17 ms·

There's a lot of reasons for this but one of the largest is the near invisible (to me) structural shift from direct hire to contractors for jobs at the lower en

There's a lot of reasons for this but one of the largest is the near invisible (to me) structural shift from direct hire to contractors for jobs at the lower end of the wage/salary spectrum. There is a fantastic long form article that articulates this better than I can at: https://highline.huffingtonpost.com/articles/en/poor-millennials-print/ https://highline.huffingtonpost.com/articles/en/poor-millenn... The portion relevant to this discussion: "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. The effect of all this “domestic outsourcing”—and, let’s be honest, its actual purpose—is that workers get a lot less out of their jobs than they used to. One of Batt’s papers found that employees lose up to 40 percent of their salary when they’re “re-classified” as contractors. In 2013, the city of Memphis reportedly cut wages from $15 an hour to $10 after it fired its school bus drivers and forced them to reapply through a staffing agency. Some Walmart “lumpers,” the warehouse workers who carry boxes from trucks to shelves, have to show up every morning but only get paid if there’s enough work for them that day."

woo49 6y ago
The biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up? The productivity gains went to either things that got automated (e.g. speciality equipment operator - wages are higher but there are less jobs) or knowledge workers (software engineering salaries have skyrocketed).
- dublinben 6y ago
  >So why would the wages go up if productivity is not up? The wages in lots of sectors without productivity gains have gone up because they must compete against sectors where productivity has gone up. This is known as Baumol's Cost Disease.[0] [0] https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease
- oramit 6y ago
  For something like hotel cleaning you also have to take into account the large grey market for labor. There are estimated to be around 10.5-12 million undocumented migrants in the US. It's not a coincidence that there is a rotating crew of Russian speaking janitors who clean my office building and Spanish speaking landscapers outside my apartment. I'm not discounting that many of them are legal immigrants, just lower skilled and working their way on up. More power to them. I can also see though how this situation is easily taken advantage of. Contracting firm hires undocumented workers for below market rates and is able to under bid for contracts. Big company fires their in house workers to save money and hires the contracting firm. Big company then gets the advantage of undocumented labor wages without the liability.
- lotsofpulp 6y ago
  > The biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up? Wages are a function of supply and demand. If the people cleaning hotels had better options, their wages would go up (or hotels would shut down, or ask people to clean their own room before they leave, etc.)
ci5er 6y ago
That seems more-or-less intuitively plausible, but I often find missing from these discussions, is the aggregate employers' contribution to health insurance plans. If, for example, my employer's contribution to my health insurance premiums go up $500/month - I am going home with $6000 less that year. Now, they probably don't cut my wages, but it's pretty easy to see how they might be frozen for a few years.
- qq12as 6y ago
  great comment -- you may like this https://pubs.aeaweb.org/doi/pdf/10.1257/jep.30.2.53 https://pubs.aeaweb.org/doi/pdf/10.1257/jep.30.2.53
  - ci5er 6y ago
    Thanks! I love to read this kind of stuff!
dantheman 6y ago
The question is why these services exist? I don't think it has to do with wages, I think it has to do with the difficulty of firing employees.
- thatguy0900 6y ago
  Is this an issue in other countries where it is even more difficult to fire employees?
  - yoz-y 6y ago
    I haven't looked into whether it's specifically an issue but in France it's notoriously hard to fire employees and indeed a lot of work is done by workers hired from agencies. This is also because it is very hard to make temporary contracts here.
    - inglor_cz 6y ago
      Czech Republic here. We are somewhere between France and the US when it comes to hardness of firing people. Agency work is extremely common here, especially on the lower level of the job ladder. Gig economy and contractors are common even in higher settings, such as software development.
- jjeaff 6y ago
  I think it has to do with wages. And also with the ability to abuse those employees without exposing the "brand" to public scrutiny and litigation. It also allows you to offer better benefits to your core employees without offering the same to employees that work for contractors (there are fringe benefits like childcare or use of company facilities like private gyms that generally must be offered to all employees in order to expense them). Oh, you all weren't paid for your overtime? Sorry, you don't work for Hilton. You work for Rent-a-Janitor. And they just filed for bankruptcy and closed shop. Hilton had previously dropped their contract with them due to their unscrupulous practices. We have now contracted with a totally different company, Rent-a-Janitor 2. (This is a made up example. I have no idea if Hilton does anything like this, but most all huge companies do it.)
dredmorbius 6y ago
A friend tells of a nearby rehabilitation hospital at which there are only two permanent employees: the director and a chaplain. All the rest are contract. Desk clerks, cooks, nurses, doctors, therapists, janatorial....
mortenjorck 6y ago
There’s an excellent and frankly damning ProPublica report that serves as a case study in the movement to rely on staffing companies for low-wage labor: https://www.propublica.org/article/meet-the-customer-service-reps-for-disney-and-airbnb-who-have-to-pay-to-talk-to-you https://www.propublica.org/article/meet-the-customer-service... The degree to which both costs and risk are shifted onto workers is at times astonishing: “After paying about $1,500 for home office equipment: a computer, two headsets and a phone line dedicated to Arise; after paying Arise to run a check on her background; after passing Arise’s voice-assessment test and signing Arise’s nondisclosure form; after paying for and passing Arise’s introductory training, to which she devoted three days, unpaid; after paying for and passing a certification course to provide customer service for Arise client AT&T, to which she devoted 44 unpaid days; after then being informed she had to get more training yet — an additional 10 days, for which she was told she would be paid, but wasn’t; and then, after finally getting a chance to sign up for hours and do work for which she would be paid (except for her time spent waiting for technical support, or researching customer issues, or huddling with supervisors), Tami Pendergraft spent three weeks fielding telephone calls from AT&T customers, after which she received a single paycheck. For $96.12.”
- Ductapemaster 6y ago
  The really awful thing from that story (Planet Money did a great recent episode on the ProPublica coverage) is that they are able to get away with this through Arbitration clauses. By way of their contracts, they strongarm their contractors into dealing with any "misclassification" issues (eg. exerting too much control over a contractor) individually, silently, and outside of court. Contractors have no ability to sue in a class action suit, and aren't even allowed to speak to fellow contractors if they go through arbitration. It's such a sneaky and frankly complicit way to enforce their business model. They know it's grey, and they put people in the corner so they can't call it grey with a loud enough voice for serious attention to be brought to the issue. Thankfully some law firms have taken the approach to overwhelm Arise with individual arbitration claims. Arise likely calculated in to their model as a cost of business expense, so the best that can be done is to make that expense grow.
  - 6y ago
rmason 6y ago
All these comparisons miss one thing: after WWII America had a monopoly. We had destroyed our competitors factories in Asia as well as in Europe. It took a while for them to build back and be truly competitive outside their home countries. Here in Michigan we had a front row seat to this happening with manufacturing. Everything peaked in 1973 and has been on a slow decline ever since. Sure there have been booms but the long term trend has been down. The Japanese started importing cheap motorcycles to the West coast, then cheap cars. We didn't see them in Michigan and if auto execs did they would have laughed. The Big 3 saw VW and their Beetle as the big import threat. Suddenly those Japanese cars became better in quality. Then the Koreans went through the same cycle and Japan introduced luxury cars as well. Because wages were much less in Asia even after accounting for shipping this exerted downward pressure on wages. Give America back the monopoly it had in the fifties and sixties and minimum wage would be $24 an hour.
- martin_bech 6y ago
  Hi from Scandinavia, we dont have a monopoly on anything, and no actual minimum wage, yet people make about $20+ at the lowest paying jobs, enjoy 5 weeks paid vacation, free healthcare and cheap childcare..
  - deleted 6y ago
    [deleted]
  - friedman23 6y ago
    Scandinavia isn't a country
    - Daishiman 6y ago
      We are all aware of that. Doesn't change that their policies are extremely similar by all accounts.
      - friedman23 6y ago
        The point is that I can't determine where his country's wealth comes from if he doesn't state his country. Also I'm skeptical f this person actually even being from the region. For example, if he is from Norway most of his wealth is derived from oil.
oramit 6y ago
I agree, this is one of those slow moving trends that you just don't see but has really large effects after decades of compounding. It used to be normal for companies to have much larger work forces and to in-source all tasks, even if they were not a core competency. Now the emphasis is on lean everything, to only focus on your niche, and outsource as much as possible. Remember IT departments? It's all been outsourced to the Cloud. I have two theories on this. One is that we simply have improved our management processes. The economy became more developed and you could realize real efficiency gains from outsourcing. From a pure GDP perspective - this was good. The second is more messy and i'm still working on it but it ties into a lot of macro issues. It used to be much easier start out with no experience, say as a janitor, and work your way up to a higher position in the same company. This was possible because it was all the same company. Now with outsourcing this is impossible, if you start as a janitor, the only thing you can do is maybe run the janitor company, but you won't ever become the CEO of the company whose office you clean. At the same time, you've made entry-level positions at the company harder to attain. The floor is no longer janitor, it is now junior developer (to take a software example). This is one of the reasons why I think there is such a bifurcation in our labor market. A college degree is now the minimum requirement to get your foot into the door. Again, it used to possible to start at the very bottom and work your way up but now there is a hard cap on growth unless you go the college route. I think this was a clever way for companies to also push costs onto employees. Training used to be a thing companies did but now it's basically been abandoned. Go spend your own money and get a degree before even talking to us is the attitude.
- WalterBright 6y ago
  On the other hand, it's never been easier to start a company and instantly reach a global market.
  - WalterBright 6y ago
    Not only that, but you can draw collaborators from the entire world, and even get investment capital from the globe (like kickstarter, etc.). I remember when I wanted to sell in France, I had to find a French distributor, make a French version of the product, guess how many would sell there, ship a pile to the distributor, the distributor collects most of the money, and unsold merchandise is scrapped. If I didn't have a distributor, the merchandise was always getting hung up in customs, would disappear in the mail, would take 6 weeks to deliver, I'd get paid in dollary-doos that no bank would exchange, etc. Rinse, repeat for every country. Today, I ship all over the world via the internet for $0, have no stock, no scrap, no middlemen, get paid instantly, ship instantly, and the transaction cost is 1% for paypal and 3% for credit cards. Still have to pay taxes, though :-)
ForHackernews 6y ago
Another really great illustration of exactly this subject was this article comparing janitors at Kodak in the 1980s with janitors at Apple (but not employed by Apple) today: https://www.seattletimes.com/business/economy/tale-of-two-janitors-kodak-vs-apple-dramatizes-how-economy-has-changed/ https://www.seattletimes.com/business/economy/tale-of-two-ja... > Yet the biggest difference between their two experiences is in the opportunities they created. A manager learned that Evans was taking computer classes while she was working as a janitor and asked her to teach some other employees how to use spreadsheet software to track inventory. When she eventually finished her college degree in 1987, she was promoted to a professional-track job in information technology. > Less than a decade later, Evans was chief technology officer of the whole company, and she has had a long career since as a senior executive at other top companies. Ramos sees the only advancement possibility as becoming a team leader keeping tabs on a few other janitors, which pays an extra 50 cents an hour.
- 908B64B197 6y ago
  There's an other issue here: Evans bootstrapped herself by getting a (relevant) degree. The spreadsheet story is nice, but even having these skills back in the 80's was way less common than today. The article should also have looked at how much tuition was relative to the cost of living/salary Evans was making, and if Ramos could afford it today.
  - ForHackernews 6y ago
    Did you read the whole article? > Evans was a full-time employee of Kodak. She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March. When the facility she cleaned was shut down, the company found another job for her: cutting film. She was able to bootstrap her career at least in part because Kodak offered tuition reimbursement and other benefits.
    - 908B64B197 6y ago
      > Did you read the whole article? I did. What I would be curious to read is an accountant taking a look at Ramos finances and figuring out how she could afford (or not) to get the same degree.
roenxi 6y ago
You might have your finger on something, but that explanation as written doesn't make much sense. If workers don't have the market power to prevent being reclassified as contractors, they certainly don't have enough market power to lobby for real wage increases. The structural shift to contractors is part of a broad trend after 1970 suggesting American labour isn't, economically speaking, a growth engine.
ashtonkem 6y ago
And there’s no career advancement for contractors. Thirty years ago the best and brightest at the hotel might get a chance to get promoted to manager, which would give them a better wage and even more skills. As a contractor this is practically impossible, both because your actual company never observes you and has very few management positions to get promoted to, and because the hotel probably can’t hire you without breaching their contract with the staffing agency.
m12k 6y ago
It was recently pointed out to me that health insurance costs roughly the same to purchase for each employee, so with wildly different wages, the percentage that health insurance makes up of the total cost associated with an employee also differs wildly. So while health insurance might make up e.g. 5% of what is paid for a software engineer, it could make up 80% of what is paid for a janitor. This puts a big incentive on companies to get rid of their lowest paid employees (or wiggle their way out of providing benefits), since there is essentially a fixed price income tax that always needs to be paid on any salary regardless of it's size otherwise.
coldtea 6y ago
>Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc. That should be made illegal to do...
slykar 6y ago
> let’s be honest, its actual purpose—is that workers get a lot less out of their jobs than they used to. Do you really belive there is a collective of business owners who thought "yeah, let's outsource everything, because f..k employees"? Obviously it's about specialization. Why a software house should hire a cleaning lady? They are not in the business of cleaning, they know nothing about it and they don't want to even think about how you go about hiring someone for cleaning. Or the other way around. Should a cleaning company hire software developers? They would fail so hard at it. Not to mention the frustration. World got more complex, business got too.
- 7952 6y ago
  It is also about the time consuming reality of being an employer. You have to advertise jobs, find applicants and hire someone, cover holidays and sickness, deal with poor performance. All of that takes time. I honestly think that having people in house to do these kind of jobs can be a benefit. A good receptionist for example can be a real asset. But they are hard to find.

woo49 6y ago

The biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up? The productivity gains went to either things that got automated (e.g. speciality equipment operator - wages are higher but there are less jobs) or knowledge workers (software engineering salaries have skyrocketed).

dublinben 6y ago
>So why would the wages go up if productivity is not up? The wages in lots of sectors without productivity gains have gone up because they must compete against sectors where productivity has gone up. This is known as Baumol's Cost Disease.[0] [0] https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease
oramit 6y ago
For something like hotel cleaning you also have to take into account the large grey market for labor. There are estimated to be around 10.5-12 million undocumented migrants in the US. It's not a coincidence that there is a rotating crew of Russian speaking janitors who clean my office building and Spanish speaking landscapers outside my apartment. I'm not discounting that many of them are legal immigrants, just lower skilled and working their way on up. More power to them. I can also see though how this situation is easily taken advantage of. Contracting firm hires undocumented workers for below market rates and is able to under bid for contracts. Big company fires their in house workers to save money and hires the contracting firm. Big company then gets the advantage of undocumented labor wages without the liability.
lotsofpulp 6y ago
> The biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up? Wages are a function of supply and demand. If the people cleaning hotels had better options, their wages would go up (or hotels would shut down, or ask people to clean their own room before they leave, etc.)

ci5er 6y ago

That seems more-or-less intuitively plausible, but I often find missing from these discussions, is the aggregate employers' contribution to health insurance plans. If, for example, my employer's contribution to my health insurance premiums go up $500/month - I am going home with $6000 less that year. Now, they probably don't cut my wages, but it's pretty easy to see how they might be frozen for a few years.

qq12as 6y ago
great comment -- you may like this https://pubs.aeaweb.org/doi/pdf/10.1257/jep.30.2.53 https://pubs.aeaweb.org/doi/pdf/10.1257/jep.30.2.53
- ci5er 6y ago
  Thanks! I love to read this kind of stuff!

dantheman 6y ago

The question is why these services exist? I don't think it has to do with wages, I think it has to do with the difficulty of firing employees.

thatguy0900 6y ago
Is this an issue in other countries where it is even more difficult to fire employees?
- yoz-y 6y ago
  I haven't looked into whether it's specifically an issue but in France it's notoriously hard to fire employees and indeed a lot of work is done by workers hired from agencies. This is also because it is very hard to make temporary contracts here.
  - inglor_cz 6y ago
    Czech Republic here. We are somewhere between France and the US when it comes to hardness of firing people. Agency work is extremely common here, especially on the lower level of the job ladder. Gig economy and contractors are common even in higher settings, such as software development.
jjeaff 6y ago
I think it has to do with wages. And also with the ability to abuse those employees without exposing the "brand" to public scrutiny and litigation. It also allows you to offer better benefits to your core employees without offering the same to employees that work for contractors (there are fringe benefits like childcare or use of company facilities like private gyms that generally must be offered to all employees in order to expense them). Oh, you all weren't paid for your overtime? Sorry, you don't work for Hilton. You work for Rent-a-Janitor. And they just filed for bankruptcy and closed shop. Hilton had previously dropped their contract with them due to their unscrupulous practices. We have now contracted with a totally different company, Rent-a-Janitor 2. (This is a made up example. I have no idea if Hilton does anything like this, but most all huge companies do it.)

dredmorbius 6y ago

A friend tells of a nearby rehabilitation hospital at which there are only two permanent employees: the director and a chaplain. All the rest are contract. Desk clerks, cooks, nurses, doctors, therapists, janatorial....

mortenjorck 6y ago

There’s an excellent and frankly damning ProPublica report that serves as a case study in the movement to rely on staffing companies for low-wage labor: https://www.propublica.org/article/meet-the-customer-service-reps-for-disney-and-airbnb-who-have-to-pay-to-talk-to-you https://www.propublica.org/article/meet-the-customer-service... The degree to which both costs and risk are shifted onto workers is at times astonishing: “After paying about $1,500 for home office equipment: a computer, two headsets and a phone line dedicated to Arise; after paying Arise to run a check on her background; after passing Arise’s voice-assessment test and signing Arise’s nondisclosure form; after paying for and passing Arise’s introductory training, to which she devoted three days, unpaid; after paying for and passing a certification course to provide customer service for Arise client AT&T, to which she devoted 44 unpaid days; after then being informed she had to get more training yet — an additional 10 days, for which she was told she would be paid, but wasn’t; and then, after finally getting a chance to sign up for hours and do work for which she would be paid (except for her time spent waiting for technical support, or researching customer issues, or huddling with supervisors), Tami Pendergraft spent three weeks fielding telephone calls from AT&T customers, after which she received a single paycheck. For $96.12.”

Ductapemaster 6y ago
The really awful thing from that story (Planet Money did a great recent episode on the ProPublica coverage) is that they are able to get away with this through Arbitration clauses. By way of their contracts, they strongarm their contractors into dealing with any "misclassification" issues (eg. exerting too much control over a contractor) individually, silently, and outside of court. Contractors have no ability to sue in a class action suit, and aren't even allowed to speak to fellow contractors if they go through arbitration. It's such a sneaky and frankly complicit way to enforce their business model. They know it's grey, and they put people in the corner so they can't call it grey with a loud enough voice for serious attention to be brought to the issue. Thankfully some law firms have taken the approach to overwhelm Arise with individual arbitration claims. Arise likely calculated in to their model as a cost of business expense, so the best that can be done is to make that expense grow.
- 6y ago

rmason 6y ago

All these comparisons miss one thing: after WWII America had a monopoly. We had destroyed our competitors factories in Asia as well as in Europe. It took a while for them to build back and be truly competitive outside their home countries. Here in Michigan we had a front row seat to this happening with manufacturing. Everything peaked in 1973 and has been on a slow decline ever since. Sure there have been booms but the long term trend has been down. The Japanese started importing cheap motorcycles to the West coast, then cheap cars. We didn't see them in Michigan and if auto execs did they would have laughed. The Big 3 saw VW and their Beetle as the big import threat. Suddenly those Japanese cars became better in quality. Then the Koreans went through the same cycle and Japan introduced luxury cars as well. Because wages were much less in Asia even after accounting for shipping this exerted downward pressure on wages. Give America back the monopoly it had in the fifties and sixties and minimum wage would be $24 an hour.

martin_bech 6y ago
Hi from Scandinavia, we dont have a monopoly on anything, and no actual minimum wage, yet people make about $20+ at the lowest paying jobs, enjoy 5 weeks paid vacation, free healthcare and cheap childcare..
- deleted 6y ago
  [deleted]
- friedman23 6y ago
  Scandinavia isn't a country
  - Daishiman 6y ago
    We are all aware of that. Doesn't change that their policies are extremely similar by all accounts.
    - friedman23 6y ago
      The point is that I can't determine where his country's wealth comes from if he doesn't state his country. Also I'm skeptical f this person actually even being from the region. For example, if he is from Norway most of his wealth is derived from oil.

oramit 6y ago

I agree, this is one of those slow moving trends that you just don't see but has really large effects after decades of compounding. It used to be normal for companies to have much larger work forces and to in-source all tasks, even if they were not a core competency. Now the emphasis is on lean everything, to only focus on your niche, and outsource as much as possible. Remember IT departments? It's all been outsourced to the Cloud. I have two theories on this. One is that we simply have improved our management processes. The economy became more developed and you could realize real efficiency gains from outsourcing. From a pure GDP perspective - this was good. The second is more messy and i'm still working on it but it ties into a lot of macro issues. It used to be much easier start out with no experience, say as a janitor, and work your way up to a higher position in the same company. This was possible because it was all the same company. Now with outsourcing this is impossible, if you start as a janitor, the only thing you can do is maybe run the janitor company, but you won't ever become the CEO of the company whose office you clean. At the same time, you've made entry-level positions at the company harder to attain. The floor is no longer janitor, it is now junior developer (to take a software example). This is one of the reasons why I think there is such a bifurcation in our labor market. A college degree is now the minimum requirement to get your foot into the door. Again, it used to possible to start at the very bottom and work your way up but now there is a hard cap on growth unless you go the college route. I think this was a clever way for companies to also push costs onto employees. Training used to be a thing companies did but now it's basically been abandoned. Go spend your own money and get a degree before even talking to us is the attitude.

WalterBright 6y ago
On the other hand, it's never been easier to start a company and instantly reach a global market.
- WalterBright 6y ago
  Not only that, but you can draw collaborators from the entire world, and even get investment capital from the globe (like kickstarter, etc.). I remember when I wanted to sell in France, I had to find a French distributor, make a French version of the product, guess how many would sell there, ship a pile to the distributor, the distributor collects most of the money, and unsold merchandise is scrapped. If I didn't have a distributor, the merchandise was always getting hung up in customs, would disappear in the mail, would take 6 weeks to deliver, I'd get paid in dollary-doos that no bank would exchange, etc. Rinse, repeat for every country. Today, I ship all over the world via the internet for $0, have no stock, no scrap, no middlemen, get paid instantly, ship instantly, and the transaction cost is 1% for paypal and 3% for credit cards. Still have to pay taxes, though :-)

ForHackernews 6y ago

Another really great illustration of exactly this subject was this article comparing janitors at Kodak in the 1980s with janitors at Apple (but not employed by Apple) today: https://www.seattletimes.com/business/economy/tale-of-two-janitors-kodak-vs-apple-dramatizes-how-economy-has-changed/ https://www.seattletimes.com/business/economy/tale-of-two-ja... > Yet the biggest difference between their two experiences is in the opportunities they created. A manager learned that Evans was taking computer classes while she was working as a janitor and asked her to teach some other employees how to use spreadsheet software to track inventory. When she eventually finished her college degree in 1987, she was promoted to a professional-track job in information technology. > Less than a decade later, Evans was chief technology officer of the whole company, and she has had a long career since as a senior executive at other top companies. Ramos sees the only advancement possibility as becoming a team leader keeping tabs on a few other janitors, which pays an extra 50 cents an hour.

908B64B197 6y ago
There's an other issue here: Evans bootstrapped herself by getting a (relevant) degree. The spreadsheet story is nice, but even having these skills back in the 80's was way less common than today. The article should also have looked at how much tuition was relative to the cost of living/salary Evans was making, and if Ramos could afford it today.
- ForHackernews 6y ago
  Did you read the whole article? > Evans was a full-time employee of Kodak. She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March. When the facility she cleaned was shut down, the company found another job for her: cutting film. She was able to bootstrap her career at least in part because Kodak offered tuition reimbursement and other benefits.
  - 908B64B197 6y ago
    > Did you read the whole article? I did. What I would be curious to read is an accountant taking a look at Ramos finances and figuring out how she could afford (or not) to get the same degree.

roenxi 6y ago

You might have your finger on something, but that explanation as written doesn't make much sense. If workers don't have the market power to prevent being reclassified as contractors, they certainly don't have enough market power to lobby for real wage increases. The structural shift to contractors is part of a broad trend after 1970 suggesting American labour isn't, economically speaking, a growth engine.

ashtonkem 6y ago

And there’s no career advancement for contractors. Thirty years ago the best and brightest at the hotel might get a chance to get promoted to manager, which would give them a better wage and even more skills. As a contractor this is practically impossible, both because your actual company never observes you and has very few management positions to get promoted to, and because the hotel probably can’t hire you without breaching their contract with the staffing agency.

m12k 6y ago

It was recently pointed out to me that health insurance costs roughly the same to purchase for each employee, so with wildly different wages, the percentage that health insurance makes up of the total cost associated with an employee also differs wildly. So while health insurance might make up e.g. 5% of what is paid for a software engineer, it could make up 80% of what is paid for a janitor. This puts a big incentive on companies to get rid of their lowest paid employees (or wiggle their way out of providing benefits), since there is essentially a fixed price income tax that always needs to be paid on any salary regardless of it's size otherwise.

coldtea 6y ago

>Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc. That should be made illegal to do...

slykar 6y ago

> let’s be honest, its actual purpose—is that workers get a lot less out of their jobs than they used to. Do you really belive there is a collective of business owners who thought "yeah, let's outsource everything, because f..k employees"? Obviously it's about specialization. Why a software house should hire a cleaning lady? They are not in the business of cleaning, they know nothing about it and they don't want to even think about how you go about hiring someone for cleaning. Or the other way around. Should a cleaning company hire software developers? They would fail so hard at it. Not to mention the frustration. World got more complex, business got too.

7952 6y ago
It is also about the time consuming reality of being an employer. You have to advertise jobs, find applicants and hire someone, cover holidays and sickness, deal with poor performance. All of that takes time. I honestly think that having people in house to do these kind of jobs can be a benefit. A good receptionist for example can be a real asset. But they are hard to find.