4 ms·

The problem with the concept of a middle class job (one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations), is

by asdff 3y ago

The problem with the concept of a middle class job (one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations), is that it represents an unstable equilibrium state. Incentives of most businesses are the opposite of someone in the middle class. Businesses don't think in terms how they can take so little such as to perpetuate some idyllic lifestyle unimpinged, they think in terms of how much can they possibly take off the table for our own gain without bleeding the beast dry. This is why over time, middle class lifestyles get clawed away into more desperate paycheck to paycheck ones. So even if AI used well restores some middle class jobs tomorrow, what about next week lets say when companies realize they can charge more for goods and services, and people are back to paycheck to paycheck? Short of a planned economy with price controls I don't know how you prevent these incentives from emerging.

teekert 3y ago
[flagged]
- asdff 3y ago
  You don't have to tell me that. You have to just out compete over a century of very successful anti union propaganda to get through to the labor in this country. Not to mention how the working class is so fractured on identity politics. No easy thing to go up against, especially when so many groups profit off the status quo as it is and will fight you every step of the way.
  - toomuchtodo 3y ago
    https://news.gallup.com/poll/510281/unions-strengthening.aspx https://news.gallup.com/poll/510281/unions-strengthening.asp... https://www.marketplace.org/2023/01/03/gen-z-is-the-most-pro-union-generation/ https://www.marketplace.org/2023/01/03/gen-z-is-the-most-pro...
    - asdff 3y ago
      Never underestimate capitals ability to buy votes and influence when it matters. See how uber bought prop 22. All you have to do is fill the void with enough noise and you can convince the few percent of eligible voters who actually vote to believe anything.
aerhardt 3y ago
Who are companies going to sell to if everyone is impoverished? The emergence of the middle class was a boon for businesses.
- asdff 3y ago
  Why charge $5 for paper towels when clearly people can afford to spend $6? Repeat ad nauseum for just about everything a consumer might purchase until we go from the 1950s where an unskilled manufacturing job can pay for a home and two cars and a nonworking spouse and kids in college, to where you need to be a physician to afford the same today. Sure people aren't all impoverished and starving, but there's plenty of sources out there that highlight how wages have stagnated despite productivity gains and cost of living increases.
- liveoneggs 3y ago
  That is a problem for next quarter, not this one.
deleted 3y ago
[deleted]
hiddencost 3y ago
There's a whole range of options. We can make the state stronger without going full planned economy. To pick a few things we could do: -> criminal liability for white collar crime -> muscular antitrust -> roll back citizen's united -> public option for health insurance -> taxes on real estate as investment I don't understand why people think this is all or nothing. Plenty of countries are doing much better than the US on these fronts.
- asdff 3y ago
  Can you cite some countries that haven't seen any wage stagnation and have actually seen wages grow linearly with productivity? I certainly can't think of any. Wage stagnation is endemic in the western world at least.
- smallmancontrov 3y ago
  Right, max/median net worth is about 1000000:1, there is lots of room between 1000000:1 and 1:1. The problem is that for the people on the 1000000 end of the spectrum, the same mechanics that encourage investment in productive activities also encourage investment in corruption, as they make no distinction between the two. With hundreds of billions in present-value-of-future-cash-flows at stake, almost any expenditure is justified. The laws of economics say that for you lobbying is a hobby, but for them it's a job with ROI (a whole office full of jobs, in fact). That's a steep advantage to overcome, but we've done it before and we'll do it again.
sideshowb 3y ago
I'd like to see that math expanded because I'm not sure I follow. Just because some (even if all) companies want to bleed the world dry, they aren't all colluding. If Tesco put up their prices it's not going to derail my middle class lifestyle, I'll just go shop at lidl instead. If my employer cuts pay in real terms then that's certainly a tougher situation which is why we have a union, but though it may be hassle, middle class people have been known to change jobs.
- smallmancontrov 3y ago
  > they aren't all colluding The world is mostly inhabited by people who work for a living but mostly run by people who own things for a living. These two sources of income (or capital gains -- heaven forbid we tax our rich like we tax our plebs) lead to highly distinct and often directly opposed objective functions. The extent to which this leads to a self-serving policy spiral for the rich is a function of the degree to which the inhabited-by/run-by distinction is true: with a steep enough wealth distribution, yeah, it's fair for people at the bottom to say that people at the top actually are all colluding. The self-serving policy spiral doesn't look like "Lidl hikes prices and Tesco doesn't, so you can just shop at Tesco," it looks like "merger approved between Lidl and Tesco, now listen to the surviving PR department tell you how this will surely save you money."
  - sideshowb 3y ago
    Ok so gp was talking about businesses. You are talking about the fact that money is power which is a fundamental problem, though a different one. Not sure how to solve it but stronger controls on political donations and lobbying would help.
- asdff 3y ago
  I'm not alleging collusion, I don't believe there is any active collusion at all. These things are possible through just incentives. E.g. consider a hypothetical streaming providor; compute is cheaper by the year, cost of owning your datacenter goes down by the year, your customer base grows by the year, the amount of money you return on investments like productions continues to pay out by the year, yet your shareholders expect you to raise prices by the year as well despite productivity increasing, customer reach widening, and your costs lowering. Imagine a CEO arguing they don't need to raise prices like the board wants in order to see a bump in the speculative markets on their investments, they'd just sack that CEO for someone who will. That's just for the hypothetical streaming agency. When you add up all these little increases of just about every good and compare that to wage growth, you see that wages are stagnating relative to other metrics like cost of living or business/national productivity, in the US or the UK or just about anywhere with these sort of metrics available. You can raise minimum wages to fend of a total economic collapse every now and then but these increases find their way to these other hands reaching into your pocket before long as well. A constant sucking noise and a march to what, I'm not sure, but it won't be pretty I expect.
abdullahkhalids 3y ago
Institute law that give employees greater than 50% shares of any large company they were work for. So, the capitalist class can't actually extract wealth away from the worker class.
- asdff 3y ago
  There are many ways to snap ones fingers and right the ship, very few ways to do it in practice. Imagine trying to get such a law passed, you'd have the entire worlds economy outadvertising and out lobbying you.
  - abdullahkhalids 3y ago
    > We live in capitalism, its power seems inescapable – but then, so did the divine right of kings. Ursula K Le Guin [1] [1] https://www.theguardian.com/books/2014/nov/20/ursula-k-le-guin-national-book-awards-speech https://www.theguardian.com/books/2014/nov/20/ursula-k-le-gu...
    - asdff 3y ago
      In practice, is there anything different between a king and someone who was born into a wealthy family? Not really. We might have severed the idea of divinity choosing who receives these resources (plenty of billionaires praise god of course for their success all that being said) but we have not done anything about the issue of a small chosen few accumulating the bulk of the gains of our productivity.
drewcoo 3y ago
> The problem with the concept of a middle class job (one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations), is that it represents an unstable equilibrium state. Incentives of most businesses are the opposite of someone in the middle class. Ok, and I claim that the problem with the current model of capitalism, as opposed to the post-WWII model, is that it's oppositional to a middle class - the incentives are opposed. Now the question is about the societal outcomes we expect from the systems people create. Why should we prefer greater inequity and an even more complete loss of the middle class? These things are all being imposed by human-manufactured systems - we can control them. We don't even need to throw AI or human desperation or planned economies on this bonfire of ideas to recognize that, as initially posed, the problem is itself incorrect.
- asdff 3y ago
  >Now the question is about the societal outcomes we expect from the systems people create. Why should we prefer greater inequity and an even more complete loss of the middle class? These things are all being imposed by human-manufactured systems - we can control them. Control of these systems lies in the capital class not in the working class. They prefer greater inequality, you and I probably don't but you and I have zero agency to do anything at all about how the world works. We lack support and we lack money to advertise our position and garner support relative to the groups empowered and enriched by the status quo.
ben_w 3y ago
> one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations My understanding is that most people's understanding of "middle class" is "about 20% richer than me", and that this remains true regardless of how rich one is. Most people, for most of the years since Joseph Marie Jacquard realised he could control a loom with punched cards, the Red Queen race of automation has given us more stuff and experiences per hour of labour — if you wanted to live the 1820s idea of a middle class life, you can retire as soon as you get around €$£ 25-50k of savings (just don't start a family, the rest of society considers this standard to be unacceptable for that, what with no electricity). If this improvement in living standards is despite, or because of, each business trying to maximise revenue, is basically the entire disagreement between Adam Smith and Karl Marx; though it's worth also noting that neither liked rent-seeking, and if you have a completely efficient market then nobody can extract any profits because competition drives margins to zero… but also since then we've had research show that complex markets aren't and can't be efficient: https://arxiv.org/abs/1002.2284 https://arxiv.org/abs/1002.2284
- smallmancontrov 3y ago
  > "middle class" is "about 20% richer than me" There are better definitions. > Karl Marx You said Voldemort's name! Now he will surely haunt us. In any case, your objective function dramatically changes when you own things for a living rather than work for a living. Many people would call someone with a 1MM retirement portfolio rich, but 4% returns on a 1MM portfolio is $40k/yr and probably isn't going to replace a job, not for someone who managed to amass 1MM in the first place. However, 4% returns on a 10MM portfolio is $400k/yr, and it might. 4% on $100MM is $4MM/yr, and it probably will. So the composition of incentives switches from worker-like to owner-like somewhere around $10MM net worth, and this is worth noting. If you ever saw old timey movies from the 50s or 60s where "millionaire" was said with reverence, note that $1MM in 60s dollars is $10MM in 2024 dollars. They were aware of the class divide back then in a way that people generally are not today.
  - ben_w 3y ago
    > There are better definitions. I'm a linguistic descriptivist, not a prescriptivist. This is how I think most use the term, even if there's a more useful term of art in economics or in politics. > You said Voldemort's name! Now he will surely haunt us One might even say that a spectre is haunting Europe… ;P > So the composition of incentives switches from worker-like to owner-like somewhere around $10MM net worth, and this is worth noting. In a sense, sure. This is also close to what I'm told is the actuarial value of a human life in the USA, and that's not a mere coincidence. But also, at that level you most likely only got the money by having a very different objective function to begin with, as it comes from starting a successful business. (Other options are "inherit" and "win big on lottery" and both groups have differently bad reputations to the kind of bad reputation that successful businesses people get; I can't possibly comment how accurate any of these reputations are).

by asdff 3y ago

teekert 3y ago

[flagged]

asdff 3y ago
You don't have to tell me that. You have to just out compete over a century of very successful anti union propaganda to get through to the labor in this country. Not to mention how the working class is so fractured on identity politics. No easy thing to go up against, especially when so many groups profit off the status quo as it is and will fight you every step of the way.
- toomuchtodo 3y ago
  https://news.gallup.com/poll/510281/unions-strengthening.aspx https://news.gallup.com/poll/510281/unions-strengthening.asp... https://www.marketplace.org/2023/01/03/gen-z-is-the-most-pro-union-generation/ https://www.marketplace.org/2023/01/03/gen-z-is-the-most-pro...
  - asdff 3y ago
    Never underestimate capitals ability to buy votes and influence when it matters. See how uber bought prop 22. All you have to do is fill the void with enough noise and you can convince the few percent of eligible voters who actually vote to believe anything.

aerhardt 3y ago

Who are companies going to sell to if everyone is impoverished? The emergence of the middle class was a boon for businesses.

asdff 3y ago
Why charge $5 for paper towels when clearly people can afford to spend $6? Repeat ad nauseum for just about everything a consumer might purchase until we go from the 1950s where an unskilled manufacturing job can pay for a home and two cars and a nonworking spouse and kids in college, to where you need to be a physician to afford the same today. Sure people aren't all impoverished and starving, but there's plenty of sources out there that highlight how wages have stagnated despite productivity gains and cost of living increases.
liveoneggs 3y ago
That is a problem for next quarter, not this one.

deleted 3y ago

[deleted]

hiddencost 3y ago

There's a whole range of options. We can make the state stronger without going full planned economy. To pick a few things we could do: -> criminal liability for white collar crime -> muscular antitrust -> roll back citizen's united -> public option for health insurance -> taxes on real estate as investment I don't understand why people think this is all or nothing. Plenty of countries are doing much better than the US on these fronts.

asdff 3y ago
Can you cite some countries that haven't seen any wage stagnation and have actually seen wages grow linearly with productivity? I certainly can't think of any. Wage stagnation is endemic in the western world at least.
smallmancontrov 3y ago
Right, max/median net worth is about 1000000:1, there is lots of room between 1000000:1 and 1:1. The problem is that for the people on the 1000000 end of the spectrum, the same mechanics that encourage investment in productive activities also encourage investment in corruption, as they make no distinction between the two. With hundreds of billions in present-value-of-future-cash-flows at stake, almost any expenditure is justified. The laws of economics say that for you lobbying is a hobby, but for them it's a job with ROI (a whole office full of jobs, in fact). That's a steep advantage to overcome, but we've done it before and we'll do it again.

sideshowb 3y ago

I'd like to see that math expanded because I'm not sure I follow. Just because some (even if all) companies want to bleed the world dry, they aren't all colluding. If Tesco put up their prices it's not going to derail my middle class lifestyle, I'll just go shop at lidl instead. If my employer cuts pay in real terms then that's certainly a tougher situation which is why we have a union, but though it may be hassle, middle class people have been known to change jobs.

smallmancontrov 3y ago
> they aren't all colluding The world is mostly inhabited by people who work for a living but mostly run by people who own things for a living. These two sources of income (or capital gains -- heaven forbid we tax our rich like we tax our plebs) lead to highly distinct and often directly opposed objective functions. The extent to which this leads to a self-serving policy spiral for the rich is a function of the degree to which the inhabited-by/run-by distinction is true: with a steep enough wealth distribution, yeah, it's fair for people at the bottom to say that people at the top actually are all colluding. The self-serving policy spiral doesn't look like "Lidl hikes prices and Tesco doesn't, so you can just shop at Tesco," it looks like "merger approved between Lidl and Tesco, now listen to the surviving PR department tell you how this will surely save you money."
- sideshowb 3y ago
  Ok so gp was talking about businesses. You are talking about the fact that money is power which is a fundamental problem, though a different one. Not sure how to solve it but stronger controls on political donations and lobbying would help.
asdff 3y ago
I'm not alleging collusion, I don't believe there is any active collusion at all. These things are possible through just incentives. E.g. consider a hypothetical streaming providor; compute is cheaper by the year, cost of owning your datacenter goes down by the year, your customer base grows by the year, the amount of money you return on investments like productions continues to pay out by the year, yet your shareholders expect you to raise prices by the year as well despite productivity increasing, customer reach widening, and your costs lowering. Imagine a CEO arguing they don't need to raise prices like the board wants in order to see a bump in the speculative markets on their investments, they'd just sack that CEO for someone who will. That's just for the hypothetical streaming agency. When you add up all these little increases of just about every good and compare that to wage growth, you see that wages are stagnating relative to other metrics like cost of living or business/national productivity, in the US or the UK or just about anywhere with these sort of metrics available. You can raise minimum wages to fend of a total economic collapse every now and then but these increases find their way to these other hands reaching into your pocket before long as well. A constant sucking noise and a march to what, I'm not sure, but it won't be pretty I expect.

abdullahkhalids 3y ago

Institute law that give employees greater than 50% shares of any large company they were work for. So, the capitalist class can't actually extract wealth away from the worker class.

asdff 3y ago
There are many ways to snap ones fingers and right the ship, very few ways to do it in practice. Imagine trying to get such a law passed, you'd have the entire worlds economy outadvertising and out lobbying you.
- abdullahkhalids 3y ago
  > We live in capitalism, its power seems inescapable – but then, so did the divine right of kings. Ursula K Le Guin [1] [1] https://www.theguardian.com/books/2014/nov/20/ursula-k-le-guin-national-book-awards-speech https://www.theguardian.com/books/2014/nov/20/ursula-k-le-gu...
  - asdff 3y ago
    In practice, is there anything different between a king and someone who was born into a wealthy family? Not really. We might have severed the idea of divinity choosing who receives these resources (plenty of billionaires praise god of course for their success all that being said) but we have not done anything about the issue of a small chosen few accumulating the bulk of the gains of our productivity.

drewcoo 3y ago

> The problem with the concept of a middle class job (one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations), is that it represents an unstable equilibrium state. Incentives of most businesses are the opposite of someone in the middle class. Ok, and I claim that the problem with the current model of capitalism, as opposed to the post-WWII model, is that it's oppositional to a middle class - the incentives are opposed. Now the question is about the societal outcomes we expect from the systems people create. Why should we prefer greater inequity and an even more complete loss of the middle class? These things are all being imposed by human-manufactured systems - we can control them. We don't even need to throw AI or human desperation or planned economies on this bonfire of ideas to recognize that, as initially posed, the problem is itself incorrect.

asdff 3y ago
>Now the question is about the societal outcomes we expect from the systems people create. Why should we prefer greater inequity and an even more complete loss of the middle class? These things are all being imposed by human-manufactured systems - we can control them. Control of these systems lies in the capital class not in the working class. They prefer greater inequality, you and I probably don't but you and I have zero agency to do anything at all about how the world works. We lack support and we lack money to advertise our position and garner support relative to the groups empowered and enriched by the status quo.

ben_w 3y ago

> one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations My understanding is that most people's understanding of "middle class" is "about 20% richer than me", and that this remains true regardless of how rich one is. Most people, for most of the years since Joseph Marie Jacquard realised he could control a loom with punched cards, the Red Queen race of automation has given us more stuff and experiences per hour of labour — if you wanted to live the 1820s idea of a middle class life, you can retire as soon as you get around €$£ 25-50k of savings (just don't start a family, the rest of society considers this standard to be unacceptable for that, what with no electricity). If this improvement in living standards is despite, or because of, each business trying to maximise revenue, is basically the entire disagreement between Adam Smith and Karl Marx; though it's worth also noting that neither liked rent-seeking, and if you have a completely efficient market then nobody can extract any profits because competition drives margins to zero… but also since then we've had research show that complex markets aren't and can't be efficient: https://arxiv.org/abs/1002.2284 https://arxiv.org/abs/1002.2284

smallmancontrov 3y ago
> "middle class" is "about 20% richer than me" There are better definitions. > Karl Marx You said Voldemort's name! Now he will surely haunt us. In any case, your objective function dramatically changes when you own things for a living rather than work for a living. Many people would call someone with a 1MM retirement portfolio rich, but 4% returns on a 1MM portfolio is $40k/yr and probably isn't going to replace a job, not for someone who managed to amass 1MM in the first place. However, 4% returns on a 10MM portfolio is $400k/yr, and it might. 4% on $100MM is $4MM/yr, and it probably will. So the composition of incentives switches from worker-like to owner-like somewhere around $10MM net worth, and this is worth noting. If you ever saw old timey movies from the 50s or 60s where "millionaire" was said with reverence, note that $1MM in 60s dollars is $10MM in 2024 dollars. They were aware of the class divide back then in a way that people generally are not today.
- ben_w 3y ago
  > There are better definitions. I'm a linguistic descriptivist, not a prescriptivist. This is how I think most use the term, even if there's a more useful term of art in economics or in politics. > You said Voldemort's name! Now he will surely haunt us One might even say that a spectre is haunting Europe… ;P > So the composition of incentives switches from worker-like to owner-like somewhere around $10MM net worth, and this is worth noting. In a sense, sure. This is also close to what I'm told is the actuarial value of a human life in the USA, and that's not a mere coincidence. But also, at that level you most likely only got the money by having a very different objective function to begin with, as it comes from starting a successful business. (Other options are "inherit" and "win big on lottery" and both groups have differently bad reputations to the kind of bad reputation that successful businesses people get; I can't possibly comment how accurate any of these reputations are).