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Silicon Valley wages have dropped for non-tech jobs

188 points by Futurebot 8y ago

crankylinuxuser 8y ago
Surprised? I'm not. Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes. https://www.nytimes.com/2015/01/15/technology/silicon-valley-antitrust-case-settlement-poaching-engineers.html https://www.nytimes.com/2015/01/15/technology/silicon-valley... Google, Apple, Intel and Adobe in this one.... https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay here. https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixing-enforcement-action-following-joint-doj-ftc-human-resources-guidance https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixin...
- lupire 8y ago
  The article is about non-tech employees' wages dropping.
- rayvy 8y ago
  I'm sure you'll get downvoted to kingdom come, but I actually checked out the included links - interesting stuff
  - crankylinuxuser 8y ago
    > I'm sure you'll get downvoted to kingdom come, but I actually checked out the included links - interesting stuff Oh, indeed I shall. Still, we're sold a bundle of goods by the capitalists that "unions are evil" and et cetera, yet when when it is advantageous to the very capitalists, they form unions of their own to hold down the very workers' wages. Now, some unions do indeed suck. They were ineffective and only lacklusterly fought for employee rights. Yet, many demanded fair compensation and safe working conditions. And with companies forming unions, are pushing both of those down. Look at FAANG on glassdoor and news websites. They're no rosy pictures, unless you're in ML at the top. But that price bump is just temporary. It'll come down in time. What I'd hope is that tech realizes that the capitalists are treating us IT people as yet more line workers. Where once we had rooms, they dissolved to cubicles. From cubicles, we only wish we had them as now it is "open office" concepts. Insurance premiums keep going up, and compensation keeps lowering. And with more automation, the demand for more work skyrockets. 'Fire 2 and let the 3rd take over'. Ive read those stories again and again. IT needs unions, now more than ever. It is the only counteracting force when 'They' (capitalists) are indeed out to get us.
    - Arbalest 8y ago
      I think for organisations such a thing is called a cartel. Cartels are usually illegal, but only ever get noticed on the sale side, and some are downright legalised (eg OPEC).
      - GeneralMayhem 8y ago
        I don't think calling OPEC "legal" is particularly meaningful, considering the entities participating in the cartel are nation-states.
    - Aeolun 8y ago
      They are not out to get you. They’re just doing what makes most sense for them.
    - refurb 8y ago
      It's less about capitalism and more about people just lining their own pockets. It's human nature. It's not like unions aren't susceptible to the same thing. [1] [1]http://nlpc.org/2018/01/18/top-ten-union-corruption-stories-year-8/ http://nlpc.org/2018/01/18/top-ten-union-corruption-stories-...
    - thepp1983 8y ago
      Also as I previously replied to your original statement capitalism != corporatism. The large tech companies should have been broken up about 5 years ago. The only reason that any of us have job is because capitalists in the 70s and 80s popularised computers so they were small enough and low enough in price for anyone to own. It really pains me that most are completely ignorant of anything that happened in computing before the mid-90s. Regulation and Unions help corporations because it makes it raises the bar of difficultly for startups to enter any market. As for working environment. I work from home and I freelance. I run a high end modern workstation with dual 4k screens, a nice sound system for music and my choice of caffeinated beverages. If you don't want to be a slave to the man, work for yourself.
- hazz99 8y ago
  Edit: I'm not a mod, nor trying to masquerade as one. > Please don't use Hacker News primarily for political or ideological battle. This destroys intellectual curiosity [0] Please keep your ideological battles away from HN. [0] https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - crankylinuxuser 8y ago
    Rather than threats, I'd like to hear commentary. If anyone's "destroy[ying] intellectual curiosity", its the one threatening bans. I've made a point, from multiple sources, that SV major players are retarding salaries from all but the C-level positions. Considering that YC is in that area, it would be a rather interesting discussion to hear from the VC's vs workers vs founders. But, threats.
    - hazz99 8y ago
      > it would be a rather interesting discussion to hear from the VC's vs workers vs founders. I'd love to hear that conversation, I think it'd be very interesting. That is very tangential to commentary on capitalism itself, which is purely ideological.
  - tomcam 8y ago
    Sticking up for my ideological opposite crankylinuxuser again. HN is constantly used for political and ideological battle. Why is crankylinuxuser's different?
    - hazz99 8y ago
      Disclaimer: I'm not a mod, so you don't have to listen to my opinion. This article is about low-skill workers, and has nothing to do with tech companies being against unions. But, it could simply be a tangential discussion, and those are often interesting! My main concern was the Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes. generalization, which turned a potentially interesting discussion of tech unions into an "capitalism vs. xyz" ideological battle.
- tomcam 8y ago
  Upvoted not because I agree (I'm a happy capitalist who happens to hate corporate welfare) but because many, many people on HN have views like this. Don't know why parent should be downvoted for them. Why single this person out?
- thepp1983 8y ago
  Capitalism != Corporatism. We have a problem with corporatism not capitalism. Please learn the difference.
  - dragonwriter 8y ago
    > Capitalism != Corporatism. True. > We have a problem with corporatism not capitalism. In the U.S., we have a problem with something much closer to capitalism. (People occasionally indicate that it is a problem with “crony capitalism”, but cronyism has always been a feature or capitalism, it is not an aberration or alien feature.) In China (and even maybe Mexico, though much moreso during the PRI one-party era) there is a problem with corporatism, which is not th same thing as (even crony) capitalism. Both are problems of global impact, to be sure.
    - thepp1983 8y ago
      > Crony capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. No crony capitalism is not a feature of capitalism. Crony capitalism is a feature of corporatism. You clearly don't understand the terms you are using. China is a totalitarian state that as long as those businesses keep in line and bring enough benefit to the state (which is run by wealthy elites). Businesses are allowed to exist if they don't challenge this status quo. In China an individual has no property rights unlike most of the Anglo-sphere. This is because property rights are an important pre-requisite to many of the other rights we enjoy in the western world.
      - dragonwriter 8y ago
        > No crony capitalism is not a feature of capitalism. Yes, it's a feature of the real world system for which the term capitalism was coined by it's 19th Century critics, and it's been a prominent feature of every real example (including, to a varying extent, the modern mixed economies that have completely replaced the original system named “capitalism”, but retain significant elements of its structure, and are often referred to as “capitalism”.) It may not be a feature of the incoherent and unworkable “ideal” capitalism dreamed up as a defense after the criticism in which “capitalism” was named, but that fantasy has little relevance to anything. > Crony capitalism is a feature of corporatism. No, it's not. Capitalism, crony or otherwise, isn't an essential feature or corporatism, though some versions of corporatism have encompassed elements of capitalism though sometimes at a fairly superficial level. It's true that corporatism provides strong opportunities for cronyism, though.
kuyaab 8y ago
It’s incredible how hard it’s been for retail and service companies to recruit lower-wage workers her in the South Bay. Mike Rowe and tech execs love to talk about skills gaps, but the fact is most jobs aren’t filled because the compensation these positions offer is garbage.
- claydavisss 8y ago
  They're trapped - probably unable to even scrape together the money to move. Moving is expensive! You need the money not only to relocate, but also to tide you over until you find work. Casual mobility is for the wealthy.
  - bredren 8y ago
    It isn't just that, many low wage people have their families there. Sometimes extended family. Moving would mean moving the whole clan away from friends and their connections and where they grew up. Moving is not a small thing.
    - dabockster 8y ago
      Exactly this. Moving elsewhere when your extended family has lived in one place for multiple generations is probably one of the largest risks a person can take. You’re essentially trading most or all of your network for the possibility of a better life. If the possibility doesn’t work out, the person is usually worse off than if had they stayed in their original location.
    - yourbandsucks 8y ago
      And no childcare for their children.
  - curuinor 8y ago
    henry george strikes again!
  - gr33nman 8y ago
    Not to mention that less wealthy people often rely on extended family for support such as childcare. For many people, leaving family behind is a risk not worth taking.
lupire 8y ago
The author almost noticed Simpson's paradox: > Surprisingly, the UC Santa Cruz study suggests that employment in low wage industries is growing. The share of worker in jobs considered low-wage in 1997 grew 25 percent over the next 20 years, while the percent working in middle- and high-wage jobs declined. The problem isn't that wages are dropping for certain work; the problem is that middle-wage jobs are being automated away, leaving only low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes.
- dunpeal 8y ago
  > low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes. Machines already have those. They're just more costly and clunky than humans, often by a relatively small margin. Anyone thinking low-skilled / low-paid jobs are not automatable is deluding themselves.
- Barrin92 8y ago
  the jobs that are mentioned in the article that are being hit the hardest are teachers, firefighters, caretakers and so forth. How many of those have been automated away? It seems that tech workers in the valley have found their own analog to blaming immigrants for downward wage pressure, their particular boogeyman seems to be the robots. No, the answer is much more trivial. As the article points out, the huge influx of capital in the area is being returned only to the tech sector, who merrily spend it and drive up the cost of living. The machines are not to blame for this one.
  - empath75 8y ago
    I think there’s a step missing in the analysis there. If tech workers are spending all this money — what are they spending it _on_? If they’re spending it locally shouldn’t that increase wages locally?
    - jameslevy 8y ago
      Shelter and avocado toast.
Scipio_Afri 8y ago
Boost the wage floor. High skilled workers have more force to push against the wage supply price that employers set; they have a lot of power to set wages, including an entire department called HR dedicated to ensuring they get the best deal as they can. Low wage employees do not have that power.
- mlindner 8y ago
  The wage floor has been continuously getting raised. Many areas of California have the highest minimum wage laws in the country. That isn't going to solve the problem.
  - rrcaptain 8y ago
    Only very recently and many haven't even raised all the way. But I agree that it's not going to solve the problem, only a maximum income can solve that.
  - Scipio_Afri 8y ago
    Adjusted for inflation its lower than it was in the 1960's
- malandrew 8y ago
  Raising the wage floor just puts more upward pressure on housing.
  - dredmorbius 8y ago
    So you need to attack both. Land tax and wage floor.
jjtheblunt 8y ago
Meanwhile Nancy Pelosi and company keep on taxing to support inefficient bureaucracy
- claydavisss 8y ago
  A little trollish, but now that Democrats have a veto-proof majority (meaning Gavin Newsom is really just a spokesperson, his opinion is irrelevant, he cannot veto legislation), Californians only have one party to ask why the State is the way it is....the #1 poverty State. Not only can Californians no longer blame Republicans (there basically aren't any left in the State), they can't even blame the Governor...he is truly pointless as he can no longer even veto legislation.
  - flukus 8y ago
    > Not only can Californians no longer blame Republicans Assuming republicans are at fault (I know nothing of California state politics, so not taking a side here) it will take years to decades to move beyond any damage their policies caused. Politicians aren't free of blame they day they're voted out.
    - claydavisss 8y ago
      Well, you are right about one thing - you know nothing of the State politics Democrats have had a virtual lock on this State for at least five years. So much so that their primary nemesis was their own moderate Governor, Jerry Brown. Think about that - conservatives had been so utterly decimated that the only thing standing in the way of the State legislature was a Governor from their own party. They have a pliant Governor now but it is irrelevant - he can't even veto their bills anymore. He's a hood ornament and he knows it. And astoundingly, outrageously, you actually think State Republicans, who have basically been an endangered species for years...are actually to blame. Wow. As it stands the last Republican Governor of the State was basically a Democrat anyway. But sure, maybe its all Pete Wilson's fault.
      - vernie 8y ago
imagetic 8y ago
As someone who lives in the outer bay area, pay for jobs hasn't really gone up at all in the last 8 years, but the tech industry has really pushed the cost of living up a lot. I can't say I've noticed a drop in pay outside of the media industry since that's what I work in. And a lot of that has to do with the cost of gear now and the supply is so high buy the demand hasn't grown that much. Most of my neighbors are contractors / construction workers. Nobody I know can fathom buying a home. But until last year things were fairly stagnant for them. There is a lot more construction going on now, but it's mostly to turn homes we can't afford into vacation rentals.
- mlindner 8y ago
  This is because zoning laws largely prevent additional housing construction. Converting existing housing isn't blocked however so converting them to vacation rentals makes sense economically.
deleted 8y ago
[deleted]
kumarm 8y ago
Call any service business from top list on Yelp (Handyman, Dryer Vent Cleaning, Plumber etc), they would charge minimum 80$ (Irrespective of whether they do work or not). Where is this money going?
- itomato 8y ago
  Time spent sitting in traffic?
Aeolun 8y ago
Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world?
- mlindner 8y ago
  That's because creation of new housing is highly restricted in Silicon Valley because of high regulation and very restrictive zoning laws. And additionally all the money that would be going to the low income is getting sucked out by the continuous raising of the minimum wage, greatly restricting the size of the labor market at the low end resulting in higher unemployment.
- clubm8 8y ago
  > Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world? Not really - a natural side effect of corporations not paying their fair share in taxes, alongside employees who are compensated in ways (stock options) where large chunks of their salary are untaxable by local governments. (It's my understanding it's much harder for local governments to tax stock options as capital gains go to feds, please correct me if I'm mistaken)
  - GeneralMayhem 8y ago
    That's half true at best. Capital gains are reported on your tax return as a form of income. The rate at which they're taxed is up to each jurisdiction. For federal taxes, long-term capital gains happen to be taxed at a lower rate than other income. For California state taxes, there is no such distinction - all income, including capital gains, is taxed on the same progressive taxation schedule. So for Californians, getting paid in stock options usually results in lower federal taxes, but no change in state taxes. Now, where it gets interesting is with local jurisdictions. In California, cities and counties are not allowed to collect income taxes. However, San Francisco does collect payroll taxes. Paying your employees in options could reduce the amount that counts as payroll, but only if the stock options are increasing in value quickly. If your employees are getting all of their money from you, the city gets its cut. If your employees are getting some of their money from you and some from the stock market, then the city loses out on the latter portion - but most employees should consider that a bonus and negotiate pay primarily based on current value, so that shouldn't matter too much in the long run. What the city (but not the state!) definitely misses out on taxing is capital gains on wealth already accrued. When I make money on investments (not so much this year, but hypothetically), the city doesn't get anything from that, because there's no payroll involved. The feds get some of it (at the reduced capital gains rates, assuming I've held for a year); California gets some of it (at the full income tax rate); San Francisco gets none. But again, that story is only for investment income on money I already had, not for new stock compensation.
yjhoney 8y ago
I started a nonprofit 2 years ago (garagescript.org) that hires low income people in San Jose and their full time job is to learn how to code and teach new students. Our nonprofit started off with 20 students, most were making about 25k/year and had no coding experience. I paid each of them 2k / month to quit their jobs and focus on coding full time. From the original 20 students, 6 are left. The other 14 are all full-stack software engineers. If anyone wants to help out, send me an email to song at garagescript.org. I believe the real long term solution is to train under-served communities better and help them acquire technical skills. edit remove donation link.
- StudentStuff 8y ago
  This seems like a great model, and your a kind person to burn through all your savings and 401k to build a nonprofit that helps some of the most disadvantaged among us. Hopefully more than a few of us will support your efforts!
- snazz 8y ago
  You should post this as a Show HN. That’s a wonderful idea. I’m sure many people would gladly donate.
  - yjhoney 8y ago
    I'm currently just focused on helping students with their learning. I don't plan to do a Show HN until the remaining students get a job because I think the attention might be distracting. I plan to do a writeup after the remaining 6 students gets a job and while I take a breather, hope you get a chance to see it next year!
    - ENGNR 8y ago
      It sounds like you should apply for Ycombinator, they accept non-profits too The hardest bit will be doing the marketing, getting sponsorship or donations from alumni so that it’s a sustainable organisation
CydeWeys 8y ago
I have when the news writes an entire article around a single report, but then fails to link to that report. You had one job ... Anyway, here's the report in question: http://www.everettprogram.org/main/wp-content/uploads/TIGHTROPE-2018-REPORT.pdf http://www.everettprogram.org/main/wp-content/uploads/TIGHTR... Reading the fine details of the report, you see that the top-line metric is real income, adjusted for inflation and local cost of living. And the #1 factor that's proved ruinous to local cost of living in the Bay Area these past two decades is of course housing prices. If zoning restrictions were relaxed and more housing was allowed to be built, costs would be reduced and a lot of these problems would be solved. The Bay Area has a critical lack of housing, which is driving all these prices up and causing most of the decline in CoL-adjusted non-tech wages.
- bcatanzaro 8y ago
  Thank you! I had no idea what they were talking about in that article. Not only did they not link the report, they didn't even explain how they were measuring real income. Which matters a lot. My #1 issue is housing. We have got to build more in the Bay Area. It's a social justice issue.
- dublidu 8y ago
  If only we could aloe property assessments to increase with a local cost of living index, we would at least have enough property tax revenue to pay teachers.
  - pm90 8y ago
    I think we should be careful with this. Currently, because of the frozen property tax law, many houses worth millions pay very little in property taxes; if they did have to pay taxes on the millions of dollars their property is worth, they would have had to sell their houses ages ago. This would have likely created a downward pressure on the prices; making it unlikely that the home prices would reach the levels they are now. All of which to say that assessing the property tax on the current market value of all those properties isn't an accurate number; there is no way there are so many people making that much money living in California.
mlindner 8y ago
Silicon Valley has a multi-fold problem. 1. Housing is expensive because of the influx of people immigrating to the state from out of state and also out of country. (I'm one of them.) This causes a housing shortage which will naturally drive up price of housing. 2. The housing prices don't come down because California in general has very restrictive zoning laws, especially in the most expensive areas, that prevent building of sufficient housing density to cover demand. This in turn drives housing development further outside of the bay area forcing long commute times and highway usage. 3. Because of the high cost of living (primarily from housing, food/etc is not significantly more expensive) from the above problems the solution proposed is to greatly raise the minimum wage, now hitting $15 in many areas. This causes a drive to automate away simpler jobs (also providing an entry for further tech startups to automate these things) or more commonly, move the jobs out of the state via company acquisition followed by moving the administrative jobs to company headquarters located out of state or sometimes out of country. A high minimum wage reduces the available job market by putting an artificial job supply limit in place thus causing unemployment for these simpler jobs. 4. On top of this there's a loophole for illegal immigrants where companies abuse them by paying them below minimum wage because they are here illegally. (Another reason that giving a path to legal immigration for illegal immigrants would help things.) The first thing and most important thing that needs to happen is for the state to overrule local zoning laws (as opposed by the NIMBYs) and force generic zoning, allowing unrestricted housing development. Just look at the south bay area. The zoning is obvious even looking at satellite maps. Industrial areas are kept separate from housing which are kept separate from retail. This prevents natural intermixing of these causing a lot of need for road development to allow people to travel between these blocks rather than walking down the street.
- humanrebar 8y ago
  > ...giving a path to legal immigration for illegal immigrants would help things. I would rather consider paying anyone below minimum wage a form of wage theft and prosecutable as a criminal offense. Dunno why embezzlement is a felony but breaking the law to underpay people is just grounds for a lawsuit.
  - jldugger 8y ago
deanmoriarty 8y ago
How about: 1) Introducing a much higher tax rate for rental property income. 2) Making property taxes be reassessed every single year unless your AGI is lower than average and you are a resident. 3) Introducing a much (much!) higher tax for non-residents/foreign investors who buy a house purely for investment, and sometimes they don't even rent it out (I know a few rich folks from FAANG who bought a handful of houses in MV, and they keep them empty because they don't want the trouble of dealing with tenants, they say the appreciation is more than enough, to me it's borderline criminal). I've seen numerous instances of those three events playing out against normal people trying to afford some housing while working a normal job. If it's not obvious, I'm heavily biased against real estate investors, because housing is a need for everybody, so the market should be much more regulated.
- stanleydrew 8y ago
  Regarding #3, maybe something like Vancouver's vacancy tax: https://vancouver.ca/home-property-development/empty-homes-tax.aspx https://vancouver.ca/home-property-development/empty-homes-t...
- bduerst 8y ago
  I've had a hard time explaining point 3) to people in other parts of the US, but its a huge and very real problem in the Bay area. Someone should do a "lights out" analysis in the Bay, where you count the number of homes that don't turn their lights on at night for 30 days.
  - malandrew 8y ago
    Software engineers can trivially solve this.
- jacobolus 8y ago
  Keep in mind the context of https://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197... It will take a lot of political organizing to undo. There have been several attempts and they all meet stiff resistance.
InclinedPlane 8y ago
So much of economics (as it exists in reality, not in theory) is not about maximizing RoI or efficiency or revenue or supply vs. demand, it's about power. Exercising it, abusing it, using it to set up class distinctions, reveling in the feelings of superiority and control, etc. That's a big reason why workers end up underpaid. It's not because it's good for business (it rarely is), it's simply an exercise of power. It feels good to those who want to set themselves up as being above others.
- dredmorbius 8y ago
  "Wealth, as Mr Hobbes says, is power." -- Adam Smith, Wealth of Nations https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/Chapter_5 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/... Or: Yes, I agree. And much of Smith's book concerns this.
anon2775 8y ago
Folks should unionize for livable wages. Walk off the job and be noisy until they're paid fairly. There's no other way because wealth and power concedes nothing without a resolute disagreement backed by action.
ummonk 8y ago
One thing I've noticed is that aside from rent, random expenses in NYC are so much more expensive. E.g. classpass classes, restaurants, etc. Do service workers get better paid there?
cutler 8y ago
This is the real truth about the tech boom - how it impacts society as a whole and who benefits. A nation's progress is measured by the standard of living of the average citizen, not the elite. By that yardstick the so-called advanced nations such as the UK and USA, with their spiralling housing costs, are moving backwards not forwards.
ReptileMan 8y ago
This looks like the run of the mill hollowing of the middle that has been going on since the late 70s.
helen___keller 8y ago
Zoning law and housing code were enacted across the nation in response to the crowded, unsanitary, and unsafe tenements of the industrial revolution. But, we’ve gone too far and allowed too much local control of housing. Now in 21st century American boomtowns, you can’t convert your single family into a duplex or small apartment building, you can’t convert the first floor of your building into a small business, you can’t have organic growth in your city the way cities had grown up until the early 20th century. Far from just outlawing tenements, we’ve outlawed our cities from adapting to change, which is why we see such absurdities as in the bay areas cost of living. For decades now we’ve been surviving off technical debt. Cars and roads allow us to survive even when our cities are absurdly inefficiently organized. But as the nation changes more and more, our top cities’ roads and street layouts don’t adapt to the change, so we have unbearable traffic in every major city. On top of that, we continue to ignore the needs of a more efficient method of organizing ourselves - relaxing zoning to allow organic growth in the city, and construction of mass transit between the dense regions that develop under this system. That’s how we developed cities before we started relying on cars, and what we need to do to continue scaling American cities. Or we can just accept as every house in the Bay Area reaches multimillion dollar price tag.

188 points by Futurebot 8y ago

Surprised? I'm not. Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes. https://www.nytimes.com/2015/01/15/technology/silicon-valley-antitrust-case-settlement-poaching-engineers.html https://www.nytimes.com/2015/01/15/technology/silicon-valley... Google, Apple, Intel and Adobe in this one.... https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay here. https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixing-enforcement-action-following-joint-doj-ftc-human-resources-guidance https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixin...

lupire 8y ago
The article is about non-tech employees' wages dropping.
rayvy 8y ago
I'm sure you'll get downvoted to kingdom come, but I actually checked out the included links - interesting stuff
- crankylinuxuser 8y ago
  > I'm sure you'll get downvoted to kingdom come, but I actually checked out the included links - interesting stuff Oh, indeed I shall. Still, we're sold a bundle of goods by the capitalists that "unions are evil" and et cetera, yet when when it is advantageous to the very capitalists, they form unions of their own to hold down the very workers' wages. Now, some unions do indeed suck. They were ineffective and only lacklusterly fought for employee rights. Yet, many demanded fair compensation and safe working conditions. And with companies forming unions, are pushing both of those down. Look at FAANG on glassdoor and news websites. They're no rosy pictures, unless you're in ML at the top. But that price bump is just temporary. It'll come down in time. What I'd hope is that tech realizes that the capitalists are treating us IT people as yet more line workers. Where once we had rooms, they dissolved to cubicles. From cubicles, we only wish we had them as now it is "open office" concepts. Insurance premiums keep going up, and compensation keeps lowering. And with more automation, the demand for more work skyrockets. 'Fire 2 and let the 3rd take over'. Ive read those stories again and again. IT needs unions, now more than ever. It is the only counteracting force when 'They' (capitalists) are indeed out to get us.
  - Arbalest 8y ago
    I think for organisations such a thing is called a cartel. Cartels are usually illegal, but only ever get noticed on the sale side, and some are downright legalised (eg OPEC).
    - GeneralMayhem 8y ago
      I don't think calling OPEC "legal" is particularly meaningful, considering the entities participating in the cartel are nation-states.
  - Aeolun 8y ago
    They are not out to get you. They’re just doing what makes most sense for them.
  - refurb 8y ago
    It's less about capitalism and more about people just lining their own pockets. It's human nature. It's not like unions aren't susceptible to the same thing. [1] [1]http://nlpc.org/2018/01/18/top-ten-union-corruption-stories-year-8/ http://nlpc.org/2018/01/18/top-ten-union-corruption-stories-...
  - thepp1983 8y ago
    Also as I previously replied to your original statement capitalism != corporatism. The large tech companies should have been broken up about 5 years ago. The only reason that any of us have job is because capitalists in the 70s and 80s popularised computers so they were small enough and low enough in price for anyone to own. It really pains me that most are completely ignorant of anything that happened in computing before the mid-90s. Regulation and Unions help corporations because it makes it raises the bar of difficultly for startups to enter any market. As for working environment. I work from home and I freelance. I run a high end modern workstation with dual 4k screens, a nice sound system for music and my choice of caffeinated beverages. If you don't want to be a slave to the man, work for yourself.
hazz99 8y ago
Edit: I'm not a mod, nor trying to masquerade as one. > Please don't use Hacker News primarily for political or ideological battle. This destroys intellectual curiosity [0] Please keep your ideological battles away from HN. [0] https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- crankylinuxuser 8y ago
  Rather than threats, I'd like to hear commentary. If anyone's "destroy[ying] intellectual curiosity", its the one threatening bans. I've made a point, from multiple sources, that SV major players are retarding salaries from all but the C-level positions. Considering that YC is in that area, it would be a rather interesting discussion to hear from the VC's vs workers vs founders. But, threats.
  - hazz99 8y ago
    > it would be a rather interesting discussion to hear from the VC's vs workers vs founders. I'd love to hear that conversation, I think it'd be very interesting. That is very tangential to commentary on capitalism itself, which is purely ideological.
- tomcam 8y ago
  Sticking up for my ideological opposite crankylinuxuser again. HN is constantly used for political and ideological battle. Why is crankylinuxuser's different?
  - hazz99 8y ago
    Disclaimer: I'm not a mod, so you don't have to listen to my opinion. This article is about low-skill workers, and has nothing to do with tech companies being against unions. But, it could simply be a tangential discussion, and those are often interesting! My main concern was the Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes. generalization, which turned a potentially interesting discussion of tech unions into an "capitalism vs. xyz" ideological battle.
tomcam 8y ago
Upvoted not because I agree (I'm a happy capitalist who happens to hate corporate welfare) but because many, many people on HN have views like this. Don't know why parent should be downvoted for them. Why single this person out?
thepp1983 8y ago
Capitalism != Corporatism. We have a problem with corporatism not capitalism. Please learn the difference.
- dragonwriter 8y ago
  > Capitalism != Corporatism. True. > We have a problem with corporatism not capitalism. In the U.S., we have a problem with something much closer to capitalism. (People occasionally indicate that it is a problem with “crony capitalism”, but cronyism has always been a feature or capitalism, it is not an aberration or alien feature.) In China (and even maybe Mexico, though much moreso during the PRI one-party era) there is a problem with corporatism, which is not th same thing as (even crony) capitalism. Both are problems of global impact, to be sure.
  - thepp1983 8y ago
    > Crony capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. No crony capitalism is not a feature of capitalism. Crony capitalism is a feature of corporatism. You clearly don't understand the terms you are using. China is a totalitarian state that as long as those businesses keep in line and bring enough benefit to the state (which is run by wealthy elites). Businesses are allowed to exist if they don't challenge this status quo. In China an individual has no property rights unlike most of the Anglo-sphere. This is because property rights are an important pre-requisite to many of the other rights we enjoy in the western world.
    - dragonwriter 8y ago
      > No crony capitalism is not a feature of capitalism. Yes, it's a feature of the real world system for which the term capitalism was coined by it's 19th Century critics, and it's been a prominent feature of every real example (including, to a varying extent, the modern mixed economies that have completely replaced the original system named “capitalism”, but retain significant elements of its structure, and are often referred to as “capitalism”.) It may not be a feature of the incoherent and unworkable “ideal” capitalism dreamed up as a defense after the criticism in which “capitalism” was named, but that fantasy has little relevance to anything. > Crony capitalism is a feature of corporatism. No, it's not. Capitalism, crony or otherwise, isn't an essential feature or corporatism, though some versions of corporatism have encompassed elements of capitalism though sometimes at a fairly superficial level. It's true that corporatism provides strong opportunities for cronyism, though.

kuyaab 8y ago

It’s incredible how hard it’s been for retail and service companies to recruit lower-wage workers her in the South Bay. Mike Rowe and tech execs love to talk about skills gaps, but the fact is most jobs aren’t filled because the compensation these positions offer is garbage.

claydavisss 8y ago
They're trapped - probably unable to even scrape together the money to move. Moving is expensive! You need the money not only to relocate, but also to tide you over until you find work. Casual mobility is for the wealthy.
- bredren 8y ago
  It isn't just that, many low wage people have their families there. Sometimes extended family. Moving would mean moving the whole clan away from friends and their connections and where they grew up. Moving is not a small thing.
  - dabockster 8y ago
    Exactly this. Moving elsewhere when your extended family has lived in one place for multiple generations is probably one of the largest risks a person can take. You’re essentially trading most or all of your network for the possibility of a better life. If the possibility doesn’t work out, the person is usually worse off than if had they stayed in their original location.
  - yourbandsucks 8y ago
    And no childcare for their children.
- curuinor 8y ago
  henry george strikes again!
- gr33nman 8y ago
  Not to mention that less wealthy people often rely on extended family for support such as childcare. For many people, leaving family behind is a risk not worth taking.

lupire 8y ago

The author almost noticed Simpson's paradox: > Surprisingly, the UC Santa Cruz study suggests that employment in low wage industries is growing. The share of worker in jobs considered low-wage in 1997 grew 25 percent over the next 20 years, while the percent working in middle- and high-wage jobs declined. The problem isn't that wages are dropping for certain work; the problem is that middle-wage jobs are being automated away, leaving only low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes.

dunpeal 8y ago
> low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes. Machines already have those. They're just more costly and clunky than humans, often by a relatively small margin. Anyone thinking low-skilled / low-paid jobs are not automatable is deluding themselves.
Barrin92 8y ago
the jobs that are mentioned in the article that are being hit the hardest are teachers, firefighters, caretakers and so forth. How many of those have been automated away? It seems that tech workers in the valley have found their own analog to blaming immigrants for downward wage pressure, their particular boogeyman seems to be the robots. No, the answer is much more trivial. As the article points out, the huge influx of capital in the area is being returned only to the tech sector, who merrily spend it and drive up the cost of living. The machines are not to blame for this one.
- empath75 8y ago
  I think there’s a step missing in the analysis there. If tech workers are spending all this money — what are they spending it _on_? If they’re spending it locally shouldn’t that increase wages locally?
  - jameslevy 8y ago
    Shelter and avocado toast.

Scipio_Afri 8y ago

Boost the wage floor. High skilled workers have more force to push against the wage supply price that employers set; they have a lot of power to set wages, including an entire department called HR dedicated to ensuring they get the best deal as they can. Low wage employees do not have that power.

mlindner 8y ago
The wage floor has been continuously getting raised. Many areas of California have the highest minimum wage laws in the country. That isn't going to solve the problem.
- rrcaptain 8y ago
  Only very recently and many haven't even raised all the way. But I agree that it's not going to solve the problem, only a maximum income can solve that.
- Scipio_Afri 8y ago
  Adjusted for inflation its lower than it was in the 1960's
malandrew 8y ago
Raising the wage floor just puts more upward pressure on housing.
- dredmorbius 8y ago
  So you need to attack both. Land tax and wage floor.

jjtheblunt 8y ago

Meanwhile Nancy Pelosi and company keep on taxing to support inefficient bureaucracy

claydavisss 8y ago
A little trollish, but now that Democrats have a veto-proof majority (meaning Gavin Newsom is really just a spokesperson, his opinion is irrelevant, he cannot veto legislation), Californians only have one party to ask why the State is the way it is....the #1 poverty State. Not only can Californians no longer blame Republicans (there basically aren't any left in the State), they can't even blame the Governor...he is truly pointless as he can no longer even veto legislation.
- flukus 8y ago
  > Not only can Californians no longer blame Republicans Assuming republicans are at fault (I know nothing of California state politics, so not taking a side here) it will take years to decades to move beyond any damage their policies caused. Politicians aren't free of blame they day they're voted out.
  - claydavisss 8y ago
    Well, you are right about one thing - you know nothing of the State politics Democrats have had a virtual lock on this State for at least five years. So much so that their primary nemesis was their own moderate Governor, Jerry Brown. Think about that - conservatives had been so utterly decimated that the only thing standing in the way of the State legislature was a Governor from their own party. They have a pliant Governor now but it is irrelevant - he can't even veto their bills anymore. He's a hood ornament and he knows it. And astoundingly, outrageously, you actually think State Republicans, who have basically been an endangered species for years...are actually to blame. Wow. As it stands the last Republican Governor of the State was basically a Democrat anyway. But sure, maybe its all Pete Wilson's fault.
    - vernie 8y ago

imagetic 8y ago

As someone who lives in the outer bay area, pay for jobs hasn't really gone up at all in the last 8 years, but the tech industry has really pushed the cost of living up a lot. I can't say I've noticed a drop in pay outside of the media industry since that's what I work in. And a lot of that has to do with the cost of gear now and the supply is so high buy the demand hasn't grown that much. Most of my neighbors are contractors / construction workers. Nobody I know can fathom buying a home. But until last year things were fairly stagnant for them. There is a lot more construction going on now, but it's mostly to turn homes we can't afford into vacation rentals.

mlindner 8y ago
This is because zoning laws largely prevent additional housing construction. Converting existing housing isn't blocked however so converting them to vacation rentals makes sense economically.

deleted 8y ago

[deleted]

kumarm 8y ago

Call any service business from top list on Yelp (Handyman, Dryer Vent Cleaning, Plumber etc), they would charge minimum 80$ (Irrespective of whether they do work or not). Where is this money going?

itomato 8y ago
Time spent sitting in traffic?

Aeolun 8y ago

Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world?

mlindner 8y ago
That's because creation of new housing is highly restricted in Silicon Valley because of high regulation and very restrictive zoning laws. And additionally all the money that would be going to the low income is getting sucked out by the continuous raising of the minimum wage, greatly restricting the size of the labor market at the low end resulting in higher unemployment.
clubm8 8y ago
> Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world? Not really - a natural side effect of corporations not paying their fair share in taxes, alongside employees who are compensated in ways (stock options) where large chunks of their salary are untaxable by local governments. (It's my understanding it's much harder for local governments to tax stock options as capital gains go to feds, please correct me if I'm mistaken)
- GeneralMayhem 8y ago
  That's half true at best. Capital gains are reported on your tax return as a form of income. The rate at which they're taxed is up to each jurisdiction. For federal taxes, long-term capital gains happen to be taxed at a lower rate than other income. For California state taxes, there is no such distinction - all income, including capital gains, is taxed on the same progressive taxation schedule. So for Californians, getting paid in stock options usually results in lower federal taxes, but no change in state taxes. Now, where it gets interesting is with local jurisdictions. In California, cities and counties are not allowed to collect income taxes. However, San Francisco does collect payroll taxes. Paying your employees in options could reduce the amount that counts as payroll, but only if the stock options are increasing in value quickly. If your employees are getting all of their money from you, the city gets its cut. If your employees are getting some of their money from you and some from the stock market, then the city loses out on the latter portion - but most employees should consider that a bonus and negotiate pay primarily based on current value, so that shouldn't matter too much in the long run. What the city (but not the state!) definitely misses out on taxing is capital gains on wealth already accrued. When I make money on investments (not so much this year, but hypothetically), the city doesn't get anything from that, because there's no payroll involved. The feds get some of it (at the reduced capital gains rates, assuming I've held for a year); California gets some of it (at the full income tax rate); San Francisco gets none. But again, that story is only for investment income on money I already had, not for new stock compensation.

yjhoney 8y ago

I started a nonprofit 2 years ago (garagescript.org) that hires low income people in San Jose and their full time job is to learn how to code and teach new students. Our nonprofit started off with 20 students, most were making about 25k/year and had no coding experience. I paid each of them 2k / month to quit their jobs and focus on coding full time. From the original 20 students, 6 are left. The other 14 are all full-stack software engineers. If anyone wants to help out, send me an email to song at garagescript.org. I believe the real long term solution is to train under-served communities better and help them acquire technical skills. edit remove donation link.

StudentStuff 8y ago
This seems like a great model, and your a kind person to burn through all your savings and 401k to build a nonprofit that helps some of the most disadvantaged among us. Hopefully more than a few of us will support your efforts!
snazz 8y ago
You should post this as a Show HN. That’s a wonderful idea. I’m sure many people would gladly donate.
- yjhoney 8y ago
  I'm currently just focused on helping students with their learning. I don't plan to do a Show HN until the remaining students get a job because I think the attention might be distracting. I plan to do a writeup after the remaining 6 students gets a job and while I take a breather, hope you get a chance to see it next year!
  - ENGNR 8y ago
    It sounds like you should apply for Ycombinator, they accept non-profits too The hardest bit will be doing the marketing, getting sponsorship or donations from alumni so that it’s a sustainable organisation

CydeWeys 8y ago

I have when the news writes an entire article around a single report, but then fails to link to that report. You had one job ... Anyway, here's the report in question: http://www.everettprogram.org/main/wp-content/uploads/TIGHTROPE-2018-REPORT.pdf http://www.everettprogram.org/main/wp-content/uploads/TIGHTR... Reading the fine details of the report, you see that the top-line metric is real income, adjusted for inflation and local cost of living. And the #1 factor that's proved ruinous to local cost of living in the Bay Area these past two decades is of course housing prices. If zoning restrictions were relaxed and more housing was allowed to be built, costs would be reduced and a lot of these problems would be solved. The Bay Area has a critical lack of housing, which is driving all these prices up and causing most of the decline in CoL-adjusted non-tech wages.

bcatanzaro 8y ago
Thank you! I had no idea what they were talking about in that article. Not only did they not link the report, they didn't even explain how they were measuring real income. Which matters a lot. My #1 issue is housing. We have got to build more in the Bay Area. It's a social justice issue.
dublidu 8y ago
If only we could aloe property assessments to increase with a local cost of living index, we would at least have enough property tax revenue to pay teachers.
- pm90 8y ago
  I think we should be careful with this. Currently, because of the frozen property tax law, many houses worth millions pay very little in property taxes; if they did have to pay taxes on the millions of dollars their property is worth, they would have had to sell their houses ages ago. This would have likely created a downward pressure on the prices; making it unlikely that the home prices would reach the levels they are now. All of which to say that assessing the property tax on the current market value of all those properties isn't an accurate number; there is no way there are so many people making that much money living in California.

mlindner 8y ago

Silicon Valley has a multi-fold problem. 1. Housing is expensive because of the influx of people immigrating to the state from out of state and also out of country. (I'm one of them.) This causes a housing shortage which will naturally drive up price of housing. 2. The housing prices don't come down because California in general has very restrictive zoning laws, especially in the most expensive areas, that prevent building of sufficient housing density to cover demand. This in turn drives housing development further outside of the bay area forcing long commute times and highway usage. 3. Because of the high cost of living (primarily from housing, food/etc is not significantly more expensive) from the above problems the solution proposed is to greatly raise the minimum wage, now hitting $15 in many areas. This causes a drive to automate away simpler jobs (also providing an entry for further tech startups to automate these things) or more commonly, move the jobs out of the state via company acquisition followed by moving the administrative jobs to company headquarters located out of state or sometimes out of country. A high minimum wage reduces the available job market by putting an artificial job supply limit in place thus causing unemployment for these simpler jobs. 4. On top of this there's a loophole for illegal immigrants where companies abuse them by paying them below minimum wage because they are here illegally. (Another reason that giving a path to legal immigration for illegal immigrants would help things.) The first thing and most important thing that needs to happen is for the state to overrule local zoning laws (as opposed by the NIMBYs) and force generic zoning, allowing unrestricted housing development. Just look at the south bay area. The zoning is obvious even looking at satellite maps. Industrial areas are kept separate from housing which are kept separate from retail. This prevents natural intermixing of these causing a lot of need for road development to allow people to travel between these blocks rather than walking down the street.

humanrebar 8y ago
> ...giving a path to legal immigration for illegal immigrants would help things. I would rather consider paying anyone below minimum wage a form of wage theft and prosecutable as a criminal offense. Dunno why embezzlement is a felony but breaking the law to underpay people is just grounds for a lawsuit.
- jldugger 8y ago

deanmoriarty 8y ago

How about: 1) Introducing a much higher tax rate for rental property income. 2) Making property taxes be reassessed every single year unless your AGI is lower than average and you are a resident. 3) Introducing a much (much!) higher tax for non-residents/foreign investors who buy a house purely for investment, and sometimes they don't even rent it out (I know a few rich folks from FAANG who bought a handful of houses in MV, and they keep them empty because they don't want the trouble of dealing with tenants, they say the appreciation is more than enough, to me it's borderline criminal). I've seen numerous instances of those three events playing out against normal people trying to afford some housing while working a normal job. If it's not obvious, I'm heavily biased against real estate investors, because housing is a need for everybody, so the market should be much more regulated.

stanleydrew 8y ago
Regarding #3, maybe something like Vancouver's vacancy tax: https://vancouver.ca/home-property-development/empty-homes-tax.aspx https://vancouver.ca/home-property-development/empty-homes-t...
bduerst 8y ago
I've had a hard time explaining point 3) to people in other parts of the US, but its a huge and very real problem in the Bay area. Someone should do a "lights out" analysis in the Bay, where you count the number of homes that don't turn their lights on at night for 30 days.
- malandrew 8y ago
  Software engineers can trivially solve this.
jacobolus 8y ago
Keep in mind the context of https://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197... It will take a lot of political organizing to undo. There have been several attempts and they all meet stiff resistance.

InclinedPlane 8y ago

So much of economics (as it exists in reality, not in theory) is not about maximizing RoI or efficiency or revenue or supply vs. demand, it's about power. Exercising it, abusing it, using it to set up class distinctions, reveling in the feelings of superiority and control, etc. That's a big reason why workers end up underpaid. It's not because it's good for business (it rarely is), it's simply an exercise of power. It feels good to those who want to set themselves up as being above others.

dredmorbius 8y ago
"Wealth, as Mr Hobbes says, is power." -- Adam Smith, Wealth of Nations https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/Chapter_5 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/... Or: Yes, I agree. And much of Smith's book concerns this.

anon2775 8y ago

Folks should unionize for livable wages. Walk off the job and be noisy until they're paid fairly. There's no other way because wealth and power concedes nothing without a resolute disagreement backed by action.

ummonk 8y ago

One thing I've noticed is that aside from rent, random expenses in NYC are so much more expensive. E.g. classpass classes, restaurants, etc. Do service workers get better paid there?

cutler 8y ago

This is the real truth about the tech boom - how it impacts society as a whole and who benefits. A nation's progress is measured by the standard of living of the average citizen, not the elite. By that yardstick the so-called advanced nations such as the UK and USA, with their spiralling housing costs, are moving backwards not forwards.

ReptileMan 8y ago

This looks like the run of the mill hollowing of the middle that has been going on since the late 70s.

helen___keller 8y ago

Zoning law and housing code were enacted across the nation in response to the crowded, unsanitary, and unsafe tenements of the industrial revolution. But, we’ve gone too far and allowed too much local control of housing. Now in 21st century American boomtowns, you can’t convert your single family into a duplex or small apartment building, you can’t convert the first floor of your building into a small business, you can’t have organic growth in your city the way cities had grown up until the early 20th century. Far from just outlawing tenements, we’ve outlawed our cities from adapting to change, which is why we see such absurdities as in the bay areas cost of living. For decades now we’ve been surviving off technical debt. Cars and roads allow us to survive even when our cities are absurdly inefficiently organized. But as the nation changes more and more, our top cities’ roads and street layouts don’t adapt to the change, so we have unbearable traffic in every major city. On top of that, we continue to ignore the needs of a more efficient method of organizing ourselves - relaxing zoning to allow organic growth in the city, and construction of mass transit between the dense regions that develop under this system. That’s how we developed cities before we started relying on cars, and what we need to do to continue scaling American cities. Or we can just accept as every house in the Bay Area reaches multimillion dollar price tag.