
The Tech Industry Is Building a Vast Digital Underclass - pseudolus
https://www.nytimes.com/2019/07/24/opinion/doordash-tipping.html
======
gringoDan
Reminds me of this post from Venkatesh Rao:
[https://www.ribbonfarm.com/2017/08/17/the-premium-
mediocre-l...](https://www.ribbonfarm.com/2017/08/17/the-premium-mediocre-
life-of-maya-millennial/)

> _Today, you’re either above the API or below the API. You either tell robots
> what to do, or are told by robots what to do._

It seems like we're returning to a state of inequality seen for most of
history, and the second half of the 20th Century was just a historical
anomaly. See PG's essay:
[http://www.paulgraham.com/re.html](http://www.paulgraham.com/re.html)

> _Which in turn means the variation in the amount of wealth people can create
> has not only been increasing, but accelerating. The unusual conditions that
> prevailed in the mid 20th century masked this underlying trend._

~~~
yters
One difference is the old inequality meant the poor people lived short
miserable lives, starving to death or dying from disease.

Today's inequality means poor people have a climate controlled place to live,
regular food, decent healthcare, the ability to travel across the nation if
not the world, see and communicate around the world in a moments notice, easy
access to knowledge at their fingertips that spans all human civilization,
endless amounts of entertainment, and freedom to live as they please.

It's unclear to me why this kind of inequality is a bad thing, or how it is
comparable to inequality in the past.

~~~
hn_throwaway_99
TBH, this feels like a "why aren't they happy eating cake" kind of response.
Just look at the statistics of rising "deaths of despair" in the US. To say "I
don't see why this kind of inequality is a bad thing" \- well, huge amounts of
inequality is also what ends up destroying democracies.

~~~
yters
You seem to jump from 'deaths of despair' to 'inequality is a problem'. Can
you explain how you establish the connection?

~~~
yters
My point is the two are not necessarily connected. Very well off socialist
countries, such as the Norse, also have quite high suicide rates.

My hypothesis is 'deaths of despair' is due to the emptiness of materialism,
not due to inequality.

------
cosmodisk
My office is based on a very uninspiring,private road,which among others,has a
police station,UPS, post office, a couple of construction companies,music
studio,law firm, recycling centre, furniture company and BMW centre. The road
looks like crap,zero glamour.. There's a little cabin in the middle of the
road- that's where the owner of the street is based.It looks like a cabin of a
ticket inspector,while in fact it's the home for nearly 20 companies the guy
has.The only clue is plenty of luxurious cars parked outside. 100 meters
further,anothet shabby office,which turns out is the home of a nearly
£30Million company,again the only clue are very expensive cars outside the
office.Next to our office,is so called dark kitchen,which makes food for
multiple restaurants listed on Deliveroo. Since they moved in, the road is
always packed with mainly asian guys on scooters collectind meals for
delivering.They all look overworked,tired and simply miserable. Makes such a
contrast when you see all those Ferraris parked on the opposite side of the
road...

~~~
core-questions
While it's depressing, what alternative is there? No expensive cars for
anyone? Should entire industries of engineers and designers making these
artful creations be put out of business because you and I (and most of the
people working on them) won't be able to afford one ourselves?

Income disparity is natural. Regulation to prevent people from exploiting the
system into higher income is good, but we'll never be able to make it so that
the delivery driver and the corporate executive have the same standard of
living, unless that standard is consuming gruel in a formless concrete cube
somewhere.

~~~
kartan
> we'll never be able to make it so that the delivery driver and the corporate
> executive have the same standard of living, unless that standard is
> consuming gruel in a formless concrete cube somewhere.

You moved the post from "delivery drivers" should get a fair salary to
"everybody should have the same salary". The question is if delivery drivers
should have a fair salary that allows them to have a decent life.

Do you agree that "delivery drivers" should get a fair salary?

~~~
core-questions
> Do you agree that "delivery drivers" should get a fair salary?

What is "fair"?

One variety of "fair" is "getting a reasonable cut of the profit made from
their actions", where "reasonable" is based on what the market will bear -
i.e. if your labour is undercut by someone else, then it's a race to the
bottom. This is what guilds and then trade unions originally evolved to deal
with.

Another variety of "fair" that seems to be gaining mindshare is the idea that
you deserve a "living wage" for literally any full-time job, which is a new
idea unsubstantiated by economic reality. It belies the fact that there are
jobs that do have some demand, but simply aren't worth enough to the people
who'd pay for them that they can supply a "living wage". And what's living? Is
mung beans, rice, and a shared room in a house "living" enough or does
everyone need their full maximized-carbon-footprint atomized solo lifestyle in
order to "live"?

~~~
perl4ever
"And what's living?"

Implicit in most discussions, but frequently left unstated, is the idea that a
wage-earner should be able to support several dependents. Obviously how many
makes a huge difference in what kind of pay is needed.

~~~
core-questions
Again, at what level of luxury? I know people making six figures that are
utterly convinced they're not able to afford to have children. I know people
making a third of that who have five kids and seem happy enough, though as
harried and as cash-strapped as you'd expect.

~~~
perl4ever
Well, my point is that it's O(N), regardless of the constant factor.

------
malvosenior
Alternative take:

Tech companies are allowing people to make money where before they couldn't. I
was poor once. It would have been _freaking awesome_ to be able to deliver
some food or drive someone somewhere to make a couple of bucks, the
alternative was sitting around making zero bucks. This sentiment is shared
with nearly every Uber driver I speak to about it. They are happy for the
opportunity to make money in their spare time.

Technology enabled this and it's a good thing. People who say otherwise
probably have never been poor and bereft of any option to make money.

~~~
TrackerFF
If you're poor and desperate, you're probably also agreeing to devalue your
own time. If you feel that netting $3/hr is a good deal, because it's better
than $0, that's one thing - but you're also enabling this thing to be
generalized to others.

This is rampant in the creative world. Hungry and desperate musicians racing
to the bottom, because getting paid _anything_ over nothing is "better". What
happens is that they're devaluing the whole industry, and suddenly "paid in
exposure" is a thing.

I understand that being poor can be hard, and short-term fixes can be
tempting; But people need to see the whole picture.

~~~
malvosenior
> I understand that being poor can be hard, and short-term fixes can be
> tempting; But people need to see the whole picture.

You can’t expect people to skip meals or rent because it _may_ be helpful down
the road in someone else’s labor negotiation.

------
RandallBrown
Food delivery isn't creating a "vast digital underclass."

Companies like GrubHub pay their delivery drivers the way you'd expect them to
be paid and local pizza places and chinese restaurants have been profitably
doing food delivery for decades.

There are certainly good examples of technology disrupting the current labor
market in ways that take advantage of people, but DoorDash being shitty isn't
really one of them.

~~~
twalla
Every time I see a hit piece on "big tech" from an established journalism
entity like a newspaper or magazine I just consider who used to be the main
ad-delivery mechanism and who the main one is now.

~~~
snowwrestler
You fundamentally misunderstand how journalism works, then, and what is being
lost in this shift.

In a newspaper there are two or three teams: news and/or opinion, and
business. The teams do not tell each other what to do. Business doesn't tell
news what to report on or how to write their stories. News doesn't tell
opinion what to write or publish. And news doesn't tell business what ads are
OK to run.

News and opinion take direct responsibility for what they publish. Every piece
of content is put into the paper on purpose, usually written in-house. Their
goal is to inform, enlighten, provoke, etc. -- to serve their society.

The job of the business team is to keep the lights on so more journalism can
get done.

In a tech company like Facebook or YouTube, there are no such distinctions.
Every decision, content or otherwise, is made for a business reason, and only
for a business reason.

That's why YouTube and Facebook publish horrible, abusive, ugly content _every
day_ that no news or opinion editor would ever have cleared for publication.
Facebook and YouTube don't care; they have no sense of a duty to society, and
have no master other than the pageview, the click, the ad sale.

There are no "Chinese Walls" in modern ad-driven tech companies. It's worth
remembering that those walls were built in journalism for a reason.

[https://en.wikipedia.org/wiki/Chinese_wall](https://en.wikipedia.org/wiki/Chinese_wall)

~~~
core-questions
There's no way any reasonable person can believe for a minute that advertising
doesn't have a tremendous impact on what news outlets will publish. You seem
to be operating in some 1950s dream world where the news media is honest and
operating in the public interest.

> Their goal is to inform, enlighten, provoke, etc. -- to serve their society.

No. Their goal is to get eyeballs looking at ads and turn those into
conversions so that the paper can sell more ads. If tabloid content achieves
that goal, then that's what you will get. If pushing a narrative accomplishes
that, or is more profitable in other ways for the shareholders, then you'll
get that instead.

------
the_gipsy
The exact same issue is happening in Barcelona with Glovo, Deliveroo, etc.
Workers are not protected by labor rights, because they are employed as
freelancers. They are working for these gig-companies effectively like
delivery personnel since before this loophole existed. But they lose
protections like unemployment, against being fired at will, payed vacations,
minimum wage, wage rigging.

Recently a "Glover" was killed in a traffic accident. The company is not even
bound to give them a life insurance, like regular companies that employ
delivery personnel.

------
jonhendry18
That's not a digital underclass, that's a very analog meatspace underclass.

------
tw1010
The most annoying part of everything changing so fast is how hard and slow it
is to analyze, make sense of, and actually get to the bottom of things and
what should be done about them. Like, even if we do figure out if Uber etc is
good for the people in a utilitarian sense, then the next thing will come and
make it our sense-making apparatuses all haywire again, getting us back to
square one.

------
foobarbecue
I thought this was going to be about how the tech industry is dumbing down
interfaces and creating a class of people who don't know how to use a URL or a
file. Hopefully someone will write that article soon.

I'd like something to point to next time I have to explain the difference
between a domain name and a search query.

------
aylmao
> The Tech Industry Is Building a Vast Digital Underclass

It'd change this title to "capitalism is building a vast digital underclass".
Decisions are carried out by algorithms, but made by people. All "the tech
industry" is doing is optimizing capitalism with new methodologies, but at the
end of the day it's the same incentives that build the systems in the first
place.

This has been studied and known for a while: economists have speculated that
capitalism would invariable result in a vast underclass with concentration of
capital in a small portion of the population.

Let's not blame this or focus exclusively on the tech industry: the current
wave of hate towards tech isn't but the realization that tech companies are
businesses too, and so will do what they need to do to grow the business as
much as possible and extract capital for the gain of their investors.

------
tj-teej
Rent-seeking Capital is building the Vast Digital Underclass not "The Tech
Industry".

What new tech did Uber/Uber-Eats, Doordash, Task-Rabbit create? They used
Venture Capital to centralize industries which previously had distributed
ownership/profits amongst small businesses, leveraging cheap capital to
undercut their competition.

Then when you consider Walmart replacing small shops, or McDonalds replacing
burger joints, you realize the problem is unregulated Capitalism, not "The
Tech Industry".

------
core-questions
This article is just a thin veil around advocacy for an $15 minimum wage,
which is typical nonsense peddled by well-meaning people that simply don't
understand economics well enough to be writing for a prestigious paper.

I understand the sentiment, but the problem is that a rising minimum wage is
guaranteed to result in rising prices for staple products, while the majority
of the people purchasing them aren't earning any more.

Facile example: as a middle class guy, I can pay $5 for a box of blueberries
and just have them in the house. $10 pushes it to be a treat that I would buy
ten times less often. $20 makes it a luxury I buy once a year at most.

If we increase the minimum wage, and fight for people working illegally under
the table for less than the minimum (which has to be part of the plan if you
intend to have any honesty in your approach), the result is necessarily that
the price of blueberries will rise. If this pushes the cost of blueberries to
the point where normal people won't buy them anymore, the business model
becomes unsustainable.

As the wage rises, during the process, we'll see worker conditions
deteriorate, an increased turn to illegal labour (and a commensurate demand
for illegal immigrants to do it, which furthers that problem), and eventually
either farms folding, changing crops to something more profitable, or perhaps
subsidies coming in. Of course, we should have learned from corn what happens
when we oversubsidize crops; at the very least price discovery is somewhat
removed from the market and so things are priced cheaply that shouldn't be,
people overconsume while tax dollars make up the difference, etc. One can
probably argue that staple crops (wheat, etc) should be subsidized, but
blueberries aren't quite as critical, are they?

To make an example more germane to this particular issue: if the minimum wage
increases and all of the people involved in the chain leading to these food
delivery drivers costs too much, when the potential consumer sees that
ordering food is simply too expensive for them, they'll just give up. Entire
industries that function because intelligent people have carefully budgeted
around wages and expenses to eke out a living will be negatively impacted, and
parts of them will fail.

And yet, we'll survive it. But let's not kid ourselves: the standard of living
for the poor isn't going to get any better by changing this number. Instead,
what happens is that the middle class effectively earns less (try calculating
your salary as a function of the minimum wage - if you made 3x before, maybe
you make 2.5x now; if you made 1.25x before, maybe you make 1x now....) while
the rich don't even notice the change. For brief periods of time while the
market settles, those at the minimum wage line will have an advantage, but
once the price of goods and services finishes rising to compensate, it's back
to square one. The purchasing power of the dollar simply drops to match.

~~~
jimmaswell
The math works out fine if you think about it. Here's an example.

The costs to make a burger at McDonald's include property taxes/rent, food
costs, utilities, other things, and labor. Labor is only one part of it. If a
burger costs $1, and labor is 50% (very generous estimate), and minimum wage
doubles, the burger now costs $1.50. Now at the end of a 4 hour shift the
employee now has, say minimum wage rose from $7 to $14, $56 instead of $28. If
they were going to spend that all on burgers, they used to be able to buy
28/1=28 burgers, while now they can buy 56/1.5=37 burgers.

So even with extreme examples, the minimum wage worker comes out ahead here.
People who made more before can buy a bit less now but it's not as drastic as
it's made out to be.

Beyond this hypothetical, here's a study that says rising wages to $15 would
only increase prices by 4%. [https://www.marketwatch.com/story/raising-fast-
food-hourly-w...](https://www.marketwatch.com/story/raising-fast-food-hourly-
wages-to-15-would-raise-prices-by-4-study-finds-2015-07-28)

~~~
joejerryronnie
The issue with a large increase in minimum wage isn’t that consumers may have
to pay a little more for a burger. It’s that small business owners, with razor
thin margins to begin with, can’t afford to pay their existing staff the new,
higher wages. Therefore, they cut staff, increase automation, etc. so now you
have 1 person who makes $15 per hour and 1 person who makes $0 per hour. Can
you truly say this is better than 2 people each making $7.50 an hour?

~~~
jimmaswell
In practice it's phased in gradually, and that problem doesn't happen much.
Here's one look at real data.

"[I]n a new research paper by Doruk Cengiz, Arindrajit Dube, Attila Lindner
and Ben Zipperer that looks at data during the period from 1979 to 2016 in 138
U.S. states and regions where minimum pay was increased[, t]he conclusion is
that low-wage workers had a pay gain of 7 percent after a minimum-wage law was
enacted, but there was little or no change in employment."

[https://www.bloomberg.com/opinion/articles/2019-01-24/u-s-
ec...](https://www.bloomberg.com/opinion/articles/2019-01-24/u-s-economy-
higher-minimum-wages-haven-t-increased-unemployment)

Businesses can adapt, like they do when unions negotiate better pay.

~~~
joejerryronnie
Yes, if the increase is phased in over a few years you’re right, business will
adjust. But many places have implemented a large increase in one shot and it’s
had a really negative impact on small businesses

------
droithomme
It's OK we'll get minimum guaranteed income as long as we don't question
anything they want to do. No doubt they will be benevolent overseers, like
great chairman Kim.

