Interesting take, but I think SS is still better. Since a person can get some money for basics, he can try to learn something he/she is interested in and get a better job than that pay $20K. In India, though lot of maids would prefer to do something else, they don't have the luxury to take some time off and get skilled to earn more.
But the article makes the case that just acquiring the skill set isn't enough. There are prohibitive costs involved if you want to legally use those skills professionally.
Obviously there is a case of the grass being greener on the other side here, though.
Consumers in India want the quality assurance and standardization of services, that American regulation ensures to a certain extent.
Consumers in India want that option. They want the option of spending 60rs on guaranteed clean pani puri. (I love Elco and I have it every time I pass through Bandra.)
That doesn't mean they want encounter killings of the guys who are selling regular pani puri.
Yet another article that completely ignores cost of living and cost of working to the worker.
> In short, if a person could earn $15k-20k/year as a maid, they have no incentive whatsoever to actually take this job; they can also have $15-20k/year of consumption by taking advantage of the safety net and they don't even have to work.
There's absolutely nothing wrong with this. Based on the cost of living in a certain area, I wouldn't be surprised if the person decides not to work even if the job offered was in the $25k-30k/year range, since the marginal benefits of earning an extra $10,000 do not outweigh the marginal cost of having to work as a maid for a year.
It is not up to an individual person to ensure that their personal utility function aligns with the supply side economics prerogative that work is somehow inherently beneficial to the worker aside from the net benefit that it provides.
If you want such a worker to work - create a higher wage job or create a policy that allows them to receive education to acquire such a job somewhere else. Or provide such worker a means to relocate to an area with lower cost of living, where taking a job with $10,000 marginal benefit will be sufficient to enter the workforce.
As the author of the article, I'm glad that even people with wildly different normative premises recognize I'm 100% right on factual matters: namely that automation has not eliminated jobs and that wealth transfers cause people to refuse to work.
We probably disagree on normative premises - I believe even low skill people should also contribute to society - but that's fine. I'm only arguing about facts in this piece.
I'm not sure I find it useful to provide a descriptive framework about this issue without also discussing a normative interpretation. In fact, I think I personally have a somewhat extreme view that we have to do a better job of even defining what "work" means, and that such a definition should not be articulated in purely economic terms, but that aspects of human mental health, goal satisfaction, Self Determination Theory, and baseline morally just working conditions should be mandatory prerequisites to any notion of "work" -- that economic analyses of the side effects of different work-related policies are literally only meaningful if they take place after accounting for these other baseline factors.
Except that's not at all what the person you're responding to said. And it's quite possible that there are multiple causes for job elimination. Automation eliminating classes of jobs being one, and menial jobs simply not paying enough to be worth it.
You're not really talking about facts. You're quoting numbers, but not seeking to actually understand the numbers at all. This is illustrated greatly by your crack that poverty wages in the US would make someone "rich" in India. You're completely ignoring any and all context around that number.
> automation has not eliminated jobs and that wealth transfers cause people to refuse to work.
One of those statements is meaningless and the other is flat-out incorrect.
Since you seem to have no education in economics aside from some libertarian drivel you picked up elsewhere (going only by your resume), I'll explain:
1. Automation has obviously not eliminated all jobs. It has eliminated some jobs, which have been partially or fully replaced by new, higher-skill jobs. There is an ongoing debate on how many of eliminated jobs get replaced and whether they get replaced in full at all. This isn't even an economic argument.
2. Welfare is a transfer of income, not wealth. Wealth is by and large capital, means of production and generally does not get transferred as it would be a violation of property rights - a literal theft of assets. Welfare occurs in the short term, whereas if you gave poor people stocks that were taken from investors - that would be a transfer of wealth.
> I'm only arguing about facts in this piece.
But your argument has nothing to do with automation. The arguments you presented give a case for some regulations being harmful to creating additional low-wage jobs.
And taking a case of Uber where we remove the taxi medallions and where the endgame is complete automation it's obvious why even if it was trying to make that claim a very recents example shows it to more complicated than that.
Provide, provide, provide. Create a higher-wage job. Provide an education. Provide a means to relocate. Is any part of the "running of one's own life" the responsibility of the individual? Is it not the job of one to take advantage of the opportunities that exist? (e.g. schooling, self-education, moving to areas with higher opportunity, etc.)?
This is a part of the learned helplessness of poverty - waiting for others to provide.
So tell me, where does one get the money to pay for such an education? Where does one get the money to move to places with jobs? Further, where does one get the time to study if they're working two jobs? How does one afford the computer equipment and the internet connection? If you say "use a library", how does one ensure that their two jobs don't take all of the time that the library is open? What if one has children?
You can drone on and on about "personal responsibility" all you want if it makes you feel better, but at the end of the day, that isn't going to do jack shit. We need actual answers to these issues, not some haughty, Captain Hindsight, "well, you should have..." crap designed only to make yourself feel better.
It all comes down to, do you actually care about fixing these problems, or not? If you drone on about "personal responsibility", then it's clear you're only interested in assigning blame, and not interested in actually trying to fix things. Go feel superior somewhere else, and get out of the way of people actually trying to fix things.
> you're only interested in assigning blame, and not interested in actually trying to fix things
This succinctly sums up your comment. Perhaps if you gave OP the benefit of the doubt, you'd understand he's trying to fix things in a distributed manner, rather than thinking everybody can be rescued with top-down omniscience.
OP is not trying to fix things in a distributed manner. They're saying that the status quo is fine - the solutions are already here and that people aren't taking advantage of them. This is is not a constructive position because, the current status quo clearly doesn't work for many people, so there is scope for making changes and improvements.
Like any complex problem, there probably isn't a simple solution. Its not a binary issue of 'personal responsibility' vs 'central government', theres room for central, state & local governments as well as charities, communities, and companies to work together on this.
Would you please point me to exactly where the original blog post, or the above comment by 'jackhack, assert that these jobs are currently available in the US?
There's really two independent facets to this subject. One is about the immediate state of things, which in the US is regulation artificially lowering the amount of jobs available (even minimum wage does this). The blog post does a good job exploring this.
The second, which you seem more concerned about, is the trends of whether these types of jobs will continue to exist at all in the future. Which I will agree is questionable.
The US basically has an accelerated view of the effects of automation, as outsourcing to cheaper countries has identical effects. Furthermore, our poor lack the table stakes for participation in our highly-regulated economy, as explored in the original post.
I would point to broken employment and monetary policy that are actively further screwing up the economy and fostering the current go-big-or-stay-home environment. If we really have gotten much more productive, why is the standard "full time" workweek 40+ hours and not 15?
The post have a comment by the author saying basically this:
"I'm just pointing out that the jobs are here and those folks simply refuse to do them."
Problem is that this is a phenomena you see everywhere regardless of system but in all liberal markets.
The only thing thats consistent is the technology.
The problem when you remove regulation (uber) you end up with lots of jobs that pay less until as with Uber they will all be automated away.
This is the problem and ignoring it by trying to use the typical "there are plenty of jobs" as the Author does is simply refusing to deal with the reality as it is IMO.
That's the entire point of their post, is that the status quo is fine, and it's other people's fault for not being able to pull themselves up by their bootstraps. It's their fault for not being able to get an education. It's their fault for not being able to up and move to another area.
No, the OP was not trying to fix anything. The OP was complaining about "personal responsibility". They were simply trying to make themselves feel superior for nothing being unlucky enough to get caught in one of those situations.
Given that most poor Americans don't work [1] and yet have more money than 95% of Indians [2], you'd expect these problems to be solved in the US. Particularly since Americans also have free libraries, free schools where teachers show up, and internet access is a tiny fraction of the consumption available to poor Americans.
So are these problems solved there? Since education is available to Americans, why haven't they all used it and acquired higher wage jobs?
Tell me, when are you going to find the time to visit the library or these free schools (which do not exist everywhere, only in a few places) when you're working two jobs trying to make ends meet?
Further, the amount of money an American has compared to an Indian IS NOT RELEVANT IN THE SLIGHTEST. It's called "cost of living". Look it up. $15k buys you a fuckload of stuff in India. Look at how much it buys you in the US.
Seriously, you have no idea what you're talking about. A high school education is available to all Americans. That's it. And high school education does not translate to high wage jobs. One needs higher education for that, which is not available to all Americans.
Did you somehow miss the sentence in all capital letters that I put right after my second reference? Not to mention the axis labels in my second source, as well as all the text in my second source addressing this point?
When the maximum wage one can get is below their living costs, let alone saving for studying etc., yes someone needs to provide for them.
Sometimes one is able to get out of poverty on their own, but that often requires, besides hard work, plenty of luck. Many people end up pennyless or homeless trying to move to areas with higher opportunity, for example.
I've spent lots of time in India, surrounded by people earning far less than what American hipsters call a "living wage". Yet these folks weren't dead!
Sometimes one is able to get out of poverty on their own, but that often requires, besides hard work, plenty of luck.
The role of luck is overstated. Here's a thought experiment. Suppose we import 1 million Gujuratis, all of whom have income below the 95'th percentile of India. Fast forward 20-30 years. Do you still think that this group of a million people - having an average level of luck due to the law of large numbers - will have the same level of income as a similar group of American poor people?
1. Survivorship bias. The ones who don't do well are more likely to be dead (edit: or to have left) and aren't counted in your average.
2. Self-selection bias. The ones who import themselves are not a random sample, they move because they see an advantage for themselves.
3. From your link: "Furthermore, this was achieved mostly by just one group, essentially an extended family, the Patels" and "Traditionally, most of the finance to start a business comes from within the family, or at least the community." Most poor people do not have such good connections or ability to borrow money.
There are a billion people in India, basically all of whom live below the US concept of a "living wage". They aren't all dead.
You are correct that pretty much everyone sees an advantage for themselves from moving to the US - that's because the US is a vastly wealthier country.
> I've spent lots of time in India, surrounded by people earning far less than what American hipsters call a "living wage". Yet these folks weren't dead!
Bit of a survivor bias here, don't you think? Of course you haven't met anyone that died.
(Dying is not the only problem, of course - one could live cheaply in a dangerous neighborhood and without heating on the winter and so on.)
I'm interested in the links you posted, however - I'll have to read through them.
One of my good friends, if he were to go to India and live with his Great Aunts/Uncles, would be Gujarati. His parents immigrated here before he was born. Both of his parents are doctors who went to med school in India, and re-did residency here in the US. Because of the significant delay between his and his sister's birth (youngest child and all that), his parents earlier/primary set of friends are all Gujurati, most of them living in the tri-state of NY. He's met them and talked about them.
His mother, in particular, is interesting, mostly because her case is typical among her Gujarati friends who she practices Yoga as a religious practice with. She's a high risk OB/GYN.
Adjusted for PPP, she is wealthier in India compared to the relatives she left behind. So are most of her friends in her Yoga group.
His sister, also a doctor with a similar professional stance that makes as much, wouldn't be
In no way is this surprising. Nearly all of his parents friends are Upper Caste, and speak excellent English. Nearly all immigrated here when there were actual shortages of certain types of professions. Almost all brought over important relatives, (eg: his grandparents) and to this day are wealthy enough to go back.
Structural changes in those jobs, however, are leaving their "earlier" children economically behind. Despite the fact that both he and his sister are both Born American citizens (unlike their parents, who are naturalized)
His sister will never have that same PPP. Nor do any of her friends, mostly the early born children of said same immigrants, almost all of whom have felt (and in many cases caved) to pressure to become Doctor/Lawyer/Engineer (with the exception of those who got lucky and work for google while also in a low cost of living area)
My friend, ironically, because of the severe birth delay (almost 10 years) will out-earn his sister. He also is far more "behaviorally whiter" than any of his sister's friends. As far as I can tell, he has few, if any, friends who are Gujarati children of high caste immigrants. He also is the first to choose a non-typical career path in his family. (Department of Defense Analyst)
So fast forwarding a few years, it appears your numbers only work for gen=1, and only if gen=1 is high caste.
It's very strange that was your only takeaway from my post. Perhaps you don't understand the terms I've used?
It is not the responsibility of the individual to work when such work is disadvantageous to their overall well being. It has absolutely NOTHING to do with helplessness, and everything to do with them making the optimal choice.
> Is it not the job of one to take advantage of the opportunities that exist? (e.g. schooling, self-education, moving to areas with higher opportunity, etc.)?
Everything you've listed has a non-zero cost to the individual. And the only affordable thing out of those listed to someone subsisting on welfare is self-education.
"they have no incentive whatsoever to actually take this job"
A hidden nightmare of the Orwellian paradise of the cashless hyper monitored new society is the way it "really" works in America now is those folks take jobs for $10K that are cash-on-the-barrel untaxed and unregulated and don't legally exist. What happens when cash no longer exists and the IRS gets a live GPS feed from all phones and all the poor people with agency and motivation have their safety valve of illegal employment simultaneously removed? Riots? Burn the cities (again) ? Guillotines?
The really lazy ones are too lazy to work legally, illegally, or riot. It those nice strong motivated construction day laborers who you have to worry about unemploying. They know which end of the pitchfork is sharp and they're really busy today working day labor illegally and untaxed. They'll be really pissed off if nobody ever hires them again due to IRS "improvements". And they'll probably all be pissed off together at the same time. Motivated people have a way of making their own fun.
Insightful post. Occupational licensing is regressive because it hurts lower income families the most. Single mother wants to run a salon from her apartment in the projects? Illegal. Guy wants to hustle cigarettes on the street? Death sentence.
Makes things more expensive for consumers, and totally chokes out small startups.
Licensing should be voluntary, and paid for by premium prices. Instead we have all these artificial monopolies crushing competition and distorting prices.
That's not true at all. As an American, I was never given the option to purchase an "unsafe" cigarette from Eric Garner - he was killed in order to prevent me from having that option.
I believe he is referring to the safety of a stable income, which such protectionism attempts to provide. If someone can come in and try to do a better job, then you are always at risk of losing your revenue stream. If the law prevents competition, then you can feel more secure in having that revenue stream for life.
At least as indicated in the video of his death, none of this is relevant. He didn't assault any police officers when he was killed and he didn't appear to be resisting or committing larceny.
Also, you do know that "resisting arrest" just means "the cops don't like this guy", right? (I suppose it's easy for folks who don't interact with the police not to know this.)
I just rewatched the video, module the actual killing part. He's having a conversation and pretty animated, waving his arms Italian style, when the police grab him. Almost immediately he's put into a chokehold.
"And if all others accepted the lie which the Party imposed – if all records told the same tale – then the lie passed into history and became truth. "Who controls the past," ran the Party slogan, "controls the future: who controls the present controls the past." And yet the past, though of its nature alterable, never had been altered. Whatever was true now was true from everlasting to everlasting. It was quite simple. All that was needed was an unending series of victories over your own memory. "Reality control," they called it: in Newspeak, "doublethink." (1.3.18)"
I think it's possible to believe: that Garner was not an ideal person; that the policy he was killed to enforce is wrong; and that his actual killing was wrong.
And to elaborate on this, wealthy societies "buy" all sorts of things via regulation that can't be directly purchased.
Americans "buy" consumer safety by enacting regulations that reduce competition and increase overhead costs.
Americans "buy" food safety by having government inspections and paperwork regulations that track supply chains in order to recall contaminated foods more quickly.
Americans "buy" clean air and water by enacting pollution controls which raise prices.
Americans "buy" fewer highway deaths by having lots of safety regulations on cars and putting up considerable trade barriers to imports (want to import a VW California to California? It's unlikely).
Most western countries "buy" the same things. I suspect everyone wants these things but not every country is rich enough to "buy" them. And it's easy to fixate on the costs of these things (and yes, sometimes regulations go too far or the costs outweigh the benefits) and ignore the benefits, which mostly benefit a different set of people than those who bear the direct costs. But in the end all of these things are "bought" by distorting markets via regulation.
Some people may actually disagree that using the term "buy" or "bought" is accurate here, because they may look at the "transaction" and say that the "cost" is not actually a cost.
In some cases it is -- paying for government food inspections costs time and money and so there is at minimum the opportunity cost of what else those resources could have been used for.
But some things that people say are "costs" -- hindrances on employment, keeping the number of professionals in a certain field artificially low -- may not be viewed as costs. Some may say it's good to have a throttle on employment in field X, not just because of licensing, but because making it super easy to jump into X is just not desirable for anyone and it's too easy for uncredentialed Xers to rip unsuspecting people off, or something.
I personally feel this way about Uber and Lyft services (but my opinion could change when self-driving cars become a part of that service). I'd love it if there were heavy licensing regulations for Uber/Lyft, and for drivers. I genuinely think everyone would be better off, and the "cost" of there not being an extremely liquid market for new drivers is actually not a real cost, that liquid market is more harmful for everyone than it is beneficial. We essentially get two "wins" -- regulated drivers leading to more safety, and regulated drivers leading to slightly slower pipeline of introduction of new drivers.
>Yes, but your (or y'all's) collective decision that you prefer safety to freedom shouldn't infringe upon my choice to prefer freedom to safety.
I would also remind you that no classical libertarian(IE: John Locke) would allow you to go kill someone, and would say the state can and should have the power to regulate you to prevent you from doing so.
So I would equally assume that in no way shape or form Locke would be ok with you dumping Trichloroethylene willy-nilly.
Unless of course you think it is ok to give someone kidney cancer and not tell them?
(Dumping tricholorethlyene willy nilly makes a super-fund site. It takes years for cancer clusters to clear out as they get cleaned up. The one in Mountain View related to chip manufacture has only within the past year or so stopped causing cancer clusters en mass. Most of the silicon valley superfund sites come from TCE, and were declared as such around 1988.
We're close to our 30th year of cleaning this stuff up. It is totally possible, and even probable, that if a pluse/area is massively disturbed, TCE will leach en mass into nearby people causing new cancer clusters, among other issues)
I can extend this logic easily to the Food and Drug Act and its amendments - which is why it is terrible to find out that the 5 largest producers of chicken in the US allow people to pee and poop on themselves on the killing floor, because in chicken slaughterhouses, you aren't allowed to have bathroom breaks.
I agree, these kinds of regulations and over-licensing is what's killing jobs, not taxes (or at least not as much).
You don't see many big corps complain about licensing or regulations, that's because they can afford to pay for them, small business and even individuals are the one who get screwed. This kind of stuff is what I would like to see Bernie complain about but I see very little from him on this front. The funny thing is that Northern Europe countries have way less regulations and licensing, this is why they survive despite super high taxation but you never see Bernie rooting for that, he just wants wants the high taxation from Sweden and high regulation/licensing from the US, ie the worst of both worlds http://reason.com/archives/2016/04/18/bernies-rightamerica-s...
Sigh. Really? Is this really what is passing for high quality discussion here these days?
Occupational licensing is a form of consumer protection in almost EVERY case.
We have taxi licensing because at one point, people being extorted by being dropped off in bad areas in the middle of nowhere unless they paid massive amounts of cash to a driver was common. Hell, it still is in a lot of parts of the world where licensing isn't enforced.
When a single mother with her salon causes a staph outbreak in your Randian paradise of no regulations because she can't be bothered to wash her scissors properly, what then? How does that help the "lower income families" that now can't pay for the medical services they need because they couldn't afford an extra $10 for a proper haircut?
We have medical licensing because too many quacks called themselves healers and fostered bullshit on too many ignorant people. Same with legal licensing, real estate licensing, etc, etc.
Your assertions fall apart with a thirty second google search into the history of why we have enacted these things coupled with some basic common sense. Yes, certain reliance on regulation has been used to stifle competition by established players, no that does not mean all regulation is bad. Cons and scams are a real reality in the free market, and not everyone has the means to avoid them, or worse to recover from them when they are victims. Any just market will have sufficient barriers and safeguards in place to provide a reasonable protection to consumers to ensure those consumers actually use their money on new services and products instead of being scared into a position of paying much higher prices for services from entities they trust.
Licensing is an incubator of a stronger economy; it allows people to be mobile with their money because it creates a lower boundary of competence and expectation.
Licensing based on the number of hours sitting in a classroom does not inherently protect consumers, but it does discourage employment. If the classroom hours requirements were eliminated and licensing was based on objectively demonstrating competency, some of the current impediments stemming from regulation would be diminished and consumer protection would probably increase.
Yes, some licenses have poorly defined metrics that are hard to properly evaluate.
No, ensuring people that claim to understand a topic they are selling their advice on as a product actually know what they are talking about is not a worthless endeavor.
Should a Doctor have to spend a certain amount of time performing operations even if they nail their first one? Should a pilot need to fly 50 hours in a circle even if he got his landings down in the first 3? What if a person can pass a law school final the day after they take the LSAT? Should they be able just to skip law school completely and be admitted to the Bar? Clearly law school only exists to discourage employment!
I'm constantly amazed at how so many of the people that don't think time invested matters at all never have time invested themselves.
I think one of the difficulties of preserving freedom is that it's easy to get stuck in distortion bubbles where we become unaware of what we're actually missing. We can maintain we have a free market in the US, and it does not appear to be otherwise. Only the few who see outside of the bubble actually have a wider gamut in which to compare.
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A part I think is missing from this analysis is relative wealth inequality. Prashant's driver and cook can only ever have a fraction of his income. This seems untenable in the US where those servants would be priced out of any wider economy. For example, there is no market for the $1 prepared meal in the US, likely due to those barriers to entry. But this creates a self-sustaining cycle which compounds the low-income trap. In effect, the poor are discouraged from even having an economy.
I for one intend to wait and see how these Universal Basic Income experiments play out. Maybe the decrease in overhead for over 9000 social programs will combine with the increased tax revenue generated by additional low income persons entering the workforce (now that doing so works to their financial advantage) and produce enough revenue to offset the cost of the programs. Maybe not.
considering the projected expenses for Swiss proposal - something around 220 billions of CHF per year (~=USD), and if I recall correctly only about 1/3 of it could be saved by reducing social programs and other savings, rest is a necessary steep taxes hike - not likely. It's ridiculously high amount for this tiny, albeit wealthy country. And it goes in exact opposite of what made this country consistently great over last 800 years - belief that you should be successful only if you put in hard and quality work. citizens are given more rights than elsewhere, but also more responsibility over their own destiny.
it's ridiculously expensive social experiment. vast majority of people around me is very skeptical since we all know plenty of people (ie from childhood) that live whole life on social help, and they don't contribute anything back. their full time job is slacking, drinking and finding a way to screw system and others more and more.
but boy would I wish to see it work! I just don't consider it possible in this century. not even in this great country
"I put "poverty" in scare quotes because in India this would be considered "rich""
Yeah, this guy doesn't know what he's talking about. Yes, in India, that might be considered "rich". But he's not talking about India. He's talking about the US. And in the US, that amount of money would make you desperately poor. Further, if you could make that amount of money either doing hard, laborious work, or not doing anything, any rational person would do nothing, as it doesn't have the costs that labor have on the body.
If you really wanted to see that the person took the job as a maid, then what should happen is that they would get the safety net money as well. That way, there's an incentive to take the maid job. (One could also just raise the wages of the maid job, but nobody wants to do that).
Branco Milanovic's numbers support the exact claim I made - 95'th percentile in India is approximately the bottom 5'th percentile in the US.
THOSE NUMBERS ARE ADJUSTED FOR PURCHASING POWER. (I feel the need to heavily emphasize this since whenever I post that graph, people ignore this fact.)
I think it is worth noting that the graph you provide is based on data from 1998, and only includes data for rural india, since Milanovic's study split rural and urban india into two separate countries (with good statistical reason). But your claim only holds for a rural india to US comparison in 1998.
> "At the time of the incident, he was out on bail for selling untaxed cigarettes, driving without a license, marijuana possession, and false impersonation."
You happily ignore all these circumstances surrounding his death and only mention cigarette sales, as if he was some sort of renegade, libertarian unlicensed cigarette salesman and nothing else. It's an interesting, deceptive way to use someone's death to surreptitiously effect an emotionally charged opinion on your readers.
Because your numbers are absolutely meaningless. Yes, the amount of money a poor person has in America would make them wealthy in India. But they're not in India. They're in America. And in America, they're fucking poor. Stop trying to say otherwise.
> In the "poverty" regime of approximately $0-$15k/year (I put "poverty" in scare quotes because in India this would be considered "rich")
Cost of living is what makes $0-15k/year poverty in the US. It's disingenuous to suggest that one can equate the US dollar amount poverty level designation with that of India.
This comes up a lot. And like the similar "poor people in America are richer than medieval kings" thing, it weirdly always seems directed at the lower ranks in society, when it applies much more so to the wealthiest.
This only gives part of the picture, economic wealth is only a partial proxy for quality of life. The poorest 5% in the US are e.g. disproportionally affected by disease, mental illness and various forms of economically oppressive arrangements such as high debt or the requirement to work multiple minimum-wage jobs.
Your link is interesting from a pure economic wealth perspective. But it is certainly not correct to claim that the poorest 5% of the US is better off than the richest 5% of India, which is easy to misread from these statistics.
In a sense, we are all kings compared to the Middle Age. This is truly wonderful and well worth remembering. But not everyone is living the life of kings.
If you want to claim that poor Americans have diseases and mental illness (which might be the cause of their poverty - i.e., I'm not letting a crazy person be my maid), I'd love to see evidence of that. Do you have any?
Many people feel healthier when they are working, because it affords self-actualization and a sense of accomplishment. When employment conditions are so abject that they render it a bad idea to accept employment, that doesn't necessarily mean people are happier not working. It just means they are happier not working vs. whatever the available working options are. If instead of trying to cut off their option to not work, forcing them to take jobs they hate whose mental health side effects in their lives aren't worth the money made, we instead cut off the option of offering jobs with properties that would be hated, then they may decide working is worthwhile.
There are also a lot of status effects you don't explore. Being poor in America means that even if you have the purchasing power of the richest 5% in India, you're a total scumbag nobody for privileged people to shit on, hate, call lazy, etc. The effects of being embedded in that sort of social situation are significant. I'm even thinking of Robin Hanson's article "Cut Medicine in Half" and also "Showing That You Care" -- which indicate that status effects for health are very real. Being the richest person in a poor neighborhood can be better than being the poorest person in a rich neighborhood, even if your overall consumption ability is higher in the second case.
I suspect this is likely true in this 5% American vs. 95% Indian example. Merely by having the status of being in the lowest 5% of the relevant social group you frequently interact with, that alone engenders negative life outcomes that can't be overcome just by raising the absolute consumption available to that 5% person.
So I would definitely not characterize the overall quality of life of a 5% American as similar to that of a 95% Indian. It would be way more complicated than that. There are probably many 5% Americans with roughly better lives than 95% Indians. There are also probably many 5% Americans with absolutely worse lives than 95% Indians. And some with lives that are as bad as 5% Indians (in fact, I know some of those people in my home region of Appalachia).
Regarding your last comment, I think drug use might be a relevant topic, because it is related to poverty (though, as always, it's complicated, good new data is hard to get [0]), and like mental illness, often creates a stigma against employment. There are many people in America who on paper may appear to have an amount of income that, in a worldwide sense, is very privileged, yet who nonetheless live lives that in some mental health or addiction adjusted QALY sense are some of the worst lives on the planet.
I agree that there are status effects, but status is a zero sum game. No matter what you do, 1/20 of the population will be stuck in the bottom 5%.
A friend of mine suggests ethnic segregation might be a good way to handle this. If you are a Jain, you get to be at the very top of the Jain status hierarchy (and Muslims are at the bottom). And if you are Parsi, well, Parsis are awesome (just have more babies please!?!?!), so much better than the Jains. Aren't you lucky to be one?
Being the richest person in a poor neighborhood can be better than being the poorest person in a rich neighborhood, even if your overall consumption ability is higher in the second case.
If this were true, wouldn't the rich try and avoid each other and move to poor neighborhoods? In contrast, the poor would form gated communities with no rich folks allowed?
Isn't that the exact opposite of what is observed?
> I agree that there are status effects, but status is a zero sum game. No matter what you do, 1/20 of the population will be stuck in the bottom 5%.
This is silly. You could, in one extreme, just implement some kind of Harrison Bergeron system whereby everyone's consumption is literally manipulated to be equal with everyone else, including inhibiting natural talents or augmenting natural flaws as needed. More practically, you could pursue egalitarian political ideas instead of allowing resources to be allocated in response to market demands.
I'm not saying I support those ideas, just that it's silly to say that status is a zero sum game. You just eliminate the whole game.
> If this were true, wouldn't the rich try and avoid each other and move to poor neighborhoods? In contrast, the poor would form gated communities with no rich folks allowed?
I hardly think it's that simple. Many people are convinced that increasing their status is a desperately necessary pursuit, and will put themselves at a disadvantage to do so. They may willingly accept a lower life span (supposing that was one of the health effects of being the least wealthy person in a rich community) to gain access to an intangible feeling of status and belonging to that community. Deluded people move to New York and LA frequently, often to their own detriment, because of the status of residing in such glamorous places.
If we imputed values from these actions, it would tell us that the pursuit of status effects was more valued than the pursuit of demonstrable health benefits. And I fully believe many people feel this way, and by extension, living in a situation that affords certain top-5% health benefits (like being poor in America) but which does not confer the status they want, is a form of perpetual misery.
There's also research on Last Place Aversion that somewhat refutes what you're saying [0]. People who are in second-to-last place will oppose policies that make everyone unilaterally better off if those policies also move them from second-to-last into last place. They prefer a poorer world overall (even themselves poorer in absolute terms) so long as they are not the truly lowest status person. A world in which everyone (including them) is better off, but they rank last, is worse.
If you manipulated consumption to be identical, you'd still have status - it'd just be based on good looks or other such things.
In fact, realistically, status already is based on things like this. A friend of mine (roughly top 1-2%) complained to me last night that no matter how much effort he puts in, he still won't be as tall or non-bald as I am. And realistically, a hot woman earning $25/year has much higher status than both of us 1-2%ers.
I hardly think it's that simple.
It was your theory that being the richest person in the neighborhood raises your status, not mine. I'm glad we've mutually rejected that theory.
Deluded people move to New York and LA frequently, often to their own detriment, because of the status of residing in such glamorous places.
Why do you believe that they do so for status rather than for other amenities (e.g. access to jobs, NY/LA lifestyle, a desire to be near people they identify with)?
If you are really concerned about such things, the right solution is a pigouvian signalling task - apply a tax to status goods to internalize the externality. E.g., we should tax things like education, suits, good looks, and loudly criticizing Trump on twitter/facebook.
> If you manipulated consumption to be identical, you'd still have status - it'd just be based on good looks or other such things.
I feel like you didn't really read my comment. Have you read Harrison Bergeron? The premise is that people receive body or mind alterations to suppress natural advantages or enhance natural flaws in order to make everyone equal.
I was already accounting for consumption being generalized to something like the advantages or good looks or a quick wit in my comment before.
> I'm glad we've mutually rejected that theory.
This is a bit glib, almost antagonistic, of you. The Last Place Aversion literature I linked provides direct evidence that at least a mild form of the effect I described exists, so I certainly don't reject it. All I'm saying is that, like all simple theories, it's not perfect. There are situations where being high status among poor is better than being low status among rich. I am not saying anything more specific.
Regarding the signaling tax -- I mostly do agree. I think we should use the same governmentally forced redistributive procedures that we apply to income or wealth and also apply them to sex, good looks, loneliness/social connection wealth, etc.
It's just too ingrained in our primitive morality to view these as acceptable. And I think that stems from another hypothesis from Hanson, in his blog post "Inequality talk is about grabbing" -- basically that we focus on monetary redistribution instead of say sex experience redistribution because we believe it's easier for us to use coalition politics to take what we want in terms of money, whereas we less believe it would work for sex, and for some other things, like, say, true love redistribution, we could not really even know if we were successfully grabbing what we wanted.
You're right, I didn't fully understand your comment. I haven't read Harrison Bergeron and didn't realize he actually bit that bullet.
I agree that a mild form of status seeking exists (e.g. last place aversion), but I was taking issue with the strong form.
Personally, I don't bite the bullet of extreme redistribution myself. There are a few forms of harmful signalling I'd favor taxing (e.g. educational certification) and a few forms of negative signalling I'd favor subsidizing/regulating (e.g. mandatory paternity tests), but generally I think we just need to accept accidents of birth/luck/etc and should only apply minimal interference in extreme cases. I raise this more as a reducto-ad-absurdum than something I actually advocate.
>Their influences are not difficult to spot. Their startup economy’s success stories are of entrepreneurs who spent VC money to create their own wealth, who spent every paisa immediately to multiply each into a rupee. The stories they hear are of Mukesh Ambani, who inherited an empire and built a very expensive home, instead of Dhirubhai, who lived in a very small home and built a very big empire. They read about Katrina Kaif’s hair costing ₹50 lakh to dye correctly. They internalise the lesson that to earn any money, you’ve got to spend a lot of it.
The comments local to india are telling
>You completely misunderstood the point. You need that burger to socialise, FOR THE SAKE OF YOUR JOB. Your job as an actor would require you to dress well, your job as a journalist will require you to go to places for interviews that you probably cannot afford yourself, and neither will your company pay for it. It isn't that simple, choosing roti over burger.
So apparently, your example, job for job, starves in india, but may hopefully be caught by the safety net in the US and may luckily escape out as they get older.
I am not so sure about the validity of that graph. Even a quick google search search provides http://timesofindia.indiatimes.com/calculator.cms which is also from 2011. 8500 dollars (the cutoff for the bottom 5% of the US according to http://www.nytimes.com/interactive/2012/01/15/business/one-p...) a year gives a person in the top 16% of India. But this is without any adjustment whatsoever. And I checked, the calculator is in terms of USD not INR according to the survey it comes from. The other argument to consider is how much India's top ventile has increased by compared to the bottom ventile of the US since 2011. Just by economic growth numbers it would have relatively increased. If you can provide what your article's base income numbers were and how they adjusted them to get the graph, it would be much more convincing.
Yearly statistics on India are not very good. Realistically if you have accurate info on what happened in the past 5 years (form what I've seen, they've been great!), you should keep quiet about it and just rake in crores in the shares markets.
The paper you have cited not only uses data from 1998, it also splits India into rural and urban India. The passage in the paper that I can find to support you claim is as follows:
"Now, consider mean income of the people belonging to the top decile or ventile, in countries ranging from rural India to Cameroon. Their income puts them between the 51th and 69th percentile of world distribution. Therefore, these two distributions, e.g. Japan’s and rural India’s, practically do not overlap. Or to give another example: a Frenchman
on welfare or unemployment benefits (who would presumably belong to the bottom decile of income distribution in France) would still be better off than a top decile person in Madagascar."
Note that it only talks about rural India. In fact all the charts in the paper, including the chart on top decile/ventile of poor vs bottom decile/ventile of rich on page 47 do not even include Urban India. I would be curious to see this study repeated with current numbers and without splitting India into urban and rural. Especially because of the amount of urbanization and economic growth that India has seen since 1998.
Have these jobs existed in the US in the first place? Was it commonplace for people to have cooks for example? Not to nitpick but is it really a matter of jobs disappearing or a cultural/societal difference?
It was definitely fairly common for middle class in my neighborhood (60's, 70's US) to have a cook or a maid, at least for special occasions or maybe a few times a week.
We also had diaper service, dry cleaner, milk, and Charles Chips: all pickup and delivery by a dedicated truck on a regular schedule.
All these service jobs are gone now. Dead tree newspaper delivery is next.
On the street I grew up in, the houses all had maid quarters. These were suburban houses built in the 20's and are smaller than the typical McMansion from the 80's. Also there was that one episode of Baywatch where Mitch hired a cook...
Women of my maternal grandmother's generation & class expected to have daily help with the washing & children (her class was such that it wasn't unknown for women like her to themselves have domestic jobs). It was really common once upon a time.
> Have these jobs existed in the US in the first place? Was it commonplace for people to have cooks for example?
IIRC, yes, there was a time (up through the late 19th, early 20th century) where having at least one live-in household servant, often either specifically a cook or a generalist where cook would be part of their duties, was typical of the middle class, and not entirely uncommon in the middle class through the middle or so of the 20th Century.
So when Uber and the other transportation companies will be introducing automated cars and truck and one of the only industries that isn't possible to outsource and doesn't require education, become replaced by robots then what?
The Taxi Medallions where obviously out of touch with reality because technology allow anyone to be able to drive a car and find the right address, but it does so by lowering the money you can actually make and so removing restrictions creates more jobs but at lower salaries (especially in ubers case where they dont allow drivers to hire other drivers).
It's ironic how many people who normally claim to be free market proponents simply ignore the consequences of the free market when it works against their argument.
Nothing in that post changes the fact that there are less and less jobs and that there will continue to be so as long as technology progresses.
We can hope that prices comes down so we don't need a lot of money to get by, but unless something fundamentally change not just robots, technology is going to take over all functions on what we today consider jobs humans can do.
In the linked article op misses the critical variation of occupational licensing and regulation over time. Never, ever, ever constant over time and thats the real problem.
Nobody, and I mean nobody, wants to go back to Upton Sinclair's "The Jungle" wrt the linked article's discussion of street food providers. The current establishment system sucks about as bad as "The Jungle" yet in a totally different way. A pre-FDA, pre-OSHA, pre-FCC, pre-FAA world? No thanks!
The solution is that historically the establishment changes as little as possible with the exception of riots, revolutions, and guillotines. Status quo till the collapse. A new cultural solution such as all laws and regulations having a sunset date might help us smooth over the human nature boom bust cycle of laws and regulation.
All laws and regulations stink after they sit around too long and start rotting. You can use tech and muscle and money to try to prevent change, or you can try something totally new and flow with change.
My bright idea won't help with entrenched interests such as property owners. Nobody who paid $5M for the land for a restaurant is EVER going to make nice with food trucks. In a limited way bureaucracy can help.. crack the path of money... "I'm so sorry mr restaurant real estate landlord, but you don't pay prop taxes that fund the state DMV and we're in charge of the road regulations WRT selling food from a truck, so if you don't like progress you can pound sand or rent to a different type of business other than restaurant."
93 comments
[ 3.4 ms ] story [ 121 ms ] threadObviously there is a case of the grass being greener on the other side here, though.
Consumers in India want the quality assurance and standardization of services, that American regulation ensures to a certain extent.
That doesn't mean they want encounter killings of the guys who are selling regular pani puri.
> In short, if a person could earn $15k-20k/year as a maid, they have no incentive whatsoever to actually take this job; they can also have $15-20k/year of consumption by taking advantage of the safety net and they don't even have to work.
There's absolutely nothing wrong with this. Based on the cost of living in a certain area, I wouldn't be surprised if the person decides not to work even if the job offered was in the $25k-30k/year range, since the marginal benefits of earning an extra $10,000 do not outweigh the marginal cost of having to work as a maid for a year.
It is not up to an individual person to ensure that their personal utility function aligns with the supply side economics prerogative that work is somehow inherently beneficial to the worker aside from the net benefit that it provides.
If you want such a worker to work - create a higher wage job or create a policy that allows them to receive education to acquire such a job somewhere else. Or provide such worker a means to relocate to an area with lower cost of living, where taking a job with $10,000 marginal benefit will be sufficient to enter the workforce.
We probably disagree on normative premises - I believe even low skill people should also contribute to society - but that's fine. I'm only arguing about facts in this piece.
You're not really talking about facts. You're quoting numbers, but not seeking to actually understand the numbers at all. This is illustrated greatly by your crack that poverty wages in the US would make someone "rich" in India. You're completely ignoring any and all context around that number.
One of those statements is meaningless and the other is flat-out incorrect. Since you seem to have no education in economics aside from some libertarian drivel you picked up elsewhere (going only by your resume), I'll explain:
1. Automation has obviously not eliminated all jobs. It has eliminated some jobs, which have been partially or fully replaced by new, higher-skill jobs. There is an ongoing debate on how many of eliminated jobs get replaced and whether they get replaced in full at all. This isn't even an economic argument.
2. Welfare is a transfer of income, not wealth. Wealth is by and large capital, means of production and generally does not get transferred as it would be a violation of property rights - a literal theft of assets. Welfare occurs in the short term, whereas if you gave poor people stocks that were taken from investors - that would be a transfer of wealth.
> I'm only arguing about facts in this piece.
But your argument has nothing to do with automation. The arguments you presented give a case for some regulations being harmful to creating additional low-wage jobs.
Please avoid these kinds of attacks on HN. Just make your case without making it personal. Thanks.
And taking a case of Uber where we remove the taxi medallions and where the endgame is complete automation it's obvious why even if it was trying to make that claim a very recents example shows it to more complicated than that.
This is a part of the learned helplessness of poverty - waiting for others to provide.
You can drone on and on about "personal responsibility" all you want if it makes you feel better, but at the end of the day, that isn't going to do jack shit. We need actual answers to these issues, not some haughty, Captain Hindsight, "well, you should have..." crap designed only to make yourself feel better.
It all comes down to, do you actually care about fixing these problems, or not? If you drone on about "personal responsibility", then it's clear you're only interested in assigning blame, and not interested in actually trying to fix things. Go feel superior somewhere else, and get out of the way of people actually trying to fix things.
This succinctly sums up your comment. Perhaps if you gave OP the benefit of the doubt, you'd understand he's trying to fix things in a distributed manner, rather than thinking everybody can be rescued with top-down omniscience.
Like any complex problem, there probably isn't a simple solution. Its not a binary issue of 'personal responsibility' vs 'central government', theres room for central, state & local governments as well as charities, communities, and companies to work together on this.
There's really two independent facets to this subject. One is about the immediate state of things, which in the US is regulation artificially lowering the amount of jobs available (even minimum wage does this). The blog post does a good job exploring this.
The second, which you seem more concerned about, is the trends of whether these types of jobs will continue to exist at all in the future. Which I will agree is questionable.
The US basically has an accelerated view of the effects of automation, as outsourcing to cheaper countries has identical effects. Furthermore, our poor lack the table stakes for participation in our highly-regulated economy, as explored in the original post.
I would point to broken employment and monetary policy that are actively further screwing up the economy and fostering the current go-big-or-stay-home environment. If we really have gotten much more productive, why is the standard "full time" workweek 40+ hours and not 15?
"I'm just pointing out that the jobs are here and those folks simply refuse to do them."
Problem is that this is a phenomena you see everywhere regardless of system but in all liberal markets.
The only thing thats consistent is the technology.
The problem when you remove regulation (uber) you end up with lots of jobs that pay less until as with Uber they will all be automated away.
This is the problem and ignoring it by trying to use the typical "there are plenty of jobs" as the Author does is simply refusing to deal with the reality as it is IMO.
So are these problems solved there? Since education is available to Americans, why haven't they all used it and acquired higher wage jobs?
[1] See table 3, http://www.census.gov/content/dam/Census/library/publication...
[2] http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t... THESE NUMBERS ARE ADUSTED FOR PURCHASING POWER PARITY
Ironically I have enough cash to outright buy a new car and I only earn 8k/year.
Tell me, when are you going to find the time to visit the library or these free schools (which do not exist everywhere, only in a few places) when you're working two jobs trying to make ends meet?
Further, the amount of money an American has compared to an Indian IS NOT RELEVANT IN THE SLIGHTEST. It's called "cost of living". Look it up. $15k buys you a fuckload of stuff in India. Look at how much it buys you in the US.
Seriously, you have no idea what you're talking about. A high school education is available to all Americans. That's it. And high school education does not translate to high wage jobs. One needs higher education for that, which is not available to all Americans.
Did you somehow miss the sentence in all capital letters that I put right after my second reference? Not to mention the axis labels in my second source, as well as all the text in my second source addressing this point?
Sometimes one is able to get out of poverty on their own, but that often requires, besides hard work, plenty of luck. Many people end up pennyless or homeless trying to move to areas with higher opportunity, for example.
Key graph: http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t... (THESE NUMBERS ARE ADJUSTED FOR PURCHASING POWER.)
Sometimes one is able to get out of poverty on their own, but that often requires, besides hard work, plenty of luck.
The role of luck is overstated. Here's a thought experiment. Suppose we import 1 million Gujuratis, all of whom have income below the 95'th percentile of India. Fast forward 20-30 years. Do you still think that this group of a million people - having an average level of luck due to the law of large numbers - will have the same level of income as a similar group of American poor people?
Actually it's not a thought experiment. http://www.economist.com/news/christmas-specials/21683983-se...
We've done this experiment with Chinese, Gujuratis, Punjabis, Bengalis, and all sorts of other folks. Mostly they don't stay poor.
2. Self-selection bias. The ones who import themselves are not a random sample, they move because they see an advantage for themselves.
3. From your link: "Furthermore, this was achieved mostly by just one group, essentially an extended family, the Patels" and "Traditionally, most of the finance to start a business comes from within the family, or at least the community." Most poor people do not have such good connections or ability to borrow money.
You are correct that pretty much everyone sees an advantage for themselves from moving to the US - that's because the US is a vastly wealthier country.
Bit of a survivor bias here, don't you think? Of course you haven't met anyone that died.
(Dying is not the only problem, of course - one could live cheaply in a dangerous neighborhood and without heating on the winter and so on.)
I'm interested in the links you posted, however - I'll have to read through them.
His mother, in particular, is interesting, mostly because her case is typical among her Gujarati friends who she practices Yoga as a religious practice with. She's a high risk OB/GYN.
Adjusted for PPP, she is wealthier in India compared to the relatives she left behind. So are most of her friends in her Yoga group.
His sister, also a doctor with a similar professional stance that makes as much, wouldn't be
In no way is this surprising. Nearly all of his parents friends are Upper Caste, and speak excellent English. Nearly all immigrated here when there were actual shortages of certain types of professions. Almost all brought over important relatives, (eg: his grandparents) and to this day are wealthy enough to go back.
Structural changes in those jobs, however, are leaving their "earlier" children economically behind. Despite the fact that both he and his sister are both Born American citizens (unlike their parents, who are naturalized)
His sister will never have that same PPP. Nor do any of her friends, mostly the early born children of said same immigrants, almost all of whom have felt (and in many cases caved) to pressure to become Doctor/Lawyer/Engineer (with the exception of those who got lucky and work for google while also in a low cost of living area)
My friend, ironically, because of the severe birth delay (almost 10 years) will out-earn his sister. He also is far more "behaviorally whiter" than any of his sister's friends. As far as I can tell, he has few, if any, friends who are Gujarati children of high caste immigrants. He also is the first to choose a non-typical career path in his family. (Department of Defense Analyst)
So fast forwarding a few years, it appears your numbers only work for gen=1, and only if gen=1 is high caste.
It is not the responsibility of the individual to work when such work is disadvantageous to their overall well being. It has absolutely NOTHING to do with helplessness, and everything to do with them making the optimal choice.
> Is it not the job of one to take advantage of the opportunities that exist? (e.g. schooling, self-education, moving to areas with higher opportunity, etc.)?
Everything you've listed has a non-zero cost to the individual. And the only affordable thing out of those listed to someone subsisting on welfare is self-education.
A hidden nightmare of the Orwellian paradise of the cashless hyper monitored new society is the way it "really" works in America now is those folks take jobs for $10K that are cash-on-the-barrel untaxed and unregulated and don't legally exist. What happens when cash no longer exists and the IRS gets a live GPS feed from all phones and all the poor people with agency and motivation have their safety valve of illegal employment simultaneously removed? Riots? Burn the cities (again) ? Guillotines?
The really lazy ones are too lazy to work legally, illegally, or riot. It those nice strong motivated construction day laborers who you have to worry about unemploying. They know which end of the pitchfork is sharp and they're really busy today working day labor illegally and untaxed. They'll be really pissed off if nobody ever hires them again due to IRS "improvements". And they'll probably all be pissed off together at the same time. Motivated people have a way of making their own fun.
Makes things more expensive for consumers, and totally chokes out small startups.
Licensing should be voluntary, and paid for by premium prices. Instead we have all these artificial monopolies crushing competition and distorting prices.
1. He had been a horticulturist at the New York City Department of Parks and Recreation, but quit for health reasons.
2. Garner had been arrested by the NYPD thirty times since 1980 on charges such as assault, resisting arrest, and grand larceny.
https://en.wikipedia.org/wiki/Death_of_Eric_Garner
With thirty arrests, he is best described as a criminal who used to work as horticulturist. Although:
"An official said he had been arrested multiple times for allegedly selling unlicensed cigarettes"
Also, you do know that "resisting arrest" just means "the cops don't like this guy", right? (I suppose it's easy for folks who don't interact with the police not to know this.)
Is this the one you were talking about? https://www.youtube.com/watch?v=JpGxagKOkv8
PS: Can you tell just how biased you are? I'm curious as to how oblivious you are of your own professional shortcomings.
Clearly the personal attacks bolster your case.
Americans "buy" consumer safety by enacting regulations that reduce competition and increase overhead costs.
Americans "buy" food safety by having government inspections and paperwork regulations that track supply chains in order to recall contaminated foods more quickly.
Americans "buy" clean air and water by enacting pollution controls which raise prices.
Americans "buy" fewer highway deaths by having lots of safety regulations on cars and putting up considerable trade barriers to imports (want to import a VW California to California? It's unlikely).
Most western countries "buy" the same things. I suspect everyone wants these things but not every country is rich enough to "buy" them. And it's easy to fixate on the costs of these things (and yes, sometimes regulations go too far or the costs outweigh the benefits) and ignore the benefits, which mostly benefit a different set of people than those who bear the direct costs. But in the end all of these things are "bought" by distorting markets via regulation.
In some cases it is -- paying for government food inspections costs time and money and so there is at minimum the opportunity cost of what else those resources could have been used for.
But some things that people say are "costs" -- hindrances on employment, keeping the number of professionals in a certain field artificially low -- may not be viewed as costs. Some may say it's good to have a throttle on employment in field X, not just because of licensing, but because making it super easy to jump into X is just not desirable for anyone and it's too easy for uncredentialed Xers to rip unsuspecting people off, or something.
I personally feel this way about Uber and Lyft services (but my opinion could change when self-driving cars become a part of that service). I'd love it if there were heavy licensing regulations for Uber/Lyft, and for drivers. I genuinely think everyone would be better off, and the "cost" of there not being an extremely liquid market for new drivers is actually not a real cost, that liquid market is more harmful for everyone than it is beneficial. We essentially get two "wins" -- regulated drivers leading to more safety, and regulated drivers leading to slightly slower pipeline of introduction of new drivers.
Business leader lobbying politicians is not really collective
Yes, but your (or y'all's) collective decision that you prefer safety to freedom shouldn't infringe upon my choice to prefer freedom to safety.
I would also remind you that no classical libertarian(IE: John Locke) would allow you to go kill someone, and would say the state can and should have the power to regulate you to prevent you from doing so.
So I would equally assume that in no way shape or form Locke would be ok with you dumping Trichloroethylene willy-nilly.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3228569/
Unless of course you think it is ok to give someone kidney cancer and not tell them?
(Dumping tricholorethlyene willy nilly makes a super-fund site. It takes years for cancer clusters to clear out as they get cleaned up. The one in Mountain View related to chip manufacture has only within the past year or so stopped causing cancer clusters en mass. Most of the silicon valley superfund sites come from TCE, and were declared as such around 1988.
Though even today the EPA is cautious - people have seen TCE plumes in the Valley that still cause problems http://www.paloaltoonline.com/news/2015/12/16/discovery-of-t...
We're close to our 30th year of cleaning this stuff up. It is totally possible, and even probable, that if a pluse/area is massively disturbed, TCE will leach en mass into nearby people causing new cancer clusters, among other issues)
I can extend this logic easily to the Food and Drug Act and its amendments - which is why it is terrible to find out that the 5 largest producers of chicken in the US allow people to pee and poop on themselves on the killing floor, because in chicken slaughterhouses, you aren't allowed to have bathroom breaks.
http://qz.com/681025/big-poultry-workers-are-literally-peein...
Unless you think it is ok for you to potentially eat someone's very dangerous e. coli and salmonella from their asses because you want freedom?
(I assume, and hope not)
It's not a freedom if it kills you.
Occupational licensing is a form of consumer protection in almost EVERY case.
We have taxi licensing because at one point, people being extorted by being dropped off in bad areas in the middle of nowhere unless they paid massive amounts of cash to a driver was common. Hell, it still is in a lot of parts of the world where licensing isn't enforced.
When a single mother with her salon causes a staph outbreak in your Randian paradise of no regulations because she can't be bothered to wash her scissors properly, what then? How does that help the "lower income families" that now can't pay for the medical services they need because they couldn't afford an extra $10 for a proper haircut?
We have medical licensing because too many quacks called themselves healers and fostered bullshit on too many ignorant people. Same with legal licensing, real estate licensing, etc, etc.
Your assertions fall apart with a thirty second google search into the history of why we have enacted these things coupled with some basic common sense. Yes, certain reliance on regulation has been used to stifle competition by established players, no that does not mean all regulation is bad. Cons and scams are a real reality in the free market, and not everyone has the means to avoid them, or worse to recover from them when they are victims. Any just market will have sufficient barriers and safeguards in place to provide a reasonable protection to consumers to ensure those consumers actually use their money on new services and products instead of being scared into a position of paying much higher prices for services from entities they trust.
Licensing is an incubator of a stronger economy; it allows people to be mobile with their money because it creates a lower boundary of competence and expectation.
No, ensuring people that claim to understand a topic they are selling their advice on as a product actually know what they are talking about is not a worthless endeavor.
Should a Doctor have to spend a certain amount of time performing operations even if they nail their first one? Should a pilot need to fly 50 hours in a circle even if he got his landings down in the first 3? What if a person can pass a law school final the day after they take the LSAT? Should they be able just to skip law school completely and be admitted to the Bar? Clearly law school only exists to discourage employment!
I'm constantly amazed at how so many of the people that don't think time invested matters at all never have time invested themselves.
---
A part I think is missing from this analysis is relative wealth inequality. Prashant's driver and cook can only ever have a fraction of his income. This seems untenable in the US where those servants would be priced out of any wider economy. For example, there is no market for the $1 prepared meal in the US, likely due to those barriers to entry. But this creates a self-sustaining cycle which compounds the low-income trap. In effect, the poor are discouraged from even having an economy.
it's ridiculously expensive social experiment. vast majority of people around me is very skeptical since we all know plenty of people (ie from childhood) that live whole life on social help, and they don't contribute anything back. their full time job is slacking, drinking and finding a way to screw system and others more and more.
but boy would I wish to see it work! I just don't consider it possible in this century. not even in this great country
Yeah, this guy doesn't know what he's talking about. Yes, in India, that might be considered "rich". But he's not talking about India. He's talking about the US. And in the US, that amount of money would make you desperately poor. Further, if you could make that amount of money either doing hard, laborious work, or not doing anything, any rational person would do nothing, as it doesn't have the costs that labor have on the body.
If you really wanted to see that the person took the job as a maid, then what should happen is that they would get the safety net money as well. That way, there's an incentive to take the maid job. (One could also just raise the wages of the maid job, but nobody wants to do that).
http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...
Branco Milanovic's numbers support the exact claim I made - 95'th percentile in India is approximately the bottom 5'th percentile in the US.
THOSE NUMBERS ARE ADJUSTED FOR PURCHASING POWER. (I feel the need to heavily emphasize this since whenever I post that graph, people ignore this fact.)
> "At the time of the incident, he was out on bail for selling untaxed cigarettes, driving without a license, marijuana possession, and false impersonation."
From: https://en.wikipedia.org/wiki/Death_of_Eric_Garner
You happily ignore all these circumstances surrounding his death and only mention cigarette sales, as if he was some sort of renegade, libertarian unlicensed cigarette salesman and nothing else. It's an interesting, deceptive way to use someone's death to surreptitiously effect an emotionally charged opinion on your readers.
Bravo.
Cost of living is what makes $0-15k/year poverty in the US. It's disingenuous to suggest that one can equate the US dollar amount poverty level designation with that of India.
http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...
THESE NUMBERS ARE ADJUSTED FOR COST OF LIVING.
(Since this keeps coming up, I added a link to that article to the post.)
Your link is interesting from a pure economic wealth perspective. But it is certainly not correct to claim that the poorest 5% of the US is better off than the richest 5% of India, which is easy to misread from these statistics.
In a sense, we are all kings compared to the Middle Age. This is truly wonderful and well worth remembering. But not everyone is living the life of kings.
http://www.census.gov/content/dam/Census/library/publication...
If you want to claim that poor Americans have diseases and mental illness (which might be the cause of their poverty - i.e., I'm not letting a crazy person be my maid), I'd love to see evidence of that. Do you have any?
There are also a lot of status effects you don't explore. Being poor in America means that even if you have the purchasing power of the richest 5% in India, you're a total scumbag nobody for privileged people to shit on, hate, call lazy, etc. The effects of being embedded in that sort of social situation are significant. I'm even thinking of Robin Hanson's article "Cut Medicine in Half" and also "Showing That You Care" -- which indicate that status effects for health are very real. Being the richest person in a poor neighborhood can be better than being the poorest person in a rich neighborhood, even if your overall consumption ability is higher in the second case.
I suspect this is likely true in this 5% American vs. 95% Indian example. Merely by having the status of being in the lowest 5% of the relevant social group you frequently interact with, that alone engenders negative life outcomes that can't be overcome just by raising the absolute consumption available to that 5% person.
So I would definitely not characterize the overall quality of life of a 5% American as similar to that of a 95% Indian. It would be way more complicated than that. There are probably many 5% Americans with roughly better lives than 95% Indians. There are also probably many 5% Americans with absolutely worse lives than 95% Indians. And some with lives that are as bad as 5% Indians (in fact, I know some of those people in my home region of Appalachia).
Regarding your last comment, I think drug use might be a relevant topic, because it is related to poverty (though, as always, it's complicated, good new data is hard to get [0]), and like mental illness, often creates a stigma against employment. There are many people in America who on paper may appear to have an amount of income that, in a worldwide sense, is very privileged, yet who nonetheless live lives that in some mental health or addiction adjusted QALY sense are some of the worst lives on the planet.
[0] http://www.nber.org/chapters/c11165.pdf
A friend of mine suggests ethnic segregation might be a good way to handle this. If you are a Jain, you get to be at the very top of the Jain status hierarchy (and Muslims are at the bottom). And if you are Parsi, well, Parsis are awesome (just have more babies please!?!?!), so much better than the Jains. Aren't you lucky to be one?
Being the richest person in a poor neighborhood can be better than being the poorest person in a rich neighborhood, even if your overall consumption ability is higher in the second case.
If this were true, wouldn't the rich try and avoid each other and move to poor neighborhoods? In contrast, the poor would form gated communities with no rich folks allowed?
Isn't that the exact opposite of what is observed?
This is silly. You could, in one extreme, just implement some kind of Harrison Bergeron system whereby everyone's consumption is literally manipulated to be equal with everyone else, including inhibiting natural talents or augmenting natural flaws as needed. More practically, you could pursue egalitarian political ideas instead of allowing resources to be allocated in response to market demands.
I'm not saying I support those ideas, just that it's silly to say that status is a zero sum game. You just eliminate the whole game.
> If this were true, wouldn't the rich try and avoid each other and move to poor neighborhoods? In contrast, the poor would form gated communities with no rich folks allowed?
I hardly think it's that simple. Many people are convinced that increasing their status is a desperately necessary pursuit, and will put themselves at a disadvantage to do so. They may willingly accept a lower life span (supposing that was one of the health effects of being the least wealthy person in a rich community) to gain access to an intangible feeling of status and belonging to that community. Deluded people move to New York and LA frequently, often to their own detriment, because of the status of residing in such glamorous places.
If we imputed values from these actions, it would tell us that the pursuit of status effects was more valued than the pursuit of demonstrable health benefits. And I fully believe many people feel this way, and by extension, living in a situation that affords certain top-5% health benefits (like being poor in America) but which does not confer the status they want, is a form of perpetual misery.
There's also research on Last Place Aversion that somewhat refutes what you're saying [0]. People who are in second-to-last place will oppose policies that make everyone unilaterally better off if those policies also move them from second-to-last into last place. They prefer a poorer world overall (even themselves poorer in absolute terms) so long as they are not the truly lowest status person. A world in which everyone (including them) is better off, but they rank last, is worse.
[0] < http://www.nber.org/papers/w17234 >
In fact, realistically, status already is based on things like this. A friend of mine (roughly top 1-2%) complained to me last night that no matter how much effort he puts in, he still won't be as tall or non-bald as I am. And realistically, a hot woman earning $25/year has much higher status than both of us 1-2%ers.
I hardly think it's that simple.
It was your theory that being the richest person in the neighborhood raises your status, not mine. I'm glad we've mutually rejected that theory.
Deluded people move to New York and LA frequently, often to their own detriment, because of the status of residing in such glamorous places.
Why do you believe that they do so for status rather than for other amenities (e.g. access to jobs, NY/LA lifestyle, a desire to be near people they identify with)?
If you are really concerned about such things, the right solution is a pigouvian signalling task - apply a tax to status goods to internalize the externality. E.g., we should tax things like education, suits, good looks, and loudly criticizing Trump on twitter/facebook.
I feel like you didn't really read my comment. Have you read Harrison Bergeron? The premise is that people receive body or mind alterations to suppress natural advantages or enhance natural flaws in order to make everyone equal.
I was already accounting for consumption being generalized to something like the advantages or good looks or a quick wit in my comment before.
> I'm glad we've mutually rejected that theory.
This is a bit glib, almost antagonistic, of you. The Last Place Aversion literature I linked provides direct evidence that at least a mild form of the effect I described exists, so I certainly don't reject it. All I'm saying is that, like all simple theories, it's not perfect. There are situations where being high status among poor is better than being low status among rich. I am not saying anything more specific.
Regarding the signaling tax -- I mostly do agree. I think we should use the same governmentally forced redistributive procedures that we apply to income or wealth and also apply them to sex, good looks, loneliness/social connection wealth, etc.
It's just too ingrained in our primitive morality to view these as acceptable. And I think that stems from another hypothesis from Hanson, in his blog post "Inequality talk is about grabbing" -- basically that we focus on monetary redistribution instead of say sex experience redistribution because we believe it's easier for us to use coalition politics to take what we want in terms of money, whereas we less believe it would work for sex, and for some other things, like, say, true love redistribution, we could not really even know if we were successfully grabbing what we wanted.
I agree that a mild form of status seeking exists (e.g. last place aversion), but I was taking issue with the strong form.
Personally, I don't bite the bullet of extreme redistribution myself. There are a few forms of harmful signalling I'd favor taxing (e.g. educational certification) and a few forms of negative signalling I'd favor subsidizing/regulating (e.g. mandatory paternity tests), but generally I think we just need to accept accidents of birth/luck/etc and should only apply minimal interference in extreme cases. I raise this more as a reducto-ad-absurdum than something I actually advocate.
https://www.buzzfeed.com/gayatrijayaraman/broke-hungry-and-o...
>Their influences are not difficult to spot. Their startup economy’s success stories are of entrepreneurs who spent VC money to create their own wealth, who spent every paisa immediately to multiply each into a rupee. The stories they hear are of Mukesh Ambani, who inherited an empire and built a very expensive home, instead of Dhirubhai, who lived in a very small home and built a very big empire. They read about Katrina Kaif’s hair costing ₹50 lakh to dye correctly. They internalise the lesson that to earn any money, you’ve got to spend a lot of it.
The comments local to india are telling
>You completely misunderstood the point. You need that burger to socialise, FOR THE SAKE OF YOUR JOB. Your job as an actor would require you to dress well, your job as a journalist will require you to go to places for interviews that you probably cannot afford yourself, and neither will your company pay for it. It isn't that simple, choosing roti over burger.
So apparently, your example, job for job, starves in india, but may hopefully be caught by the safety net in the US and may luckily escape out as they get older.
http://siteresources.worldbank.org/INTPOVRES/Resources/47722...
Yearly statistics on India are not very good. Realistically if you have accurate info on what happened in the past 5 years (form what I've seen, they've been great!), you should keep quiet about it and just rake in crores in the shares markets.
"Now, consider mean income of the people belonging to the top decile or ventile, in countries ranging from rural India to Cameroon. Their income puts them between the 51th and 69th percentile of world distribution. Therefore, these two distributions, e.g. Japan’s and rural India’s, practically do not overlap. Or to give another example: a Frenchman on welfare or unemployment benefits (who would presumably belong to the bottom decile of income distribution in France) would still be better off than a top decile person in Madagascar."
Note that it only talks about rural India. In fact all the charts in the paper, including the chart on top decile/ventile of poor vs bottom decile/ventile of rich on page 47 do not even include Urban India. I would be curious to see this study repeated with current numbers and without splitting India into urban and rural. Especially because of the amount of urbanization and economic growth that India has seen since 1998.
I spent a few minutes googling hoping to find something academic by the same author, but didn't look as carefully as I should have.
But since you've called me out, I dug up my copy of the book. Apparently this paper is the original source and it uses 2005 data: https://www.gc.cuny.edu/CUNY_GC/media/CUNY-Graduate-Center/P...
No idea where to get the most current data.
We also had diaper service, dry cleaner, milk, and Charles Chips: all pickup and delivery by a dedicated truck on a regular schedule.
All these service jobs are gone now. Dead tree newspaper delivery is next.
IIRC, yes, there was a time (up through the late 19th, early 20th century) where having at least one live-in household servant, often either specifically a cook or a generalist where cook would be part of their duties, was typical of the middle class, and not entirely uncommon in the middle class through the middle or so of the 20th Century.
The Taxi Medallions where obviously out of touch with reality because technology allow anyone to be able to drive a car and find the right address, but it does so by lowering the money you can actually make and so removing restrictions creates more jobs but at lower salaries (especially in ubers case where they dont allow drivers to hire other drivers).
It's ironic how many people who normally claim to be free market proponents simply ignore the consequences of the free market when it works against their argument.
Nothing in that post changes the fact that there are less and less jobs and that there will continue to be so as long as technology progresses.
We can hope that prices comes down so we don't need a lot of money to get by, but unless something fundamentally change not just robots, technology is going to take over all functions on what we today consider jobs humans can do.
Nobody, and I mean nobody, wants to go back to Upton Sinclair's "The Jungle" wrt the linked article's discussion of street food providers. The current establishment system sucks about as bad as "The Jungle" yet in a totally different way. A pre-FDA, pre-OSHA, pre-FCC, pre-FAA world? No thanks!
The solution is that historically the establishment changes as little as possible with the exception of riots, revolutions, and guillotines. Status quo till the collapse. A new cultural solution such as all laws and regulations having a sunset date might help us smooth over the human nature boom bust cycle of laws and regulation.
All laws and regulations stink after they sit around too long and start rotting. You can use tech and muscle and money to try to prevent change, or you can try something totally new and flow with change.
My bright idea won't help with entrenched interests such as property owners. Nobody who paid $5M for the land for a restaurant is EVER going to make nice with food trucks. In a limited way bureaucracy can help.. crack the path of money... "I'm so sorry mr restaurant real estate landlord, but you don't pay prop taxes that fund the state DMV and we're in charge of the road regulations WRT selling food from a truck, so if you don't like progress you can pound sand or rent to a different type of business other than restaurant."