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> Workers are also a pretty big beneficiary FANNGS, by definition, are 1% of the Fortune 500. In term of headcount, it's even lower. They should not even be pa

by axlee 6y ago

> Workers are also a pretty big beneficiary FANNGS, by definition, are 1% of the Fortune 500. In term of headcount, it's even lower. They should not even be part of this argument. You can't base taxation policies around the personal experience of hyper-specialized, in-demand trained professionals. Fortune 500 no1: Walmart. no2? Amazon. Are you arguing that those kinds of companies have a upward pressure on salaries? Because at least in the case of Walmart and Amazon (excluding AWS), it's proven that it doesn't. And in terms of workforce, the low-pay employees that those companies hire overwhelm "well-paid" engineers from FAANGS a 1000-1. And that's not even accouting for all "red badge" contractors not lucky enough to get a cosy position at those FAANGS, who don't appear in the company's salary statistics, and are not in such a good financial situation themselves.

MR4D 6y ago
If I use the S&P 500 instead (easier calculation given available data for me), the the FANG is a huge portion. (Yes, 5 companies out of 500 are by definition 1/100.) No argument about headcount, though. Take a look at the second chart (bottom of "Page 1", the third actual page considering the title page and contents page). [0] Revenue may be small, but profits are huge, and market capitalization (aka "wealth") is absolutely massive. And that market cap is what feeds retirement plans & pensions. So while Europe is taxing people, the US is growing profits and wealth. The World Economic Forum had this to say about Europe's tech giants in 2017: "In total more than a third of European tech founders are based in the UK." [1] That doesn't bode well for the future, when your economy is stuck in old industries, and the leader is leaving the party. BTW, hats off to the Finns - not sure what they are doing with gaming, but they punch well above their weight. When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. And what's important is that every one of those high paying tech jobs is one less low-paying job. Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago. I can only imagine how many high paying tech jobs there will be in the US in 20 more years, even though I expect low-paying jobs to still outnumber them. [0] - https://www.yardeni.com/pub/yardenifangoverview.pdf https://www.yardeni.com/pub/yardenifangoverview.pdf [1] - https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-titans/ https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-...
- dmitriid 6y ago
  > And that market cap is what feeds retirement plans & pensions. Market cap is a myth based on the fiction that is the share price. > So while Europe is taxing people, the US is growing profits and wealth. Tell that to 23 million Americans who can't afford their next rent, or can't afford to go to the doctor.
- discreteevent 6y ago
  "Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago." How many low paying jobs are taken by e.g. a high paying e-commerce job? Hundreds surely. And if there are less low paying jobs you can pay someone less to do them because there are so many people looking for those few jobs.
- tsimionescu 6y ago
  > When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. Sure, it's a virtuous spiral if you're one of the minuscule number of people that the spiral is pointing to. Otherwise, you see it for what it is, wealth being siphoned from Us to Them. Also, the level of political control that huge companies almost automatically exert greatly minimizes democracy, leading to things like the bottom 50% of Americans having almost no bearing on the political sphere, at least at the federal and state levels.
  - nickpp 6y ago
    All you have to do to become one of "Them" is to buy a stock share. Never has been wealth creation more accessible than today.
    - tsimionescu 6y ago
      Do you actually believe that? How much money will I get from 1 share? How much money would I have to invest before my fortunes actually rise with the real fortunes of any particular company?
fennecfoxen 6y ago
Agree. The most pro-Wal-Mart economists will tell you that Wal-Mart as a firm has boosted the US economy by at least 1% of GDP, by being more efficient, and forcing its competitors to be more efficient as well. Suppose for a moment that we accept that claim uncritically -- it is still very clear to see that these gains do not accrue through the vehicle of employment. Indeed, the non-logistics savings from Wal-Mart comes in no small part from reducing the number of workers involved in retail. As with many economic situations, the losses are simply concentrated and obvious, while the gains are diffuse and spread across many transactions from many shoppers. In this case, the gains accrue as part of every grocery-store transaction in the country (and particularly to the poorest in the country, who are most price-sensitive). One can hold many opinions about the matter, and one can dispute that there is a net benefit at all, but it is clear that referring to this as "good for workers" is not particularly enlightening.
- sokoloff 6y ago
  There's "good for workers as workers" and "good for workers as consumers". Walmart and Amazon are very good for workers-as-consumers, IMO.
  - abnry 6y ago
    Your point is often missed and I wish it was stated more often. However, I think the current sticking point for many is that, while their wage may allow them to buy more consumer goods, it is a lot harder than it used to be to pay for housing and health care.
  - maest 6y ago
    Arguably that's a contributor to the increase in wealth gap, which is what the GGGP post was originally about.
- 6510 6y ago
  > forcing its competitors to be more efficient as well Right, must be good for those workers too!

by axlee 6y ago

MR4D 6y ago

If I use the S&P 500 instead (easier calculation given available data for me), the the FANG is a huge portion. (Yes, 5 companies out of 500 are by definition 1/100.) No argument about headcount, though. Take a look at the second chart (bottom of "Page 1", the third actual page considering the title page and contents page). [0] Revenue may be small, but profits are huge, and market capitalization (aka "wealth") is absolutely massive. And that market cap is what feeds retirement plans & pensions. So while Europe is taxing people, the US is growing profits and wealth. The World Economic Forum had this to say about Europe's tech giants in 2017: "In total more than a third of European tech founders are based in the UK." [1] That doesn't bode well for the future, when your economy is stuck in old industries, and the leader is leaving the party. BTW, hats off to the Finns - not sure what they are doing with gaming, but they punch well above their weight. When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. And what's important is that every one of those high paying tech jobs is one less low-paying job. Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago. I can only imagine how many high paying tech jobs there will be in the US in 20 more years, even though I expect low-paying jobs to still outnumber them. [0] - https://www.yardeni.com/pub/yardenifangoverview.pdf https://www.yardeni.com/pub/yardenifangoverview.pdf [1] - https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-titans/ https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-...

dmitriid 6y ago
> And that market cap is what feeds retirement plans & pensions. Market cap is a myth based on the fiction that is the share price. > So while Europe is taxing people, the US is growing profits and wealth. Tell that to 23 million Americans who can't afford their next rent, or can't afford to go to the doctor.
discreteevent 6y ago
"Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago." How many low paying jobs are taken by e.g. a high paying e-commerce job? Hundreds surely. And if there are less low paying jobs you can pay someone less to do them because there are so many people looking for those few jobs.
tsimionescu 6y ago
> When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. Sure, it's a virtuous spiral if you're one of the minuscule number of people that the spiral is pointing to. Otherwise, you see it for what it is, wealth being siphoned from Us to Them. Also, the level of political control that huge companies almost automatically exert greatly minimizes democracy, leading to things like the bottom 50% of Americans having almost no bearing on the political sphere, at least at the federal and state levels.
- nickpp 6y ago
  All you have to do to become one of "Them" is to buy a stock share. Never has been wealth creation more accessible than today.
  - tsimionescu 6y ago
    Do you actually believe that? How much money will I get from 1 share? How much money would I have to invest before my fortunes actually rise with the real fortunes of any particular company?

fennecfoxen 6y ago

Agree. The most pro-Wal-Mart economists will tell you that Wal-Mart as a firm has boosted the US economy by at least 1% of GDP, by being more efficient, and forcing its competitors to be more efficient as well. Suppose for a moment that we accept that claim uncritically -- it is still very clear to see that these gains do not accrue through the vehicle of employment. Indeed, the non-logistics savings from Wal-Mart comes in no small part from reducing the number of workers involved in retail. As with many economic situations, the losses are simply concentrated and obvious, while the gains are diffuse and spread across many transactions from many shoppers. In this case, the gains accrue as part of every grocery-store transaction in the country (and particularly to the poorest in the country, who are most price-sensitive). One can hold many opinions about the matter, and one can dispute that there is a net benefit at all, but it is clear that referring to this as "good for workers" is not particularly enlightening.

sokoloff 6y ago
There's "good for workers as workers" and "good for workers as consumers". Walmart and Amazon are very good for workers-as-consumers, IMO.
- abnry 6y ago
  Your point is often missed and I wish it was stated more often. However, I think the current sticking point for many is that, while their wage may allow them to buy more consumer goods, it is a lot harder than it used to be to pay for housing and health care.
- maest 6y ago
  Arguably that's a contributor to the increase in wealth gap, which is what the GGGP post was originally about.
6510 6y ago
> forcing its competitors to be more efficient as well Right, must be good for those workers too!