To Understand Rising Inequality, Consider Janitors • Hacker News Board

Re: To Understand Rising Inequality, Consider Janitors

#131

Post by [deleted] » Sun, Sep 03, 2017, 4:00 PM UTC

adwhit wrote: post #103

lotsofpulp wrote: post #76

Earlier quoted context omitted.

The reason for inequality is that people are not equal. The work they do produce is not equal in value. More people can do a janitor's job, and/or do without a janitor, so the value of a janitor's work is less. More supply, elastic demand, means lower price point. Through technology, some people are able to produce much more than others, so inequality is inevitable unless there is a balancing force (aka taxation).

Indeed, the value of keeping toilets sanitary is far greater than that of creating the next web app. "This work is essential to the health of the population, but because of something to do with marginal economics and supply and demand and weak labor laws and class power and reserve supply of labor, I don't have to pay a proper wage, or even treat them like human beings!"

[deleted]

Re: To Understand Rising Inequality, Consider Janitors

#132

Post by mathiasben » Sun, Sep 03, 2017, 4:01 PM UTC

AdrianB1 wrote: post #117

mathiasben wrote: post #36

The underlying cause of this whole issue is the changes in tax policy instated in the Tax Reform Act of 1986, previously income was taxed at higher rates unless deductions were utilized which forced those earnings back into the economy creating jobs funding research, etc.. As it's become easier to retain more earnings there's little incentive not to optimize an entire corporation solely with the purpose of generating…

It looks like the Soviet Union lost the Cold War on economic grounds, but won it overall by turning Americans to socialism.

it did this in 1954?

Re: To Understand Rising Inequality, Consider Janitors

#133

Post by AdrianB1 » Sun, Sep 03, 2017, 4:02 PM UTC

GuiA wrote: post #125

AdrianB1 wrote: post #117

Earlier quoted context omitted.

It looks like the Soviet Union lost the Cold War on economic grounds, but won it overall by turning Americans to socialism.

? Not sure if you're making a point or trying to be funny, but socialism is far from a Soviet (or even a Cold War) thing. European countries pioneered mandatory paid vacation and paid medical leave over a century ago, a fundamental workers' right which the US still does not give its citizens.

I always thought the people that left Europe for USA did it for a different life, not to get socialism and get back in line with the herd. But it seems that the people in California had afterthoughts about this and decided to go commie. Not kidding, Hacker News commenters are very much biased towards socialism - take it from a guy that was born and lived in a socialist country and had the chance to feel it the hard way, not dream about it.

Re: To Understand Rising Inequality, Consider Janitors

#134

Post by Joe-Z » Sun, Sep 03, 2017, 4:04 PM UTC

Taek wrote: post #119

mathiasben wrote: post #36

The underlying cause of this whole issue is the changes in tax policy instated in the Tax Reform Act of 1986, previously income was taxed at higher rates unless deductions were utilized which forced those earnings back into the economy creating jobs funding research, etc.. As it's become easier to retain more earnings there's little incentive not to optimize an entire corporation solely with the purpose of generating…

Taxes aren't the core issue. It's more fundamental than that. Imagine taxing bill gates at 95%. He's still thousands of times more wealthy than your average individual. That's not going to change much, other than that America is going to become highly avoided because of the tax pressures. The real issue is that the fundamental structure of our economy aggregates wealth towards the top. Employees who add millions of d…

You have to start somewhere though. Changing the "fundamental structure of our economy" takes nothing short of a revolution.

Re: To Understand Rising Inequality, Consider Janitors

#135

Post by mathiasben » Sun, Sep 03, 2017, 4:05 PM UTC

coredog64 wrote: post #128

osteele wrote: post #112

Earlier quoted context omitted.

"It's actually quite terrifying that people would advocate for taking up to 90% of someone's income." Interestingly, the top U.S. tax rate from 1951–1963 was >90%, and it was >50% during the half-century from 1932–1986 – https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...

And, due to deductions, literally no one paid that rate. Realized tax rate was lower, combined with a bunch of dead weight losses as people optimized for tax avoidance.

yes, very few paid the top rate. but that's the point, the excess income was being thrust back into the economy, driving innovation and creating jobs not just languishing in someone's bank account.

Re: To Understand Rising Inequality, Consider Janitors

#136

Post by WalterBright » Sun, Sep 03, 2017, 4:06 PM UTC

mathiasben wrote: post #109

winstonewert wrote: post #99

Earlier quoted context omitted.

Income inequality has been increasing since the 1970s, so I submit the underlying cause cannot have been a policy change in 1986.

true, the effectiveness of this scheme was slowly eroded beginning shortly after it was enacted. '86 was the knife blow that killed it for good with it's "revenue neutral" rebalancing of the "loopholes" and deductions available for reinvestment tax treatment.

The reinvestment tax treatments you mentioned were more conventionally known as "tax shelters". People structured their income around tax shelters. Tax shelters tended to be crummy investments that only made sense when considering the tax savings.

By eliminating the tax shelters and correspondingly lowering the tax rates, Reagan brought about much more efficient allocation of investment capital.

Re: To Understand Rising Inequality, Consider Janitors

#137

Post by jellicle » Sun, Sep 03, 2017, 4:08 PM UTC

dexterdog wrote: post #107

kirsebaer wrote: post #16

Gail Evans worked as a janitor at Kodak in the 1980s. "She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March... A manager learned that Ms. Evans was taking computer classes while she was working as a janitor and asked her to teach some other employees how to use spreadsheet software to track inventory... Less than a…

So, IOW they cherry-picked what was likely the most driven of the janitors in the past and compared it to a random one today. That seems honest.

Is it your assertion that other janitors at Kodak didn't get paid vacation, tuition reimbursement, bonuses?

Re: To Understand Rising Inequality, Consider Janitors

#138

Post by sulam » Sun, Sep 03, 2017, 4:08 PM UTC

newforice wrote: post #62

robteix wrote: post #20

Earlier quoted context omitted.

Coding is a very particular case, though. You can't self-study your way to becoming a lawyer or a doctor. And even in coding, more companies are slowly requiring formal education as a prerequisite for even applying for jobs. We know someone like you can be just as productive as someone from a great school, but that won't matter if you're cut from the selection process.

Agree on both points. It's ironic, my pay is the same or less today than it was 5 years ago and it was lower then, than it was during the dot com boom.

I would submit that you are not negotiating when you move jobs, are not moving jobs enough, or are sacrificing comp for other things you value if this is true. It is very normal for people to offer you a small bump over current salary to get you to move. Your goal is to at least double that bump, if not figure out how to get on another rung of the ladder entirely.

I say all of this because there has been a significant upward tick over the last 5 years. Roughly speaking new grads are now making the same as what people with 5 years of experience made 5 years ago.

Re: To Understand Rising Inequality, Consider Janitors

#139

Post by acidburnNSA » Sun, Sep 03, 2017, 4:09 PM UTC

aswanson wrote: post #118

acidburnNSA wrote: post #110

Earlier quoted context omitted.

True, but also for multiple homes, fancy cars, world travel, etc. When I worked at a hardware store we had a brochure we could order in a gold-plated Ducane grill for $4 million. That recent graph showing the top 1% having a 6% wealth growth rate is wholly unsustainable for any society. So there's something to be said for trying to level it off.

What makes you think the government would be better at job creation through confiscating more capital than individuals who created the wealth redistributing it through investments and purchases? Every summer home or car bought puts people to work as well, its not like the money disappears.

I'm not sure that tasking the government with job creation is a good solution. There are many kinds of wealth redistribution that people are talking about these days and I'm only pointing out that it may be necessary. What fraction of wealth are the richest among us spending and investing rather than saving? Yes Bill Gates and Warren Buffett are saving millions of lives, and yes we have Facebook now. But what should we tell Marta Ramos? Enjoy the $0.50 raise after all that hard work!

If the wealth continues the trend to concentrate at the top then there will be an increasingly large and unhappy group of people who will elect increasingly non-mainstream politicians who promise to help them, eventually leading to who knows what kind of unpleasantries for all.

Re: To Understand Rising Inequality, Consider Janitors

#140

Post by WalterBright » Sun, Sep 03, 2017, 4:10 PM UTC

mathiasben wrote: post #135

coredog64 wrote: post #128

Earlier quoted context omitted.

And, due to deductions, literally no one paid that rate. Realized tax rate was lower, combined with a bunch of dead weight losses as people optimized for tax avoidance.

yes, very few paid the top rate. but that's the point, the excess income was being thrust back into the economy, driving innovation and creating jobs not just languishing in someone's bank account.

> thrust back into the economy

This is another variation on the "rich people hoard cash" theory, which is completely false. Rich people invest all of their money back into the economy. Even bank deposits are invested back into the economy (when the bank loans it out).

Scrooge McDuck cash vaults do not exist.