from Hacker News

To Understand Rising Inequality, Consider Janitors

by jessup on 9/3/17, 2:02 PM with 672 comments

by esarbe on 9/3/17, 8:07 PM
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?
by choxi on 9/3/17, 4:44 PM
We should tax wealth, not income. [1]
The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3]
We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your investment returns (which then gets taxed at 15% instead of 35% for ordinary income). If you don't spend all of that $2M, you'll continue to make more money just by having more money.
By taxing income instead of wealth, we're also essentially penalizing labor and rewarding wealth. We shouldn't penalize something that actually contributes to the economy and instead ask people who have more (not earn more necessarily) to contribute via taxes.
1. http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequali...
2.http://www.businessinsider.com/the-critical-difference-betwe...
3. https://www.forbes.com/sites/robertlenzner/2011/11/20/the-to...
by nsriv on 9/3/17, 2:35 PM
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.
by mathiasben on 9/3/17, 3:01 PM
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.
by kirsebaer on 9/3/17, 2:47 PM
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."
by jfaucett on 9/3/17, 2:53 PM
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?
by peatmoss on 9/3/17, 2:56 PM
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.
by user5994461 on 9/3/17, 3:59 PM
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.
by ScottBurson on 9/4/17, 2:12 AM
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.
by fatjokes on 9/3/17, 3:01 PM
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.
by Spooky23 on 9/3/17, 3:03 PM
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.
by mathattack on 9/3/17, 2:49 PM
And then Kodak died. How many high paid janitors do they have in their upstate NY headquarters now?
by newforice on 9/3/17, 2:37 PM
"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.
by dlrk on 9/3/17, 2:56 PM
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.
by averagewall on 9/3/17, 11:01 PM
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.
by sandworm101 on 9/3/17, 3:05 PM
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.)
by CPAhem on 9/3/17, 11:19 PM
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.
by foxhop on 9/4/17, 1:13 AM
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.
by fatjokes on 9/3/17, 2:47 PM
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.
by FLUX-YOU on 9/3/17, 2:30 PM
>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.
by phreeza on 9/3/17, 2:27 PM
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.
by RealityNow on 9/3/17, 5:33 PM
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.
by jchonphoenix on 9/3/17, 2:54 PM
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.
by vadym909 on 9/3/17, 3:44 PM
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.
by tomxor on 9/3/17, 5:29 PM
> 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...
by bluedino on 9/3/17, 4:38 PM
>> 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?
by galfarragem on 9/3/17, 6:59 PM
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."
by hippich on 9/3/17, 9:51 PM
"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?
by ciconia on 9/3/17, 9:15 PM
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?
by ChemicalWarfare on 9/3/17, 2:44 PM
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.
by mmcnl on 9/3/17, 8:16 PM
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.
by indigo0086 on 9/3/17, 9:32 PM
Love when threads like these dissolve into "How can we further overcomplicate tax law to benefit to ultimately benefit the government"
by ben_jones on 9/4/17, 1:38 AM
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.
by zanny on 9/3/17, 6:08 PM
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.
by aceon48 on 9/3/17, 5:17 PM
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...?
by banned1 on 9/3/17, 9:44 PM
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!
by aplaice on 9/3/17, 3:21 PM
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:
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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.