The Rise of Men Who Don’t Work – And What They Do Instead | Hacker News Reader

The Rise of Men Who Don’t Work – And What They Do Instead

nytimes.com

264 pointscjdulberger276 comments

The silent yet steady substitution of unemployment benefits with federal disability insurance is well covered in an episode of This American Life [1]. We, as a country, have a shoddy system for re-training low-skills workers facing technological obsolescence. We have also set up a system under which unemployment benefits are largely a state liability. Disability, on the other hand, is federally funded. The intersection of these trends, as documented by This American Life, lands us in the curious situation of state governments encouraging their unemployed to seek disability benefits (thereby shifting their burden onto the federal budget).

In the short run, state unemployment and federal disability benefits have similar effects. Social stability is enhanced through buying off the poor. But long-term disability is not designed for the under-trained. Its means-testing paradigm discourages even the exploration of employment options which might jeopardise the applicant's disability status. Thus a one-way valve to dependency on the state's largesse.

[1] http://www.thisamericanlife.org/radio-archives/episode/490/t...

There is also an issue with disability benefits where they are structured with disincentives to work. The motivation to not pay disability to people who can work is understandable, but for people who can work some but whose disability hinders their ability to get a full-time job or one that's not highly paid, it's a disaster.

http://marginalrevolution.com/marginalrevolution/2013/07/aid...

This is a point that's not fundamentally liberal or conservative. Both sides should be interested in improving programs that have gratuitous barriers to work.

Totally agree, it should be obvious no matter your politics that the way disability benefits are currently structured incentivize people to not work, and serve as a de facto welfare system.

The problem is that it's going the be impossible to get an agreement on the solution. Conservatives would take this as an opportunity to slash disability benefits and walk away. Liberals would look toward new government programs.

Uh... the above-mentioned Earned Income Tax Credit solution is very popular in conservative circles. What conservative publications are you reading that advocate a slash-and-walk policy?

EDIT: Here's a conservative think tank advocating the EITC as an alternative to a minimum wage hike: http://www.aei.org/publication/earned-income-tax-credit-does...

The problem I see with using EITC in this way is that it masks the cost of labor for any company paying minimum wage. A huge hole in arguments against raising the minimum wage is that few seem to address the fact that many workers are already receiving additional pay in the form of benefits. The benefits are more expensive and less flexible than an equivalent pay raise, because new bureaucratic infrastructure inevitably has to be created to manage the new benefit. Is that really more efficient than just paying higher wages?

If we consider the difficulty in obtaining disability benefits and the difficulty in keeping them, we should also consider why someone would go through the hassle. I don't think that the benefits are all that much (I could be wrong).

What if we, as a society, could make it easier to obtain and sustain a good-paying job? Would people be still willing to go the route of disability? Maybe there are few jobs that many people can get. Or, maybe the 'costs' associated with working are too high. There's considerable social stigma for being 'disabled'' - why would someone take on that stigma?

I'm guessing that people are making a rational cost / benefit analysis.

It depends on which program and what you consider a lot. There are three main disibility programs: SSI, SSDI as the dependant of a retired worker, and SSDI as a disabled worker.

Everyone is eligible for SSI but pays the least (maximum $733 / month federal, some states add a small amount). Someone on SSI whose parent has enough qualifying working quarters can switch to SSDI at 1/2 of the benefit the retiree would be eligible for at full retirement age. This currently tops out at around $1400 / month. Finally, if you yourself have worked enough qualifying quarters (6-20 depending on age) and become disabled you may be eligible for primary SSDI. These top out at around $2600 / month, but average much less. An additional benefit of SSDI, is that after two years a recipient becomes eligible for Medicare.

A big problem is that if people leave disability, they'll lose their Medicaid health insurance, and low-paying part-time jobs won't replace that. This is another example of America being penny-wise, pound-foolish when it comes to healthcare costs.

The disability rate of 20-30 year olds really jumped in the last few years.

Possible result of Iraq/Afghanistan wars? The army's reported 1 million injured, but I'm not sure how many of them transitioned to disability.

Would disabled veterans be reflected in these numbers?

If they are discharged, yes.

One entire million injured? Something must be off there, otherwise the injury rate would be ludicrously high relative to the small number of troops we had in the wars.

It's apparently this story:

http://www.ibtimes.com/va-stops-releasing-data-injured-vets-...

Which I think uses these numbers:

http://www.publichealth.va.gov/epidemiology/reports/oefoifon...

Which are the numbers of veterans that accessed VA facilities for health care, not the numbers of veterans that were injured (disabling injuries are one of the major eligibility factors for the VA, but there are other veterans that would also be eligible for VA services).

In particular, young veterans use the VA mostly in the case that they don't have private health insurance (a job with health insurance, mostly), so the healthier young veterans don't use the VA. Older vets often use the VA because they're retired and it has good services. My grandfather uses the VA without any service injuries because they've got comprehensive care for older guys -- all the services in one building; a great-uncle used them for hearing aids (slightly service-related) but not anything else; younger vets I know just use private care for now.

The statistics I link are specific to veterans of Operation Enduring Freedom (OEF), Operation Iraqi Freedom (OIF), and Operation New Dawn (OND).

No, disability for injured veterans is separate from Social Security Disability Insurance (SSDI) that is available to the general population.

There's quite a lot of disability fraud going on, some of it downright shocking.

Example #1: A couple of weeks ago, my brother, an orthopedist, had a 26-year-old man come in for an ankle sprain. In the course of working up the ankle -- mildly sprained, no problem -- he found that the patient doesn't work and is on 100% disability. Why? Because of acne. Yes, acne. Apparently when he was 19 or 20 he had such severe acne that someone deemed him unable to work and he was approved for 100% disability. Even though his skin now is perfectly clear, with some minor acne scarring the only remaining blemish, this man will likely never work a day in his life -- he will be drawing a disability check from the government for the next 60 years.

Example #2: Another brother is a police officer. Or was. He recently retired, at age 52, and now will draw a $70,000/year pension for the next few decades, which is a separate but related issue. But he tells me that -- even though he didn't personally take advantage of this ploy -- it is routine for retiring police officers and firefighters to go to "friendly" doctors and have those doctors certify them as disabled so they can get disability checks in addition to their pensions. It's called "taking the disability topper" or "getting DA'd."

It's pretty disgusting that those that are supposed to be stopping crimes are knowingly and intentionally committing fraud to get additional money from the state. Between this and the recent civil asset forfeiture scandals, I'm amazed people aren't more outraged.

Outrage requires awareness as a first step. Our mainstream sources of journalism are often too preoccupied with party talking points when covering welfare programs to get to the real issues of corruption, fraud, and systemic brokenness underneath. It seems to be slowly changing, however. Articles like this one are a good start.

I would argue that police are inherently no more ethical than the average reasonable citizen.

The solution of course is transparency. Stop treating police as holier than thou. They're just government workers. "Trust but verify" works wonders for keeping people honest. Good people as well as bad, because it removes temptation.

This stuff is very common, especially here in Chicago with the unions running a fairly corrupt machine. I really wish something could be done. We're taxed hard and money is spent in reckless ways by the government like this. Doesn't seem fair to those of us who actually work to make this money.

Worse, there is no solution is site. Who is going to arrest these crooked cops? Other cops? They're on the take as well.

>He recently retired, at age 52, and now will draw a $70,000/year pension for the next few decades

Illinois has a pension crisis we can't get out of because of this. These union handouts and insane pensions that are 100% unaffordable. Right now every man, woman, and child in Illinois owes $26,000 in taxes to pay these pensions out. Who is going to pay this stuff?

Citizens should be able to pursue small qui tam suits against other citizens for things like welfare fraud. It's worked very well for Medicare fraud, I'd like to see it implemented on a micro scale.

Do you think the process of pursuing small qui tam suits is automatable enough to make easy enough for Joe Q. Citizen?

> Worse, there is no solution is site. Who is going to arrest these crooked cops? Other cops?

The fraud burden typically lies with the agency that's cutting the checks. Other agencies (IRS, SEC) deal with fraud in their specific areas and do not rely on police except the very specific step of arresting the individual, which in these cases may never happen.

The disability topper was a huge scandal for the Long Island Rail Road in recent years:

<< About 600 Long Island Rail Road retirees will lose their disability benefits after a federal agency voted last week to halt the payments, amid a sweeping investigation into what prosecutors have called a major disability fraud scheme, according to agency documents and officials.

The agency, the United States Railroad Retirement Board, which over more than a decade granted disability benefits to hundreds of railroad retirees based on fraudulent medical evidence with little scrutiny, took the action on Thursday during a five-minute meeting at its headquarters in Chicago. The vote approved procedures under which the board will cut off the benefits, which, officials said, are costing the agency $2 million a month. >>

A bunch of the people involved have gone to prison over this fraud:

<< The first terminations came several weeks after the doctor who submitted what prosecutors have said was the bogus medical evidence underlying the applications of the roughly 600 retired railroad workers pleaded guilty in federal court in Manhattan to fraud and conspiracy. The doctor, Peter J. Ajemian, told the judge in January that the retirees were not in fact disabled. …

Dr. Ajemian, who was sentenced to eight years in prison, is among 24 people — including retirees, another doctor and two facilitators — who since 2011 have pleaded guilty to federal charges resulting from of the investigation. Charges against eight other people indicted in the case are pending, and the investigation by the F.B.I. and federal prosecutors in Manhattan, officials have said, is continuing. >>

http://www.nytimes.com/2013/07/02/nyregion/600-long-island-r...

In Colorado 80% of medical marijuana patients were 20-30 old men with chronic pain.

I'm happy if my tax money can help someone in need. However, I'm unhappy if it leads to creation of permanent poverty traps. Have any countries (perhaps in Europe or elsewhere) successfully implemented support systems that are fair both to the needy and to the taxpayers?

In Europe, Denmark's "Flexicurity"[0] model is often touted as an exemplary system. I don't know the details of the implementation though.

[0] https://en.wikipedia.org/wiki/Flexicurity

As long as a raise of income of $N docks you at most N - (whatever you consider minimum wage) dollars in welfare, you won't be outright disincentivized from working.

Upon some more research, it looks like Earned Income Tax Credit [1] attempts to provide some minimal incentives along these lines.

Simplified analysis, goal is situation C. Let's say my monthly welfare income is $1000.

A. I start earning $200. My welfare decreases by $200. Why don't I just stay on welfare?

B. I start earning $200. My welfare decreases by $300. I've lost $100, a penalty for working.

C. I start earning $200. My welfare decreases by $100. I now have an incentive to work. Over time, this leads to a future situation where I gradually earn much more than I could ever with welfare.

Also consider: What if I find $1000 sufficient to live on? What about $1100?

[1] http://en.wikipedia.org/wiki/Earned_income_tax_credit

It's actually more likely that your A and B scenarios are the same. I'd consider a more realistic A scenario to be:

I start earning $200. My welfare decreases by $200. My expenses increase by $100 (transportation to/from work, childcare while at work, clothes specifically for work, etc).

Once you realize that work usually has more costs than just time A and B become the same.

It is even worse than that. Now you are spending X hours per day being told what to do, instead of spending X hours doing whatever you want.

There are some scenarios, usually at income thresholds for various benefits, that the B scenario is manifestly true even without expenses - earn another dollar, and you'll lose money.

I suspect that angst about "permanent poverty traps" is something we're going to have to get over.

For now, we're talking about unskilled and low-skilled jobs going away permanently, and there is an element of moral panic about uneducated, supposedly low-value-producing people getting leisure and government support.

Just wait until it happens to a middle-class or upper-middle-class group. THEN is will be all kinds of innovative to offer lifelong government assistance in the form of mincome or other such program.

And if you are worried about government spending and efficiency, wouldn't you rather see the TSA payroll supporting twice or three times as many people in a mincome program? It's better to be honest about a lack of productive jobs.

> Just wait until it happens to a middle-class or upper-middle-class group.

These things don't happen overnight--there will be many years as the class of jobs that you're talking about becomes slowly less well-regarded, until when they disappear no one will care.

And it's not just disability benefits. When you stop and really analyze it; Medicaid and health insurance credits, SSI, food stamps, EITC, FICA, progressive income tax rates, refundable tax credits, phased-out tax deductions, even things like housing and energy assistance, etc.

There's easily $60,000 of services, utilities, fees, and taxes that you pay when earning $100k, that you get for free or don't have to pay if you earn $0. As @fredophile says, then you still have to add in the direct/indirect costs of going out and earning that money (e.g. childcare for starters), and you can easily gain net-zero or negative benefit all the way up to $100k of household income.

I'm sure people must have researched this extensively, and can give a properly cited cost analysis, but it's something I've been calling the 'middle class crucible'. Until you break out on the other side of $150k household income, the vast majority of your earned income is effectively running on a treadmill. E.g. On the order of 80 cents of each dollar you earn.

Every progressive (means-tested) social support program or tax rate, by definition, is a penalty for working. These programs have grown so big, and phase-out so aggressively in the income curve, it's an incredible trap / attack against the middle class.

That actually sounds like you might be able to back that up - would be interesting to see the actual stats. But I think you're missing a certain qualitative difference though - the services the 100K-income household is getting for their 60k are significantly better than the services the 0-income household is being given. Obviously they're probably spending money on better food than the food stamps would cover, they're likely living in better conditions in a better neighborhood, and their health insurance probably gives them more choices than they would have on medicaid.

There's definitely a qualitative argument. Certainly that's what you see if you turn on any ad-supported media, and you're inundated with that "quality of life" everyone is selling to the middle-class.

But for example, you can pay ~$1000/mo for a family of 4 for "Silver" health insurance and earning > $63k you would have to pay the full amount. Credits pay for almost the entire cost (aka $12,000 of tax-free income from the Fed) if your household income is $33k. So under just one program (ACA), $30k of incremental work disqualifies you from $12k of assistance. And that's for the same exact plan/service.

Then you get below $33k household income and instead of paying thousands for a Silver plan with a $6,000 family deductible, you pay basically nothing and have no deductible for Medicaid / Medi-Cal. That's effectively a $24,000 / year value for a family of 4. [1]

In both cases, you can argue about access to top-specialists for chronic care, but certainly access to acute care coverage is equivalent (i.e. hospitals can't base their ER services based on ability to pay). In many ways Medicaid is better because deductibles are a hell of a lot lower than $13,500 Bronze / $6,000 Silver.

By the way, Whole Foods takes food stamps. So that's another example where you get straight up cash for not working. Up to $8,400 / year, cash on a debit card, which phases out as household income goes to ~$30k / year (plus allowed deductions) for a family of 4. [2]

If you have a qualifying disability and have to make the choice of giving up work and going on DI, assuming you have the work history credits, it's another up to $31,000 / year of income (not entirely tax-free though). [3]

That's over $60k right there, and there are many more programs to account. It would add up to well over $100k except you can't fully stack all of the programs, e.g. CA SDI payments count against SSDI payments.

I was thinking about making a "how much do you lose by working" micro-site as an excuse to play with D3 and interactive visualization, targeted to residents of California, but the whole thing was too infuriating I haven't mustered the motivation to do it.

[1] - http://www.coveredca.com/shopandcompare/#incomeGuidelines

[2] - http://www.stanworks.com/community-reports/other-services/co...

[3] - http://www.disabilitysecrets.com/how-much-in-ssd.html

While this is interesting, I'm not sure what point we should really be taking away from it. That government assistance is so good it's a motivator not to work? It's easy to play with numbers and make it look like you're "losing money" by working, but it's somewhat disingenuous. For instance, in practice that "$30K of incremental work" is statistically very likely to involve a job with a company that provides health care for their employees and dependents.

Furthermore, your description of the way food stamps work is correct but elides how that "phase out" works. Under current CalFresh guidelines[1], a household of 4 grossing $30K a year would get $98 a month. If they grossed $24K a year that would go up to $218 a month -- an extra $1440 a year, when you work it out, which is to say much less than what they'd net by just making another $6000 a year.

[1]: http://foodstampguide.org/calculating-the-grant-how-much-do-...

In practice, I'd suggest that most of these calculations are going to work out in roughly the same way: yes, you're "losing out" on government assistance by making more money, but the benefits you accrue from actually making more money more than offset that.

chipotle_coyote, you give the perfect example (actually it's close to the worst case part of the curve). A family of 4 making $24k/year, working their ass off to increase their income 25% to $30k/year. But at the end of the year, what happened?

  Gross Increase in Income: $6,000
  - FICA:                  ($  918)
  - Fed Income Tax:        ($  900)
  - State Income Tax:      ($  500)
  - Reduced Food Stamps:   ($1,440)
  - Reduced EITC:          ($1,260)  [21% phase out after $23,260]
  - Reduced ACA:           ($ ???)   [Just about to lose Medi-Cal]

That's just top of my head. There are other programs I'm definitely forgetting or don't know about. There's at least $5,000 of additional taxes you pay, and credits you lose, for earning that $6,000. If I had all the numbers, I'm sure said hypothetical family is worse off earning the extra $6,000. They literally now have less money to spend on food every week.

Think about how broken this is. At the point in the curve where adding $6,000 in family income could actually be life-changing, the government claws back at least 83% of it?! Fucking A... (sorry, this really makes me mad).

> "$30K of incremental work" is statistically very likely to involve a job with a company that provides health care

I count benefits as part of income. So if part of the increased payroll expense is actually spent by the employer paying for a private health plan (with a high deductible and cost sharing with the employee) that's a huge net-loss for the family versus getting cash income from the employer and keeping their free health care from Medi-Cal. (It makes zero difference to the employer, ACA penalties aside, either way it's a fully deductible business expense)

Edit: I see you gave two examples, $24k vs $30k, and lets say $30k vs $60k. If we do a detailed realistic budget accounting for all costs, credits, programs, etc. you will find "earning $60k" you actually have less money to spend than "earning $30k". You will be net-negative if you have any significant health care expenses at all. It's completely counter-intuitive, and in fact, borderline insane.

> I count benefits as part of income.

While there's a case to be made for that, it's not what most people do -- and it's not what you do for computing benefit eligibility for food stamps, ACA, and other government programs, AFAIK. So I'm not sure you should count benefits as income for this purpose. In principle you're right re: getting cash income instead, but in practice, I'm not sure it's that clearcut.

Re: taxes vs. credits, it would be really interesting to actually work that out. I'm not convinced your take is right, but I'm not convinced my take is right, either. :) I didn't intentionally pick the perfect example; the $24K a year came from typing "2000" into the spreadsheet I downloaded from the CalFresh web site because "3000" was too high to qualify. I didn't actually try any numbers other than 2000 and 2500. But my suspicion remains that most people would be better off actually working than taking assistance programs, both in purely pragmatic terms and in less quantifiable terms -- I've known a fair number of people who make assistance-qualifying incomes but I haven't known a single one who wants to be in that position. (Which is of course anecdotal, but it's still interesting to me.)

(Also, I don't think you can really count every possible credit -- most people can't qualify for disability income, for instance. And the observation I made about not wanting to be in that position is extremely relevant here; I've known a couple people who get permanent disability income and they absolutely do not consider it a good thing. They're making less than they were when they could actually get employment, and that's not getting into unquantifiable but real things like damage to their self-esteem.)

It's just wrong to mention DI here, since that won't apply to most people (downthread, I pointed out that it has serious incentive problems if you're on it, so I partially agree with you there).

I'm certainly not eligible for it, not even with the most cooperative doctors I could find. So it's not lost income for me.

Also: I hope your Econ 101 class that you tout mentioned the lifetime earnings hypothesis. Based on that, you can't count payroll taxes as lost income, because they contribute to your future social security benefit. So you'd have to adjust your figures to account for that. (And if you say that it won't be there for your generation, you have to put that in expected value terms, not absolutes...)

> It's just wrong to mention DI here

I agree with SSI and SSDI the pit is very, very deep. The incentive to just give up is extraordinary. You have to willingly forgo tens of thousands of dollars for the pleasure of working. Since trying even just a little bit disqualifies you. And yes, SSI/SSDI eats your soul.

But the argument stands even without SSI/SSDI though. Just adding ACA on top of the existing subsidies was enough to almost completely eliminate the incentive to work for practically half of Americans! (median household income: $53,891)

> you can't count payroll taxes as lost income, because they contribute to your future social security benefit.

If only that were literally true!! As usual, a tiny little bit of work each year contributes a lot to your benefits. Everything above that contributes ~1/8th as much. See: http://www.ssa.gov/pubs/EN-05-10070.pdf

I'll summarize: Take your annual earnings each year (up to the FICA max for that year), and adjust for inflation. Take the 35 highest earnings years, and sum them, then divide by 420 (35 * 12). The result is "Step 4". Now look at Step 5:

5a. Multiply the first $816 in Step 4 by 90%. 5b. Multiply the amount in Step 4 over $816 and less than or equal to $4,917 by 32%. 5c. Multiply the amount in Step 4 over $4,917 by 15%. Step 6. Sum the three to find your benefit!

Do you see what they did there?! This is nuts! What does this actually all mean? The net effect?

  15.6% * $10k *  35 = $ 54,600 of FICA taxes ==>  $  816/mo in benefits (5.5yrs till breakeven)
  15.6% * $120k * 35 = $655,200 of FICA taxes ==>  $2,642/mo in benefits (20 yrs till breakeven)

TL;DR - With Social Security, paying 12x the premium nets you at most 3.2x the benefits. The highest payers would need 20 years of benefits just to get their money back, and that's with no ROI / compound interest.

Plug $20,000 (it's a bit more than current-day maximum FICA) per year savings for the next 35 years at even 4% ARR into a calculator... the day you retire you should be looking at $1.35 million dollars in your savings account. At 8% ARR (S&P500) the balance would be $2.8 million.

But they'll pay you inflation-adjusted $2,600 / month. About 1% annually on your 2.8 million. It's. A. Scam. $18,000 / month would be a respectable ROI on that level of investment. In other words, the vast majority of that up to $655k is effectively lost.

I'm not tracking inflation, but since the Wage Base tracks inflation, and payout as well, I can make the point without adding that complexity.

It's like a disease ridden throughout the tax code. The progressive nature is literally everywhere, and it's all designed to apply more and more pressure the more money you make. The problem is, it's all additive, and there are so many layers...

You're right, the proper statement is "you can't count _all_ payroll taxes as lost income." Your numbers still aren't accurate. You're also going higher than the initial income you mentioned ($100k), and you've switched from household income to individual (a two income family with $75k and $45k will look quite differently).

And you can't make the point without disability income. As shown lower down in the thread, your claims are hyperbolic even including DI of $31k!

It's funny..I agree there is a problem here. I just think we need someone intellectually honest to do the numbers properly. And that person is obviously not you.

My point was simply to show the maximum range of possible outcomes, which is why I showed from $10k to $120k. I wasn't trying to tie it back to any particular scenario. Even in the absolute best case, the SSI program is clearly not about providing individual ROI for your tax dollars. It's about your incremental work supporting others. Which is fine... to a point.

The 'retained future income' portion of FICO payments, lets say with a 4% discount rate (ARR), is pennies on the dollar even in the best parts of the income curve where your earnings count the most toward achieving benefits.

Using 'danans' numbers he came up with $35k of marginal utility from $115k of household income. Those numbers were obviously overly conservative, but did include an average SSDI of $24k. There are many, many benefits that danans did not include, which I enumerated in my reply downthread, but I'm willing to settle on $35k of utility from $115k of work as a starting point.

Now showing it without SSI/SSDI and just relying on food stamps, Medicaid, EITC, and other means-tested programs you still get horrible outcomes like the $24k - $30k example from 'chipotle_coyote' but I agree it won't be a straight-out loss up to $100k.

But I hear you -- if I believe enough in making an irrefutable point, I should just code up the site and accept pull requests on Github.

I have always shown my math and quoted my sources, so you might not agree with the methodology, but I've tried to be accurate with the numbers, and cite sources of inaccuracy where-ever possible. I'm sorry you found it dishonest.

In California, Medicaid + MediCal is substantially better than most private insurance, at least for elder care.

> In California, Medicaid + MediCal is substantially better than most private insurance

Medi-Cal is the name of California's Medicaid program, so "Medicaid + Medi-Cal" is just counting the same program twice. Which, if you could actually benefit that way, would probably be fairly generous, but the state actually makes a significant effort to prevent that.

Did you intend to say Medicare + Medi-Cal, perhaps?

Indeed I did. Thanks.

> Obviously they're probably spending money on better food than the food stamps would cover

The inverse is usually true. Good food doesn't cost much, it's the garbage food that's expensive. You can easily afford fresh fruits/vegies/meat with food stamps.

> they're likely living in better conditions in a better neighborhood

You can get public housing in Manhattan. Granted it's public housing, but hey, location location location.

> and their health insurance probably gives them more choices than they would have on medicaid.

This is state specific. For New Jersey, it is absolutely the best health insurance to have. You can't even buy the sort of stuff they will cover with almost zero out of pocket.

This sounds crazy to me. Maybe you're living in a place with a really high cost of living? What's included in "services, utilities, fees, and taxes that you pay when earning $100k" ?

It's completely bonkers when you lay it all out there. On $100k of family of 4 household income... it's a combination of actively paying taxes, and missing out on credits;

   Payroll taxes*       = $ 15,300
   Federal income taxes = $  6,500
   CA income taxes      = $  4,000
   ACA Subsidy          = $ 12,000
   Food Stamps          = $  8,000
   EITC                 = $  5,000
   Disability           = up to $30,000 if applicable
   Energy credits       = ???
   Housing credits      = ???
   Waived fees          = ???

Some of these are refundable credits or progressive credits which you lose by earning too much, so it's a direct cost of working.

Every progressive subsidy is mathematically equivalent to a progressive tax. The $12,000 ACA "tax credit" is actually a $12,000 progressive tax. It's the single largest tax hike against the middle class... possibly ever?

This doesn't even get into the property tax side of the equation, since we're talking direct cost of working, not cost of owning things like houses, and cars. But that's part of the overall conversation of the war on the middle class. [Edit] There are even property tax circuit breakers where you get credits on property tax for earning less, so that should be in the above table. That's separate from housing credits such as means-tested rent control.

Then you can start to pay for the personal costs of actually going out and earning that income.... everything from child care, to transportation, to business clothes, etc.

And then that's still not even counting opportunity costs, e.g. I'm too busy at work, now I have to pay for a plumber, contractor, mechanic, landscaper, take-out dinner, etc. versus doing it on my own time. Think, all the things you could do for yourself in 2,080 hours per year...

* Don't be fooled by the employer hiding half the cost from you.

- The $15,300 in payroll tax is over and above your 100k. If you are going too call that a tax on you, then you need to call your income $115,300 for the purposes of the % calculation.

- You can't subtract the opportunity cost of not working from your income when you make $115k, because you've made the decision to work and earn that salary. - The EITC is for people who work (hence the "earned" part). If you chose to go exclusively on govt assistance, your max EITC is $11 for a family of 4: http://www.irs.gov/uac/Newsroom/Earned-Income-Tax-Credit-Do-...

- I don't doubt that there is a measurable amount of disability insurance abuse, but the fact remains that you probably have a disability that prevents you from doing child care. The poor still often have to pay for childcare. In any case, the average annual benefit for a family of 4 comes to about $24k, not $30k: http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

Subtracting the opportunity cost of not working from vs working at 115300k muddies the comparison. It's more sensible to compare the two scenarios separately:

115300-15300(payroll tax)-6500(fed tax)-4000(CA tax)-8000(foodstamp equivalent food cost)-2600(typical employee cost for PPO-health program)= 78900

vs.

12000(ACA)+8000(food stamps)+11(per EITC comment above)+24000(per disability citation above) = 44011

Even this comparison isn't apples to apples. In the $100k figure, are you accounting for the employer paid portion of health-insurance (and the lower rates that those in a employer-negotiated plan pay?), any tax-free employer retirement plan contributions, and other pre-tax benefits (DCAP, flex-spending account, employee health insurance contributions?). If you own a home, are you accounting for the mortgage interest and property tax deduction?

I do agree with one sliver of your argument: making financial progress on $100k income is challenging for a family of 4 in VERY high cost-of-living places such as the Bay Area, where that remaining 79k easily gets eaten up by childcare, housing, food, transportation, etc.

Is the standard of living on the $115k salary equivalent to that of a family of 4 on govt assistance? I don't know, but I doubt it, and I would bet on the latter's standard of living being significantly worse. Neither situation is easy street.

EDIT: wording. EDIT2: formatting

> The $15,300 in payroll tax is over and above your 100k.

Actually, only half (the employer share) is.

My Macroeconomics 101 class claimed it's been "proven" the full cost of payroll taxes is born by the employee. It's obvious when you are self-employed that's the case, it's less obvious on W-2, but the net effect is the same.

Going from "Payroll Cost" on the Company Income Statement to "Net Benefit" on the Family Annual Budget, $140,000 becomes about $15,000, and actually often times much less, or negative.

You have to take a careful accounting of where all the money is going, and what your expenses would have been had you NOT earned any of that money, and just stayed home. Unfortunately, it's an extremely demoralizing exercise.

If you go a step further, and even say I'm going to earn some gray-market money off-the-books from home instead of taxable income... then you really do just throw in the towel. But all the numbers I'm quoting are assuming the completely legal and above-board approach.

The good news for all the self-employed boot-strapping startups out there; STOP paying yourself. It's the absolute worst use of your company's cash. If you take a full and honest accounting, you aren't actually paying yourself anything, you're mostly just paying government taxes and forgoing government benefits. Think of it as the unwritten startup tax credit if it makes you feel better! :-)

> My Macroeconomics 101 class claimed it's been "proven" the full cost of payroll taxes is born by the employee.

Whether or not that's true, that's already reflected in you showing the full cost of payroll taxes (employee + employer share) as an expense to the employee. What you failed to do is show all of the income that pays that expense (including the money from the employer that goes directly to paying the employer share) as part of the income from which that cost was being paid.

> The good news for all the self-employed boot-strapping startups out there; STOP paying yourself. It's the absolute worst use of your company's cash.

Perhaps its worse for your company, OTOH, it mitigates the risk to you should the company -- as many do -- fail, since in that case you will have forgone labor income for equity in the failed firm.

> FICA / Payroll Taxes

I run a business, from my perspective the meaningful number is the total payroll cost for the employee. Taxes are taken before it even leaves my pocket and goes to the employee, and then more and more taxes by the time the employee finally sees it. You can't waive away the taxes just because the law says you can't show the true tax burden on the pay stub.

> Opportunity Cost

There are real, direct, added costs to choosing to work. It's reasonable to subtract those from salary when trying to calculate the net benefit of working. Just like there's an opportunity cost for waiting in line for bread. It's a real thing.

> $115300 -> $78,900 vs. $0 -> $44,011 (for a gap of $35k)

First, you can't take home quite $78,900 on $115,300 -- you've shifted up income but haven't adjusted taxes accordingly. From my perspective that employee is earning more like $140,000 (you can't just waive away the cost of paying for all those benefits that otherwise would be provided free by the government, just because they are taken out of your earnings before you see them).

Second, you can't just count $100 / pay period as the cost of insurance. It's the full cost of the plan (up to almost $24k / year for Platinum insurance for a family of 4) that has to be paid every two weeks at payday. Benefits are tax advantaged income, income paid out before you see it, but income all the same. If you are self-employed all this becomes obvious, but if you've never worked outside a W-2 the true cost is very much hidden out-of-sight.

Employer group insurance plans are more expensive than individual plans, which are obviously way more expensive than free means-tested plans. Going from $0 -> $30k you lose about $8k of value from losing Medi-Cal and going to the Cost-Shared Silver Plan. Going from $30k -> $60k you lose another $12k of subsidies. "Total actuary value" of having Medi-Cal is around $20k / yr for a family of 4. So if you are at $0 income, it's not just +$12k for ACA subsidies, it's more like +$20k for Medi-Cal since it's comparable coverage to a Platinum plan.

Third, yes the EITC phases-in and phases-out, it doesn't mean it's not a cost you pay for earning more. It's a curve and it's not a straight line, but it's still a real refundable tax credit that is clawed back as earnings increase over $24k. I agree it's impossible to maximize all benefits concurrently, it's a very complex equation with local and global minima/maxima. One day I really hope to be able to program it and put in on GitHub.

> Making financial progress on $100k income is challenging

So very true! Even per all your numbers, which are way more conservative than mine... the 'net benefit' to the family of earning "$115,300" of income (~$140k payroll) is only $35,000 !! (the gap)

And if you dig deep into all the assistance available, start counting things like income-based rent control, income-based property tax limits, income-based car registration fees, income-based electricity bills, etc.... you can easily erode that $35k down to more like $15k.

Isn't that just astounding?! Starting at $140k of employee payroll expense, by the end of the year you've only added $15k of net cash benefit to the family?!

As they say, "What the actual fuck!"

> First, you can't take home quite $78,900 on $115,300 -- you've shifted up income but haven't adjusted taxes accordingly.

While grandparent made an error of including both halves of the payroll tax, when only the employer share should have been added, the point is that employer share (while it can be considered "income" of a sort that goes directly into paying payroll taxes), isn't taxable income subject to any other taxes, so properly counting it as part of the "income" number if you are counting the whole payroll tax (including employer share) as part of the tax expense doesn't shift up the taxes, it just correctly accounts for the income that goes with the taxes originally presented.

My statement was totally fair. I'd rather you reply to the core point then 6 replies about how FICA is paid.

I don't want to argue the mechanics of taxation on W-2 vs 1099! I was totally happy to accept 'danans' much more conservative numbers because we still end up with a maximum of $35,000 net benefit from $115,300 of compensation!

This is, with danans math, which is adjusted from mine by not even counting;

  Employer portion of health care cost
  Employer share of FICA
  Excluding direct employment costs
  Excluding indirect opportunity cost
  Use average disability payment, instead of max
  Exclude SSI payments
  Exclude rent control
  Exclude property tax circuit breakers (21 states, not CA)
  Exclude EITC

If my point still stands after all those are ignored, I think we can stop arguing the mechanics of FICA and realize there's a huge fucking social service+taxation problem in this country, so big that at many points of the curve from $0 - $150k, almost across that entire curve, earning more, earns you less.

Like I said, the only way to properly calculate all this is to code it all up and chart it. But the laws are insanely complex (we've proven that just now, right?) I don't think anyone has ever tried.

Your core point is entirely dependent on the relation of additional income to additional costs; if that relation is calculated incorrectly, then the core point is not supported.

> * Don't be fooled by the employer hiding half the cost from you.

You can't count it as a cost on you without adding the value of the employer share to your base income.

> Every progressive subsidy is mathematically equivalent to a progressive tax.

Wrong. You've basically made the same error as you did with employer share of payroll tax -- a progressive subsidy is arguably analogous to (but "mathematically equivalent" is still too strong of a term):

1. An addition to your income (whether or not you receive the benefit, maximum or otherwise) equal to the maximum benefit provided, and

2. An additional tax equal to the difference between the maximum benefit and the amount you actually receive.

Its absolutely not even similar, much less "mathematically equivalent", to the latter alone, which is how you presented it.

> You can't count it as a cost on you without adding the value of the employer share to your base income.

I agree with you, but I think I did that. I was trying to say $100,000 of payroll expense causes $15,300 of payroll taxes. Then the other taxes, and subsidy phase-outs, pile on from there.

> Its absolutely not even similar, much less "mathematically equivalent", to the latter alone, which is how you presented it.

You are right, they are not "mathematically equivalent", let me try again;

By "progressive subsidy" I mean a declining benefit as you earn more. That is, income from the government which decreases as you earn more. An example is Medi-Cal and ACA subsidies, food stamps, shit we didn't even mention SSI, etc.

By "progressive tax" I mean an increasing tax rate as you earn more. That is, an increasing number of cents out of each dollar in payroll expense is confiscated as you earn more. An example is Federal Income Tax.

The progressive subsidy offsets the benefit of early income, the progressive tax offsets the benefit of later income. The net effect is reducing the vast majority if not all of the the "Realized Family Benefit" from $0 - $150,000 of [household] payroll expense! I mean, it's disgusting to think about that way, but it's the economics of the system we've created.

> > You can't count it as a cost on you without adding the value of the employer share to your base income.

> I agree with you, but I think I did that.

You did not. Or you calculated the tax wrong, but it looks more like the former than the latter.

> I said $100,000 of payroll causes $15,300 of payroll taxes.

You said when "earning" $100k, you pay $15,300 of payroll tax, you did not say $100k of payroll causes $15,300 of payroll tax -- and interpreting earning in the usual way for such a discussion (i.e., the income shown on your pay stub subject to payroll tax) -- this is exactly correct; at $100k of such income, the total payroll tax (employer + employee share, Social Security + Medicare) is exactly $15,300.

If you are looking at the employer's payroll expense, however, though, that's not $100k, its at least $107,650 (the employee's income subject to payroll tax -- which includes the employee share of the tax -- plus the employer share of the tax.)

Are we not saying the same thing two different ways?

Earning $100k to me means providing services worth $100k. It's obvious when it's 1099 or self-employment. On a $100,000 '1099' or Schedule C income you owe $15,300 of payroll tax. I pulled the number straight from Schedule SE, Line 5. You will pay less income tax as a result, due to the 1/2 (e.g. $7650) deduction from income tax on Line 6. (I tried to account for that in my estimated $6500 of Federal Income Tax due, an effective 6.5% rate)

Somewhere along the line the Fed tricked us into subtracting 7.65% off our W-2 compensation before we even see it, and even got us to think we didn't even earn it. It's fully institutionalized now. It's like VAT being baked in and no one thinks they're paying the tax, but they are!

In my earning $100k example, the reported "Compensation" on the W-2 would be only 100,000 / 1.0765 = $92,893. My point is your W-2 is lying. The company is paying $100k for your services, and the IRS has their fingers in it before you even see it.

Anyway, we are arguing a very minor point to a very serious issue. I think I've provided enough numbers that are accurate enough to see the insanity of the whole system. It doesn't really matter when in the "pipeline" the $7,650 is confiscated. It's enough to know that FICA is 15.3% of every dollar up to $117,000 per person, $234,000 per household.

> Are we not saying the same thing two different ways?

No.

> It's obvious when it's 1099 or self-employment.

Ah, I see what you did -- you made the mistake of thinking that self-employment tax and W-2 payroll taxes are functionally identical, but just the way W-2 reports it is different and misleading. This is decidedly not the case, while the self-employment tax has the same rate as the combined employer + employee share of W-2 payroll taxes, the base value isn't comparable (since the latter is based on W-2 income, while the former is on the total, which is effectively equivalent to W-2 income plus the employer share of payroll tax.)

As a result, the self-employment tax has a greater effective rate than the payroll tax, even though they have the same nominal rate.

> Somewhere along the line the Fed tricked us into subtracting 7.65% off our W-2 compensation before we even see it, and even got us to think we didn't even earn it. It's fully institutionalized now. It's like VAT being baked in and no one thinks they're paying the tax, but they are!

Perhaps, but the problem with your analysis isn't disagreement over who is paying the tax, but it is how you calculated the amount of the tax and what the income is that goes with it. Payroll tax and self-employment tax server similar purposes and have identical nominal rates, but do not have equivalent bases. So, if you make a statement about payroll tax and how it relates to the income it is based on, but your logic is driven by self-employment tax and the income it is based on, the conclusion will be incorrect.

> As a result, the self-employment tax has a greater effective rate than the payroll tax, even though they have the same nominal rate.

To be clear, yes there is a different convention for quoting the "salary" based on W-2 vs 1099. I agree that saying "$100k of W-2 Salary" is like saying "$109,031 of 1099". In both cases you net $92,350 after payroll taxes.

To your point, the difference in total payroll expense is $1,381. I'm sure my overall point does not sway on $1,381. Yet this difference will be almost exactly offset by the $7650 deduction allowed against Federal income tax!

Bringing me back to, we are saying the same thing, in two different ways.

Sorry everyone for the rat hole, I wish I stated it more clearly at the on-set. I think there's a more important discussion to be had here.

(Note: I edited this about 15 times over 20 minutes since the first 'Submit'. Dragon's response came against an early draft! Sorry D.)

> This is nonsense?!

No, its a mathematical fact.

> I agree that if all you consider is the verbal, "I'll pay you $100k W-2" is actually agreeing to a payroll expense of (at least) 7.65% more than saying, "I'll pay you $100k 1099". But companies don't set salaries that way!

Its not a matter of how companies set salaries, its a matter of the mechanics of the calculation of the tax.

Granting for now your argument that total payroll expense for a W-2 employee is comparable to total payment to a contract employee that must pay their own self-employment income, and considering (for simplification) only W-2 income and payroll taxes in payroll expense for the W-2 worker:

For a W-2 employee with a $107,650 total payroll expense, they will have a $100,000 W-2 income, and $15,300 in payroll taxes (employee + employer share), and (excluding any issues which make W-2 payroll tax income different from W-2 income tax income) $100K in income-taxable income

For a 1099 contractor paid $107,650, they will have $16,470.45 in self-employment taxes and (excluding any other issues which make self-employment tax income different from income tax income) $99,414.77 in income-taxable income (due to the income tax deduction for half of the self-employment tax.)

> We pay employees based on the total cost of payroll. That was my point way up there about Macro Econ 101.

Self-employment taxes and payroll taxes bear a different mathematical relationship to total expenses to the party paying the employee. This is completely orthogonal to any argument about whether, in the case of the W-2 employee, they effectively bear the cost of the employer share of the payroll tax in the form of depressed nominal wages, as well as bearing the cost of the employee share.

> I can easily make up the difference by the higher Fed Income Tax rate (due to missing the $7650 deduction),

The W-2 employee doesn't really miss the deduction for half of the self-employment tax that the self-employed worker gets, since the income which pays half of their payroll tax isn't part of their taxable income to start with.

> local taxes, property taxes,

Local taxes and property taxes tend not to be directly income-contingent (and tend to be regressive in net effect), so they probably hurt your point rather than helping it.

Responding to your revised version:

> To your point, the difference in total payroll expense is $1,381. I'm sure my overall point does not sway on $1,381. Yet this difference will be almost exactly offset by the $7650 deduction allowed against Federal income tax!

Why would you compare the difference in payroll expense to the deduction against Federal income tax? What are you trying to get at with that? It doesn't make sense to talk about that.

Also, on your current numbers, the deduction the 1099 worker gets (half of the self-employment tax) is more than that ($8,340.87 vs. $7,650), but it still leaves the 1099 worker with a higher income subject to income tax than the W-2 worker, so it doesn't "make up" for anything -- the actual total tax difference between the two is greater than the additional payroll tax paid by the 1099 worker, since the 1099 worker will also pay greater income tax, all other things being equal.

That sounds like it covers all necessary expenses and taxes, which means there's $40k of discretionary income. A savings rate of 40% is excellent, especially if you can invest it for 10-20 years.

No, I'm just talking about just take-home pay. Then you can start paying living expenses with what's left.

I'd also really like to see some numbers, because I don't believe that 60% of a $100k/yr. income is lost to "services, utilities, fees, and taxes that you pay when earning $100k, that you get for free or don't have to pay if you earn $0".

Is your list "Medicaid and health insurance credits, SSI, food stamps, EITC, FICA..." things that you have to pay, or benefits you get if your income is $0/yr.? For example, you wouldn't get EITC if you had no income, but you wouldn't get food stamps if you had $100k/yr.

I would argue that it's poor framing to compare a hypothetical family with $0/yr. income to one with $100k/yr. income. You bring up childcare as an example, but when you look at a family making, say, $35k/yr., they're largely unqualified for assistance but childcare is almost certainly out of reach for them. $100k/yr. families are paying for childcare, paying tons of taxes, and buying amazing Christmas gifts.

Because only 20% of Americans even make >= $100k/yr., I don't think you can rightly call them middle class. I'm not sure we should really be concerned for those at that income level, I think it's more imperative to start looking at people working full time but still making < $35k/yr. Is there an upper-middle class treadmill? Yeah sure, I'm not even sure what your argument is, that you're not getting rich? Regardless, a treadmill is much better than the alternatives. You imply that until you make $150k/yr., you may as well make $0/yr. This is really just untrue; probably (depending on number of children) it's untrue until you get down around $20k/yr., which is where you start getting into living wage argument territory.

Finally, I'm with you on progressive taxation. Tax tiers make no sense; we need a (simple) tax function. Problem solved.

See below for a table. Also, please note, $100k household income != $100k individual income. Although if one parent works and the other stays home to take care of the kids...

> Is your list "Medicaid and health insurance credits, SSI, food stamps, EITC, FICA..." things that you have to pay, or benefits you get if your income is $0/yr.? For example, you wouldn't get EITC if you had no income, but you wouldn't get food stamps if you had $100k/yr.

I edited in; they don't all fully stack or else it would hit well over $100k. So it's a very complicated calculation (why we need a nice D3 app to show how everything interacts!). For EITC, I think it's fair to count the full $5k which you could get by working just a little, against the cost of working 'too much'.

I have not done the math necessary to find the global maxima of public support. Frankly, I'm not sure it's a great idea to make that calculation too easy for everyone to figure out, lest we all start optimizing for it!! Conversely, there are many points in the curve where you are below Net-$0. $63k household income for a family of 4 is probably the global-minima, where you're way below Net-$0.

The cost of working is much worse if, for example, you have a qualifying disability but are not vegetative and know how to code. You then have to choose, just stop working and get $30k, or don't go quietly into the night and forgo the entire $30k of SSDI.

> the 'middle class crucible'. Until you break out on the other side of $150k household income, the vast majority of your earned income is effectively running on a treadmill.

> it's an incredible trap / attack against the middle class.

If your household is not making $150k you're not middle class though. You're working class. Middle class people don't have to run on a treadmill like that (unless they want to).

For about 25 years after World War II, an anomaly occurred where a young blue collar veteran could go on the GI bill, or alternatively get a unionized job at the factory, and buy a car and a house in the suburbs with a stay-at-home wife who took care of the kids whose college tuition was affordable, along with long-distance one week vacations every year, a solid pension etc. Some people even extended the term middle class to these people, which had previously meant professionals. Because they were living the lifestyle of middle class people.

If anything is clear, it's the eradication over the past 40 years of the idea of extending the term middle class downward from professional households to those making less than $150k a year. This was the working class before World War II and it is the working class now. Even if nowadays it's banging out PHP code or putting Visual Basic widgets together or wiring Cisco switches together instead of going into the mines or soldering parts on an assembly line.

Father of two, I have earned ~20,30,40k a year at various points in the past decade, then a good bit more.

You are simply wrong. There are places below $50k where you might suffer from close to 100% marginal rates, which I view as an enormous problem, but it's not true at higher incomes. Even the 80% figure you quote sounds wrong (and of course I know I shouldn't believe you because you don't even pick a set of numbers and stick to it).

Edit: I see elsewhere in the thread, it's clear that you're not really talking about income.

How the CBO defines "income": Labor income includes cash wages and salaries, including amounts allocated by employees to 401(k) plans; employer-paid health insurance premiums; the employer’s share of payroll taxes for Social Security, Medicare, and federal unemployment insurance; and the share of corporate income taxes borne by workers (see Box 1)." [1]

I see how bad the problem is, when we can't even agree what 'income' means. I've been mainly self-employed the last 5 years, and had years of near-$0 income, and other years, better, where I was also paying other employee W-2s and 1099s. Before that, I was W-2 from $50k up to one particularly good year where I max'd out FICA. I've also seen the process of applying for SSDI, SSI, Medi-Cal, food stamps, the whole gambit.

Call me wrong, but please do me the favor of doing the math for yourself and let us follow along with your examples. I thought the $24k - $30k example was a great one. It's the reality for many Americans. I though the $100k example was also fairly straight-forward, minus the FICA confusion.

I don't quite get why companies tend to hide all the payroll costs associated with a W-2 plus full benefits. If cost of an employee is $140k line item on the income statement, I tend to want them to know that, even if it's not all showing up in the direct deposit or on the paystub.

I know exactly how much $0 deductible group health insurance costs in my zip code by age, and I know you can get that all for free by not working. Economically that is income you have to earn (value you have to create for the company) to make up for that loss of benefits. It doesn't come from the magical W-2 benefits fairy. All that money would be actual real income if you didn't lose your guaranteed free Medi-Cal (the best insurance money can't buy) by simply deciding to work full time.

A rigorous financial analysis must count the totality of lost and forfeit benefits. I understand the inclination to bury one's head in the sand to avoid the realization that it's almost literally all-for-nothing but the enjoyment of doing good work. Once you actually get your head above water at around $100k+ of GROSS household income, and you actually see a little bit of real free cash flow, things improve rapidly. Up to that point, it's economically, almost entirely treadmill.

The only reason to keep going is building experience and hopefully getting a raise till you finally crawl out of the hole. It's not too bad in the programming field, even a single breadwinner can get the family there, but statistically, most people will never emerge from the social welfare pit.

[1]... "In its analyses of the distribution of income and taxes, the Congressional Budget Office (CBO) strives to measure income as broadly as possible and thus includes in income some items that people may not usually consider to be part of income. For example, CBO counts taxes paid by businesses as part of household before-tax income; because those taxes are ultimately borne by households in the form of reduced income, CBO adds them to before-tax income in order to measure more accurately what a household’s ability to consume would have been in the absence of those taxes."

[2] CBO intentionally broke it's measure of government transfers after ACA, in their latest report, [because it just looked too bad otherwise] (emphasis added): "CBO recently undertook a more comprehensive analysis of the distribution of federal spending in 2006. Although that study used a similar methodology to the one used in this report, it differed in some important respects, most notably by adjusting the amount of transfer income reported in survey data to match the budgetary totals reported in the Treasury Department’s Monthly Treasury Statements. The data used in this report are not aligned to budgetary totals and, because of underreporting of transfer income in surveys, do not capture the full effects of government transfers on household income."

Look ma, that's me! Free of a soul crushing corporate job, back to doing a "startup", I may not have the cash rolling in, but at least I'm in control of my destiny. Hey Ma, I'm moving in!

I think there are a lot of people out there like me. I have some money coming from side projects, several opportunities to grow that, and several opportunities for new side projects.

And quite a long personal runway before I have to "get a job" again.

If I can get to personal ramen profitability, that would be great.

And if my cofounders and I get a real startup off the ground that can pay us salaries.... well, then I can start showing up in statistics as employed again.

But either way, it's not as big a deal to me as it would be to men of my age 20 years ago.

And that's a huge shift-- in opportunity towards the individual.

> it's not as big a deal to me as it would be to men of my age 20 years ago.

Less than 6% of workers are working computer or math jobs - of any kind - which suggests that the overwhelming majority of people still have a difficult time when they're listed as "unemployed."

One common trend I have seen in my social circle is the lack of any employable skills. They may or may not have college degrees, but in general their degrees did not give them concrete job skills or they don't have a degree and no skilled trade.

What would ideally happen is people learn a skilled trade if they are stuck on the job market. This training should also happen in high school.

Except the education system is bad at picking winners. What's in demand when you're in highschool is not what's in demand by the time you're entering the workforce.

I remember finding that "Computer Programmer" wasn't listed as a possible job when we got careers advice as early teens.

My 15 year old son got recommended the following options by a career guidance system his school uses:

- Lawyer

- Town planner

- Royal Marine Officer

I'd love to know the "logic" that led from his interests/skills to that selection!

[NB Only one of these got the reaction "don't do that" from his mother and I].

How do they pick? Maybe they need help picking better. Seems like there's a lot of people around here interested in trends and intelligence that could help with that.

It's not about picking winners. It is about giving students at least one practical skill early on, then letting them choose what they want to do.

I am a programmer, but I can also weld and fix cars. This is because in high school I took some auto shop classes. Let's say for some odd reason programming doesn't work out anymore as a career(this is happening to lawyers and pharmacists), I have something to fall back on.

>>I am a programmer, but I can also weld and fix cars. This is because in high school I took some auto shop classes.

That's a pretty flippant dismissal of the knowledge required to either "fix cars" or "weld" for a living. My brother was an excellent welder and it's a very hard life.

> very hard life

As in "physically demanding", or "lots of technical knowledge needed"?

Both. Also in steadily working. My brother was one of three people with certain certifications in our state of several million people and had to put up with the sort of nonsense that would have us quitting immediately.

But it's part of the job of an iron-monger.

Agreed. Figuring out how to evaluate the trades and schools seems really important. I would be worried about ending up with more debt and still no job, in cases where the school was bad or the job market wasn't really there in the end.

It is great that you are able to do this, but not that your situation is not the one described in the article. The article discusses men who only qualify for low/no skill jobs paying $10-15/hr. That is markedly different from a tech startup cofounder who could get a software engineering job paying $100k+ with benefits.

yeah, a big problem with the whole "Don't need BigCo's job cuz I'm running a SV startup!" narrative is that it's really only accessible for people who already belonged to pretty privileged classes (exceptions exist, obviously.)

A portion of the population does not get opportunities to develop these skills and were once allowed low-skilled jobs that paid "decently" but have now found themselves squeezed due to inflation and companies hoarding cash instead of spending it.

> companies hoarding cash instead of spending it

I've heard this sentiment many times but I've wondered if there's an economic fallacy there. Would the economy be better off if lots of companies stopped hoarding cash and hired lots of new employees? Or would there be side-effects like inflation, or some effect of pulling out cash from whatever it was invested in, etc.?

Serious question.

> I've heard this sentiment many times but I've wondered if there's an economic fallacy there.

There is, it's a confusion between money and capacity. That money is an option, the possibility of getting people to do things for you. Unused money is paper.

> Would the economy be better off if lots of companies stopped hoarding cash and hired lots of new employees?

The economy is an abstraction. It can't be better off. But if the companies that have the money had productive ways to spend it they would be doing so. The fact that there aren't that many productive ways to use the money is why the interest rate is so low. The interest rate is the cost of renting money.

But we cannot produce more, because the unemployed don't consume. So we lay of people. It is a death spiral.

This is also wrong. You just have to switch what to produce and to whom. There are many starving people in the world, and quite a lot new medicals to invent and so on.

Yes, wonderful. The wretched of the earth are a huge untapped market with tons of disposable income.

If your future economic prospects require ever increasing consumption then surely there's a problem; resources are finite.

If we need more people consuming more and more stuff (that mostly gets put in landfill within a couple of years) then we're completely screwed. We need to start restructuring our way of life to accommodate the need to conserve resources, for one, and the need to support a basic standard of living for all people (across the world) for another.

Instead of encouraging increased consumption we need to be levying massive taxes against disposable items, requiring all goods to be largely recyclable, requiring the ability to repair before production can be licensed.

> If your future economic prospects require ever increasing consumption then surely there's a problem; resources are finite.

Yeah, that's the inherent contradiction of capitalism. But unless someone comes along with a different system we're probably stuck with that for a while.

Depends on what that 'consumption' consists of. We could have an economy of eternal growth in art, scholarship, mathematics, music, and software. The main input there is human thought.

>an economy of eternal growth in art, scholarship, mathematics, music, and software //

They're all production with minimal consumption agree; they hardly summarise current human activity though. They don't require [many] raw materials beyond energy and humans but nevertheless they do tend to still use some non-renewable resources.

Very little down side. People with more income spend more which grows the economy. In a two person economy, your expenditure is my income and my expenditure is your income. If one of us hoards then both of us lose eventually. Also moderate inflation is a good thing. It disincentivises hoarding of cash.

Also moderate inflation is a good thing. It disincentivises hoarding of cash.

Another way to look at that is that it incentivises short-term investment in anything that brings returns above inflation, instead of allowing for capital to be saved up for more important projects.

Do you think the same rules apply to an information economy?

Why would they not?

I don't know. There always seem to be many alternate compositions of rules that can be used to define the environment while enforcing or altering the rule composition rules.

Rules can define themselves, rules used to regulate the flow of information become information.

That spending stimulates the economy is a fallacy.

Standard economics defends that idea; but it is only true in a fairy-tale world where you have a magic money printing machine - like the world we are currently living in.

In the real world you actually have to have savings first and foremost in order to produce the products that others will buy.

Hoarding is a good thing since it frees the person to work on what they like, which is likely to benefit others. Also, money hoarded is usually invested in some instrument that might be benefiting other businesses.

> In a two person economy, your expenditure is my income and my expenditure is your income.

This is wrong. Imagine two people in an island. We elect that fish is money since it's the thing we all want and have a use for and can easily trade with each other. Now I fish 5 fish and put that in my savings account (a bucket of salt). As I spend this money, it does not become your income.

You might be confusing the way governments characterize the economy with how a real world economy actually works in practice.

> Also moderate inflation is a good thing. It disincentivises hoarding of cash.

And moderate tax-evasion is a good think because it disincentivizes hoarding of cash by the government. This is wrong as well. Not to say morally wrong, as it's trying to steer people's financial decisions in a definite uniform direction (ie. spending).

That sort of thinking is what had the US government almost shut down yesterday and have to inflate the money supply with $1.1 trillion more. It used to take us decades as a country to spend that much, but now it's only expected to last until September 2015.

But we still have people saying moderate inflation is a good thing.

First of all, you have to understand that "state where everybody is better off" is not something that's given. Everybody can be rational and still be worse off - prisoner's dilemma is a canonical example.

Economic fallacy there is, but it's in standard economic theory. Standard economics claims that only sensible things to do are investment and consumption, and considers savings to be a waste. But the savings are not waste for individual economic entities; savings are a way of gaining power in economics.

Let me give a couple examples, consider two companies, company A which saves (has large quantities of liquid capital), the other B which doesn't (and invests everything into machinery, better production, etc.).

First example: A stealthy startup appears with a completely new ("disruptive") technology. Company B cannot buy it, so the company A is at advantage.

Second example: Workers decide to strike for higher wages. Company A can survive the long strike by taking hit on it's monetary reserves, perhaps pay strikebreakers, etc. Company B cannot do anything and have to give in to the strikers demands.

In other words, savings are a way to break out of the market system, and so people do it and race who does it better, because they want power (which comes from ability to react). Economy as a whole suffers; but why should the winning actor care?

This is the typical principle agent problem, it depends of the ownership of the company. If it is privately hold, then savings make sense and you have to optimize for sustainability, i.e. otherwise your private savings are nilified. But if the company is widely spread by shareholders, then you have the maximize value by concentrating on one product, and leverage by keeping down the risk factor while still maintaining a high enough earnings on capital rate. The risk is adverted by the shareholders themselves that have their own portfolio of companies.

I think to say the economy as a whole suffers is too broad, and falls into the trap of people who really are advocating a consumption oriented society.

For instance, you could spend your money constantly hiring more employees to do more work and to grow.

Or you could save your money, until you have enough to build a new modern factory that produces the product much more efficiently. That efficiency lets you pay your fewer employees more, but overall lets the business grow more reliably.

In your example, Company A is better for the economy because it will last a lot longer than Company B.

Companies failing does more economic damage than a company saving its profits for several years.

The whole foundation of capitalism is growth so if we're embracing zero-growth we have to radically change things. (in short, yes, companies hiring and spending is an unalloyed good on the macroeconomic level)

What do you mean by "privileged classes", not sure i understood your idea ?

The people who have had more good things happen to them (money, smarts, education, favorable societal position, supportive family) than most other people. It is easier for these people to not get a regular job and try to build something on their own.

Personal availability of risk capital. I mean, if I make a mistake with my cashflow stream, I don't eat. It has happened three times in my life, and not in twelve years.

This means that I make decisions differently to somebody who has a buffer of parental emergency capital injection. For example, I would love passionately to quit my job right now. I would love to set up a consultancy specialising in data analysis for capital management for insurance companies, and have more than the required skill set, but if I take too much risk my family could be hungry. That would be decidedly uncool.

He means those that belong to "privileged classes" usually don't have liabilities such as student loans to pay off and therefore have the freedom to pursue endeavors such as startups which don't pay the bills upfront. Furthermore, their support network is also a significant factor.

And of course the vast majority of the world would consider someone with student loan debt to belong to a "priviledged class".

For one thing, you need savings. If you absolutely need a paycheck this month to make it through to next month, you simply cannot afford the risks involved in doing the whole startup thing.

Another thing, you need skills. But it's very difficult to get a decent education (formal or otherwise) if your family isn't able to support you during your formative learning years. It's not easy to learn programming if your family can't afford a computer. It's not easy learning financial management when the largest amount of money you ever had is $500.

Basically, if you want to do a startup, you had better not be poor or uneducated.

> Basically, if you want to do a startup, you had better not be poor or uneducated.

Robert Herjavec would disagree with you, as would Sam Walton, Andrew Carnegie, Li Ka-shing, and dozens more who overcame poverty and a lack of education via hard work and common sense (and yes, a bit of luck in some cases) to become successful businessmen.

I wouldn't go so far as the post you're replying too (I think you can do a startup without all the advantages named, but your risk looks different).

However, I think you are falling into the trap of identifying outliers and then trying to reason about the general case from it - it's pretty hard to use that to say anything more that "it's possible for X to happen, because it happened here, and here."

That's all I was saying, that it is possible to bootstrap yourself from poor conditions. I'm not saying everyone who is poor can do that; it takes hard work and, as I conceded initially, a bit of luck, but I'm simply saying it can be done. If I'm being downvoted for stating the obvious, so be it, but I have a feeling it's that I've hurt some privileged feelings here. If so, then good; everyone needs a dose of reality once in a while.

http://en.wikipedia.org/wiki/Survivorship_bias

The single best advice I ever received is "Think probabilities, not possibilities."

I'm not denying that it is possible that an illiterate girl from a low-income family in Mali could overcome every obstacle and build a successful start-up. But how much would you bet on that happening? Do you also think that her success will negate the hardships that other folks in her position face?

I don't disagree with you, my issue was that yen223 was speaking in absolutes when there is no such thing, in the business world or life in general. Maybe I'm just being pedantic about yen223's wording, but it sounded to me like he was trying to say "You're poor? Don't bother breathing, prole". It was dismissive and classist. But then, I grew up poor, so I'm sure there's bias at work on my part.

I am intrigued by the way you think. Do you play poker?

Our monthly tournament is always looking for new players...

When did I say I was betting on anything? I was simply refuting the position that a poor person has never bootstrapped themselves into a successful entrepreneur, using a few well-known examples. Who knows what the statistics are on unknown success stories? As a poker player, you should know that even a bad hand can win a game if it's dealt to the right player.

All it takes is a computer, hard work and dedication. The 'poor' manage to find the time to surf the net, why not spend the time learning how to build the net?

It's a simplistic idea, but it is definitely possible. I lived out of my car for months until I was able to turn it around by using my computer for something besides surfing MySpace.

I think the sad fact is that so many people are now in front of vast, utterly vast learning resources, and it just doesn't matter.

Rich or poor, there are numerous people sitting in front of extreme learning resources, and they'll never do anything with it unless there's this enormous infrastructure designed to remedy issues of motivation and planning. And that's where I think the difference is between rich and poor; yes, there are networking differences, yes, there are differences in local crime rate and other environmental stressors and so on, but the biggest factor is motivation.

I've seen a peer ditch school to go to the library to use public terminals, back at the time when computers still weren't that popular, and there was no Google or Wikipedia. But even then I could see that some people have a different heart -- starting from an early age, they had a yearning to learn that surpassed the praises of parents or the soothing structure of school.

The issue isn't access. The access is already intense for rich and poor alike. Most people don't possess the psychological traits to pursue their own intellectual growth. Almost everyone I've met, rich or poor, stop learning when society stops pressuring them. They may have high or low IQ, be rich or poor, but they are not interested in self-directed learning, at least not without strong external reasons like parents or social shame.

Almost everyone is not an intellectual.

It's a common misconception that the inability of poor people to learn/grow is related to motivation or "laziness", you should read this book: http://www.amazon.com/Scarcity-having-little-means-much-eboo...

don't think he said that... lack of motivation affects the non-poor too... A motivated person found ways to improve even when access was not as easy as it is today.

As both a lazy and a poor person I think there's definitely a significant proportion who could work but can't be bothered to, who could get a better education but can't be bothered to.

I'm doing an online python course, but works busy at the moment and I missed my last deadline; I just can't be bothered, motivation is really hard to me (perhaps it is for everyone though).

That's not to say that there can't be many people, perhaps a majority, who are poor and disadvantaged by their poverty to an extent that locks them out of opportunities. I just think you have to be careful you're not saying "well sure he's lazy but looks he's poor so he can't help himself".

I can't afford that book could you say why you recommend it; our libraries here will order any book requested for a small charge.

I pointed out that both rich and poor people alike suffer grievously from issues of planning and motivation. The difference is that rich people get better access to the motivation and planning infrastructure.

I also imply that most people, when placed in front of vast access to knowledge, will do nothing with it.

It's also why great online education resources have failed to achieve revolution. Giving kids access to Khan Academy isn't enough; because too many people would rather visit another website.

>>The issue isn't access.

Access clearly isn't an issue for you, and that's good. Perhaps your peer didn't have access issues either and that's good too, but if you believe that access isn't an issue for some people, then you are inexperienced in dealing with some forms of poverty.

Perhaps in some places the library is the solution, but in Chicago, public access is limited to two hours a day. I don't know how much access you required when learning to program, but I needed more than two hours a day.

That is assuming that you can get a library card. For one, you need a verifiable address, which is easy to produce if you live in a home, but very difficult if you do not. Also, if you have violated your card in the past, perhaps due to a youthful indiscretion, you are shut out of the system unless you can monetarily recompense, which is also difficult to do when you are poor.

Not to mention that street gangs can make it challenging to leave your block to get the library in some cases.

So while access has improved, to deny that it is an issue for some people because public libraries exist is glossing over the problem.

they'll never do anything with it unless there's this enormous infrastructure designed to remedy issues of motivation and planning.

That's an interesting thought. What might infrastructure to remedy issues of motivation and planning look like?

Start up businesses are a gamble. Most fail. If you're middle class. that's ok. You can crash at mom and dads, and fall back on that college degree you earned. But the poor can't afford to fail. Gotta make rent somehow. At least McDonalds is a sure bet.

"A portion of the population does not get opportunities to develop these skills and were once allowed low-skilled jobs that paid decently..."

Exactly!

"A portion of the population does not get opportunities to develop these skills and were once allowed low-skilled jobs that paid "decently" but have now found themselves squeezed"

Slate Star Codex had a great post a while back that touched on this:

http://slatestarcodex.com/2014/08/16/burdens/

Key pull quote: "Society got where it is by systematically destroying everything that could have supported him and replacing it with things that required skills he didn’t have."

> I may not have the cash rolling in, but at least I'm in control of my destiny. Hey Ma, I'm moving in!

How are people who don't have a meaningful source of income and who are dependent on their parents for shelter any more in control of their destinies than corporate worker bees?

It is not only that - even when you run your own company you can and often are effectively dependent on your clients/market ( especially that big client making 80% of your revenue ), or the need of your dependents ( you still need to pay your mortgage ) . That's a common complain here on HN of founder "selling out", "losing the original spirit", ...

There is a cultural bias for entrepreneur, especially in the US (that's not a bad thing BTW), so struggling directly against the market is seen as more glamorous then through a corporate structure/middleman.

In the end, you are as in control of your destiny as much as your wealth permit, no matter how you made that wealth in the first place.

Here's the difference: When the market says something, I can react to it and improve immediately. For me the market is large and variety, it's not like a few people make up %80 of the income.

Working for a corporation, in the most recent case, meant dealing with people who were so incompetent that they did everything I can think of to interfere with us reacting to the market.

You know the saying about how people with nothing to do create work for others? Well, when you're a software team and the boss has zero software skills, or understanding, or care, you end up in a lot of pointless meetings.

Seriously, I would get interrupted 200 times in a day. (I counted once).

So, more risk, less secure money, but avoiding harassment, verbal abuse, manipulation, gas lighting, and 200 interruptions a day is a huge positive trade off.

For me at least.

Plus I get to see my parents for a few months while I pick out the next place I'm going to live.

You are just comparing a shit job to a good job, and well the shit job is shittier than the good one.

Let's run with your example - what would have been your boss opinion ? Or if your business is growing and you need more people, how will you treat them and how should they feel ?

You have a good job in a hot sector, enjoy it, don't try to generalise to everybody or other sectors. Actually, the article is all about people that don't share our luck.

Not all corporate jobs are soulless, mind crushing Orwellian nightmares, and nothing prevents you from looking for a fulfilling job if you are unhappy with your present one, especially in our field.

True, and I did spend some time looking. It's kinda sad, though, how our field seems to have devolved in the past 15 years. Startups today are much more corporate, more likely to be run by biz guys without appreciation for software, etc.

Here's a good litmus test: If they have an open floor plan they clearly don't care about developers.

If they BRAG about having an open floor plan-- and so many of them do-- they are terrible. Run away.

I have never had 'a job' and had startups (and later mature companies) since I was 15 (I am 40 now). I am not sure what age you are, but you need to know this thing for sure if you are past, I think, around 30 as running a life like this can be very painful. There simply is a tiny chance of 'big success' while most just live in almost poverty the first 20-30 years of doing this. That's also why I think you are probably young and haven't seen that yet ; most give up and tell stories to their kids later about it.

Not to squash your enthusiasm; just saying that 'control of my destiny' is mostly not true at all; you are being lived by actual constraints of life. If you get a mortgage, kids, spouse, investors etc these constraints can easily 'live' you instead of you controlling anything. I was lucky, but just saying to be careful in thinking this and keep tabs on the 'do I actually still like this' factor. A regular job, for most of my friends who started out with me, was a blessing.

I'm older than you. Have done this before, spent 6 years "unemployed" traveling the world before I "got a job" that turned out to be a terrible decision.

Of course you don't have control over your destiny to the point of just wishing you had a million bucks... but I also now don't have a psychotic boss whose only experience has been in the military micromanaging software development and doing everything he can to "control" things without any understanding of software development.

Indeed that's a reason I do it as well and I applaud all for going that route ; I'm just saying that if you do it for that reason you might turn out in a smaller prison than actually having a boss. But if you are not greedy, don't care about materialistic things too much, know how to save money for a rainy day and have a family that supports that way of living, I wouldn't want it any other way.

I've lived with a parent (it's a big house they'd alone otherwise here) for I guess too many years then I've should. Also I'm old and my g/f who is similar age of five years also lives with a parent. Though she is getting antsy and wants kids and she only has a few years left. I want a family too but have been holding off for that big moment when my team and I start generating money and or sell our work. Ugh will that happen I don't know but I need to get back into the workforce and do our startup on the side. This what I was doing for the last year and half until I lost yet another developer job because of my incessant need to startup. I've lost two jobs in the two and half years because my bosses found out about my startup or we become friendly and I talk about it a lot.

Ugh I'm sorta feeling stuck professionally and tomorrow I start my 3rd incubator yet im unemployed.

You might want to reconsider startup pursuits after your early to mid 30s.

I might be naive, but I don't see having to choose self-employment or salaried work as a all-or-nothing, no-going-back decision.

You could easily secure a well paid job for a few years, and save enough to support working on a start-up or starting a consulting business.

If things do not go as planned, I can see no problems in going back to being employed, since your skills won´t have withered in the meantime, and possibily learned new ones.

It seems to me that the startup culture is seen sometimes as a "get rich quick" scheme, where the goal is to retire at 25.

A normal career in most professions lasts 30/40 years...

I'm in my 40s and have been working for and with startups since my early 20s.

I'd rather scrape by doing what I love than make bank and hating my life.

Of course, making bank and loving it would be the ideal. But its not like I think the odds are huge.

One thing I am doing is building up my side businesses. Get enough side income going to live on and you can work for a startup at low risk.

Not the case when you have a family, of course.

> we become friendly and I talk about it a lot.

Loose lips sink ships.

I don't think the majority of the long-term unemployed are unemployed because they're working on tech startups.

I don't know the proportions at all, didn't mean to imply the majority were.

However, it is a trend that there are a lot more people becoming independant and making their money online via various ways (not all of which are startups, most of which are probably what would be called "lifestyle businesses" here, though I hate that term) and thus not counted on the "employment rolls".

Maybe, but most of those people aren't voluntarily doing that, are underpaid, and don't have any chance of making it big with what they're doing. Basically, all of the hardship of being independent without the rewards. (think of freelance journalists working for peanuts, or often putting stuff out for free for "exposure," for instance)

Actually, I think this is less common now than it was 20 years ago.

Well, 30 years ago there was no global internet full of knowledge and allowing collaboration-- I had to go to the college library.

There was also no global internet allowing for an instant global market to be serviced from the middle of nowhere. If you started a business in podunk, your market was the podunk area. (For the most part, there was mail order and stuff, but that still had a higher barrier to entry than the internet does now.)

So I think things have gotten easier and a lot more people are doing it.

I'm interested in hearing why you think the opposite-- I bet you're observing a different trend than I am focusing on. (eg both trends can be true)

I don't think there are "quite a lot of people out there" like you, but I guess it depends on what "a lot" is. It's great what you're doing, but you are likely in the minority. Most people do not have the luxury or skills to do that.

> The places with the highest rates of male nonwork include parts of Arizona, New Mexico, Nevada, Kentucky, West Virginia, Arkansas and Michigan.

The areas of high unemployment in Arizona and New Mexico overlap almost exactly with the Indian reservations. A problem deserving its own analysis.

Does that mean that more Indians are unemployed, or that the reservations were placed in the greatest economic crapholes that could be found?

The folks living in the reservations have not grown their economies. Economic growth isn't something that happens automatically; you have to go out and start new enterprises, invent new technologies, etc. Some cultures are simply incapable of this and will eventually die out; if you want an extreme example go read "Don't Sleep, There are Snakes" by Daniel Everett.

Perhaps you should look at the conditions that were imposed on these areas. Horrible government education and health care, relocation of individuals resulting in horrific suicide rates, boarding schools that beat students for keeping their culture and language, US government mishandling resources to the point the Dept of Interior was required to cut their internet connection multiple times. Never mind the oil and uranium problems.

Its a culture problem, but not from the Native American side. The current generation suffered all these things and is trying to dig out of a hole. The next generation is better poised to grow as the culture is returning.

Also, I would love for you to go to the Seminoles and read them your comment. I expect they would have a words. I would imagine these stats also don't cover pow-wow circuit youth very well, but that would take research.

As a side note, this is the most ignorant and racist comment I have read on HN.

I agree with your last line. The comment made me want to wash after reading it.

There was this article recently that being poor is a set of bad habits and someone commented "poor is a permanent condition, broke is temporary."

https://news.ycombinator.com/item?id=2590535

Stating it that way seems reasonable enough. I haven't read "Don't Sleep, There are Snakes" fully but from summaries I'm guessing the tribes refused to accept Western ways and were comfortable living the way that let them survive for thousands of years. Which is a reasonable thing to do if you could isolate yourself from the rest of humanity and competition.

This article about Northern native tribes https://news.ycombinator.com/item?id=8449134 says that they were far enough along building a settled society of farmers and villages when apocalypse struck and the survivors became roving nomads. Just like all our post-apocalypse movies!

You are missing my basic premise, the culture was almost destroyed and is in the process of building backup now. The book has nothing in common with the experience of US Tribes.

The tribes ran the gamut in what they had before Columbus. It is know that trade routes existed bring things only found in the arctic regions south to the deserts and beyond.

Oh, I agree completely. If smallpox hadn't been a factor, then the tribes would have been strong enough to compete. They would have kept their cultures and been able to adapt and grow. It's good to hear that they are rebuilding their culture; it means that they won't die out.

The world would look very different today if the European explorers had brought back a virulent disease (like smallpox) instead of merely chronic ones (like syphilis). They simply had no idea what the risks were. They lucked out with malaria and yellow fever as well; most of Europe is too far north for them to be as big a problem as they are in Africa, or as they were in the American south.

"If smallpox hadn't been a factor, then the tribes would have been strong enough to compete."

Smallpox is the least of the problems that the tribes faced. The government abuse of land and wealth, the beating out of culture, the killing of food sources, and parking the tribes in the middle of nowhere on land that wouldn't grow anything. Broken promises and laughing officials are the problems.

You have to be kidding. The Indians are poor because their degenerate culture causes them to be totally cool with poverty?

What is a Native American on a reservation on worthless land in the middle of the desert going to do for a living? I'd like to see a reservation be granted in midtown Manhattan and see what happens.

Merely being within an easy drive of Manhattan has proven quite profitable: http://en.wikipedia.org/wiki/Mohegan_Indian_Tribe

If you want a thoughtful and interesting analysis of why you're wrong, read Guns, Germs, and Steel by Jared Diamond. While it's (of course) a simplification of the real world, Diamond looks at questions like "Why did Spaniards conquer Peru, rather than Peruvians invading Spain?". Not surprisingly (to most, I'd hope) it's not because of innate differences between cultures.

Both. Many natives are unemployed because reservations were placed in really inconvenient and resource-poor places. Check out the employment rates in neighboring areas: also low.

There's also been a huge transfer of land from tribal to non-tribal/non-Indian ownership [1]: the US government held a lot of land in trust for the tribes, identified a lot of it as "surplus to their needs," and sold it to non-tribal members, and on other reservations they transferred ownership to individual tribal members and then economic pressures pushed them to sell, especially if they traditionally did agriculture and the land wasn't farmable. This land wasn't developed, in general, so there's really not that many places to work on a reservation...

[1] https://www.iltf.org/resources/land-tenure-history/allotment

I live in france, am 29, I worked 2 months in my life.

"what they do instead"

Trying to go back to school, I learned programming for 2 years in some technician school program, did not get the degree, after that I expanded my programming skills by myself, but it has been pretty bleak. I'm quite ashamed of myself. I have many ideas of projects, but they really seems to be out of my reach in terms of skill, experience, motivation and networking. I took anti depressants for 4 years but am not so unhealthy in term of mental health...

I'm back at school again, for some equivalent degree, but on 1 year, I have an internship starting wednesday, I really hope it will hook me to some job opportunities.

If I don't get the degree nor a job, well I could really try to start some crowdfunded game project or social network, but I don't feel the industry really needs that many programmers. Maybe I'm really incompetent.

I'm really sorry to hear about your struggles. One wonderful thing about software development, is that credentials and pedigree are not required. If you can make software, you can get a job. Even if you can't write software, there are lots of related jobs. I've been writing software professionally for about 15 years or so. Before that I had flunked out of an electrical engineering program a couple times, and was waiting tables to get by. I considered myself a failure. There is always hope.

Writing software isn't really about intelligence, although it probably helps. It isn't really about knowing the "one right way to develop software." It is more about being willing to admit you are wrong. Learn from your mistakes. Also a good dose of stubbornness is needed to deal with tools that don't work properly. Sometimes the documentation will lie to you. It helps to not take the little failures too personally.

Best of luck to you.

thanks :)

> Even if you can't write software, there are lots of related jobs.

I'm more than a little frustrated that the tech sector hasn't taken this to heart more. There's a lot of day-to-day work that we expect developers to do that anyone with good grades in high school or a liberal arts associates degree could do.

I guess what I'm saying is that there's a low ratio of administrative assistants to developers considering how much developers are paid. Perhaps it would be better if developers were paid hourly or otherwise went home at 5 p.m. like normal professionals.

My suggestion for where you're at, is to start smaller projects. Completing them feels really great. You can then open source them if you care to, or shut them down if they don't go any further.

Take one of your ideas, scale it down to nothing more than its essence, and build the simplest form of it you can imagine to get it to work, so people can use it. Then add on to it if or when you care to.

Whatever you do, build within your means to complete; as otherwise, you'll never actually get anywhere. As you launch things successfully, your ability to build to a larger vision will likely expand.

> I don't feel the industry really needs that many programmers.

That's definitely false, at least in the US.

...which it's a relatively small part of the world.

For example in many parts of Europe, although it is relatively uncommon for a programmer to be unemployed, salaries are a far cry from the 100k+ of Silicon Valley, meaning that the (local) industry is not exacly "starving" for programmers.

I guess I don't have a lot of exposure since I did not announce any concrete project. But I'm not seeing a lot of hiring ads... Maybe it's because I'm not fluent in .net, javascript or java.

I don't answer so many stackoverflow questions, but I use bitbucket regularly, several stackexchange accounts, several programming-oriented forums...

I guess it boils down to immigration policy...

You know more than I do, and 97 percent of the world population. Start your own project and work to your strengths. This isn't a race or competition btw :)

That's definitely false, we aren't virtualizing brains, we don't have sapient AI, and Mesa still needs tessellation shaders. Plenty of work left to be done.

Priorities, man, priorities.

Are those the problems that are best solved by throwing more and more programmers at them? If anything, the people doing the grunt work would be PhD students (save the shaders, perhaps).

I'm sorry for your troubles. I do have a question: How do you pay for anything? Have you been on govt. benefits this whole time?

yes.

I only do my shopping at aldi, so I save a good amount of money.

don't forget that in france, government benefits are pretty good compared to other countries.

Pretty common in France, from my experience -- even more so than in other European countries. It would be more popular in the US, too, if school wasn't so damned expensive!

There are books on this phenomenon. Part of what they say is now men have access to their basic needs with out needing to work as much. Entertainment is abundant and relatively cheap and sex isn't tied to marriage. You can lounge around and be if not exactly satisfied, at least not terrible wanting for stuff. Of course these guys are screwed when it comes to retirement.

just "these guys"? everyone will be screwed.

> just "these guys"? everyone will be screwed.

Why? I'm pretty sure I'll be totally fine in retirement (predicted savings of $5M+).

He's probably referring to the average American, and someone with a predicted savings in the mid seven figures is certainly not among that demographic.

Everyone can still be screwed at the same time you're OK. Unless you're implying you're just average median dude.

Some experiments can be run in a spreadsheet. I assumed 40 years of work (optimistic) and google reports a median personal income of 32140/yr and average savings rate of 3.2%. Shadowstats reports an average inflation rate around 5%, thats sounds about right. The S+P 500 total return over the last half century has been 7% but it oscillates insanely from -5 to +17 percent per decade. I think it very unrealistic to assume the 50s or 90s will ever happen again, but whatever, I feel optimistic this morning. I modeled in a 1% annual decline in income, which is lower than actual but sounds vaguely realistic.

My spreadsheet model shows an inflation adjusted retirement nest egg of $51K for joe 6 pack median middle class dude assuming its never dipped into for medical, educational, or unemployment issues for J6P or his kids or parents (in other words almost everyone will not have the money). I'm also assuming smooth economic growth (LOL) for best compounding results.

It still affects you as most investment advisors assume 0% inflation, 10% rates of economic growth, etc. In a world of poverty for almost everyone, that sounds rather optimistic.

Some other interesting experiments... 15% annual growth rate still only gets joe 6 pack to about 10% of your goal.

Joe6Pack at 1% annual wage increase (which is totally unrealistic in era of long term decline) and 15% annual economic growth rate (LOL) and triple the median savings rate at 10% of gross income being saved for 40 years and no unemployment, medical issues, or educational costs for J6P or his parents or kids (LOL) is still only about 1/3 of your goal.

Sorry, but some of your assumptions seem ridiculous.

Nobody I know experiences nominal wage declines, even of 1%. For reference, the average annual raise is a full 3%. [1]

As for 5% inflation, everyone knows Shadowstats is incredibly bogus and pushing a clear agenda without any grounding in realistic CPIs. [2] [3] For the past few years we've been experiencing almost 0% inflation, though I use 3% for my models (to be conservative).

I'm not implying that someone with average income will retire with millions, I just took issue with the idea that somehow "everyone" is going to end up penniless. 50% of people fall above median income and a substantial portion of us can reasonably expect to have retirement savings readily available.

1: http://www.usatoday.com/story/money/personalfinance/2013/09/... 2: http://voxrationalis.wordpress.com/2011/05/15/the-absurdity-... 3: http://www.forbes.com/sites/modeledbehavior/2013/10/14/niall...

I was having in mind europe's imminent pension fund tragedy a few years down the road. Even if americans don't have statewide retirement funds, when a crisis erupts, pensions are one of the first things that does get cut. These costs, and also healthcare will eventually be shared by everyone.

This has already happened in europe's southern bankrupt economies

Obviously the solution is to not depend on pensions (which I don't think most young Americans are planning on anyways). It's awfully hard to lose your own savings though.

Basically, "everyone" is hyperbole. Obviously many people can retire fine, if you live within your means and consistently save.

Who is saying that and what is their data? I wouldn't say it never happens, but it sounds more like the kind of argument a random, obnoxious TV pundit would make.

Shortly before meeting m'lady, I'd nearly paid off the house and otherwise driven my expenses to near zero. The prospect of withdrawing from the system ("going Galt") was becoming a realistic option; grow much/most of my food (as my folks had growing up), find a mundane job in walking/biking distance (notable as I lived in the country), and spend my time writing what software I wanted and puttering in a back-to-basics life. We live in a culture of cheap abundance, and if un-hitched and rent/mortgage-free then very little work effort is needed to get by in a comfortable, if humble, lifestyle. (Then I met m'lady, and life got very expensive very fast.)

This is a really good point, actually. Parent says:

  Part of what they say is now men have access to
  their basic needs with out needing to work as much.

...but men don't have access to enough resources to fulfill their basic responsibilities. If you're a celibate hermit who pays his taxes and is funding his own retirement, that's fine. But I don't know many of those.

In reality, one of the easiest ways to be poor is to have a single mom. In other words, one of the easiest ways to be poor is to have a dad who isn't (can't or won't) fulfilling his responsibilities. Men and women who are fertile and sexually active need to be able to care for a child for eighteen years. Yes, birth control, please. But there are millions of single moms out that came from somewhere.

Additionally, someone needs to pay for current social security retirees, poverty programs, etc. And if you aren't having kids, someone else's kids will be paying for both their social security checks and yours.

I say all that not to be judgmental, but to point out that the numbers don't add up for men to just live the minimalist lifestyle free of guilt. Like I said, that's possible, but you'd literally have to live (and die!) off the grid while somehow caring for orphans, veterans, and windows at the same time (lifestyle choices don't count).

Are you saying 'm'lady' unironically?

Yes, as the period referred to spanned unmet/acquaintance/girlfriend/wife. "M'lady" seems a more respectable term than "significant other".

The article states that every month the Census Bureau and Bureau of Labor Statistics asks all men who are not working and not receiving unemployment benefits what their situation is.

How does this process work? Having been in this population, I know for certain nobody from the government has ever asked me for this information.

Not all of them, just a random sample of the population which includes some of them: http://www.census.gov/acs/www/

The problem is there is a multiplier affect from technology today that causes unemployment. The average IQ required to be economically relevant is increasing each year.

Do you have any alternatives to what we seem to be doing at the moment? Namely, propping those individuals up from life-failure by state aide programs funded by people that are able to sustain themselves and supposedly others.

I would say that this is actually a good solution. It's lopsided today since we don't officially acknowledge that this is what we're doing, but if the trend continues, you and I will also eventually be hit by this development (unless we're exceedingly lucky).

Global wealth tax on large personal fortunes (say, 0.2-1.0% per annum of fortunes greater than $2MM) and even redistribution to everyone will make the solution more transparent and fair.

It's not as though if everyone were a Harvard-educated brainiac it would suddenly be possible for everyone to have high-paying jobs.

Well, one, being Harvard educated does not necessarily mean you are really a brainiac. Above the curve certainly, but you still have deviations from the mean in both directions.

And no, even if everyone were a genius, there are limited funds allocated by geniuses to pay geniuses to be geniuses. But if everyone were brilliant and have complete information and comprehensive educations about everything, either we are already in post-scarcity singularity utopia or we are imminently going to get there because you have hundreds of millions of geniuses capable to work on it, and geniuses running the system capable of realizing that potential and working to make it happen.

So either you are in a state where employment no longer matters, or your geniuses are smart enough to devote all their overflow resources to getting there, since they are all geniuses, they can all contribute to that end goal.

We simultaneously have people who just do not have the skills or mental capabilities to contribute, and leadership that is too ignorant or selfish to acknowledge the benefits of investing in research and science, and thus neither is possible.

Yes, but in my hypothetical scenario everyone is both very intelligent and very educated. The problem is, whoops, we still unglamorous work to be done and there still aren't enough cushy jobs for everyone.

Or unglamorous jobs would be paid very well, and garbagemen would be able to work a 2-hour day and spend the rest of their time as they please.

Why would that happen? By what mechanism?

Supply and demand. If no one wants to do a job, that employer will need to offer more, raising the demand, since supply is low.

It makes perfect sense that you don't know this since you seem completely misinformed about capitalism, judging by what you've said here in other replies:

> "The whole foundation of capitalism is growth"

The foundation of capitalism is savings, which is something current mainstream Economics thinks is evil (it only recognizes investment and consumption as good things to do with money, and saving is bad for Keynesians because they think if you know the price of food will be cheaper tomorrow, you won't eat today).

> "Yeah, [ever increasing consumption and resources being finite are] the inherent contradiction of capitalism"

Capitalism needs resources to be scarce in order to be a coherent system. Communists are the ones to whom resources being finite (and hence creating the need for a system of allocation of those resources, namely the price system in Capitalism) is a contradiction, which is why it never works (without price there's no way to know where to allocate resources).

Seriously, read up on Capitalism.

Nobody wants to be a garbage man now either, but if the choices are that or complete destitution it starts to look better. I'm sure you did well in freshman econ, though.

The problem is that certain jobs create scenarios with imperfect information. The society of rational actors is a useful model, but so is a war of all against all.

Smart people aren't immune to principal-agent problems. The 2008 crisis was created by exactly the smart people we're trying to be. We shouldn't stop trying, but neither should we be deluded that that is sufficient.

(A little facetiously, but..) Perhaps this is just the decrease of work required that was historically expected by economists, being applied unevenly.

Of course there's nothing in the article to suggest many of these people are happy.

>Some countries have developed policies that encourage older people to leave the labor force, so they do not “crowd out” younger workers

Classic lump of labor fallacy.

Classic lump of labor fallacy.

That fallacy is far from proven, see e.g. http://econpapers.repec.org/article/tafrsocec/v_3a65_3ay_3a2...

Here in France that fallacy is a clear as the baguette in the corner bakery.

You've alerted us to the existence of a fallacy, but you make no effort to explain what the fallacy is or how the argument you are refuting has committed this fallacy.

You did this in a previous discussion with me as well

https://news.ycombinator.com/item?id=8691296

Of course, you are absolutely free to do this if you wish. But I did take the time to explain why I felt you had misdiagnosed the situation, and explained how the position I held was not undermined by the lump of labor fallacy.

Just my own opinion, but if you're going to cite this fallacy, I do think you should be explain how you feel it relates to the current discussion and be prepared to engage in a debate about whether it is relevant.

Fair enough.

The main reason why there is a lump of labor fallacy is that it rests on the fact that there is just a fixed quantity of jobs in the economy. A fixed amount of jobs means that thers is only a fixed amount of goods and services people desire. But this is wrong because human wants and desires are unlimited. This is the basic condition in economics. So in theory there is an infinite amount of jobs to be done to cater to our infinite wants.

Now, there are structural reasons for why there isn't universal employment. These can range from government policies, to technological reasons. If people want multistoried houses, and builders can build them, they will have jobs but if the government has policies which block those houses, the builders will not have those jobs. Another thing people want is to travel into space, say a visit to alpha centauri. There may be tourism operator jobs who can do that but technology does not exist which can take us there.

The main focus of government policies to promote and encourage job growth should be on building technology to promote new job creating industries, promoting skills growth to manage these industries, and removing or modifying policies which hinder job growth.

If trade or immigration caused a loss of jobs, the 90s would have been a time of high unemployment. It wasn't because a new industry came up to generate jobs and other jobs were created to service those workers. The same goes for policies to shorten hours or promote early retirement.

Yes, that's more or less the lump of labor fallacy. I'm still not sure why it's relevant here.

Here's the full quote from the nytimes article:

"Some countries have developed policies that encourage older people to leave the labor force, so they do not “crowd out” younger workers. But studies across countries and time suggest that crowding-out may not actually be a problem. Economies do not appear to have a fixed number of jobs. When more older people are working, they are earning money that they will then spend in ways that may create more jobs for young people, for example."

So in this case, I don't disagree with you, but it seems that the times article identifies the lump of labor fallacy immediately after the quote you provided.

>still not sure why it's relevant here.

I think it is important to point out because so few people still know about it. If few people know about it, they are likely to support harmful policies that they think will help the economy or job creation, but will not.

Oh, I agree, I'm just not sure why you felt it was necessary to point it out when the article had already done just that. I don't really see what your comment ads. Were you worried that people had only read the first sentence in the middle of the article and stopped there, not reading the next sentence?

In the other case - our previous discussion, I explained how I though you had misapplied the lump of labor fallacy. You claimed that notion that H1B workers could displace local workers commits the lump of labor fallacy.

I made an argument that very specific, targeted immigration programs designed to increase workforce in a narrow sector of the economy can in fact cause market distortions that lead to displacement and deterrence. This is a pretty common objection to these sorts of visas. Many people who support free markets and free immigration see a real problem when the government starts creating programs where a worker is allowed to come to the US only under certain employment conditions (in this case, related to working as an employee to a high tech company).

Even Milton Friedman chimed in:

"There is no doubt," he says, "that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy."

I assure you that Milton Friedman was aware of the lump of labor fallacy. It's a bit more complicated than just citing a fallacy.

As of 2011, there were 3.5M disabled veterans, of which 800K were receiving significant disability benefits.

https://www.census.gov/newsroom/releases/archives/facts_for_...

That's an awesome graph. I mean, we could say some things like that the thickness of the gray bit is not so clear, or that it might be better if smoothed, perhaps the legend would be better elsewhere than in the coloured areas, but... it is still a totally expressive and elegant graphic.

Yes it made me realize the rise of retirement-aged persons who don't retire. "Can't" retire? What a shift, in only 14 years!

I did a lot of work a while back doing longevity projections, i.e., stochastic models of the rate of change of mortality rates at different ages as time goes by. It is a bit of a trend that pension funds might choose to offset their risk by entering into longevity swaps, which work like interest rate swaps, swapping floating payments for fixed payments.

Anyway, I attended a few conferences on aging, and all that fun. One thing that stuck out was that, in Germany at least, the ratio of workers to retirees of 4:1 will be more like 2:1 when I reach the current age of retirement.

Another is that you need to consider years of abled life.

A last is that I will never retire, and probably you won't either.

Note that, in Bismarck's time, life expectancy was about 55:

One persistent myth about the German program is that it adopted age 65 as the standard retirement age because that was Bismarck's age. This myth is important because Germany was one of the models America looked to in designing its own Social Security plan; and the myth is that America adopted age 65 as the age for retirement benefits because this was the age adopted by Germany when they created their program. In fact, Germany initially set age 70 as the retirement age (and Bismarck himself was 74 at the time) and it was not until 27 years later (in 1916) that the age was lowered to 65. By that time, Bismarck had been dead for 18 years.

Another myth is that the designers of Social Security in the US did not expect lifespans to increase over time; we are actually a little below target right now on expected lifespans.

I am mesmerized by the age 40 bar. It barely moves; a few more people are retired or are in school. My armchair speculation is that turning 40 really makes people reexamine their decisions.

At 40+ you realize you've pretty much accomplished everything you're going to with your life. All those plans and ambitions? You've had 40 years to act, if you haven't done something yet, chances are you're not going to. Its all down hill from there. Hopefully you've got a family you can put you're energy into. At least this was how i felt 40+, ymmv.

I'm not 40 yet, I'm 29, but I feel like I've only had 9 years to act so far and I have another 30-40. Look at how old Elon Musk is and he's finally hitting his stride. Still got time man.

He's 43, but your comment makes it sound you think he's older.

I'm not sure he's a great example. He has inertia and a lot of money made from when he was much younger. Take an average person at that age, middle class income, family, etc, and see if they can accomplish life changing goals that they just started chasing.

I'm not going to agree with the poster above that claimed that "At 40+ you realize you've pretty much accomplished everything you're going to with your life." but I think as a generalization it's probably closer to truth than feels comfortable (I'm 37).

How depressing! I'm 37 and still feel I've got loads to learn and try out. Although I note that many of my peers are planning their escape routes to retirement.

If I try to create a startup I'll be doing it on my own.

Thanks for the down votes, guess it's wasn't obvious enough I posted my personal experience, was the ymmv (your mileage may vary) at the end not enough?

You're still alive, right?

It may be because you used "you" 10 times and "I" once. Given that, it's clearly not obvious.

I think you might be suffering from the current "downvote mania that we're not allowed to talk about or else you'll get downvoted" on HN.

EDIT: I disagreed with you, with a following comment, and didn't downvote you.

I occasionally see the rise of the single-breadwinner family where a woman has a job celebrated as forward progress for gender equality or something, but that's misguided. Frankly, a lot of men are just unable to work and then their families are forced to subsist on the woman's job, which still pays, on average, less. Newspapers talk a lot about high-powered female executives with stay-at-home husbands and so on, but that's a small sliver, not somehow representative of the trend.

A more subtle point is that the incentive structure for men to work had has evaporated. In divorce (which is largely initiated by women), men stand to lose more in alimony and child support. The economics say that if you marry (and far more people decide not to do these days), you probably shouldn't be the sole breadwinner and you certainly shouldn't earn more than your wife.

I know a number of couples where the man just doesn't work and is supported by his wife. I don't think it's a conscious choice, it's unconscious and based on incentive.

Alimony isn't just magically awarded in every divorce case, you know.

True, but child-support and the children go overwhelmingly to the mother.

I might be wrong, but something like 4% of divorce cases have custody determined by the court, so that's a decision made by fathers (I have custody of my kids, and had no problem getting it, FWIW).

True, but it's not a choice made in a vacuum. Often the context is: I'm the only one making enough money to support the kids, so I have to work for this to work out at all, and I can't afford day care. So for the sake of the kids the mother gets custody. "Choice," true---but not free and uninfluenced, as you imply.

> People in the military, prison and institutions are excluded from these figures.

One of these is not like the other…

Everyone in the military (at least, who's not also imprisoned) should count as fully-employed.

I think the reason they excluded those in the military is to allow an apples-to-apples comparison through time. It could be argued that the large number of draftees through the early 1970's forced some otherwise nonemployed into employment.

I think you are right, but I think they are wrong for doing it given the importance of the military in a lot of regions and the military being a known career path for many young males.

It's not employment because it doesn't generate wealth.

Your warm feelings about it notwithstanding.

So, excluding all government jobs would be appropriate? No police or fire in your numbers either?

The government owes $118 trillion total (adding unfunded liabilities). When it can balance its budget than maybe we can have this discussion.

Otherwise, anyone can steal $18 trillion from the masses under the pretense of using it for the public good - when really all (yes, 100%) it does is pay debt interest according to the government's own report on how tax money is spent - and "create" several jobs for you as well.

So no, those shouldn't count unless you want to keep on living on fantasy land, believe government's inflation numbers (and close your eyes when you go grocery shopping), and ignore the fact those government "jobs" do not make us more competitive to other countries. You don't win in the global economy by giving everyone jobs, but by allowing people to create real jobs that compete with other countries so that we as a population become wealthier.

As protomyth notes, by your rationale neither does law enforcement, public education or firefighting, but I'll add that the same rationale also argues for exclusion of anyone working for a non-profit (and indeed, at least the public sector ideally creates an environment in which wealth creation can exist, while charity consumes wealth).

Given that these are employment figures, it's odd to segregate one career from all the others.

Why do they exclude men in the military from their numbers?

They aren't really market participants when it comes to the labor force.

Why aren't they considered market participants?

Military law punishes them for quitting.

(Walking away from a civilian employment contract wouldn't normally result in criminal charges)

I like in Columbus, GA, which is right next to Fort Benning, one of the largest Army bases in USA. If these soldiers were included in the stats, then our numbers would look better.

This related article, also dated today, was linked at the bottom, and is a longer read with more/different details and stories:

http://www.nytimes.com/2014/12/12/upshot/unemployment-the-va...

Where does minimum wage [objectively] fit in?

If an employer can't pay someone what a job is worth, either the job doesn't get done or a machine is found to do it - leaving someone without the opportunity for a job. Yes, it may not be a "living wage", but no wage is even less desirable.

I've started using Taco Bell's remote ordering app. The clerk, seeing how I'd ordered (not using his services), yesterday thanked me for making his job easier. Couldn't help thinking that rather than happy, he should be scared: with all the talk about pushing for $15/hr minimum wages, coupled with automation of order-taking, he's facing prospects of no job instead of an easy one.

I know minimum wage is meant to help, but it only contributes to increased unemployment and inflation.

[Objectively] in countries where a minimum wage has been introduced at a higher rate than the US and is reviewed each year it has pushed up wages but had little effect on employment.

e.g. see for instance this discussion http://www.economist.com/blogs/freeexchange/2013/02/labour-m...

Further I can't really stand the crocodile tears of business who want to employ workers at below living level wages. Their fake concern for worker is nauseating.

If workers are having to top up wages with food stamps and government aid then the business, management, and shareholders rather than the worker are effectively being subsidised by the taxpayer.

And if you let companies lower wages to compete then the bad employers drive out the good. Far better to make them compete on the product or service not how badly they are willing to treat people.

1. min-wage raises are so modest and so slowly phased-in (in the US) so to not produce smoking-gun employment drops, and employers prepare in advance for them, so sloppy underpowered studies don't show any large effect. marginal effects are small and so you need a powerful study.

2. do you want people who receive food stamps etc. and aren't hireable at $8/hr to have any legal on-the-books employment options or not? either way they're getting the food stamps.

3. I personally would rather see more Costcos+Trader Joes than Wal-marts+McDonalds, so i want to believe your 'bad employers winning' unless we force higher pay, but presumably people won't work for bad employers, so i don't see where your forecast is coming from. anyway it seems a little cargo-cult. you can't just start paying $20/hr instead of $8 and suddenly beat Costco.

> he's facing prospects of no job instead of an easy one.

Everyone is. He is not an exception - every office worker, every lawyer, even every artist is every day one step closer to obsolescence to automation. He might just be really smart and realize the sooner we get there, and the sooner we work out the paradigm shift it requires to approach post scarcity like that, the sooner we either reach the end of free society or enter an era of utopia, and either would be better than stagnating on the brink.

I know this isn't entirely on point but I couldn't help thinking of Mr. Jaggers replying to Pip's question "what will I do?" with "Be a gentleman, of course!" (Dickens reference) when I saw the title.

"The decline of traditional pension plans and rising education levels, which are associated with less physically demanding jobs, may both help explain why the elderly are working longer."

Nice spin there, NYT.

Nice catch of the propaganda machine at work!

"Men Who Don’t Work – And What They Do Instead"

Surprised that "read HN" isn't listed as one of the "insteads". Which reminds me, I really ought to do some work.

> To the extent that rising nonwork reflects more men graduating from school, that’s good news. Male high school graduation rates have risen 5 percentage points since 2000, and people with more education earn more and are less likely to be disabled later in life.

I am not positive this computes. People with more education might earn more now but that doesn't mean that their wages or the amount of jobs in their domains won't go down when more people have a degree.

This article describes the growth of disability benefits and the way they are dispensed: thelastpsychiatrist.com/2011/09/how_to_be_mean_to_your_kids.html

De-paywalled: https://archive.today/nOnpV

There are lot of factors which are discussed but not considered when it came to concluding this topic.

The increase in population : Instead of comparing the ratio or the percentage of working vs non-working with the present population it compares x out of every 100.

The increase in jobs : 2000 vs 2014, the number of jobs available has also changed which is not taken in account. As mentioned in the article older people end up creating more jobs.

The increase in unemployment rate : Yes, this contradicts with the above mentioned increase in jobs point but this should also be a factor. This also is affected by people not-from US who work in US.

The Shift in Generation : 14 years brings/builds a very different minded person and this person might have a different approach to living.

The higher standard of living : This also is one of the reasons why older people are still working and won't leave their jobs as their value is appreciated, helps pay the debt and they could satisfy all their needs to live a life of luxury(?) and fulfil all their ambitions.

Middle East wars creating more disabled people.

And the article very precisely says

>(People in the military, prison and institutions are excluded from these figures.)

Are veterans?

The only remarkable thing about this NYT article is that it appeared at all. Read Charlse Murray "Coming Apart: The State of White America, 1960-2010".

None of this is new or surprising. It would be more interesting to apply this kind of visualization to industries, % or part-time jobs, freelance workers, etc.

Are there any notable instances of unqualified founders beating the odds and starting a successful business?

One of my neighbors is 62 and brilliant. He's worked at Pixar and Silicon Graphics. He cranked out web sites for sites you probably go to. He lost his last job when the company went under. He now applies for jobs all over town and never gets a reply.

If age is the reason, these places don't know what they're missing.

Maybe with that much experience they don't think they can afford him?

I forgot to mention that. He applied at large and small companies but, the kicker is, he's all set for retirement, doesn't need the money, and only wants to bring in about $20K to $30K so he can help fund a non-profit he likes.

I've wondered about this. I often do interviews and say, "This guy isn't gangbusters, but he could help us out with <grunt work that's piling up> if he's willing to work for the right price."

My bosses usually wince at that sentiment, probably because I'm underestimating how much overhead is or something, but there should be a number that makes it worth it, right? And if the guy ends up being smart and reliable, you could ask him to retrain for a job with more responsibility.

Am I missing something? How else are we going to get all these unemployed men retrained in another field, especially growing ones like tech?

If your company is having that discussion in the context of full time employment, the indirect costs (i.e. non-salary things like health insurance, 401(k) matching, etc) are a significant factor in the equation. As salary drops, these (relatively fixed) indirect costs become a larger percentage of the cost of retaining someone.

If you measure the value of the employee by the salary you pay him or her, the ratio of total costs incurred by the company to value derived by the company for this one employee increases as that employee's salary drops. This is one of the major reasons that temporary jobs and part time work have become popular solutions to this problem: the indirect costs associated with these types of hires are lower.

What we really need, in an ideal world, is a set of personal benefit programs (health & life insurance are the big ones) which are completely uncorrelated with your employment status or location. Forcing employers to shoulder the burden for personal benefits leads down a dark and dysfunctional path where the programs are not controlled and managed by those who have an interest in them for what they provide, but by those who have an interest in minimizing the costs of such programs.

Retraining an unemployed philosophy major to run tests and route bug reports seems feasible as well. There are armies of people that would kill to be a barrista (with benefits) or an administrative assistant. Are you saying Starbucks can find a way to make them more productive than they cost, but engineering organizations can't?

Its hard to do primate dominance rituals on "dad" or "grandpa" and the managers are probably in their 30s. So standard employment is not going to work.

He should consult, that was what my father was driven into, more or less for the same ageism stuff. I'm in my 30s and working a "regular corporate job" and I suspect its the last job I'll have for similar reasons. Contract / consultant work really isn't all that bad.

>When more older people are working, they are earning money that they will then spend in ways that may create more jobs for young people, for example.

But... older people earn 2-3 times more than a younger one (at, least in Portugal). So for each old people there could be 2-3 younger working.

So if you lay off 100 old people you can get ~2500 younger people working. Of course, I doubt that the productivity will be lower per person, but here you are paid by how old are you (not, experience) * what you know

Reply on news.ycombinator.com