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The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic pr

The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic prospects of millennials (as a group) in ways that can't readily be overcome with thriftiness and hard work. Here's an excerpt of the article that really clarified this for me: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and enjoying the same benefits as everyone else. Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc., Watery Margarita Inc. In 2015, the Government Accountability Office estimated that 40 percent of American workers were employed under some sort of “contingent” arrangement like this—from barbers to midwives to nuclear waste inspectors to symphony cellists. Since the downturn, the industry that has added the most jobs is not tech or retail or nursing. It is “temporary help services”—all the small, no-brand contractors who recruit workers and rent them out to bigger companies." from: http://highline.huffingtonpost.com/articles/en/poor-millennials/ http://highline.huffingtonpost.com/articles/en/poor-millenni...

pitaj 9y ago
The specific example you bring up seems to be a result of increased liability on the employer for employees. Hotels etc would rather contractors carry those liabilities, especially I imagine when it comes to possibly illegal immigrants.
- knuththetruth 9y ago
  Sure, but that's not some kind of neutral, organic development. It's something the rich choose to do, in collusion with politicians, to increase their own wealth and power. Shifting all the "liability" onto workers, creating an economy where everyone but the wealthiest are fungible serfs, is a specific set of values and decisions advanced by these people because it benefits them.
  - iguy 9y ago
    It is _partly_ organic, or rather, technological. General Motors did everything in house (partly) for the same reason the hotel did: the computers needed to keep track of today's supply chain / subcontracting payments & management didn't exist. The efficient thing was to have one centralised payroll department cutting checks. But politics played a big role too. It deserves to be noted here that almost all the employees at this (1960s NYC, say) hotel were born Americans. While today a large proportion would not be, a factor which tips the balance of power towards their managers.
    - knuththetruth 9y ago
      Businesses like Costco have supply chain dynamics as complex as any hotel chain, if not moreso, and they still manage to treat their employees better and more equitably. I don’t disagree that technology has changed these dynamics, but the way power and wealth has been distributed in response to these changes is almost exclusively upward and to fewer and fewer people. Nothing about that is neutral or organic, unless you’re talking about the trajectory of wealth and political power under some Marxist analysis of Capital accumulation.
  - adrianratnapala 9y ago
    > It's something the rich choose to do, in collusion with politicians, So legislation purportedly for employee protection backfires by making direct hires uneconomical and you call this " something the rich choose to do, in collusion with politicians"?
    - knuththetruth 9y ago
      By an reasonable comparison to other wealthy economies in the developed world, no such labor protections exist in the US. What little protections are in place have been systematically under attack since at least the 1970s. If we we're talking about somewhere like France, perhaps this argument would hold water. Otherwise, seems like a strawman.
    - s73v3r_ 9y ago
ikeyany 9y ago
What can the average person do about this system? It seems like it's only becoming more widespread.
- sametmax 9y ago
  Open a company. Try to avoid it. Understand why others do it. Then look for solutions.
  - ikeyany 9y ago
    Others do it because it's cheaper than providing full-time salary+benefits. Average people don't really have the resources or connections to open a company.
    - manigandham 9y ago
      What resources or "connections" do you need? Thinking you need all these things before you can start is the biggest obstacle to actually starting.
      - sokoloff 9y ago
        Realistically, you need a couple thousand dollars at an absolute barest minimum to open a company and strike out on your own. Incorporation paperwork and filings, even for an LLC in an inexpensive state will be a few hundred, with an Inc generally more. Annual filing fees run $800 minimum in my state; that's if you do all the calculations and paperwork yourself. Then, you need adequate capitalization for the company (to avoid it being regarded as under-capitalized should the question of piercing the corporate veil ever come up). This must be used for working capital for inventory, WIP, raw materials, utilities, salary/living expenses, perhaps rent or transportation and needs to cover you between the time you start and when you are cashflow positive. You may need a license or permit from the town/city/AHJ to operate. Telling someone living paycheck to paycheck to "just go start a company" is fairly unrealistic I think.
        9y ago
T2_t2 9y ago
Except they also had less. This is the ... I'm not sure of the right word, paradox? duality? ... anyway, the problem/benefit of globalisation, that it leads to cheaper stuff. We all have more today, even on less money. Thought experiment: ask yourself when it was better to be poor: 1950, or 2018. In 1950 you could... go to the library? In 2018, even the very poor likely have a mobile phone, the internet, a games console, and an near endless world of entertainment. The problem is not with income as much as costs. The NIMBYism of a lot of places inflates the cost of the main expenses like rent - where most people's money goes - and the cost of getting around, as people are forced to live further away from jobs. That was the big finding from the minimum wage hike in Seattle, that poor people where forced to travel further for work, and it cost them more. Ironically, I think that is pretty much how all cities work since crime went away. The days of the poor occupying prime real estate near a city is pretty much over. Even sans better employment opportunities, fixing the zoning laws in most cities would lead to better lives for many people. Sadly, this NIMBYism is really hard to fight against, and often the people it hurts fight hardest for it.
- KingMob 9y ago
  The plummeting costs of technology over time make it a poor barometer for measuring wealth. Instead of mobile phones and TVs, look at bigger items like health care, housing, and education, all of which have gotten more expensive (in the case of education, astoundingly so) even as inflation-adjusted wages have decreased.
  - stretchwithme 9y ago
    Ignore manufactured goods and focus on labor intensive ones? No, I think it all matters. And the fact that technology is getting cheaper IS an improvement in our standard of living. People who can find anything within minutes and talk to anybody anytime ARE wealthier than those who have to spend large amounts of time to do the same things.
    - jacobush 9y ago
      Potentially wealthier. If they find within minutes where their opiate supplier is, the new cat video and talk to anybody about what the Kardashians (sorry, Kardashians) were up to... are they really wealthier than when these sorts of things took longer?
technofiend 9y ago
What's amazing to me is the IRS severely cracked down on contractors to the point where it was nearly impossible to get a contract in IT. Now we see employers abusing the contract system again but where's the IRS this time?
lsc 9y ago
I don't think that's the entirety of the problem. I mean, that may be part of the problem; those temp agencies take a nasty cut, but I am a temp worker going through an anonymous body shop, and I make pretty good money, like I can't contribute to a ROTH IRA good money. I mean, sure, I'd be making another 40% if I were a direct hire, but I interview pretty regularly for that sort of thing, and while I can reliably get contract gigs at top-tier companies, so far it appears that I don't meet the direct-hire bar for top-tier companies, and I'd kinda rather stick with the contract gig at a top tier company than a direct hire at the third tier down. Similar money, and the food and the company is better here. Also, they don't expect you to drink the kool-aid as much as a contractor, and I am kinda bad at consuming company kool-aid. (Note, that is a little bit of sour grapes... I think the primary thing keeping me out of direct hire positions at top-tier companies is my technical ability, which is improving... but the kool-aid factor is a big part of why I'd prefer to contract at a top-tier company than be a direct hire at some place that is not.) My point is just that the temp agencies are not the whole of the story here; for some reason, there's not enough demand for most kinds of labor to lift wages much above the statutory minimum. Why is this? We've got an oversupply of labor, why hasn't the market figured out how to use said labor?

pitaj 9y ago

The specific example you bring up seems to be a result of increased liability on the employer for employees. Hotels etc would rather contractors carry those liabilities, especially I imagine when it comes to possibly illegal immigrants.

knuththetruth 9y ago
Sure, but that's not some kind of neutral, organic development. It's something the rich choose to do, in collusion with politicians, to increase their own wealth and power. Shifting all the "liability" onto workers, creating an economy where everyone but the wealthiest are fungible serfs, is a specific set of values and decisions advanced by these people because it benefits them.
- iguy 9y ago
  It is _partly_ organic, or rather, technological. General Motors did everything in house (partly) for the same reason the hotel did: the computers needed to keep track of today's supply chain / subcontracting payments & management didn't exist. The efficient thing was to have one centralised payroll department cutting checks. But politics played a big role too. It deserves to be noted here that almost all the employees at this (1960s NYC, say) hotel were born Americans. While today a large proportion would not be, a factor which tips the balance of power towards their managers.
  - knuththetruth 9y ago
    Businesses like Costco have supply chain dynamics as complex as any hotel chain, if not moreso, and they still manage to treat their employees better and more equitably. I don’t disagree that technology has changed these dynamics, but the way power and wealth has been distributed in response to these changes is almost exclusively upward and to fewer and fewer people. Nothing about that is neutral or organic, unless you’re talking about the trajectory of wealth and political power under some Marxist analysis of Capital accumulation.
- adrianratnapala 9y ago
  > It's something the rich choose to do, in collusion with politicians, So legislation purportedly for employee protection backfires by making direct hires uneconomical and you call this " something the rich choose to do, in collusion with politicians"?
  - knuththetruth 9y ago
    By an reasonable comparison to other wealthy economies in the developed world, no such labor protections exist in the US. What little protections are in place have been systematically under attack since at least the 1970s. If we we're talking about somewhere like France, perhaps this argument would hold water. Otherwise, seems like a strawman.
  - s73v3r_ 9y ago

ikeyany 9y ago

What can the average person do about this system? It seems like it's only becoming more widespread.

sametmax 9y ago
Open a company. Try to avoid it. Understand why others do it. Then look for solutions.
- ikeyany 9y ago
  Others do it because it's cheaper than providing full-time salary+benefits. Average people don't really have the resources or connections to open a company.
  - manigandham 9y ago
    What resources or "connections" do you need? Thinking you need all these things before you can start is the biggest obstacle to actually starting.
    - sokoloff 9y ago
      Realistically, you need a couple thousand dollars at an absolute barest minimum to open a company and strike out on your own. Incorporation paperwork and filings, even for an LLC in an inexpensive state will be a few hundred, with an Inc generally more. Annual filing fees run $800 minimum in my state; that's if you do all the calculations and paperwork yourself. Then, you need adequate capitalization for the company (to avoid it being regarded as under-capitalized should the question of piercing the corporate veil ever come up). This must be used for working capital for inventory, WIP, raw materials, utilities, salary/living expenses, perhaps rent or transportation and needs to cover you between the time you start and when you are cashflow positive. You may need a license or permit from the town/city/AHJ to operate. Telling someone living paycheck to paycheck to "just go start a company" is fairly unrealistic I think.
      - 9y ago

T2_t2 9y ago

Except they also had less. This is the ... I'm not sure of the right word, paradox? duality? ... anyway, the problem/benefit of globalisation, that it leads to cheaper stuff. We all have more today, even on less money. Thought experiment: ask yourself when it was better to be poor: 1950, or 2018. In 1950 you could... go to the library? In 2018, even the very poor likely have a mobile phone, the internet, a games console, and an near endless world of entertainment. The problem is not with income as much as costs. The NIMBYism of a lot of places inflates the cost of the main expenses like rent - where most people's money goes - and the cost of getting around, as people are forced to live further away from jobs. That was the big finding from the minimum wage hike in Seattle, that poor people where forced to travel further for work, and it cost them more. Ironically, I think that is pretty much how all cities work since crime went away. The days of the poor occupying prime real estate near a city is pretty much over. Even sans better employment opportunities, fixing the zoning laws in most cities would lead to better lives for many people. Sadly, this NIMBYism is really hard to fight against, and often the people it hurts fight hardest for it.

KingMob 9y ago
The plummeting costs of technology over time make it a poor barometer for measuring wealth. Instead of mobile phones and TVs, look at bigger items like health care, housing, and education, all of which have gotten more expensive (in the case of education, astoundingly so) even as inflation-adjusted wages have decreased.
- stretchwithme 9y ago
  Ignore manufactured goods and focus on labor intensive ones? No, I think it all matters. And the fact that technology is getting cheaper IS an improvement in our standard of living. People who can find anything within minutes and talk to anybody anytime ARE wealthier than those who have to spend large amounts of time to do the same things.
  - jacobush 9y ago
    Potentially wealthier. If they find within minutes where their opiate supplier is, the new cat video and talk to anybody about what the Kardashians (sorry, Kardashians) were up to... are they really wealthier than when these sorts of things took longer?

technofiend 9y ago

What's amazing to me is the IRS severely cracked down on contractors to the point where it was nearly impossible to get a contract in IT. Now we see employers abusing the contract system again but where's the IRS this time?

lsc 9y ago

I don't think that's the entirety of the problem. I mean, that may be part of the problem; those temp agencies take a nasty cut, but I am a temp worker going through an anonymous body shop, and I make pretty good money, like I can't contribute to a ROTH IRA good money. I mean, sure, I'd be making another 40% if I were a direct hire, but I interview pretty regularly for that sort of thing, and while I can reliably get contract gigs at top-tier companies, so far it appears that I don't meet the direct-hire bar for top-tier companies, and I'd kinda rather stick with the contract gig at a top tier company than a direct hire at the third tier down. Similar money, and the food and the company is better here. Also, they don't expect you to drink the kool-aid as much as a contractor, and I am kinda bad at consuming company kool-aid. (Note, that is a little bit of sour grapes... I think the primary thing keeping me out of direct hire positions at top-tier companies is my technical ability, which is improving... but the kool-aid factor is a big part of why I'd prefer to contract at a top-tier company than be a direct hire at some place that is not.) My point is just that the temp agencies are not the whole of the story here; for some reason, there's not enough demand for most kinds of labor to lift wages much above the statutory minimum. Why is this? We've got an oversupply of labor, why hasn't the market figured out how to use said labor?