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To Understand Rising Inequality, Consider Janitors

nytimes.com

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Re: To Understand Rising Inequality, Consider Janitors

#161

Post by newforice »

sulam wrote: post #138
newforice wrote: post #62

Earlier quoted context omitted.

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 significan…

When it comes to money, I would prefer if I could skip negotiating and probably need overall to work on my negotiating skills. I also happily work for less for remote positions so you got me down to a tee on those.

Re: To Understand Rising Inequality, Consider Janitors

#162

Post by X86BSD »

collyw wrote: post #153
X86BSD wrote: post #146

Earlier quoted context omitted.

Interesting that you noted it started in 1970. Can you think of anything that happened in 1970 that would have started this death spiral of our purchasing power? Perhaps say the severing of our money from gold maybe? Look it's rather simple. You can wax and wane about tax policy until you are blue in the face. The answer lies in the currency, not taxation. I give this example every single time these stories surface.…

I see you have been down voted, yet no one has given an explanation as to why you are wrong. I was thinking the same thing. I would appreciate it if someone could explain to me why this line of thinking is wrong.

It happens every time. They can't dispute the facts I illustrated above. They just down vote without any refuting. It's hard to argue the grams of silver in pre 1965 quarters is not 6.25, it's hard to argue the current price of those 6.25 grams of silver, and it is, I suppose, theoretical you can show me bread or milk that costs more then 3.xx dollars. But those are the national averages.

So I just assume it's Wall Street vampires down voting or those who hear the word constitution and down vote because clearly that makes me wrong or insane.

Re: To Understand Rising Inequality, Consider Janitors

#163

Post by mathiasben »

acidburnNSA wrote: post #139
aswanson wrote: post #118

Earlier quoted context omitted.

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…

it's already happened; trump, al-right, etc.. there used to be all these middle class jobs that kept everyone occupied, now without that we have lots of anger and automatic weapons.

Re: To Understand Rising Inequality, Consider Janitors

#164

Post by existencebox »

aswanson wrote: post #150
existencebox wrote: post #115

Earlier quoted context omitted.

I just _had_ to rebut some of these: Apple got initial funding of only 250k, and that was split between equity and loan, very feasible even with a 400k yearly cap. (And I'd also note that 10% of "any money over that" still adds up given some of the salaries paid to top execs) Secondly, Google's initial funding was only 100k in 98` dollars. The significant 25m round was from kleiner perkins and sequoia, and I certainl…

Great, now rewind and re-run that history but with the Mike Marrkula, Andres Bectolsheim, and Peter Theil being taxed and 90 percent above 400k. How motivated would they have been to risk their capital knowing that 1)They have much less of it 2)What they do make will be taxed at 90 percent 3)Bonds are a safer bet. Further, in this thought experiment, assume that Perkins and Seqouia are much smaller, less successful f…

One would hope that we could draw the appropriate logarithmic taxation curve to constrain risky investment without eliminating it outright. I personally do not see a massive problem with curtailing some of the power/amount of money flowing around in some of these entities; but don't see it as an all or nothing as you suggest.

I'd note however that my original point was to emphasize the smallness of most of the initial investments. One does not need to be a billion dollar entity to have enough diversification in high risk investments to make it a worthwhile component of your portfolio.

(I'd also defend America's ingenuity prior to the advent of VC; we were a pioneer in the sciences and technology long before venture capital was a thing. This is an entirely separate discussion about the viability of various forms of tech. growth stimulus that I'm neither qualified nor desirous to have, but I mention it to suggest that if we've found success in other systems before, there may be reason to experiment further when we observe a clearly deleterious trend in the current state.)

Re: To Understand Rising Inequality, Consider Janitors

#165

Post by solatic »

fatjokes wrote: post #35

It sounds like the real reason for inequality is that the pay for "janitorial work" has simply decreased. The article makes a point to say that the pay is the same, accounting for inflation, but it's disingenuous not to highlight total comp, which Ramos had significantly less of than Evans.

> the pay for "janitorial work" has simply decreased.

Author's point is not about decrease in pay but about the social changes that came about as a result of prioritizing the outsourcing of non-core-competency work to contractors, which increased competition and had the effect of reducing effective pay.

In other words, income inequality has increased as contract work has increased, and the reason why is because a large part of social mobility is due to networking and connections, which are far stronger at companies which prefer in-sourcing compared to companies which prefer out-sourcing, since out-sourcing naturally creates an "us vs. them" dynamic at companies which is difficult to overcome.

The implied conclusion is, if market forces are biased towards out-sourcing, then the government should incentivize in-sourcing as a means of combatting inequality.

Re: To Understand Rising Inequality, Consider Janitors

#166

Post by WalterBright »

collyw wrote: post #158
WalterBright wrote: post #140

Earlier quoted context omitted.

> 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.

Why do tax havens exist then?

Reagan didn't get rid of all of the tax shelters. But the idea that tax havens (i.e. tax shelters) are relatively crummy investments remains.

The reason Apple, etc., invest a lot of their cash overseas is not because those are better investments, but because the US corporate taxes are so much higher those foreign investments become more attractive.

Level the taxes, and the money will be reinvested back in the US.

Re: To Understand Rising Inequality, Consider Janitors

#167

Post by collyw »

jblow wrote: post #155
arkitaip wrote: post #123

Earlier quoted context omitted.

It's not even the point of the example and they address that in the article. They point is that the janitor at Kodak had opportunities to advance her career, whereas the janitor working at Apple has none because she doesn't even for the Apple.

But she's also not taking computer classes in her spare time, and work is approximately he same number of hours leaving approximately the same amount of spare time ... even if she were taking computer classes it would not be a reasonable comparison, because taking computer classes in the 1980s was a much more rare and advanced thing than taking them today. It'd have to be something more like quantum mechanics classes…

It says that she has no paid vacation, so thats a chunk less spare time. My guess is that commuting to Apple's offices will be a large chunk as well. I doubt she can afford to stay in the same area as the high paid tech workers.

Re: To Understand Rising Inequality, Consider Janitors

#168

Post by anovikov »

1_2__4 wrote: post #5
anovikov wrote: post #4

Earlier quoted context omitted.

I think in both cases, it's just the market. There is a demand for engineers which is more than for janitors, and with more limited supply. Everything else is just moving money from one pocket into another, it doesn't have economic significance.

"It's just the market" is such a lazy reply. Did entrepreneurs not like making money back then? Or did they realize that a healthy society was just as important as healthy companies?

No, it is just that demand for janitors and engineers have shifted.

You need fewer janitors now because modern chemicals allow cleaning same space quicker (and probably tools also changed a bit, while maybe in the U.S. in 1980s, modern ones have already been in place).

You need more engineers. And they impact work more because development and marketing (which also became a branch of engineering, see: growth hackers) is more important now than production.

You can always train enough janitors, not so easy with engineers.

Same thing about nearly all low-skilled workers. They are easy to train and their supply is nearly infinite, demand isn't, and demand for high-skilled is high plus they make so much profit you can actually afford paying them a ton of money, which wasn't possible back in 1980s.

It is that proverbial bifurcation of workforce. Outsourcing has nothing to do with it. It is just technological change. There is no way out of it (at least no way which won't cripple economic growth - which is already not so good).

Re: To Understand Rising Inequality, Consider Janitors

#169

Post by X86BSD »

collyw wrote: post #149
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.

Around the same time that the gold standard was dropped and banks started creating money out of thin air.

Correct you are. And yet it's depressing how many people do not get that. Or understand money.

Re: To Understand Rising Inequality, Consider Janitors

#170

Post by pcrh »

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…

Inheritance tax was the original solution to this. Someone could be as rich as Croesus during their lifetime, but on their death returned the money from whence it came.

Their offspring could benefit from a generous endowment of a proportion of this wealth, say 10%-20%.

Edit: and no sneaking about with Trusts, either.

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