets and give them an incentive to work themselfs up.
I live in the U.S. I've observed, first hand and individually, more instances than I can count of deliberately unsafe work conditions.
Contractors having e.g. employees deal with lead paint without protection. Small businesses as well as large corporations having employees work regularly with unsafe chemicals.
Landlords renovating "under the radar", spreading toxic contaminants throughout their properties.
People take advantage of other people's ignorance. They "don't want to be hassled" and "hate the government" and want to "save money".
I'm one person. And I can hardly go through a day in life without running across this. In part, perhaps, because I am at least semi-informed, and because I pay attention to my surroundings.
It's no mystery to me that our population ends up with so many "unfit to work", disabled people.
In addition to the above, add the stress of job insecurity, health care insecurity, bully bosses.
A lot of people who have to live amidst this (and you, exhalted programmers and "high technology" wonks, are generally not -- in such roles -- among these; that is speaking generally, while I do recognize the individual experiences vary widely), eventually resign themselves that "this is the way the world works".
The smart ones try to save and earn a retirement before their body gives out. And/or to move into some sort of management position where knowledge and experience keep them valuable and employed.
In the U.S., at least, these circumstances continue to exist because we let them and because many people continue to take advantage of them. The next time you're looking for lower bids on your renovation project, keep this in mind.
There are the formal rules -- OSHA and all that. Then, there is an entire culture of "on the side" and "under the table" and loyalty and betrayal, that changes and morphs somewhat but that remains, on a day to day basis, apparently largely untouched by all this.
I'm sure it's worse, often far worse, in much of the rest of the world. But... the U.S. has more -- far more -- than a "few bad actors" that contribute to the problem, domestically. Lots of people make lots of money, in amounts both small and large, from taking advantage of this.
And... this is anecdote. One guy, just looking around as he goes through day-to-day living.
Another reason I am disgusted by the health care situation in this country (where the results of these problems ultimately end up). Another area where costs and benefits are not at all aligned and balanced, on an individual basis.
It violates my liberty when my wealth is taken away by force.
Wealth redistribution is morally hazardous to the recipients, getting something without earning it or doing anything in exchange.
Easier to say in front of peers/parents/etc.
I wouldn't propose this if I didn't already know several people who have done this in order to continue supporting their family. Also, my best friend is on disability and wholeheartedly deserves it, so I'm kind of torn about how I see people use and abuse this program.
Self reliance, while not always possible, is always better as it empowers the individual and the state. I have never met a disabled person who enjoyed being helped.