4 ms·

How come the people of Silicon Valley, always so desperately concerned about issues of social justice, never talk about wage inequality? IMO this is an issue f

How come the people of Silicon Valley, always so desperately concerned about issues of social justice, never talk about wage inequality? IMO this is an issue for which the scale and impact is far greater than what seems to be the issues of concern for most of the people working in big tech.

RyanHamilton 4y ago
Some are: "And what do I see in our future now? I see pitchforks. " https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014/ https://www.politico.com/magazine/story/2014/06/the-pitchfor...
- lazyeye 4y ago
  I meant coming from a position of concern for injustice rather than risk and self-protection.
diordiderot 4y ago
Inequality is a good thing! The more inequality you have the more jobs capitalist create. Pretty soon most of us will be working 3 or 4
hnbad 4y ago
This reminds me of the old political cartoon of the fat cat factory owner sitting on the table with the white worker and the immigrant, hoarding a huge pile of cash and telling the white worker "careful, I think he wants to take your money". Wage inequality is a problem, but the entire economic system is built on underpaying workers, i.e. extracting "surplus value" aka "profit" and paying it out to the owners for merely owning the company. Likewise rent-seeking extracts rent from individuals for using something the rentier merely owns, on top of any cost of maintenance, improvement, or loans, which themselves pay interest on top of the actual value of the money provided. The foundation of the system is to make money from nothing by enforcing and thus manifesting the fiction of "property rights" and withholding the hoarded dead weight of "stuff" (or in intellectual property even just "ideas") from the society that could benefit from it unless allowed to leech on its actual productive effort in the form of rent, wage or interest. Societal progress in the past hundreds of years (especially in Europe) has been primarily defined by expanding this fiction (even the concept of land as such property is fairly new, see Enclosure). In essence even modern states live off this fiction except the property is the ability to exist within their sphere of influence and the rent is taxes, though the state's function is more of a tool to enable this system by providing a framework of violence to enforce it than as a beneficiary (although its higher officials often benefit immensely from it, they function more like the highly-paid C-level executives than the owners of a firm). So yes, wage inequality is an issue but the problem is less that some tech workers get paid too much but rather that most of the surplus value workers generate doesn't end up on their paychecks and this problem is essentially unsolvable under the economic system, at least within a traditional corporate structure (less so in a co-operative). Also your claim is actually wrong. Wage transparency (i.e. the right to talk to coworkers about each other's salary to help them better negotiate) is a big topic, although mostly framed as a solution to discrimination. And unionization is the easiest way to tackle wage inequality because it gives power to those unable to bargain for better wages on their own.
- TheOtherHobbes 4y ago
  I don't entirely agree with the Marxist analysis of surplus value. What happens in practice is that some people have unusual talents for inventiveness, imagination, and social organisation. They can invent and innovate and that's broadly a social good. It becomes exploitative when their talents are owned by rentier investors, whose sole contribution to a project is financial. Of course the money doesn't exist physically. The investment is really a political endorsement of the project and the individuals. This unlocks resources and creates social credibility. Sometimes this comes with an explicit personal message from the investor, sometimes it's just numbers. The problem is that stock markets support casual rent-seeking which disconnects investors from the projects they throw money at. Casual investors have zero interest in the long-term health of a company. All they want is the highest possible short-term return. And this culture is what forces corporations to aggressively devalue wages and worker comp, right from the initial seed round all the way through to the other side of IPO. The typical HN reader is somewhat insulated from this, because their skills are needed to make projects happen. But casual labour is considered a fungible expense that needs to be minimised. Politically this leaves most of the population disenfranchised. Some token electoral democracy doesn't change the fact that most people have almost no political power in their work environment, and have to accept top-down orders that undermine their own prosperity and welfare.
  - hnbad 4y ago
    Oh, sure, I'm not saying founders or C-level executives don't contribute anything. A lot of entrepreneurs are extremely talented (although in practice finances are a much more important factor for success than exceptional talent). The problem is that because the system is set up on the principle of generating money from mere ownership, employees will always be exploited (i.e. be paid less than they produce, even after accounting for business expenses and operating costs). This ownership model inevitably poisons everything. A founder may be an active contributor to the company but they fulfill a dual role of owner and worker that is unique to them and alienates them from other workers in their company. This is most evident as companies grow and founders retreat into C-level roles isolating them from the day-to-day work via multiple layers of management or eventually phase out entirely, either retaining a seat on the board, transitioning to fully passive ownership of their shares or selling their stake entirely to cash out, at which point they will likely want to reinvest most of their money in ways that generate "passive income" (i.e. rent-seeking). I'm not a big fan of Marxist theory, especially in its Marxist-Leninist interpretations, but even from a capitalist lens I think what I said holds true even if one may disagree with the framing or the moral implications (capitalist theorists famously prefer framing the system is natural, innate and thus amoral and inevitable, despite the recency of its more recognizable modern iterations). But if you want to go into the political implications, the ability to generate income from property (whether it is a stake in a company, housing or just literal heaps of money) necessarily enables the unequal accumulation of wealth and in a capitalist system that wealth beyond a certain point directly translates into political power as this wealth represents an exclusive claim on resources (production, housing, finance) that can be withheld from society with state violence if necessary. This directly contradicts the abstract idea of a democracy by amending "every vote is equal" with "but you vote with your wallet" (and some wallets are bigger than others). I'm not proposing a solution. I think cooperatives are an interesting model though they are hard to bootstrap in this system as even without institutional biases (e.g. cooperatives allegedly find it harder to take out loans because banks prefer having a central individual representing the debtor) the incentives align against them: if you have the capital to start your own company, why pick a structure giving you less power by empowering those who can only bring in their labor? But cooperatives can't change this system and thus have to operate within the same system, feeding into and benefiting from the same exploitative system.
hackerlight 4y ago
Very few people get rich off wages, and those that do pay 40-50 percent tax for the privilege. It's ownership of assets, largely tax free, and propped up by government policy, that drives inequality.
- Gibbon1 4y ago
  The 40-50% tax is to prevent people earning wages from breaking out and competing with the truly wealthy.
  - chimprich 4y ago
    I don't think so. Taxes exist in order for the government to reserve some of the wealth of society so it can direct resources at communal aims such as defence, welfare, science, justice, etc. Higher taxes on higher earners are there because of pragmatism and a sense of fairness: higher earners have more disposable income to be taxed on. These kind of statements always confuse me: does anyone think anyone is motivated in this way? Do people think Buffett and Soros are sitting down in a room with Trump and Biden plotting how to keep the club of "truly wealthy" exclusive?
    - Gibbon1 4y ago
      When the republicans passed their 2017 tax bill they very carefully made sure that corps like mine didn't get any benefit. So yeah they totally do.
    - bjornsing 4y ago
      In Sweden the top tier income tax was officially named “the protection tax” (“värnskatt”). It’s openly stated purpose was to protect society from earned wealth. At the same time we have some of the wealthiest people in the world here, real oligarch style.

RyanHamilton 4y ago

Some are: "And what do I see in our future now? I see pitchforks. " https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014/ https://www.politico.com/magazine/story/2014/06/the-pitchfor...

lazyeye 4y ago
I meant coming from a position of concern for injustice rather than risk and self-protection.

diordiderot 4y ago

Inequality is a good thing! The more inequality you have the more jobs capitalist create. Pretty soon most of us will be working 3 or 4

hnbad 4y ago

This reminds me of the old political cartoon of the fat cat factory owner sitting on the table with the white worker and the immigrant, hoarding a huge pile of cash and telling the white worker "careful, I think he wants to take your money". Wage inequality is a problem, but the entire economic system is built on underpaying workers, i.e. extracting "surplus value" aka "profit" and paying it out to the owners for merely owning the company. Likewise rent-seeking extracts rent from individuals for using something the rentier merely owns, on top of any cost of maintenance, improvement, or loans, which themselves pay interest on top of the actual value of the money provided. The foundation of the system is to make money from nothing by enforcing and thus manifesting the fiction of "property rights" and withholding the hoarded dead weight of "stuff" (or in intellectual property even just "ideas") from the society that could benefit from it unless allowed to leech on its actual productive effort in the form of rent, wage or interest. Societal progress in the past hundreds of years (especially in Europe) has been primarily defined by expanding this fiction (even the concept of land as such property is fairly new, see Enclosure). In essence even modern states live off this fiction except the property is the ability to exist within their sphere of influence and the rent is taxes, though the state's function is more of a tool to enable this system by providing a framework of violence to enforce it than as a beneficiary (although its higher officials often benefit immensely from it, they function more like the highly-paid C-level executives than the owners of a firm). So yes, wage inequality is an issue but the problem is less that some tech workers get paid too much but rather that most of the surplus value workers generate doesn't end up on their paychecks and this problem is essentially unsolvable under the economic system, at least within a traditional corporate structure (less so in a co-operative). Also your claim is actually wrong. Wage transparency (i.e. the right to talk to coworkers about each other's salary to help them better negotiate) is a big topic, although mostly framed as a solution to discrimination. And unionization is the easiest way to tackle wage inequality because it gives power to those unable to bargain for better wages on their own.

TheOtherHobbes 4y ago
I don't entirely agree with the Marxist analysis of surplus value. What happens in practice is that some people have unusual talents for inventiveness, imagination, and social organisation. They can invent and innovate and that's broadly a social good. It becomes exploitative when their talents are owned by rentier investors, whose sole contribution to a project is financial. Of course the money doesn't exist physically. The investment is really a political endorsement of the project and the individuals. This unlocks resources and creates social credibility. Sometimes this comes with an explicit personal message from the investor, sometimes it's just numbers. The problem is that stock markets support casual rent-seeking which disconnects investors from the projects they throw money at. Casual investors have zero interest in the long-term health of a company. All they want is the highest possible short-term return. And this culture is what forces corporations to aggressively devalue wages and worker comp, right from the initial seed round all the way through to the other side of IPO. The typical HN reader is somewhat insulated from this, because their skills are needed to make projects happen. But casual labour is considered a fungible expense that needs to be minimised. Politically this leaves most of the population disenfranchised. Some token electoral democracy doesn't change the fact that most people have almost no political power in their work environment, and have to accept top-down orders that undermine their own prosperity and welfare.
- hnbad 4y ago
  Oh, sure, I'm not saying founders or C-level executives don't contribute anything. A lot of entrepreneurs are extremely talented (although in practice finances are a much more important factor for success than exceptional talent). The problem is that because the system is set up on the principle of generating money from mere ownership, employees will always be exploited (i.e. be paid less than they produce, even after accounting for business expenses and operating costs). This ownership model inevitably poisons everything. A founder may be an active contributor to the company but they fulfill a dual role of owner and worker that is unique to them and alienates them from other workers in their company. This is most evident as companies grow and founders retreat into C-level roles isolating them from the day-to-day work via multiple layers of management or eventually phase out entirely, either retaining a seat on the board, transitioning to fully passive ownership of their shares or selling their stake entirely to cash out, at which point they will likely want to reinvest most of their money in ways that generate "passive income" (i.e. rent-seeking). I'm not a big fan of Marxist theory, especially in its Marxist-Leninist interpretations, but even from a capitalist lens I think what I said holds true even if one may disagree with the framing or the moral implications (capitalist theorists famously prefer framing the system is natural, innate and thus amoral and inevitable, despite the recency of its more recognizable modern iterations). But if you want to go into the political implications, the ability to generate income from property (whether it is a stake in a company, housing or just literal heaps of money) necessarily enables the unequal accumulation of wealth and in a capitalist system that wealth beyond a certain point directly translates into political power as this wealth represents an exclusive claim on resources (production, housing, finance) that can be withheld from society with state violence if necessary. This directly contradicts the abstract idea of a democracy by amending "every vote is equal" with "but you vote with your wallet" (and some wallets are bigger than others). I'm not proposing a solution. I think cooperatives are an interesting model though they are hard to bootstrap in this system as even without institutional biases (e.g. cooperatives allegedly find it harder to take out loans because banks prefer having a central individual representing the debtor) the incentives align against them: if you have the capital to start your own company, why pick a structure giving you less power by empowering those who can only bring in their labor? But cooperatives can't change this system and thus have to operate within the same system, feeding into and benefiting from the same exploitative system.

hackerlight 4y ago

Very few people get rich off wages, and those that do pay 40-50 percent tax for the privilege. It's ownership of assets, largely tax free, and propped up by government policy, that drives inequality.

Gibbon1 4y ago
The 40-50% tax is to prevent people earning wages from breaking out and competing with the truly wealthy.
- chimprich 4y ago
  I don't think so. Taxes exist in order for the government to reserve some of the wealth of society so it can direct resources at communal aims such as defence, welfare, science, justice, etc. Higher taxes on higher earners are there because of pragmatism and a sense of fairness: higher earners have more disposable income to be taxed on. These kind of statements always confuse me: does anyone think anyone is motivated in this way? Do people think Buffett and Soros are sitting down in a room with Trump and Biden plotting how to keep the club of "truly wealthy" exclusive?
  - Gibbon1 4y ago
    When the republicans passed their 2017 tax bill they very carefully made sure that corps like mine didn't get any benefit. So yeah they totally do.
  - bjornsing 4y ago
    In Sweden the top tier income tax was officially named “the protection tax” (“värnskatt”). It’s openly stated purpose was to protect society from earned wealth. At the same time we have some of the wealthiest people in the world here, real oligarch style.