To Understand Rising Inequality, Consider Janitors • Hacker News Board

Re: To Understand Rising Inequality, Consider Janitors

#171

Post by agentdrtran » Sun, Sep 03, 2017, 4:34 PM UTC

WalterBright wrote: post #157

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.

> You can't self-study your way to becoming a lawyer or a doctor. That's because the law doesn't allow it.

It would be insane if it did.

Re: To Understand Rising Inequality, Consider Janitors

#172

Post by topdopfrop » Sun, Sep 03, 2017, 4:34 PM UTC

existencebox wrote: post #115

aswanson wrote: post #94

Earlier quoted context omitted.

To invest in 2 hippies starting a personal computer company in 1976. To invest in 2 guys in starting a search engine in 1996. To invest in a kid in Harvard making a social network in 2004....

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…

And what about all the other companies funded by the same people who funded Apple, Google, and Facebook, that never became profitable? I'm curious how much capital is spent on failures in addition to the companies that pan out.

Re: To Understand Rising Inequality, Consider Janitors

#173

Post by ChemicalWarfare » Sun, Sep 03, 2017, 4:35 PM UTC

nwenzel wrote: post #147

ChemicalWarfare wrote: post #13

The flip side here is if the large company goes belly up - like Kodak did - the "outsourced janitor" might still keep their position at the company they are working for - they will end up working at another customer location.

That would assume that the other customer location is currently underserved or not served at all. Outsourcing is about reducing costs. It's not good or evil. But it depersonalizes decisions on which service to choose and narrows the decision making criteria down to cost. Costs for service jobs are driven by people. So, when a company is choosing their janitorial service and they choose the lowest cost service, that m…

>> That would assume that the other customer location is currently underserved or not served at all.

sure. but it's a potential option as opposed to being let go flat out.

If Kodak went belly up before that "rags to riches" story of a janitor becoming an exec proceeded beyond the janitor stage - she'd be looking for another job elsewhere, whereas in contractor's case there's a chance of getting reassigned to another "project".

It's not as much about "depersonalizing" as it is about convenience of not having to deal with the domain that has nothing to do with core business. The cost factor is also not linear - in terms of straight up cash figures sometimes it costs the same or more to outsource maintenance, security etc vs hiring your own.

Works both ways - car dealership for example isn't going to hire a web designer for their site full time.

Re: To Understand Rising Inequality, Consider Janitors

#174

Post by aswanson » Sun, Sep 03, 2017, 4:36 PM UTC

existencebox wrote: post #164

aswanson wrote: post #150

Earlier quoted context omitted.

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 initia…

Im not completely dismissing your argument; I agree with you that something has to be done with unprecedented inequality. Also, Im not suggesting that is an all-or-nothing dichotomy, Im asking you to think of the investor behavioural consequences of that type of tax policy. We of course can never know what those investors would have done given those circumstances, but its important to try to understand what the possibly nonlinear effects would be.

Re: To Understand Rising Inequality, Consider Janitors

#175

Post by surfmike » Sun, Sep 03, 2017, 4:38 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…

How would you change it short of overthrowing capitalism? Capitalism, almost by definition, "allows the rich to increase their wealth without actually working" (although of course less wealthy people can do the same).

Parent poster proposed a way to help workers by changing the incentives in the system to reinvest more into productivity/research, without throwing out the system that has made our society propsperous.

Re: To Understand Rising Inequality, Consider Janitors

#176

Post by bluedino » Sun, Sep 03, 2017, 4:38 PM UTC

>> Ms. Ramos, the Apple janitor, lives down the road in San Jose. She

>> pays $2,300 monthly for a two-bedroom apartment where she and her

>> four children live. Before overtime and taxes, her $16.60 an hour

>> works out to $34,520 a year. Her rent alone is $27,600 a year,

>> leaving less than $600 a month once the rent is paid.

Assuming she's only losing 20% to taxes and other deductions, she can't even cover rent. How is she paying her rent? Is there another person or public assistance?

Re: To Understand Rising Inequality, Consider Janitors

#177

Post by chrisco255 » Sun, Sep 03, 2017, 4:40 PM UTC

Joe-Z wrote: post #134

Taek wrote: post #119

Earlier quoted context omitted.

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.

Wealth is not a zero sum game.

Re: To Understand Rising Inequality, Consider Janitors

#178

Post by ChemicalWarfare » Sun, Sep 03, 2017, 4:41 PM UTC

mathiasben wrote: post #152

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.

"Rich people invest all of their money back into the economy" - if it really worked like that we wouldn't be discussing inequality.

not following your logic here.

"investing" != "giving it out". "growing economy" != "less inequality".

Re: To Understand Rising Inequality, Consider Janitors

#179

Post by asmithmd1 » Sun, Sep 03, 2017, 4:42 PM UTC

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.

I will take a shot at explaining the problem with a gold standard.

1. We want slight 1%-2% inflation to prevent hoarding from slowing the economy to a crawl. Why invest or buy something today when the cash stuffed in my mattress will buy something better in 6 months.

2. If you agree with the first statement, why tie the rate of growth of money to how fast you can dig a metal out of the ground? Let "experts" survey the economy and decide how much more money there should be this year as opposed to last year.

I am not saying I agree completely with either statement, but that is one argument against a gold tied currency.

Re: To Understand Rising Inequality, Consider Janitors

#180

Post by choxi » Sun, Sep 03, 2017, 4:44 PM UTC

We should tax wealth, not income. [1]

The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3]

We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your investment returns (which then gets taxed at 15% instead of 35% for ordinary income). If you don't spend all of that $2M, you'll continue to make more money just by having more money.

By taxing income instead of wealth, we're also essentially penalizing labor and rewarding wealth. We shouldn't penalize something that actually contributes to the economy and instead ask people who have more (not earn more necessarily) to contribute via taxes.

1. http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequali...

2.http://www.businessinsider.com/the-critical-difference-betwe...

3. https://www.forbes.com/sites/robertlenzner/2011/11/20/the-to...