I very briefly worked a job like this when I was in college. I would work the concession stands at a huge football stadium with around 1,000 temporary workers on a given game day.
The wage and hours were terrible, but it was the absolute dehumanization that stuck with me. No body knew your name or particularly cared. You would walk in during the morning, flash your badge and get assigned to a particular stand. Every day it was brand new people who you've never met before with a brand new manager. There was obviously no room to move up, because you never had a chance to build a track record with anyone. There was also just plain disrespect on the part of the company towards its workers. We would spend 2-3 hours after the game just waiting for permission to go home. I can't imagine spending much of my life in a job like that, it was just horrible. But clearly there were enough people who had to do it, because there were many 40 year olds I worked with.
People who've never worked these jobs tend to read this article and assume that these articles have a hidden agenda: raising the minimum wage or some kind of socialist initiative. I read it differently, as a reminder of the depressing underside of the US economy.
> The wage and hours were terrible, but it was the absolute dehumanization that stuck with me. No body knew your name or particularly cared. You would walk in during the morning, flash your badge and get assigned to a particular stand. Every day it was brand new people who you've never met before with a brand new manager.
It's worth remembering that when CEOs talk about flexibility, this is what they are talking about: interchangeable workers, who can be swapped in and out (and thrown in the bin) like interchangeable parts.
That might be true sometimes, but it depends on the expectation. If I have a team of great developers, I'd expect to be able to put any of them on anything and walk away with something great in the end knowing that they brought their expertise and best ideas.
The only difference between those "great developers" and those replaceable workers is that corporate America hasn't figured out how to make software developers into interchangeable cogs yet. But don't fret, people are working on it. There is an entire industry whose job it is to figure out how to extract the necessary labor for any particular function from a workforce that isn't skilled or happy or otherwise invested in their work.
Sure they have. Look at banks and other major enterprises, it's exactly the same.
My point isn't about engineers; the same can be said of architects or designers or even middle managers. If you have a team that you trust, having any number and grouping of them able to come together around a problem will produce results. A team being "flexible" does not make them "cogs".
"Flexibility" in the way the term is usually used in CEO-speak doesn't mean having employees that you can trust. It means not having to have to trust your employees because their work has been broken down into such generic chunks that it requires no independent thought or initiative.
You're looking at this from the perspective of a skilled professional, which is fine -- most of the HN audience probably does as well. But it's not the perspective I'm talking about. I'm talking about the perspective of the people who see skilled professionals as a problem, because their skills mean they can demand things like money and respect as a condition of employment. That reduces the CEO's flexibility to do things like take that money and put it instead into his own golden parachute.
It's the difference between a person being flexible and an organisation or process being flexible.
Many organisations don't want to rely on a handful of supermen who solve all of their problems as such people may become indispensable and then demand higher wages or go to a competitor. They would rather break their processes down into a bunch of specialized tasks that require few skills so that new workers can be popped in and out quickly.
In much the same way, most devops guys want to spin up identical commodity EC2 instances deployed via a script, with hostnames like hypst-streamer-m00237. Like it or not, that's how you scale.
The wage level is somewhat orthogonal to this - doctors are generally interchangeable cogs, but they get paid well. The key point is avoiding single points of failure.
Doctors are not as interchangeable as say assembly line workers, doctors have different levels of experience and different specializations as well as relationships with patients in cases of more general doctors.
Besides there is a relatively small pool of people compared to the general population who are even capable of becoming doctors, not to mention the very long spin up time.
An analogy would be breaking down the tasks performed by a doctor into chunks that could be done in isolation by minimum wage workers.
I imagine radiologists are interchangeable in the same way that Python programmers are; kind of but not really.
Skilled professionals become more experienced at their jobs over time, they also have differing experiences and may have graduated from different schools etc.
This means that they will perform their jobs differently in ways that way be subtle and not easily quantifiable. So if you swap them out, things will change in ways that may not be easy to predict.
On the other hand a minimum wage worker is more likely to perform a job that requires a total training of 1 hour or less and they are likely to hit a ceiling in terms of productivity within a week. There may be minor differences in output, but these are easily quantifiable and if you have a large enough labour pool to draw from can be solved by saying "fire anybody who does like than X per hour".
I'd actually expect radiologists to be considerably more interchangeable. The goal of a radiologist is to compute a function - `isCancer(mri)` or `isBrokenBone(xray)`. As a thought experiment, consider two radiologists who are as accurate as physics allows - they will always return the same answer for `isHerniatedDisk(mri)`.
Medicine is high skill, but the outputs are fairly homogeneous. Homogeneous output is what makes workers interchangeable cogs, not skill level.
It seems to me (corrections welcome), that medical specialists are way, way more interchangeable than programmers. Each patient has a chart that follows them around through the hospital and each specialist reads the chart, makes their decisions and documents what they're doing. There are problems with that, but it's the system. That very much makes the medical practitioners cogs in the system, compared to programmers who have a much longer ramp up time for a given codebase/patient.
Sure and every codebase has documentation , specs and tests that follow it all over the internet..
I think the main difference probably comes down to medicine having more procedures and redundancy built in because you can't let a patient die when a particular doctor is not available.
OTOH my older relatives definitely complain about/praise individual doctors for bedside manor , professionalism and misdiagnosis etc.
> An analogy would be breaking down the tasks performed by a doctor into chunks that could be done in isolation by minimum wage workers.
Which would be amazingly hard for all the same reasons writing a program to replace a doctor would be amazingly hard.
In a company like Walmart, which is entirely predicated on the existence of interchangeable minimum-wage workers, the main component they can't replace is the process all those workers follow which results in a working store. That's the software run by all the human hardware.
I realize that's a joke, but it's a joke I and many people I know have lived. It's a cultural notion that we need to get a bunch of fulfillment from our jobs. Though I now have a fulfilling job, I was probably the happiest when I just had a job to make a few bucks and didn't take home the worries of knowledge work. Temp work was a good option because there was no responsibility and if I didn't want to go to work, I didn't.
I'm not saying that treating workers as animals is OK or that all temp workers are living a life of bliss – this article show most aren’t -- but there is certainly another side to the story.
It wasn't too long ago i worked long hours in removals. It still remains the only job (among quite a few) i've had that day to day I happily felt something was achieved and didn't go home drained.
[edit] I've been working as an EE/SE for the last 4 years.
I also briefly had a temp job like this when I was in high school. I worked at an Acme Brick manufacturing plant one summer. I'd show up around 5:30 every morning not sure if I was going to sweep the plant floor all day or stack the bricks that had just come out of the kiln. While I was hired through a temp agency, I was at least had a guaranteed spot at work each day. I can't imagine what it must be like to have to wait in limbo every morning.
The worst part wasn't the physical labor, it was the atmosphere. Never mind the fact that I was pretty much the only English speaker there, the other workers didn't even talk to each other. We'd go on the 30 minute lunch break at 11, and they'd all pull out their lunchboxes and eat in complete silence. Everything was so somber -- it was like everyone had the life sucked out of them.
Same here. I worked as a temp one summer during college (for two agencies). The dehumanization was absolutely the worst part: at one point I was staffed at a warehouse on a line shipping vitamins to people across the US. We mostly worked in awkward silence, as fast as we possibly could. This was punctuated by periods where a manager would gather and berate us for going too slowly.
My other favorite experience was working for a large energy drink supplier (you've heard of them), transferring cartons of drinks from pallets to other, differently-sized pallets, while 2-3 dudes in polos sat in a corner and chatted, occasionally laughing.
It gave me chills to read this and remember what it's like to work harder than you ever have before, and still be treated as a nameless soulless entity.
Money doesn't come from nothing, there are side effects of raising the minimum wage. Besides the fact that a small percentage of US work force are actually paid minimum, most more or less than it.
Everyone who comments on this thread needs to read this:
* Raising the minimum wage doesn't shift the distribution of wealth (companies lay off workers, companies no longer have profit margin close down, companies shift highering demographic).
* Raising corporate Tax doesn't shift the distribution of wealth (the increase is absorbed by the consumer)
* Income Tax on rich & (with exceptions on groceries/utilties/rent to make it non-regressive) sales Taxes & Social Programs do change the distribution of wealth, (danger being lower rewards = less risk taken, but this is debatable).
If I was a liberal, I would be pushing strongly for social programs & taxes instead of minimum wage. The economic benefit of having more workers actually working (because they are allowed to work for $4 an hour) is HUGE. and with social programs their life would be like you wanted it.
for the argument against (lower rewards = less risk taken by ceos/entrepreneur) that says "Bill Gates's decendants have never worked a day in their life and they are rich. (Actually Bill Gates is a good parent & powerful philanthropist, just replace that with some other rich dude)
Anyway for that reason we have a variable estate tax up to %40. Yes, there are probably loopholes to this and they should be closed.
CEO pay is generally an insignificant fraction of labor costs. Suppose we split the pay of Walmart's CEO (about $20M) between Walmart's 2M employees. That's $10/year per employee.
Sure, if you apply it in such a simplistic manner. Why would you give $10 to the guys making 6 figures as well? Whatever, Walmart encourages its employees to apply for food-stamps and other transfer payments so their economics are already all f'd up.
That's a specious argument. It's pretty easy to see that CEO pay (the entire pay package, not just salary) is often closely tied to corporate profits, often in ways that incentivise short term gains over longer term strategic planning.
If anything, CEOs and corporate management in general tend to overvalue long term gains, so financial incentives for short term benefits probably push incentives back closer to optimal.
Although CEO pay has lots of problems, that money is coming from shareholders, not employees.
Picking WalMart (just because they are such an icon of this), if you zero'd out their CEO pay and distributed it to employees, each employee would see a raise of 20 cents a week.
Not all jobs are supposed to be able to support a family of 4 at a middle-class lifestyle on 40 hours a week.
What jobs are teenagers supposed to have? We need to have entry-level jobs for people who are just getting started in the labor market, whose labor isn't worth that much because they are still working on basic job skills, like showing up to work on time sober.
FYI: I don't think raising the minimum wage just a buck is going to have any significant downsides. We need to remember that there can be people whose labor isn't worth that new minimum wage, though.
There is something to be said about an employer having 3 $8-an-hour employees versus 2 $12-an-hour employees.
> Not all jobs are supposed to be able to support a family of 4 at a middle-class lifestyle on 40 hours a week.
This is the fundamental problem, it shouldn't be possible for any family of 4 to have difficult basic physical necessities, job or no job. However, in the current state of things some workers are so exploited that the only available work (if you can find any for your labor) pays at a minimum wage.
> What jobs are teenagers supposed to have?
Acquiring disposable income is really different from having to have steady work at a decent rate of pay in order to afford basics like food and shelter. Also, there are tremendous issues with young people and work and exploitation of labor in that age demographic.
> We need to have entry-level jobs for people who are just getting started in the labor market, whose labor isn't worth that much because they are still working on basic job skills, like showing up to work on time sober.
This is a deliberate slander, you are associating people who receive minimum wage (and are likely poor) with alcoholism. That kind of thing is a long running stereotype that undermines the value of low paid laborers or and workers.
Further, nobody is saying that all workers must have high pay, we would expect that pay levels have differences between types of work and types of workers. However, there should be a basic guarantee that people can access basic physical needs.
>Not all jobs are supposed to be able to support a family of 4 at a middle-class lifestyle on 40 hours a week.
Sophistry. Come on, you can do better than that.
>What jobs are teenagers supposed to have?
They can mow yards, build crappy websites with PHP, Lemonade stands, etc. I don't know, nor do I particularly care. Teenagers aren't a significant part of the economy. For my part, I worked at all kinds of crap as a teenager, never making as little as the minimum wage, carefully saving up thousands of dollars (really, I was a tight fisted teenager). I pissed away lots of chances to have fun, only to face the realization that my years of constant after-school employment hadn't even netted me enough money for a single year of room, board, and tuition at a state college.
>We need to have entry-level jobs for people who are just getting started in the labor market,
If it isn't worth paying someone a livable wage, then it obviously isn't an essential need. That's basic econ telling you to stop wasting your time.
>whose labor isn't worth that much because they are still working on basic job skills, like showing up to work on time sober.
Vocational school, and probationary employment seem sufficient to me.
>FYI: I don't think raising the minimum wage just a buck is going to have any significant downsides.
Me neither. One might even argue for locales to define a minimum wage, maybe somehow indexed to the cost of living, as at least one has.
>We need to remember that there can be people whose labor isn't worth that new minimum wage, though.
Are you referring to mentally and physically disabled people? There is a gov't program to subsidize their wages, which still allows employers (like Goodwill Industries) to abuse them arbitrarily (but supposedly based upon an objective metric of productivity).
>There is something to be said about an employer having 3 $8-an-hour employees versus 2 $12-an-hour employees.
> Teenagers aren't a significant part of the economy
Yet every adult working at a job was at one point a teenager. The first time they have to punch a clock and say "yes sir" to someone giving them an attitude shouldn't be when they are starting their first job at 24.
> Is there? Please say it.
The first situation has three people with jobs, while the second only has two. Plus the people who only have skills worth $10 an hour can find a job in the first situation, where they can't in the second.
But the personal attacks have started, so I'm out on this thread.
I'm surprised at the self-delusional replies to your comments. You've laid out very reasonable points and have received very abrasive feedback. Seem's the way HN's been going.
Regardless, there are no references for either argument in this comment thread.
>Yet every adult working at a job was at one point a teenager. The first time they have to punch a clock and say "yes sir" to someone giving them an attitude shouldn't be when they are starting their first job at 24.
You seem quite invested in authoritarianism and suffering.
Insignificant price controls don't make much difference, so it's basically a wash. Significant price controls tend to have predictable perverse effects. It seems to be impolite to report them: for some years, every time I read a story about long gas lines somewhere, I go searching for information to verify that yes, it was under a system of gas price controls, and generally I can verify it with enough poking around in search engines. But it seems very uncommon for it to be reported in the news story about gas lines. Because gas lines just happen, like sunspots, you know?
If you think modern levels of intervention in the labor market --- not just minimum wage, but mandatory benefits and a host of other things --- have been imposed with such a marvellously deft touch that they shouldn't cause persistent failure of labor markets to clear, it is possible to dream up other reasons that might conceivably explain the observed outcome of historically high long term unemployment. Not everyone finds those explanations convincing, though.
>Insignificant price controls don't make much difference, so it's basically a wash. Significant price controls tend to have predictable perverse effects. It seems to be impolite to report them: for some years, every time I read a story about long gas lines somewhere, I go searching for information to verify that yes, it was under a system of gas price controls, and generally I can verify it with enough poking around in search engines. But it seems very uncommon for it to be reported in the news story about gas lines. Because gas lines just happen, like sunspots, you know?
What is this? I don't even...
>If you think modern levels of intervention in the labor market --- not just minimum wage, but mandatory benefits and a host of other things --- have been imposed with such a marvellously deft touch
I don't.
>that they shouldn't cause persistent failure of labor markets to clear, it is possible to dream up other reasons that might conceivably explain the observed outcome of historically high long term unemployment. Not everyone finds those explanations convincing, though.
Whether you like the fact that our economy is putzed around by central planners is a different topic. I'll approach this with the foregone conclusion that it's what we're stuck with, and that we have to find a way to live with it. Actually, central planning has little to do with the obvious necessity that the people who live in and around our communities must be able to support themselves, and if they cannot; then that problem will sort itself out either through social programs paid by taxes, charity, the population's mobility, or as a last resort theft and violence.
Raising the minimum wage allows for a (very) short term benefit, but in the medium and long run, it drives inflation up. The minimum wage and inflation are effectively proportional.
Economists call what you're describing "cost-push inflation." And these days most believe it's a myth.
But surely that's just an artifact of liberal Krugmanite thinking infecting our institutions of higher learning! Let's see what the reliably conservative Cato Institute thinks: http://www.cato.org/pubs/pas/pa106.html#4
There are several problems with the notion of cost-push inflation. The primary error in this analysis is that it confuses a shift in the structure of relative prices with a general rise in the level of prices. If the labor costs of businesses are increased and they succeed in passing on the costs to consumers in the form of higher prices, they will have managed to change the structure of relative prices at the expense of businesses that are unable to raise their prices because of more-intense competition. This is quite distinct from a general increase in the level of prices, which would be possible only if the real supply of money was increased.
Many firms, however, may be unable to pass on their increased costs to consumers. It is consumers who ultimately determine the price of any good on the market, and they may decide that a business's product is not worth a higher price. Producers cannot force consumers to buy what they produce, and businesses cannot always arbitrarily increase the prices of their products simply because the government has arbitrarily increased their costs.
Milton Friedman did not believe in cost push inflation. He believed that "inflation is always and everywhere a monetary phenomenon." In other words, he believed prices could not increase without an increase in the money supply.
> Raising the minimum wage allows for a (very) short term benefit, but in the medium and long run, it drives inflation up.
This is probably strictly true as written, but misleading, as it also provides a medium and long term benefit, as it (alone) drives inflation up less than the ratio by which the minimum wage was increased.
> The minimum wage and inflation are effectively proportional.
No, they aren't. Even price levels, which could be more reasonably expected to have some relation to minimum wage, aren't simply proportional. If inflation was proportional to minimum wage, places that didn't have a minimum wage would have zero inflation; if price levels were proportional to minimum wage, places that didn't have a minimum wage would have zero price levels. Neither of these is the case.
Interesting. In Germany, people usually fret about potential job losses if a general minimum wage would be introduced (they didn't have one last time I checked), not inflation.
I worked for two different Kelly Services offices in Florida (Largo/St. Pete and Pensacola (iirc)) in the 1990's and it was nothing like the article. I actually had a good experience. I worked similar jobs to the ones mentioned in the article (warehouse, plastics manufacturing, construction, moving furniture, etc.) I always transported my self to the job sites and never found no work when I got there. The pay was above minimum and I would specifically ask for 3rd shift work (because it paid a 50% premium).
There were some jobs that were always "temp" - like one time government construction contracts. But, usually the way the process worked at that time was that employers were basically using Kelly to "screen" workers. They'd bring you in as a temp. and after six months if you were still there they'd transition you to permanent position. If they didn't asked you to come back as a temp, Kelly would just send you somewhere else. Sometimes, you'd not get asked back due to an inability to do the job (I once wasn't because I was asked to hand paint the buttons for tv remotes and just didn't have the dexterity for that) but usually it was because of a chronic problem. As you can imagine with people working temp jobs many had "issues". Plenty of people missed work because they were arrested for DUI's or drug related crime the night before. Some had their probation violated. Several showed up drunk or high. One guy had a medical issue (epilepsy) and had a seizure on the factory floor while operating heavy machinery. Using temps let the companies easily handle those types of problems with out interrupting their business. Part of it was not having to involve HR in the "firing" process by just letting the shift supervisor and Kelly handle it. But, it was also that they could just easily get a different temp. There was no need to put an add in the paper and have a person interviewed and entered into the payroll system etc.
I guess it's possible that things have gotten much worse since I worked for Kelly. Or, that things may be different in poor US inner cities (which I make it a point to stay away from). But, it's probably just some sensationalism in the writing of the article and some exaggerated hearsay from the temps. Notice that there's no pictures or any other evidence like that of the articles' most egregious statements.
> minimum wage or some kind of socialist initiative
The socialist initiative we need is to shut down unskilled immigration entirely. Read the article; they're all Hispanic. These people's plight is going to be made even worse by the coming wave of even greater unskilled immigration promised by the senate bill. This is why Caesar Chavez was vehemently anti-immigration.
"The socialist initiative we need is to shut down unskilled immigration entirely."
This is the exact opposite of a "socialist" initative. Either you are being ironic or do not really know in what sense "socialist" is being used here.
Either way, feels kind of cheap considering that unskilled migration has historically been one of the driving forces behind US growth and progress, and that many first class US citizens today are probably descendants of some of those migrants.
I'm actually curious why you associate open borders with socialism/communism. That's usually considered an anarcho-capitalist position. Pro-worker policies like organized labor and immigration restriction are historically associated with the left.
Actual anarchists are socialist/communist, and quite often use anti-borders slogans. Not to mention standby organizations like No One Is Illegal..
Furthermore, one of the fundamental tenets of communism is a stateless society, so there's that. And many communists thought it was one of the more important initial goals, hence 'one world communism.'
The communists did call their organization 'International Workingmen's Association', the first international, in 1864. In fact, I think that the nationalist/internationalist question is what most closely resembles the traditional left/right axis of politics.
Look carefully, because this is the future of America. This is the plight of the average worker in a world where labor is increasingly replaced by automation capital owned by a select few, gutting the bargaining power of ordinary people in the employment market.
Assuming you're not describing a woman like Rosa Ramirez as "the average worker" of today, could you elaborate a bit on the process by which the median worker ends up like her in the future? It seems to me that the market in labor is functioning pretty well, with some arguable exceptions at the very high and low ends.
I mean that people seem to be being paid roughly what they're worth, and at that level the median household ends up with $50K or so (the average household does even better because of the skew at high incomes). $50K isn't great, but it's not, IMHO, indicative of workers with no negotiating power. How do we get from there to rayiner's "future" of Rosa Ramirez?
People are paid just less than MIN(cost to replace their labor in the labor market, cost to replace their labor with automation). Using terms like "worth" or "deserve" invoke a moral framework and it is unnecessary to do so. There is one moral framework where people are "worth" the price of their labor at the equilibrium of supply and demand, but that's not the only conceivable arrangement. For example, partners in a joint venture are rarely compensated on the equilibrium of supply and demand, but based on some percentage of the value of the venture. If someone's labor creates $X of value, there is no reason to say it is "worth" whatever it would cost to hire someone else to do the same labor instead of saying it is "worth" say 0.2 * $X.
Which brings me to the issue of $50k median household income. Contrary to your assertion, it is highly indicative of workers with weakening negotiating power. The story of the last 30 years has been one of inflation-adjusted individual income (using household income is misleading because it glosses over changing labor force participation trends) lagging individual worker productivity. That means of each dollar value created by each worker, the employer (usually the capital owner) gets to keep more of that dollar today than they did 30 years ago. That is exactly what you would expect based on a decrease in workers negotiating power.
This isn't a political argument, it's an economic argument. I'm not endorsing any particular steps towards remedying this issues. I'm pointing out the economic phenomena we are seeing.
Do you have some numbers on individual worker income vs. individual worker productivity? Most numbers I've seen have been aggregated.
And do you really believe that all productivity improvements would be captured by workers with sufficient negotiating power? What's the incentive for the capital owner to invest in new technology that would improve productivity if there's no profit motive because all the added revenue ends up in the workers' pockets?
Also, real wages keeping pace with productivity improvements does not imply that the workers have captured all (or even most!) of the increased value yielding from productivity improvements. Say a worker produces $100 of value per day in 1970 and $150 per day (both inflation adjusted) in 2010. Productivity is up 50%. If his wages rise from $20 per day in 1970 to $30 per day in 2010, his wages will also be up 50%. But he will have captured only 20% of the increased value his labor generates ($10 out of $50 per day). The remainder is profit to his employer. However, he will have maintained his share of his total production at 20% (20 / 100 == 30 / 150), which is consistent with his maintaining negotiating power against his employer.
But, what happens if his wage only rises from $20/day to $25/day? He will have captured only 10% of the increase in value from 1970 to 2010, but more importantly, his share of his total production will have fallen from 20% to 17%. That is consistent with a declining negotiating position.
You're assuming that productivity gains are something like normally distributed while income gains have (obviously) not been. But I'm not sure that's true.
Look at the composition of the top 1% of earners. The Times as always has a helpful infographic:
Huge chunks (certainly an overwhelming majority!) aren't managers or CEOs in a position to "capture" the value from the productivity of their underlings. In fact, it seems like your best bet is to be a doctor with his own practice. His productivity (or at least the market value of his services) has skyrocketed as medical science has improved, and indeed he has captured much of those gains. Ditto for, say, a Google engineer today vs. a DEC engineer of 30 years ago.
Also, a bunch of the profit from those productivity gains has surely made its way into equity prices and dividends. Nobody needs negotiating leverage to access those, just savings and investment. And indeed, workers today wisely take a larger % of their earnings in benefits like stock options and 401(k) matches, not wages.
If I understand your argument correctly, you're saying that the results might be explained by the vast majority of productivity gains happening among the 1%, so that the median worker's productivity hasn't really increased as much as the overall average productivity. I don't think that's correct, for two reasons:
1) The 1% necessarily account for a small percentage of workers, and thus are unlikely to account for the huge increases in overall productivity we're seeing. A doctor is not 10x as productive as he was 30 years ago.
2) The theory is inconsistent with what we know about specific segments of the economy. E.g. in the U.S., manufacturing output per worker has skyrocketed in the last 30 years: http://mjperry.blogspot.com/2010/02/us-manufacturing-ouput-p.... Manufacturing worker productivity has doubled in less than 20 years, but wages have totally stagnated.
It is true that wage comparisons are a little misleading because they don't take into account benefits. But the fact of the matter is that your average worker doesn't get benefits like stock options or 401(k) matching. Less than half of Americans even half a 401(k) plan, much less matching employer contributions: http://www.cnbc.com/id/100578392. The vast majority of workers simply do not own enough stock or equity to more than marginally offset how wages have failed to keep pace with productivity gains.
You're right that the bulk of the gains from improved productivity have made their way into equity prices and dividends, but that's nothing more than another way of saying what I said: capital owners are capturing an increasing percentage of the value generated by labor, as a result of the decreased negotiating power of labor. Sure, anyone can buy stock, but as a practical matter a small fraction of the population owns the vast majority of stocks and business equity: http://www2.ucsc.edu/whorulesamerica/power/wealth.html. The top 10% owns 88% of all non-housing investment assets. The top 1% owns half.
Note that this point is independent of the "fairness" of that asset distribution in the first place. A small percentage of the population has always owned most of the wealth. That's not necessarily the troubling part. The troubling part is that the fraction of the value generated by labor that is captured by the laborers rather than the owners of capital is shrinking. That's consistent with a deteriorating negotiating position, not a stable one.
In a situation where the worker was capturing all of the productivity improvements then it would be in the workers interest for the workers to invest in new technology to improve productivity.
I think we are quite far from a situation where a worker has enough negotiating power to capture everything. What we have is a situation where the share of the worker as a % of total is declining. A situation where that % doesn't buy financial security can look ugly quick.
Under that model there is a large number of workers who are worth nothing at all or only their bare sustenance. Now this might be true to some degree from an economic standpoint (in that it's an equilibrium) but it doesn't look so rosy from a societal standpoint. And what purpose does the economy have if not to serve society?
You also have to contend that market prices for labour would likely be higher if there were not so many unemployed. With low unemployment then firms would have incentive to make some of these temps into full time workers to prevent another firm from taking the best workers out of the temp pool.
From a societal standpoint, it's absolutely horrible. This train can't go on forever. At some point, the chorus of "basic income" from the large number of chronically unemployed will become too loud to ignore. For places that already have one, a recalibration towards an "Arts, Sports, and Lesiure society" should already be starting.
His reference to "automation" here of course does not necessarily mean automation of labor(i.e. assembly line automation), but instead the fact that companies with lots of cash to throw around can gut their workforce and hire in temp agencies. Hence "automation capital". They are "automating" in the sense that a churning workforce consisting of temps can be paid less overall. There will never be a shortage of people to fill those jobs and there is no need to cover expensive benefits.
Of course the economy is bigger than it was 63 years ago. I'm not disputing that. But just try and tell me with a straight face that the massive influx of immigrants (looking for work, coming here for school, etc.) from the BRIC and other developing countries coming here is not a byproduct of people in their countries fucking nonstop and unchecked in addition to their host countries being unable to provide a reasonable living for them. You don't see nth generation Americans taking up these temp jobs en masse. As more people enter the US who will work for less, wages will continue to fall for immigrants and natural-born citizens alike. A bit of an aside, but if the H1-B visa limit is released that the amazing Zuckerburg and others are clamoring for, in under a decade we'll all be wishing for the days of the 2000s.
An interesting case study in modern journalism. This article has an interesting story to tell, but the author seems unaware of it, so he tries really hard to use every trick in the book to extract hyperbolic statements suitable for headlines.
Authors should realize that a good article stands on its own merits, and tabloid-driven drama just lowers its value.
One interesting aspect of the plight of the temp workers is, that this is very exactly the kind of market Marx did analyse. The temp agencies distribute highly standardized work assignments to the temp workers, who have no choice. (If they would qualify for McDonalds minimum wage jobs, they would probably prefer them.) In this kind of environment the agencies can only compete on price, since the specific assignment is determined by the customer of the agency, and this means they need to cut their costs. ( Notice the mention of 22 workers in a 17 seat bus, this represents a 29% increase in efficiency of transportation.) And this leads to the situation where the least decent employer sets the working conditions, since he can out compete the other market participants.
Maybe this market is ready for disruption. What if a new kind of temp agency came in, a company that treated workers like real employees with training, benefits, and dignity? Would it really cost that much more to run? How about after factoring in all the costs that current temp agencies like to offload on society at large, such as health care and basic infrastructure? Could WalMart afford to keep propping up slave agencies if more sustainable resources were available?
> The people here are not day laborers looking for an odd job from a passing contractor. They load the trucks and stock the shelves for some of the U.S.’s largest companies—Walmart, Nike, PepsiCo’s Frito-Lay division
> This system insulates companies from workers’-compensation claims, unemployment taxes, union drives and the duty to ensure that their workers are legal immigrants. Meanwhile, the temps suffer high injury rates, and many of them endure hours of unpaid waiting and face fees that depress their pay below the minimum wage. Many get by renting rooms in run-down houses, eating dinners of beans and potatoes and surviving on food banks and taxpayer-funded health care.
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The willful ignorance for the social implications of this kind of corporate behavior leave me speechless. This is quite literally sucking everything around you dry, poisoning the river and then making a fuss when somebody threatens regulations.
The same corporations who complain (mostly through sock puppets) about "the nanny state" getting in their way, who lobby for laws that leave them with fewer and fewer restrictions, who set everything in motion to pay less and less taxes - they are the entities actually taxing the social systems the hardest.
What they have found is a way to convert the good will of the social system into profit. All while pushing the agenda of austerity and tough love for the people in our society who need our help the most. They give their workers the bare minimum and let the government fill the increasing amount of gaps. Meanwhile, governments see their costs of the social system rise while their tax revenue goes down.
This is profiteering from collateral damage.
And if you do threaten to regulate, they will just move to another country like the vultures that they are.
I think you're forgetting someone's role in this, and that would be all of us.
If enough of the population was against this type of behaviour, it woud be made illegal (and already-illegal behaviours would be cracked-down upon) but it's not.
Corporations have a legal obligation to provide as much value as possible for as little money as possible, and if the laws let them do this in an inhumane way, then that's the law's fault (and by extension the fault of the society that enacted those laws).
No, it really is true; it is a legal obligation of the corporation to its shareholders that is enforced through legal action -- both corporations as such and their specific duties to shareholders are products of laws, not market forces unmediated by law.
They have obligations to their shareholders in so far as they are not allowed to attempt to defraud or surreptitiously act against them them in some way. They have to be honest.
They have no obligation to minimize costs. A company director cannot be taken to court for not using the cheapest labour source available, the shareholders would have to vote them out in which case they just lose their job.
There are plenty of publicly traded companies that do not cost minimize in all areas.
I think you're splitting hairs here, and you understand what the intent of my statement was, but I'll take your point about my choice of words.
I agree there are certainly exceptions, but most corporations put profit above all else, and if they don't, then as you say, the executives or the board will be fired and replaced with people who will.
"Legal obligation" may have been inaccurate wording, perhaps "structurally obligated" or "internally compelled" then?
You're both right. There is no hard line between a contractor and a consultant - and you have highly-paid, highly-skilled people who are called either, or both.
This is part of how bad actors in our industry get away with the shenanigans they do. Companies that provide third-rate warm-body programmers at starvation wages call themselves consultancies, call their wage-slaves consultants, and try to blend in with the rest who are benign or good actors in the system.
Sometimes you bring in talent via contract because you don't have the ability internally, or you don't have enough of a need to justify a full-time hire. Other times you bring them in because they're cheap, abusive, but give you arms-length deniability.
These aren't the only companies finding loopholes to get around labor law (and it does seem like, for the long-term temp workers in this article, that's what it's about). In journalism, the preferred legal fiction is to call your employees "contractors", so that you don't have to give them time off or benefits, pay into workplace compensation, or deal with payroll tax.
This is very upsetting.
I live in Chicago's Logan Square neighborhood & pass by what I suspect is a similar temp agency, while on my way to the gym in the morning. Now I feel even worse for the people in line at its door...
People will happily say that those people (like the illegals working as temps and cannot complain or get deported) are free.
And that slavery is always evil.
Yet, when you try to look at situations without using your pre-judgement of words, it become something else entirely.
For example, in Brazil, the laws for commerce workers was that the commerce owners needed to house the workers on their own home, give them food, take good care of them, and abusing them was illegal.
Also, it was common for commerce workers get tips, and the law allowed them to keep those (and the commerce owners frequently gave them more too).
Some cities reached a point, where most of the city business were ran by ex-workers, that earned enough to start their own.
This all, were slavery.
When slavery was abolished, all that people were dumped into the streets, and the money they already got from their employers now became wage, slighly higher, but not enough to cover the stuff they lost.
Who is truly, a slave? The one that works in crap conditions because if he don't he will get deported, or the one that although he could not quit (unless he was abused, the law allowed it in those cases) he had anything he might need because the law said so?
It is easy to label a word as evil, or good, but words are used to label and describe things, you should not use words to label other words.
I would describe the situations that those people face as evil, having almost no money, and forced to work, because although they can quit, the only result from that will be starvation.
I also think that student debt is evil, I am one, of countless people, that struggles to make ends meet without even having a family, people that when the debt is paid, will be far behind non-indebted peers, I think it is funny that during the high-point of my career in money terms, I earned more than some family chefs that I know, and ended with LESS money, purely because good part of my money was in studies expenses (paying student debt and other university related costs).
Free, is a friend of mine, that refused to go to university, searched for a low paying but permanent job as manual worker at night, and slowly built his career, debt free, while he still has a blue collar job, he has a motorbike, surplus money, enough money to start a family, and his job is stable. It pains other people that went with school with him, that they got into college, and are now forced to work in "well paying" jobs but with no chance of career improvement or stability to pay their debts, while the "dumb" guy that decided to ignore college and take his time to choose his first job, is the one well off.
Slavery == evil? I don't think so... it is a word, that describe many things, some of those evil, some not.
College == success? I don't think so... it is a word, that describe a institution, the context, the process, and many other things, define what happens to you.
Now why I am writing all that? I have no idea. I just felt like writing this after reading the article.
This is actually the same logic anti-abolitionists used prior to and during the American Civil War: "we're providing them a service! We're giving them food and shelter and sometimes even wages, which is more than they could attain on their own." (The parenthetical after that quote, of course, is the subtext that this is true because African-Americans were literally incapable of being self-sufficient. America was racist.)
Still, I feel like your comment is a gross mischaracterization of exactly what slavery was.
Who is truly, a slave? The one that works in crap conditions because if he don't he will get deported, or the one that although he could not quit (unless he was abused, the law allowed it in those cases) he had anything he might need because the law said so?
You're equivocating the need to work to live with being legally considered a piece of property owned by another human being. These are unconscionable differences: maybe from not an economic perspective, but from a human perspective.
Slaves could be killed in the same way you could throw your computer out the window if you're frustrated.
I gave a example, a specific one, of urban slavery in Brazil, that was tightly regulated, as a example of why labelling a word, does not always work.
Yes, I know how plantation slavery worked in the US, but it is a different animal, that worked in a different way.
Brazil for example do not had this widespread racism, because most of the middle class population was black anyway, data found from some cities in Brazil northwest (like Recife) show that 70% of the middle class was black, most of them ex-slaves that earned enough money to not only buy themselves from their owners, but also to have their own business.
It is a different context...
I am trying to say that you cannot go by absolutes.
Brazil even made a attempt at that legally, here we have laws against "work conditions analogous to slavery" that have nothing to do with slavery, and more to do with employee abuse, unfortunately even those laws are kinda broken and sometimes punish those it is supposed to protect.
Also in US itself slavery is legal for punishment (the article that abolishes slavery in the US, says that it is forbidden except for legal punishment, and currently you can hire a private prison to have their workers be forced to do your work, classic literal slavery... is that evil? or people should be obliged to work to pay for their cost to the state?)
slavery do not always mean that you can kill someone.
Many times in history when slavery was legal, it was forbidden to kill the slave, in fact when slavery is NOT legal that this is more frequent (for example here in Brazil, I already did some research on present day slavery, and here most slaves end dead, usually killed after they are not useful anymore, so that they don't tell the police about the slave owner).
I think that yes, being allowed to arbitrarily kill anyone (pay attention to arbitrarily) is evil, this applies to US drone strikes. But arbitrariety is not evil, neither is kill someone, the combination of them that might be.
Would you be allowed to make your slave eat off the floor because he/she did not work fast enough or refused to perform a sexual favor for you?
Would a slave be able to terminate the arrangement under some conditions?
If the slave believes that they are being treated in a way that violates the slavery regulations do they have a right to bring charges against their master, do they have a right to legal council (if so , who pays)?
What about offspring of the slave, can the master decide who the slave will breed with (if at all). Do the offspring of the slave become property of the master?
Are you making an either or proposition? People either need to be well treated slaves or oppressed free people?
I have to hope there's a third way in there somewhere. An economy where wealth is distributed not equally or fairly (noting that the two are not the same), but humanely. That everyone has the dignity we all want, regardless of their social position or job.
That's an awfully pessimistic view. I don't know that I can dissuade you of it as it's more of a mode of thinking than a view that can be proven or disproven, but I don't know that I could continue to live in a world in which I thought that was the case.
I guess I see it like this: despite the various ups and downs we in the first world see, there is more equality and a higher median standard of living today than there ever has been in the history of the world. I can only hope that the trend is generally upwards over time. It has been so far.
And you forget that your "first world" was built on slaves, colonies, cleansing of ethnic races who were living there originally? Mostly that is where the "higher median standard of living" that you refer to has its foundations, that was the launchpad. So, yes, to you your world looks equitable.
Fair enough, but the third world was built on the same things. It's not as if the Asians didn't commit genocides or Africans didn't sell other Africans into slavery and Native Americans didn't wage brutal war on each other. I don't need a white man's guilt when there's plenty of guilt to go around. History is what it is, I don't hope to recreate it but I wouldn't be able to change it even if I had a time machine. Fact remains that even if the world isn't always better off today than it was yesterday, it's generally better off than it was 100 years ago.
For example, in Brazil, the laws for commerce workers was that the commerce owners needed to house the workers on their own home, give them food, take good care of them, and abusing them was illegal.
Slavery == evil? I don't think so...
Cool. I'll offer you food, shelter, healthcare and you'll work for me. I certainly won't abuse you but you can't decide where to live, what to work and how to live.
This kind of jobs are probably not quite good, but comparing them to slavery doesn't make sense. Slavery is probably the worst thing that happened to humanity.
> Slavery is probably the worst thing that happened to humanity.
I saw an opinion (really can't remember the source now) that slavery was a major improvement at the time when people who won a war used to simply eradicate conquered populations completely. With invention of slavery, strong and otherwise useful individuals had a chance to survive a bit longer.
There is no one worst things that happened to humanity. I'm sure there are plenty of contenders if one looks hard enough.
<i>Some people don't value freedom, they value food, shelter and health.</i>
I hope you understand that if you are chronically starving, "freedom (of what?)" is the last thing in your mind. That doesn't mean some people prefer slavery; it might just mean that their current situation is so horrible they are willing to trade their freedom for a mouthful.
"I’ve always dreamed of having a little house, a really small little house" the thing is that it's not economically possible for everyone to have those.
What? Why? Economically possible would mean that our society is not productive enough, that it doesn't have the capacity, to produce small little houses for everyone who wishes one. I doubt that is true in any modern economical system.
It isn't about the demand not being there, nor the supply lacking. The issue is the distribution of wealth and how much the poorest workers in America get paid and the insane cost of living associated with the "American Dream"
America is a big place. There are a lot of places suitable for living out different dreams. Some (many?) dreams are just not conducive to some (many?) situations/locations, others are.
Buying into dreams promoted by the wealthy are expensive. A lot of what we consider normal, even vital, is the result of accepting advertising's message; wasn't long ago such was considered luxurious, even impossible.
Living [sub]urban lifestyles requires reliance upon others for pretty much everything, with many layers of middlemen taking a cut for profit & raising prices; that's not a condemnation, just observation of reality. Shorten the distance & layers between source & use.
Okay, call me dumb, but I don't get it. I looked up wikipedia, and I still don't get it. What, in economics, is analogous to fermions and quantum state?
Assertion: In any modern economical system, capacity exists to produce small houses for "everyone who wishes one".
Disproof: For certain possible values of "everyone", the Pauli Exclusion Principle prevents the simultaneous existence of a sufficient number of distinct small houses.
"Living wages" supported by the only major industrialized economy not to be smashed by the two World Wars. And a labor market that actively limited its participants for many of its most rewarding roles to almost exclusively white men.
I don't get this nostalgia for the 1950's. Things have gotten radically better in essentially all aspects of life since then.
Certainly things were far from ideal in the 1950s, but pay equity was still a thing then. The CEO of the biggest corporation weren't be making thousands of times more than the people in the factories assembling the products.
Until around 1980 when things started to get a little crazy, or 1990 when they started to get intensely crazy, CEO pay was around 20-40 times that of the average worker. Now, given that a lot of manufacturing is out-sourced to countries where dollars per day is the norm and a CEO's salary of $50M a year is not abnormal, it may be that the disparity is as high as 50,000x.
It's not that the money isn't out there, it's just being concentrated to a dangerous degree.
Remember that it's not a good idea to equate "didn't have thousands of times the taxable income [in the 1950s]" with "didn't make thousands of times more" except for the purpose of misleading people. Comparing taxable income then to taxable income now is a mistake, because it was a time of 90% tax rates and not coincidentally a time of people moving heaven and earth to get their compensation in any form other than taxable income.
And even if they weren't radically better there is very little that is easy to do other than destroying other countries investments that would allow a return to such a state.
What nonsense. On any given night in the US, there are more unoccupied residential spaces (homes, apartments, etc) than there are homeless people. The problem is entirely political and structural.
The wage and hours were terrible, but it was the absolute dehumanization that stuck with me. No body knew your name or particularly cared. You would walk in during the morning, flash your badge and get assigned to a particular stand. Every day it was brand new people who you've never met before with a brand new manager. There was obviously no room to move up, because you never had a chance to build a track record with anyone. There was also just plain disrespect on the part of the company towards its workers. We would spend 2-3 hours after the game just waiting for permission to go home. I can't imagine spending much of my life in a job like that, it was just horrible. But clearly there were enough people who had to do it, because there were many 40 year olds I worked with.
People who've never worked these jobs tend to read this article and assume that these articles have a hidden agenda: raising the minimum wage or some kind of socialist initiative. I read it differently, as a reminder of the depressing underside of the US economy.