
To Understand Rising Inequality, Consider Janitors - jessup
https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-inequality-consider-the-janitors-at-two-top-companies-then-and-now.html
======
esarbe
What strikes me the most when looking at many of the comments here is the
blatant disregard for human suffering that extreme inequality and the
resulting poverty cause. The current economical status quo is accepted as a
given and all the harm it causes is dismissed with the shrug of a shoulder.

"It can't be helped, the poor sods should have made better life choices to
avoid ending up as janitor" is the attitude by which the matter is dismissed -
as if requiring everyone to be a member of the educated elite just to be able
earn a decent living.

There is so much wealth out there. This wealth is the product of society's
common strive. Why not try to change the world instead of just submitting to
the way things are?

~~~
solidsnack9000
As long as we accept the need for people to be janitors, we must accept that
becoming a janitor is not a "mistake", it's a useful thing that we all want to
see happen for some people. We can't on the one hand say, that we need people
to do this job and on the other hand say, "tough luck" to those that do it.

~~~
jaggederest
Doing janitorial work is not a mistake, but being a janitor for 40 years
certainly is.

It's not the core job, it's the fact that there's zero growth or mobility even
_possible_ that is the issue.

~~~
wavefunction
>It's not the core job, it's the fact that there's zero growth or mobility
even possible that is the issue.

Not everyone is a 'striver.' Some folks just want to pay their bills and enjoy
what time they can with their family and friends.

~~~
jaggederest
Even those 'non-striver' people would prefer to have growth over time, in
their position, wage, and skills. Humans are not static - we like to learn and
we get very frustrated when we can't improve over time.

~~~
barrkel
Do you think everybody finds growth and meaning in their job? Many people find
it in their family, in sport, in clubs, and work is just a wage.

~~~
philjohn
And yet, the Janitor in this piece can't afford to take a holiday, so is it a
stretch to assume she doesn't have much free time either?!?

~~~
jiggunjer
Maybe the fact that she's a single mom with 4 kids is a factor too. I think a
janitor with a single dependent would have a more acceptable standard of
living.

~~~
jaggederest
Are you making a _modest proposal_ that people should go from four kids to
one, post facto?

I think everyone deserves to be able to have vacation time, especially single
parents.

~~~
jiggunjer
I'm not proposing anything. Just suggesting that there are more factors than
income that affect 'inequality'.

An article that focusses on inequality due to low income should perhaps pick
an example with a more typical family situation.

~~~
URSpider94
Rewind 50 years, and it would be highly typical for a janitor to support a
wife and 3 kids on HIS salary - families were larger, and mothers didn't work.
The fact that a working single mom can't support her four kids today is
indicative in and of itself.

~~~
Chris2048
Would that janitor have many vacations too? And decent college funds?
Healthcare?

~~~
jaggederest
Yes, yes, and yes. Janitorial staff at a Ford plant in ~1965 would make enough
to own their own house, vacation once a year (probably not by plane but...),
and college was percentage-wise ridiculously cheaper - 30x if my calculations
are correct, which they probably aren't, but hey. Healthcare would have
unquestionably been provided by their employer. And all that on only a single
income for a family of four, no less.

~~~
URSpider94
... and with a defined-benefit pension as well, meaning no need for 401k
contributions out of their salary, and no risk of losing that money due to
poor investment decisions.

------
choxi
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...](http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequality-
tax-wealth-not-income.html?mcubz=1)

2.[http://www.businessinsider.com/the-critical-difference-
betwe...](http://www.businessinsider.com/the-critical-difference-between-the-
top-1-and-the-top-1-capital-gains-2011-7)

3\. [https://www.forbes.com/sites/robertlenzner/2011/11/20/the-
to...](https://www.forbes.com/sites/robertlenzner/2011/11/20/the-top-0-1-of-
the-nation-earn-half-of-all-capital-gains/#6c7ceb647893)

~~~
RealityNow
I agree, but how would we enforce a wealth tax? Seems like it'd be really easy
for rich people to hide their money in assets.

What about just printing money? Not ideal obviously, but there'd be no way to
avoid the inflation "tax".

~~~
zanny
You can do a wealth tax by targeting the big ticket items. Rather than invade
everyone's home with tax collectors to guesstimate how much every couch
cushion you have is worth, you can hit probably 98% of wealth by just taxing
the calculated value of owned land and buildings (which is already being
appraised for property taxes in most states) and stocks, bonds, and options.

So we already invade your privacy to appraise the former, and the later _has
to be be public_ because companies need to know who owns what shares and the
trading platforms need to associate users to shares they own. Both can be used
by government to provide ownership details.

You would also want to wealth tax companies for total global cash-on-hand
assets they have as well. Those are also required to be public record already.
That way private business executives cannot tax haven their own stuff under an
LLC, and companies like Google / FB are punished for hoarding hundreds of
billions in offshore accounts they have no intent to spend or bring back into
the states.

Of course, this is all saying "government should do X" which is just for
entertainment, pretty much. The US is in no condition to act in the will of
the people at all right now anyway, so its all speculation - you would have to
fix the broken democracy first.

~~~
pjmorris
> you can hit probably 98% of wealth by just taxing the calculated value of
> owned land and buildings (which is already being appraised for property
> taxes in most states)

Henry George proposed this in the 1800's [0]

[0]
[https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)

~~~
dredmorbius
And David Ricardo prior to him (George credits Ricardo lavishly, though I
seldom see this mentioned).

~~~
conanbatt
And Milton Friedman after both of those

------
nsriv
As a resident of Rochester for the last 3 years post-grad, the wasted human
talent here is staggering. There are engineers from Kodak that were bought out
of their pensions who (anecdotally of course) get passed over for adjunct
positions at RIT, because they either don't have the degree or RIT prefers
younger adjuncts. Many haven't moved away because of the sense of family among
former co-workers, but are whiling away their early retirement.

The two major research universities are propping up the city's advancement
opportunities, but doing so with tuition increases and recruitment of full-
price paying foreign students, which makes the place more vibrant, but has
also alienated many.

The largest employer in town now is the University of Rochester Medical
Center, which provides many of the middle income and higher income jobs but is
also making a habit of buying up 'distressed' hospitals.

The collapse of Kodak and exodus of money and talent has cratered the city
public school system, which has a 47.5% on-time graduation rate. The only
shining spot in terms of education is an Arts school, with great links to the
still world-class Eastman School of Music.

Rochester itself is also a great example of 'white flight' in the post-Kodak
era, though it began long before that.

~~~
Spooky23
I recently spent some time in the Roc recently. It was an amazing tale of two
cities. Some areas are incredibly beautiful and prosperous looking, but a few
hundred yards away it feels like Detroit.

~~~
rm_-rf_slash
Much of the wealth in Rochester never left. It just moved from city to suburb.

~~~
dionidium
This is the case all over the country. When people say things like "St. Louis
has lost over half its population" all it really means is that the small city
center lost those people to the suburbs. What any reasonable person would call
"St. Louis" didn't actually lose 50% of its people.

This applies basically everywhere. And a failure to really understand it leads
to all sorts of erroneous conclusions about the rust belt.

------
mathiasben
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 returns at the expense of all else. To
resolve this USA should consider reverting back to the Internal Revenue Act of
1954. Under this rule set income over $400K/yr was taxed at 90% or it was
reinvested in the economy. Do this and this inequality issue will sort itself
out in the same time frame it took to do the damage.

~~~
scarface74
What incentive would anyone have in making more then 400K a year if you were
going to be taxed at 90%?

~~~
tnzn
Why would anyone need more than 400k a year for himself in the first place
though ?

~~~
aswanson
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....

~~~
existencebox
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 certainly
imagine that corporate funds for investment would not be held to the same
limits as personal income tax.

Finally, facebook was bootstrapped out of their own pocket until they got a
500k invesmtent from thiel in 04 $'s. Once again the "big" investment a year
later came from a firm.

In all of these cases the initial seed/bootstrapping money would come FAR
under the 400k limit expressed, adjusted for inflation, and that assumes
people wouldn't both save over multiple years, or that we wouldn't see more
reliance on companies rather than individuals in early stage investment if the
tax code shifted such that it was more advantageous.

I defend this largely because in my own readings of history I've attributed a
large amount of the current economic state to events of the late 70's and 80s,
the tax code changes being a major one of them, and I think your points
unfairly detract from the validity of reintroducing such tax structures.

~~~
aswanson
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 firms with less money to invest
because most wealthy individuals have made the rational choice that risk
capital is not worth it.

~~~
existencebox
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.)

~~~
aswanson
Also, if you could, would you direct me to the sources of some of your
readings of history so I can better understand the perspective you presented,
especially regarding the 70s and 80s.

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

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

~~~
arkitaip
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.

~~~
jblow
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, or nanobiology classes, or, I don't even
know.

~~~
lozenge
Kodak was also paying for Evans' degree, which seemingly was a requirement for
her to get her professional-track job.

How can somebody have the mind to take classes when they haven't had a holiday
in years? Or when they work from 6p.m. to 2a.m.?

~~~
randallsquared
> Or when they work from 6p.m. to 2a.m.?

How is this different from anyone else who works full time? In fact, a random
college course would be more likely to be before 6pm than after?

------
jfaucett
This story reminded me of something I've often wanted to know when people
start talking about economic inequality metrics, namely, how many of those in
poverty when entering the workforce will remain in poverty their whole life?
To me the longitudinal information here is the most significant metric i.e.
what does wealth movement look like for individuals over their lifetime.
Virtually everyone in their teens and early twenties is in or near poverty,
but what does that same individual look like at 30, 40, and 60?

Can any economists / sociologists in here point me to studies / research in
this area?

~~~
peatmoss
I've heard from smarter people than me that your parents' level of economic
attainment is the best predictor of your economic attainment. Everyone may be
broke in their twenties, but some of those 20 somethings presumably got a leg
up from being in a good (pre, elementary, secondary, post-secondary) school
and can ask mom and pop for help on the down payment for a home, etc.

Suspect that's still the case, though the other trend of increasing inequality
means that more and more at the bottom are slipping out of middle class, while
a very select few at the top are headed toward cryoretirement in their ice
palaces overlooking a scenic valley on some private jovian moon.

~~~
ebfd
Score on IQ tests is a far better predictor of SES than parental SES. Someone
in the 95th percentile for IQ will, on average, earn more than someone with
parents in the 95th percentile of earnings.

See: [http://www.emilkirkegaard.dk/en/wp-
content/uploads/Intellige...](http://www.emilkirkegaard.dk/en/wp-
content/uploads/Intelligence-and-socioeconomic-success-A-meta-analytic-review-
of-longitudinal-research.pdf)

~~~
Forlien
IQ might be a better predictor, but the linked paper says it's not a far
better one:

"The results demonstrate that intelligence is a powerful predictor of success
but, on the whole, not an overwhelmingly better predictor than parental SES or
grades."

~~~
ericd
That might just mean that intelligence is useful not only for gaining personal
success, but also for raising offspring who will be successful. Is that a
problem that society should try to correct?

------
peatmoss
One of my pet peeves is when articles such as this use averages exclusively to
talk about incomes. Averages are sensitive to outliers, and thus may obscure
what's the typical condition. If you're going to pick one measure to talk
about incomes, median may give a better picture of what's typical.

~~~
jackschultz
That bothers me on basically every stat on a news article. They just come up
with a number and expect people to believe it. But they don't talk about how
it was calculated so people can't confirm it themselves, and very often, if
multiple "experts" are the ones calculating the stats, they just pick the
biggest outlier to strum up more controversy.

------
user5994461
Janitors at Kodak in 1987 lived at a great time when there were jobs and the
rent wasn't half of your monthly income. They likely bought their home long
ago and are retired now, sitting on comfortable assets.

Janitors at Apple in 2017 can barely pay rents and they will never own their
home, likely owned by the Kodak janitors from 1987.

Feel free to replace janitors with any other job title.

------
ScottBurson
I think one of the most important issues raised by this article is toward the
end:

> 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.

$2300 a month for a two-bedroom apartment. Service workers like janitors can
barely afford to live here at all.

~~~
dionidium
They _should move_. There are janitorial jobs all over the country, most of
them in areas where you could rent a nice two-bedroom for 1/3 that cost. There
is just absolutely no reason to stay in the SFBA with prospects like that. I
wish more people realized this. They'd be _much happier_ somewhere else.

~~~
kevinchen
There are many reasons why someone can't simply move. Maybe they're caring for
parents who live in the area. Perhaps they want their kids to attend well-
funded Bay Area schools, so the kids can have a shot at earning more money. It
could be they can't save up enough money to make the jump.

The list could go on and on... my point is, moving is hard, especially so for
those with little disposable income.

~~~
dionidium
Yes, of course! Been there! But a lot of stuff _will be_ easier once/if they
pull it off.

Pop culture insists on a very silly perception of the non-coastal parts of the
country. There's still a lot of opportunity elsewhere -- at _drastically_
lower costs of living.

Moving isn't easy, but everything else in their lives will be easier once they
do. One impediment to this, as I see it, is that the culture is telling them
the opposite of this. And that's actively _harmful_ to their long-term
prospects.

------
fatjokes
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.

~~~
lotsofpulp
The reason for inequality is that people are not equal. The work they do
produce is not equal in value. More people can do a janitor's job, and/or do
without a janitor, so the value of a janitor's work is less. More supply,
elastic demand, means lower price point.

Through technology, some people are able to produce much more than others, so
inequality is inevitable unless there is a balancing force (aka taxation).

~~~
adwhit
Indeed, the value of keeping toilets sanitary is far greater than that of
creating the next web app.

"This work is essential to the health of the population, but because of
something to do with marginal economics and supply and demand and weak labor
laws and class power and reserve supply of labor, I don't have to pay a proper
wage, or even treat them like human beings!"

~~~
tomjen3
Value can be defined as how much people are willing to pay for it. Based on
that, some webapps are worth more.

~~~
ericd
I think it's useful to remember that the work of one webapp developer can
positively affect the lives of millions of people. Tech yields a
counterintuitive amount of leverage.

------
Spooky23
Government was similar to this. Many of my mid to high level colleagues in IT
about 5-10 years ago came up through the ranks from clerical jobs. My longtime
director/mentor started as a tabulating machine operator in the 70s.

All of those types of people are pretty much gone into retirement now. We
don't have that type of advancement because most of those entry tasks in both
IT and business are farmed out to a permanent underclass -- a contract
bodyshops with mostly South Asians on work visas.

------
mathattack
And then Kodak died. How many high paid janitors do they have in their upstate
NY headquarters now?

~~~
adwhit
Indeed. If only they hadn't given their janitors paid vacation, they'd be in
Apple's position right now!

~~~
arkitaip
You're quite righty but imagine if they didn't have janitors at all - then
they could have been AppleGooglebook!

------
newforice
"If you’re educated, you’re in command."

I'm not college educated, I've made a comfortable living as a coder. It took
over ten years of self-teaching in my 20's while working a FT job but I knew
this is what I wanted to do. So I agree with the statement but there's more
than one way to become educated. Academia is just one way and possibly not the
best way.

~~~
princekolt
But the simple knowledge of this fact is so scarce that it makes almost no
difference. And since most schools don't care about coding (or, where I'm from
for example, about anything not related to get the most students to pass the
equivalent of SATs), this is not going to change soon.

I was so surprised when my father told me that back in the 80s, in a small
city in the interior of Brazil, in a public school, he was taught BASIC as
part of the school curriculum.

Over twenty years later, in a prestigious private high school in the capital
city, coding was only mentioned once by a school director when shaming
students for only using computers for "foolish tasks", while completely
ignoring the fact his school didn't give a single coding class, not even as
extra curriculum.

Programming should have the same importance status as maths in school, if not
more.

~~~
scarface74
I went to a small town public school in the late 80s and early 90s and we had
an AppleSoft Basic course. I'm amazed that schools don't have that now.

~~~
kazagistar
Not many people are qualified to teach programming in any way and also willing
to work for abysmal school teacher salaries.

------
dlrk
This also helps explain the "skills shortage". Traditional means of building a
skilled workforce are no longer available. The loyalty disconnect can cut both
ways. If I invest in training someone, they are likely to up and leave for a
better offer. If you employ me, I can be made redundant whenever convenient.

------
averagewall
This sounds negative from an America-centric view. Seen globally, poverty has
plummeted and countries have become more equal. If you care about people
suffering, the cleaner at Apple is probably much better off than the farmer in
China who could easily be dead from famine by now if it wasn't for the global
economy - driven by companies like Apple.

It may also be misleading to compare a contractor cleaner today to an employee
cleaner 30 years ago. I don't know the industry but perhaps the modern job is
easier to get and seen as lower status than it was in the past? Maybe someone
who's a cleaner today would have been unemployed in the 1980s? In that case,
the article is comparing lower socioeconomic status (SES) people to higher SES
people and complaining that the lower one is worse off, which is a tautology.

~~~
e12e
> I don't know the industry but perhaps the modern job is easier to get and
> seen as lower status than it was in the past?

I'd say there's more technical skill (certifications and iso standards) to
adhere to in cleaning today, than 30 years ago - and each worker clean larger
areas (and probably works harder than 30 years ago, suffering under tight
micromanaged schedules). That's my impression (though mostly in Norway). Note
that cleaners might be better, more efficient and doing a more demanding job,
and _still_ have lower status...

------
sandworm101
It isnt just the cleaning staff. IT, especially startups, have a culture of
pigeon-holing people even when they are on staff. It's a symptom over-
specialization imho. People are hired according to extensive and exacting
criteria. Once hired, managers find it difficult to think of the person as
anything else.

Honestly, that is a large part of why i broke free and enlisted. I'm now in an
organization that sees increasing skills and promotion as essential. If i fail
at my job (pilot) i wont be fired but given a different role. Call it a
throwback to the 60s if you want, but im less stressed now than i ever was as
a consultant. (And forget everything you think you know about the military.
The rcaf isnt anything like american movies.)

------
CPAhem
That's globalization for you.

Apple's software is based on open source BSD. They sub-contract the building
of their phones to China, and they are made mostly with Korean chips and
displays.

Apple can import cheap indentured workers from overseas on H1B visas.

They avoid US tax by pushing their profits through Ireland.

Kodak was a far more progressive company that invested in their employees.
Apple is now the world's biggest company, Kodak is dead.

~~~
kbart
" _Kodak was a far more progressive company that invested in their employees.
Apple is now the world 's biggest company, Kodak is dead."_

Kodak have missed digital revolution and stayed on analog for too long, that's
why it's dead. Treating its employees better had nothing to do with that
(except maybe hasten downfall a little).

------
foxhop
This post hits close to home. I went through this when I worked full time at
tech helpdesk / call center.

I was a contractor of a contractor of a contractor of the Navy.

Me <\- Contractor (payroll company) <\- Contractor <\- Contractor <\- Navy

Each step took a bit off the top, I made $17/hr no vacation, no health
insurance, no sick time.

At one point my contractor (they signed my checks, a faceless shell) who I
never met or communicated with called me at work and tried to reduce my pay. I
felt so angry and upset. I ended up arguing that I would quit if they touched
my pay.

I learned when I quit that:

Me ($17/hr) <\- Contractor ($35/hr) <\- Contractor ($55/hr) <\- Contractor
(???)

Its all about liability, health insurance is a liability, sick time is a
liability, vacation is a liability, and the possibility of paying for layoffs
is a liability.

Trickle down.

Also related,I was also working part time in retail where I learned that over
80% of the staff was part time to avoid paying health or vacation or sick
time...

This is common practice in retail. These companies have huge workforces of
part time people, they avoid giving people enough hours to be full time... Its
terrible and needs to be fixed.

------
fatjokes
Devil's advocate: there is an upside here. Come economic downturns, companies
can mitigate layoffs by choosing not to renew contracts. It means that those
who planned for stability (full time employees) are more likely to get it,
e.g., start a family, take out a mortgage, etc. Those expecting turbulence can
avoid long-term commitments.

~~~
hypersoar
So the solution to lack of stability is to not allow some people to ever have
it?

~~~
fatjokes
I don't see how having a contract job means never being able to move into a
stable position.

~~~
fatjokes
I'm getting some downvotes but nobody explaining why.

------
FLUX-YOU
>Focus on core competence and outsource the rest. The approach has made
companies more nimble and more productive, and delivered huge profits for
shareholders. It has also fueled inequality and helps explain why many
working-class Americans are struggling even in an ostensibly healthy economy.

That is the outsourced companies causing inequality. They are the ones paying
people terribly, not the company contracting with the outsourcing companies.

This article wants to blame major companies for inequality while conveniently
ignoring the existence of the outsourcing companies which are the ones setting
the pay for these employees. Stop doing that, raise the minimum wage and
benefits that outsourcing companies must pay their employees/contractors, and
fix the bloody problem at its source.

~~~
cmiles74
I disagree. Large wealthy companies are working hard to directly employ as few
people as possible. Part of what they gain from this is the ability to pretend
that the companies they hire to perform this "non-core" work are entirely
separate black boxes. It would be embarassing to Apple to be treating their
employees this way so they hire an outsourcing firm to do it for them.

As large companies, like Apple, race to shuffle employees to these companies
in order to save money, everyone gets hurt but Apple. The money gets locked
away from the middle class and Apple pretends that they don't have any full
time positions that lack advancement opportunities and decent pay.

~~~
FLUX-YOU
But if the outsourcing companies were providing opportunities on their own,
their employees could afford classes, living expenses and work on skills to
eventually work at Apple.

Apple gets quality janitors and security guards while paying the outsourcing
company more.

The outsourcing companies are the actual ones running the race to the bottom.
Stop that, and Apple will have to reconsider (at which point, we get to argue
all over again if their new solution is morally acceptable)

~~~
BeetleB
>Apple gets quality janitors and security guards while paying the outsourcing
company more.

I suspect Apple will then go and find another contracting company.

~~~
FLUX-YOU
All of them would have to obey minimum pay regulation. If Apple knowingly
hires a company violating that law, then absolutely go after them. If
loopholes come from that regulation, then that has to be fixed too.

~~~
stevenwoo
For someone who works on site at Apple in Cupertino, the minimum wage is not a
liveable wage, even with four or eight to an apartment. We could try a per zip
code minimum wage, that would even raise teachers' salaries, then we'd need a
per zip code tax for public employees. Or some other solution.
[http://www.mercurynews.com/2017/04/22/in-costly-bay-area-
eve...](http://www.mercurynews.com/2017/04/22/in-costly-bay-area-even-six-
figure-salaries-are-considered-low-income/)

------
phreeza
The article fails to mention Amazon, which does still have plenty of non-
outsourced blue collar jobs. I doubt there is a lot of the kind of upward
mobility at amazon for them that there was for the Kodak janitor in the 80s,
though.

~~~
mdorazio
Keep in mind, though, that Amazon is doing everything it can to automate most
of those blue collar jobs (warehouse robots, delivery drones, etc.). That
workforce has a very limited shelf life.

~~~
lotsofpulp
As they should be, if they want to continue to exist.

------
RealityNow
Fantastic article, we've truly been seeing a bifurcation of the workforce, and
the development of a plutonomy. The interests of capital and labor are
inherently opposed because the incentive of the employer is to reduce costs,
and capital has been winning out.

I think there's a false tendency to blame Apple for this predicament. It's not
Apple's responsibility to provide for the welfare of our country's citizens,
it's our responsibility - and it's only through our government that we can
really change things. No vacation, benefits, and 80% of one's paycheck going
to rent is our government's responsibility to fix, not Apple's.

The most obvious policy here would be some sort of universal basic income.
This would naturally prop up wages for the low-paying jobs like janitor that
nobody wants to do.

Having to work under those precarious conditions for such lousy pay (relative
to cost of living) and no prospects for advancement must be a downright
miserable experience, the literal definition of wage slavery. 6pm-2am shift
means she probably never even sees her kids during the week. All for a meager
$600/month in disposable income after rent is paid (which when you're a
contractor without vacation and benefits isn't much). And she'd never be
allowed to complain about it because she'd be told that she should be grateful
to have a job, there are people in Africa starving, she should've studied
harder in school, and she shouldn't have had kids. What a world we live in.

Many oppose universal basic income on ideological grounds, but enough with
this ideologically-driven bullshit that ignores the unnecessary suffering of
the wage slaves at the bottom. Nobody in a first world country should have to
live a lowly life like that janitor.

~~~
pjmorris
Do you know the history of Speenhamland? The empirical results of that
experiment in a basic income was that it acted as a subsidy to employers,
enabling them to pay below subsistence wages that were made up for by the
government-funded UBI. There's a parallel to how food stamps and other support
enable large corporations today to pay less in wages, as the difference will
be made up through taxpayer funding. I don't want to ignore suffering, but I
suspect something like a jobs guarantee would achieve the same ends in a more
equitable fashion.

[0]
[https://en.wikipedia.org/wiki/Speenhamland_system](https://en.wikipedia.org/wiki/Speenhamland_system)

~~~
aninhumer
So if I understand correctly, the Speenhamland System was a wage supplement
system, not a UBI system. That is, if people stopped working, they stopped
getting the extra money. This means that employers are free to slash wages and
let the supplement make up the difference.

With UBI, people get the money regardless, so employers have to compete with
what people can get without working. If you only offer them a meagre income
boost for a gruelling work week, you're going to struggle to attract people.

~~~
pjmorris
With UBI, the employer now can pay (wage-UBI) for every employee, shifting the
wage burden off the employer and onto the state by a factor of UBI x
population. With a jobs guarantee, an 'employer of last resort', the
government sets the floor on wages through hiring, giving everyone who wants a
job but can't find one in the open market at whatever base wage parallels UBI.
The government only has to pay for base wage x unemployed rather than UBI x
population. This also yields labor for the government for 'New Deal' type
projects, and employers now have to do better than the base wage/job
conditions to hire, raising the velocity of money. More importantly, everyone
has the dignity of a job if they want it as well as the money needed for basic
needs.

Are there guarantees that UBI will always be comparable to a living wage?

~~~
RealityNow
This is counteracted by the fact that employees now have the option of walking
away from their jobs, and thus employers would have to raise wages to draw
them in. Wages might rise in the type of jobs that nobody actually wants to do
(eg. janitor), though wages may very well decrease in the jobs that everybody
wants.

UBI and government job programs aren't mutually exclusive. I do think the
government should create more jobs for the public good, especially in
scientific research and development. But either way, I think a UBI is
necessary so that people have the option of working for themselves rather than
being forced to answer to someone else. UBI is like the libertarian approach,
while government jobs are the more authoritarian approach. I think both should
coexist.

I guess there's no guarantee that UBI would be a living wage. Regardless, I
think we need a UBI. Money is one's claim on society's resources, and since
we're all shareholders in this economy, we should receive a citizen's
dividend, even if that amount isn't that much (eg. Alaska's Permanent Fund)

~~~
pjmorris
> This is counteracted by the fact that employees now have the option of
> walking away from their jobs

I don't see how either a UBI or a job guarantee limits employees from walking
away from their jobs. The presence of a job, or an income, hasn't stopped many
people from starting their own thing.

> But either way, I think a UBI is necessary so that people have the option of
> working for themselves rather than being forced to answer to someone else.

The option to work for yourself isn't taken away by a jobs guarantee. I can
see how the presence of a UBI would permit people to do things no one would
pay for otherwise. As idyllic as I really do think that sounds, I suspect that
examples of people doing things no one would pay for would be used over time
by UBI opponents to drive down the value of the UBI to below a living wage.

~~~
RealityNow
UBI doesn't limit employees from walking away from their jobs, it enables them
to.

> The option to work for yourself isn't taken away by a jobs guarantee.

Obviously. Job guarantee programs however still don't allow you to truly walk
away from your job unless you're able to financially support yourself, whereas
a UBI does.

~~~
pjmorris
Yep, I misread your point, and mis-responded.

A UBI that's actually enough to replace a job has the benefits you describe,
at the cost of UBI times the population. A UBI that's not enough to replace a
job doesn't have the benefits you describe, has the negatives I describe, and
costs almost as much.

------
jchonphoenix
Six figures in the bay area is less than 79k in Rochester when it's cost of
living adjusted. This article is just wrong in many ways.

~~~
dexterdog
You can't compare the costs now since Rochester is a shell of its former self.

------
vadym909
Good point - in the race to offer superb benefits to its best employees,
companies made it harder for themselves to directly hire low skill and low pay
employees. After all you can't afford to offer free massages and laundry to
the guys delivering groceries for you making $15/hr or the receptionist making
$20/hr.

------
tomxor
> her $16.60 an hour works out to $34,520 a year.

Interesting... I'm developer at a comparably tiny company, I get paid slightly
less than her per hour but a larger salary overall, and my rent is less than
half of hers (and it's not considered cheap around here).

I know i'm not paid top notch but all I read here is it's hard to be a janitor
in expensive places.

[EDIT]

Maybe this is not a fair comparison, I'm not paid hourly, and all I have
revealed here is that I work rather a lot of hours. She does 44ish hour weeks,
and to be fair as a cleaner you are unlikely to physically be able to work
more (consistently).

The ratio of pay to rent is ridiculous though, (that is a fair comparison) my
rent is way under half hers. If housing is that expensive in that area then
janitors should be paid more...

------
bluedino
>> 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?

~~~
kelukelugames
With dependents and her income level, she is paying a much lower rate.

------
galfarragem
This.

"I look at the big tech companies, and they practice a 21st-century form of
welfare capitalism, with foosball tables and free sushi and all that,” Rick
Wartzman, senior adviser at the Drucker Institute and author of “The End of
Loyalty,” said. “But it’s for a relatively few folks. It’s great if you’re a
software engineer."

------
hippich
"Less than a decade later, Ms. Evans was chief technology officer of the whole
company"

From a Janitor to CTO in under 10 years - I wish I could dream that. I started
playing with code around 6yo and now 33..

Could it be that it was really rare period of time where such thing was
possible?

------
ciconia
The way I see it those janitors, security people and other such workers whose
jobs are today almost universally outsourced, are also contributing in their
own small way to the company's bottom line and to its success. Why should they
be treated any different?

------
ChemicalWarfare
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.

~~~
nwenzel
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 means the service that pays the lowest wages or that cuts
the most corners will typically win the contact.

Depersonalizing the buying decision and commoditizing human labor aren't good
or evil by themselves. But, turning people's welfare into a math problem
certainly leaves us open to making decisions we wouldn't have made if we saw
the consequences through a human lense instead of only an economic lense. At
best, it causes suboptimal outcomes for an individual while maximizing the
aggregate benefit.

We can fight against it all we want, but everytime we buy a t-shirt, an apple,
or an iPhone, there's a supply chain behind it built on the lowest cost
provider. We are all part of that process. I hope I'm not evil for buying a
cheap t-shirt. But I know I enabled some shady behavior that made it $1
cheaper.

~~~
ChemicalWarfare
>> 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.

------
mmcnl
This article seems very anecdotal to me, and thus tells me nothing. Jobs come
and go. Jobs once held in high regard are now common jobs. Also people
nowadays have (good paying) jobs that didn't exist decades ago.

------
indigo0086
Love when threads like these dissolve into "How can we further overcomplicate
tax law to benefit to ultimately benefit the government"

~~~
dlp211
TIL taxes only benefit the government and never go to anything useful like the
food stamps my family sustained itself on while my baby brother went through
chemotherapy, or the Post 9/11 GI Bill that allowed me to get degrees in CS
and ECE which led me to a job at one of the world's largest tech companies, or
the unemployment that allowed me to properly transition from the military into
the civilian workforce.

------
ben_jones
What gets me is the sheer _romanticization_ of the rich and powerful.
Culturally we turn people into gods who by there very virtue can do no wrong.

And because of it we'll never be able to rework income inequality - because
we've all wanted to be on top of it since childhood.

------
zanny
The roots of modern wealth inequality on deep, vast, and way more complicated
than companies just outsourcing unskilled labor because they are optimizing
for profit over being charitable.

* Automation advances in every industry. It is like AI - there is no sudden on switch when everything is automatic and post-scarcity is suddenly achieved. It is a slow march of small improvements and optimizations over time. Productivity per human labor hour has increased a hundredfold in the last century on the backs of this automation and innovation.

* A combination of social organization, peer pressure, the variable range in the quality of a persons parents, the variability in wealth of a family, the trends towards and away from high median wealth, the prevalence of anti-intellectualism, the laws at the time, the laws in the past, the general availability of materials, the competitive market internationally, and ones own biology contribute to the prevalence or absence of an educated populace. No society has figured out how to take _every_ human born and turn them into a scholar, however. We _all_ have the disenfranchised who are not educated (in fields the market deems valuable) but still need avenues to survive. This creates our unskilled labor market.

* The laws of your country influence how wealth moves throughout it. The laws of other countries also influence the behavior of private actors in your economy when interacting with foreign ones. The market is global - business decisions are not made based on arbitrary lines on a map, they are made based on the planetary market forces and trends of all seven billion+ people. Thus, you cannot set local policy (that influences wealth inequality) in a vacuum.

* Aside fiscal policy, you also have, relatively independent of other variables, how open your society is to innovation and entrepreneurship. This is another cultural marker, but if your country supports and incentivizes startups you can offset the problem of a waxing classical labor market. It also has the converse effect of generating jobs through its successes.

* Finally, and least significantly, is fiscal policy. In some countries the lack of a trustable market or rule of law can make this much more meaningful, but if your company has a functioning internationally connected economy nowadays all your fiscal policy is doing is pushing the boat rather than building it. Policies like favoring investment over salary _favor_ increasing inequality, but are not the cause of it - they just accelerate it.

The TLDR is automation, education, globalization, entrepreneurism /
innovation, and fiscal Policy, but there are more, and these alone are just as
abstract trends as wealth inequality is above them, just as much as how the
future of humanity itself is just a abstraction above that.

Together all these effects, and more, influence the total market and control
how prosperous or despondent people are. When citing historical wage averages
as having stagnated in the US in the seventies it is not one aspect in
isolation - from what this article talks about in regards to corporations only
hiring immediately for its core competency and outsourcing other labor - but
the combination of all of them. Rising automation reduces the need for labor.
Rising populations increase the supply of labor. Fiscal policy favors wealth
centralization. Globalization favors economies of scale. Giant companies
throwing around more money means more influence - which means more regulatory
capture. Regulatory capture means exploitation. Exploitation is always
parasitic - it suffocates growth and prosperity to fill few pockets.
Exploitation and rent seeking go hand in hand. Regulatory policy and capture
come back again, creating rentiers markets to pillage and exploit more.
Globalization reduces the sovereignty of individual nations, making it near
impossible to fight back with just one government run by its people.

It feels inevitable. That as we advance in our ability to make so much from so
little, that the real beneficiaries of it have to be those who were first
movers on it, that were sociopathic enough to discard anyone else in the
pursuit of power. To condemn billions to suffering and to suffocate markets
and drain pocketbooks to make fractions of a cent more, to centralize
resources just slightly faster into your control and domain of influence. Like
global warming, like space colonization, like scientific innovation, none of
these are the purview of one slice of Earth's surface area. None are limited
in scope to a few people. They matter to everyone, but we have no functional
system of making everyone matter in regards to them. These market forces are
operating beyond the bounds of one country - beyond the walls of Kodak and
Apple. They are operating on the entirety of humanity and all their
macroeconomic behaviors are dictated by the entirety of the accessible market
capital can reach. But what is supposed to keep them in line, constrain
capitalism to be to the benefit of both workers and capitalists and not just
the later, is still isolated to thin strips of land subdivided by thousand
year old traditions.

Focusing on the individual pieces of the puzzle remains valuable, but
something as pervasive as rising inequality - of understanding the movements
of markets, of a global economy that is beyond the complete knowledge of any
one person anymore (it is simply moving too fast) - is the product of a
billion causal relationships, not just whether companies want to invest in
their employees now to prosper their local economies in the medium term.

------
aceon48
While I agree with a lot of the comments and the article, can we just point
out that they say Kodak's former janitor became CTO?

That would be commendable had the company done well, but perhaps having a
janitor CTO contributed to their downfall...?

------
banned1
A number of the ideas in this thread are a little crazy. I wonder what is the
economic potential of a tax that is vested over the people who propose it and
their families. For example, it would be like "if you propose taxing wealth at
80%, the government goes into your house and your family's houses to take 80%
of your wealth as a 5 year experiment."

"Oh you live in a 300k dollar house? Confiscated! We are moving you to a tiny
house valued at 60k with all others who think like you"

I wonder if that would help folks come up with more sensical solutions. We
could vote on the ideas, and the winners get the ideas implemented on
themselves first!

------
aplaice
Entirely irrelevant to the content of the article, but is there a solution to
the problematic interaction between sticky headers and full-page scrolling?

At least in Firefox, if you press Space or PageDown (to scroll down a "page"),
on the linked article, you'll lose several lines of the text, as they're
obscured by the header. Illustrating:

<\------ page 1 --------->

<\------ page 1 --------->

<\------ page 1 --------->

<\------ page 1 --------->

<\------ page 1 --------->

<\------ page 1 --------->

<\----- lost line ------->

<\----- lost line ------->

<\------ page 2 --------->

<\------ page 2 --------->

<\------ page 2 --------->

<\------ page 2 --------->

<\------ page 2 --------->

<\------ page 2 --------->

Chrome isn't afflicted by this (on the linked article), due to the fact that
its page scroll is slightly shorter than Firefox's (on a webpage without any
sticky headers, Firefox gives you about 1.5 lines of context from the previous
"page"/screen, when you page-scroll; Chrome gives you about 5). However, if
the height of the sticky header were greater (as often is the case), Chrome
would also be affected.

This is obviously in addition to the annoyance of the sticky header wasting
vertical screen space, but the latter is just an aesthetic preference, while
the former is broken functionality.

Yes, I know that on Firefox I can just use reader mode, but it seems sad that
after almost 30 years of the development of the web, going back to a design
that could easily have existed in the 90s, is an improvement.

~~~
sw00pur
There's a bookmarklet around Google that removes fixes headers.

