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A Tale of Two Countries
theodp writes "Over at TechCrunch, Jon Bischke is troubled by the growing divide between Silicon Valley and unemployed America. While people who spend most of their days within a few blocks of tech start-up epicenters are enjoying a boom/bubble, the number of unemployed now eclipses 14 million nationwide, labor under-utilization is 16.2%, and the mean duration of unemployment has spiked to 40 weeks. 'Which bring us to an important question,' writes Bischke. 'Should Silicon Valley (and other tech clusters throughout the country) care? After all, as long as people in Nebraska or the Central Valley of California have enough money to buy virtual tractors to tend their crops in Farmville, should the tech community be worried about whether those same people are getting paid to do work in the real world? Is what's best for Silicon Valley also good for America?'"
The software development, technology, and IT industries have been under attack for quite some time now. Automation, outsourcing, H1B visas, and now the cloud.
It is a testament to the technology-related fields that the workforce keeps adapting and evolving to keep pushing forward amidst adversity.
While I feel for all those unemployed, I have worked very hard to not only stay up-to-date and relevant, but to also keep pushing myself forward. I am not saying I am better than anybody else, but I have more than paid my dues and continue to do so. Perhaps the technology-related fields fare better because it has always been a moving target. Before you had worries about job security you had worries about your tools becoming obsolete or deprecated. The entire mindset is to keep learning new languages, concepts, and technology. Never rest on your laurels.
For reporting purposes, "unemployment" counts only those who do not have; but are seeking, a job. Retirees, 'discouraged' former job seekers, students/children not seeking work, etc. don't count.
This is to say, things are generally worse than unemployment statistics indicate.
A nasty situation like riots and a bailout from Germany?
Nerd rage is the funniest rage.
I remember back when granddad had a computer. He'd add up all the coins and do the math required for the accounting for the business. Then silly technology came along and now we have "calculators" and "computers". What happened to the real faces behind these jobs?! How many people are out of work that have the skills to do long division -JUST LIKE A COMPUTER-! It's a terrible thing and we should at once do away with progress. It's far too damaging to the economy.
look, no offense.
but a lot of people whose life is a never ending string of relatively well paying jobs, "interesting" work, conferences, tech seminars, etc, tend to lose their ability to empathize with the rest of us losers.
It would be prudent to move where the jobs are but those of us that got suckered in with a mortgage are now upside down and unable to move. We're locked into living in a dead/dying economy (Michigan) by a mortgage that is sinking further year after year. Those of us mortgage-locked would sure benefit from telecommuting positions but they seem more of a fairy tale than reality. If only companies would realize that they could give us VPN access to their infrastructure and we could do the work from home, we don't need always sit in a cubicle on-site. The lack of true leadership coming out of Washington continues to worsen year after year. Heck, remember last year the state department sending millions of dollars to train middle-eastern country (Pakistan?) Java programming? Why couldn't they spend that money and train us folks here?
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
U-6 jumped a full point from 15.4 in May to 16.4 in June.
Wow, this was one hell of a crap article. Who does this guy think he is, trying to guilt trip working americans in silicon valley because they are, well... working. I mean WTF?!
It's a serious enough issue that sci-fi has considered it for decades - what if automation makes many people unnecessary? What do all those people do? If their economic worth is less than the cost of food and shelter for them, then political instability is sure to follow. Don't just debunk silly "solutions" you think people might have in mind, like ludditism or marxism - do you see a workable solution? Or a good reason to continue to think it's an unfounded fear?
Income disparity was what made roman population lose interest, hope and eventually, participation in the roman republic, leading to deterioration of not only state but also culture in just a hundred years or so :
rich were flooding the market with cheap grain, causing the small farmers not to be able to make a living because the crop they produced ended up more expensive in cost than rich, big farm holders. in turn, they had to sell their farms to rich farmers and migrate into cities to make a living. increasingly roman agriculture had come under the control of very few, rich landowning aristocrats. these farms were called latifundia.
since the backbone of the country, the small free citizen landholders were gone, public services and military continually deteriorated. the 'barbarians' (non-romans) who were increasingly conscripted to the army had less incentive than a citizen soldier to defend anything. moreover, the disillusioned citizenry, who could get nothing out of the society at that point, cared much for any intruders - whomever invaded, they were just replacing existing elite with their own, little was changing in the case of ordinary citizens. (except for exceedingly vandal barbarians and similar - vandals were also a barbarian tribe, as a sidenote).
the rich, who held all the resources had little use for anything of the sort like republic or democracy. and when augustus and later emperors started to dismantle last vestiges of republic, noone cared. now, the citizenry had no say or share from society as a whole. and from that point on it all disintegrated.
the irony is, this process started around the peak of roman momentum - late republic era. the very era in which triumvirate (caesar pompei and crassus) were waging their civil war against each other. the empire didnt instantly disintegrate - it had momentum to take itself comfortably forward at least 100 years more. everything then started to directly crumble.
today is no different. back in roman times, the poor had at least the chance to engage in trade and arts/crafts. today, even those fields of life are 'latifundiated' by the rich just like how roman agriculture (then the backbone of economy) was consolidated in the hands of very few elite.
i would like to alert you to the fact that, this situation that destroyed roman empire, had later also become the causes that led to the birth of aristocracy in middle ages and on. in fact, the entire system of feudalism, is a system of property ownership - the difference with our current capitalist system is, now everyone is able to own property (land in this case), while back then, only aristocrats could. however this doesnt change one fundamental fact - this system eventually leads to a minority having and controlling everything (yes, including politics because resource is power - just like how senate had to accept subjugation in front of those who had the funds to muster legions), and ends up in an aristocratic hierarchical society.
in short - yes, they should care. for the sake of their own freedom too.
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If you're talking about Greece, then yes - one of the EU countries who had a culture of "low or no taxes" for the wealthy and businesses at all costs. Sort of like another, slight larger, economy that is similarly struggling.
You know, it's funny but when you don't have income (in the form of taxes), you can't spend it on things that you're paying for anyway, like air conditioning Afghanistan.
The banks have just trashed the economy by selling derivates as actual notes, but NO ONE even to this day, understands their motive.
You don't understand the motive, but it really isn't that hard. Where else did you think all the crap loans that the CRA forced the banks to make would wind up, paid off in fairy dust from Nevernever land?
And when the people who wrote and pushed the CRA were told "it's going to break, we need to fix it", and they kept saying "there's no problem, there's no problem" and did nothing, did you imagine that Hansel and Gretel would buy up all the gingerbread mortgages so they could have something yummy to eat?
Obama gets stonewalled wherever he goes,
Like Bush got stonewalled when he wanted to redesign Fannie Mae and Freddie Mac and Franks and Dodd and the other CRA architects said there was no problem and thus did nothing?
But compared to the madness of Geo Bush et al, he's fending well.
Other than being a deliberate liar making promises he knew he couldn't keep just to get elected, Obama is doing very well. Now, tell me why it was madness to try to fix the mortgage problem before it exploded and not by simply handing out tons of money to political cronies like ACORN after?
Well, in the eighties some politicians here in Norway suggested a ban on robotics. It probably seemed like a nice way to save jobs (and votes.) Now, all politicians like to have a piece of the high tech cake, and claim their policies made it possible. (Our biggest claims to fame is OO, the paper clip, a cheese grater and a supposedly very efficient sea missile.)
But yes, all people should fear redundancy. I am a software engineer above the mid thirties and I fear redundancy big time. But, I do read a lot of books, follow forums and do a lot to not get left behind.
Again, I realize that is different from having your job replaced with a machine, like in the shoe industry, canning etc. For those, we invented reality TV.
On a serious note, once again: Yes, of course it can be a big problem, but only if a large enough mass of people at the same time suffer from it. OIf it is a chip at a time, it will get about as much as attention as when your last blacksmith went out of business.
It's way too easy to remain unemployed.
My friend's unemployment check is $347/wk. He's already filed for and received "Emergency Unemployment Compensation" which extends his benefits for up to a year. His only requirement to remain on unemployment is that he has to "make and active job search" meaning 3 job-searching activities (job fairs, interviews, etc.) or 3 job applications, or any combination per week. Job applications includes applying online to jobs via the state's unemployment office.
And $347wk covers all his bills, so why should he look for a job? Yet he counts as unemployed.
It's just our government messing up its own programs and making things appear worse than they should be.
OK, this one of the new "Big Lies" that is repeated enough that it might become accepted -- 'that public sector workers don't produce anything, only the private sector does'. Total BS. Examples: When a scientist employed by the Naval Research Laboratories invents a better laser, is something of value produced -- yes. When an employee of the city picks up your garbage, is a service of value performed -- yes. When a SEAL puts a bullet through the head of bin Laden, is a service of value performed -- yes. All examples of public employees producing valuable goods and services. The purveyors of this line of BS need to read some economics and learn the definition of "production". And I've known lots of persons employed in the private sector who produced absolutely nothing of value. If you want to, you could try to make some deranged argument that the private sector could always perform a service cheaper or better than the public sector, which is at least coherent, if not correct.
Public Sector workers don't pay income taxes?
On the back of what cereal box did you read that? Having worked in various players within the public sector (State, Local, and Federal) - I've been hit with the same unpleasant income tax that anyone else is required to pay. There are no free lunches where income tax is concerned.
I'm guessing you're conflating certain states (IIRC, Vermont, NH, and possibly D.C.) that don't have a state income tax. That doesn't get you out of paying federal income taxes, which are the brunt anyways, and those states and locales that don't have an income tax get the revenue in other ways (10%+ sales tax, $300 to throw away a bag of trash or $500 to park a car on your street.)
Nobody gets away clean.
Also, for what it's worth, I recently left the public sector (State of Wisconsin, of all places) and re-joined the private sector after a long hiatus. I'm up $35,000 year-over-year, even considering lousy health insurance compared to the state, and I'm responsible for much less work in the private sector than was expected of me in the public sector. Increasingly, working for government is a job that only a crazy person would sign up for. You really want the type of individual that sees a value proposition in making half-as-much money for twice-as-much work teaching your kids, writing government software, policing your streets, etc?
But by all means, don't let reality get in the way of ideology.
I don't think a small number of rich people are running around buying up all these electronic gadgets. Go out in public and you'll see people of all types with them: smartphones, Xboxes, etc.
Despite a bad economy, people are addicted to electronics.
Plus, I imagine they're selling well in markets all around the world too.
I'm a "public sector" employee. After finishing grad school I chose civil service to serve my country. I've got asthma so I couldn't join the military, but I wanted to use the skills I have to go into public [u]service[/u]
So I'm making somewhere around 50-75% less than my classmates who went to work for Google or Microsoft. I didn't even get a cost-of-living adjustment this year (a political decision which I supported fyi). The housing market in & around DC has continued to fall, although not as much as some other places in the country.
And who the hell said we don't pay income tax? If not, then something screwy is going on in payroll; at least a third of my check is gone before I ever see it, so where is the rest of it going? No, we pay income tax to both the state and the federal government, just like every other American worker out there.
I'm not trying to sit here and bitch about my job. I like it. I enjoy it. I'm glad I do what I do, and I do it for my mom & dad, my wife, my family, & my country. I don't mind sacrificing, and think there's probably further sacrifices we could make. But unless you're talking about the smooth-talking politicians and their staffers, or the stuffed shirts & suits filling up the roles of executive positions, this myth of "the luxury of government work" really pisses me off.
Yes, I've got a great job, and good job security. But I also ride crappy public transit, sleep in a crappy one-bedroom apartment, eat lunch in a room of coworkers eating PB&J or last night's leftovers, watch TV on a CRT with the beginning stages of burn-in, and sleep on a crappy freecycle mattress because I had to choose between buying a couch or a bed.
I'm not asking for pity. Hell, I'm not even asking for a raise. I'm just asking people to quit the public-sector bashing.
So, questions -
A) Where and how is 347/wk covering all of his bills? Because it wouldn't work in Sarasota Florida, I can say from experience.
B) Does the fact that it's temporary somehow not matter because it's extensible in (monitored) emergency circumstances?
C) Is this friend, in fact, not searching for employment? Because I can guarantee you that most people don't just say "Mmmm, delicious - I'm making $16k a year, until benefits end, I have no reason to try and find a job."
You're not supposed to make unemployment hard to get or maintain - because it's meant to alleviate a hardship, and allow people to keep effectively looking for a job, which gets a lot harder when you've lost your housing and communication services.
Pakistan is not in the Middle East. It is in South Asia.
It cannot be said that a private worker does not pay taxes to government, because government did not have that money already.
It is irrelevant who has the money to start with. A government employee gets a salary, part of which is paid to the government in taxes, just as a private sector employee does. How much is withheld depends on the dependents and other status filed on the same W4 for both employees. It is an identical situation: if the money being withheld for taxes was not withheld, it could be paid to the employee.
Now, if you seriously want to argue that government employees do not pay taxes, then you must also deduct the amount that is called "income tax" from their salary when complaining about how large the government employee salaries are. You cannot honestly argue both ways -- "look at how large their salaries are" and "they don't pay taxes!".
The government workers do not pay income taxes, because it is clear that it's just one government department shuffling money to another...
Except for the fact that the money goes through a private citizen first, you would be correct. You do understand, I hope, that the money withheld from a government employee's salary is just like every other worker's withholding. I.e., an estimate of the amount of taxes that will be owed at the end of the year. And that by proper estate planning and other actions the amount withheld can be returned to the employee as a "tax refund" when he files his taxes. That's another example of why your lie that government employees don't pay taxes is a lie.
My friend's unemployment check is $347/wk
Yup, one anecdote is more than enough for me to conclude the economy is just fine. Clearly we do spend too much on unemployment, and anyone who says otherwise with graphs and crap just needs to hear about your friend.
"Mmmm, delicious - I'm making $16k a year, until benefits end, I have no reason to try and find a job."
I can't speak for other people, but that's basically what I did. I lived off my savings for a year because I didn't want to work. I refused to apply for unemployment (though I qualified) because I knew I would have no motivation whatsoever to get back to work. I'm sure there are tons of people like me who would do the same.
"First they came for the slanderers and i said nothing."
A) Where and how is 347/wk covering all of his bills? Because it wouldn't work in Sarasota Florida, I can say from experience.
$347/wk is $18k/yr. According to Wikipedia, between 30% and 35% of the U.S. population earn less than that (though some will obviously be financially dependent on others to some extent).
It's certainly possible to live on that; if I live like a student - drink in cheap bars, flat share with several people etc. then I average about $350/wk. Rent is the biggie at $350/month but once that's paid everything else is relatively cheap. When I was an actual student I had to live on the (inflation adjusted) equivalent of what would be $10k/yr now... it's a matter of adjusting your expectations. Personally, I decided some time ago that I prefer to spend less and work less, and have the freedom to do whatever I want for most of the time instead of working 12 hour days to "live the dream" of an expensive house and spouse...
You did nothing REMOTELY similar to what we're discussing, because you had savings sufficient to choose to delay returning to the workforce. Most people collecting unemployment need that money to maintain families, homes, and food.
If he is going to live in Silicon Valley, he will pay one of the highest state tax rates in the country. Although I don't know how much of that goes for his less fortunate peers, and how much to groups that have lobbying power.
-- Support a free market in the field of government
Where else did you think all the crap loans that the CRA forced the banks to make would wind up,
So I keep hearing, but where did you think all the crap loans that the CRA didn't force the unregulated non-banks to make would wind up? You know, the 50% of the subprime loans made by mortgage brokers and non-bank companies like GM (ditech.com)? What about all the CDOs that were bought up by investment firms like Lehman Brothers?
If companies that the CRA didn't apply to did it, why should I assume that the banks the CRA applied to did it because of the CRA, and not because everyone else was doing it and making shitloads of money (on paper, which is all that matters on the next quarterly report)?
If I have been able to see further than others, it is because I bought a pair of binoculars.
What does pretending that doing one choice of two very very badly is a third choice have to do with any sort of reality? Those who do not understand history are condemned to think that shallow bullshit is insightful just because it is home grown and recent.
It's not just sci-fi, I know I've been saying this for years too.
I truly believe that eventually society will end up in some variation of the sci-fi utopia we see so frequently, where automation and technological progress allow people to no longer worry about financial burdens, and simply do whatever they enjoy, or work to better themselves and humanity. A world where everyone is "wealthy" and where money no longer rules our lives.
Unfortunately, I also strongly believe that things will get much much worse before we even start heading that direction. As things stand right now, if a manager replaces 100 people with 1 machine, he gets a big bonus, and those 100 people lose their jobs. The economy can absorb that to some extent for a limited time (more available people can be put to work accomplishing more things) however as you continue to automate more and more, you do eventually run out of things for those people to do. This generates high unemployment at the bottom, while making the people at the top very rich. Eventually though a couple of things happen. First the poor people at the bottom no longer have any money to inject in to the economy, and the rich people simply have nowhere to get their money from anymore, and the whole thing crumbles under it's own weight. The second thing that happens is mass rioting, insurrection, and widespread revolt (or generally, a big mess that I know I don't want to be around for!)
I would love to believe that humanity is capable of making the transition from where we are today, to the utopian future I believe in without going through full out civil war, and complete economic breakdown... but unfortunately history and human nature indicate that this is not likely.
One of my favourite sci-fi stories related to this is http://marshallbrain.com/manna1.htm I find that some parts of it hit a little to close to reality, With a rather novel way of transitioning to utopia... I don't know if it's workable, but it is certainly interesting to read.
No, the only "Freedom of the 19th Century" was a giant portion of the North American continent available for mining of numerous resources - farming land, coal, expansion land, Indians, animals. With cheap, abundant natural resources a vigorous expansion economy is relatively easy. Take away cheap, abundant resources and you have the US at present.
Rose colored Republican glasses not needed.
Faster! Faster! Faster would be better!
If compassion isn't enough to make you support unemployment, think about it this way: The most dangerous people are those with nothing to lose. When a man has to put a gun to your head to pay his rent I doubt you'll be lecturing him on how he could have avoided the whole situation if only he had saved.
So, yeah... How about that privilege you got there? Because some people might not be financially illiterate, so much as not making more than their needs. Or they got cancer, or their parent or spouse got cancer, and their means weren't sufficient to keep their loved one alive AND build up a huge savings pool. Or one of the other members of the infinite array of things that can go wrong without someone being stupid or bad for it.
Sorry, but your "if you're poor it's cause you're stupid" narrative has never had any value, and is deeply, deeply disgusting to anyone who's ever actually interacted with someone affected by poverty.
Oh, and you know what - even if you were right (which, let's never forget, you aren't) - your "lets make it harder to keep unemployment" crap is STILL deeply stupid. Because regardless of whether we provide unemployment or other job assistance or not, the unemployed people are still going to exist. And you know what sucks more than paying a small amount of tax dollars into unemployment benefits and job assistance programs? Adding to the homeless problem, the crime rate, and the other problems that poverty serves as a primary driver for. And hey - if they turn to crime, you get to pay, not partial income, but full room and board in one of our fine correctional institutes, which costs a whole lot more than unemployment.
Companies that do business internationally or those suppliers or vendors to said companies are doing great. Retailers with international sales are fine, those without are hurting. Apple for instance makes 50% or more of it's sales internationally.
China's economy is booming, as is Korea, Germany, Australia, Brazil.
If you want to find work, look at the companies with greater than 30% of revenue coming from outside the US. The company I work for has 200+ open positions in the US. The majority of those are not tech related, ~40 are (ecom, IT, logistics and data). We just hired a language specialist for QA we're doing so much translation work.
There are jobs, and yes you may have to relocate to find them. Sign on with a staffing company and check that travel box. Agreeing to travel is your best bet to get work.
A fool throws a stone into a well and a thousand sages can not remove it.
Or doesn't earn enough to actually be able to save.
Any statement that starts with "Europe handles this through ..." is misleading. Thing is, Europe consists of a multitude of very different countries inside and outside the European Union.
Any analysis that dumps Sweden, Italy, Greece and Norway in the same basket, is going to be pointless since the countries have essentially nothing in common, except geographical region.
In short; "not even wrong"
Life sucks, doesn't it?
Yes, which is why advanced civilizations invent insurance systems to cover the suckiest of times. Unemployment compensation is exactly that.
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
Don't forget about the wonderful quality of life in the 19th century, the enormous freedom to live in perpetual debt in company towns, the freedom to get a lead pipe applied to your knees should you dare to actually strike as a worker, the freedom dem niggers and womenfolk enjoyed while being kept in their respective places, the freedom of 60 hour work weeks in conditions that cut decades from your life expectancy, the freedom to have your children work to make ends meet. Great times, man, great times. I can see why you in particular would want to go back there.
Ubi solitudinem faciunt, pacem appellant.
If you're not using financially illiterate as a high-end slur, you're still wrong. I know you countered with the mega-libertarian punch of "Life sucks," but all the things I mentioned fucking happen - people's savings get wiped out, or they never get a chance to accumulate them, based on things they have precious little damn control of. Especially when we have the nightmarish health system we have now. Every time you say "all poor people are financially illiterate," you're passing a judgement on the competence of literally billions of people that you know NOTHING about. I can't see how you think that's reasonable or sensible.
Also, whether or not I know homeless people is pretty immaterial here, but for your information, I have friends who've been homeless, and my wife works at a DV shelter, so I've had a fair amount of second-hand encounters. Also, I bother to, you know, do any damn research at all.
Look, if you're saying that you'd drop out of the workforce in order to collect unemployment, well, fine. In fact, go ahead and do it. But don't pretend that your original point was just "unemployment sounds hot to ME," when your opening statement was:
If you didn't mean to say that unemployment is too easy to get/maintain, then this is a writing failure on your part, not a reading failure.
I'm sorry, but there are serious problems with this.
For one, unemployment is a temporary benefit. Paying for regular housing is far, far more economical, and makes far more sense than trying to create a new set of housing tracts and then force people to move (which is an additional expense). Additionally, what if they have a paid-up house? It's much simpler and more sensible to pay enough to afford general housing.
The "only enough for food, and none of it goes through the person receiving benefits" thing can look good, but the actual effect is TERRIBLE. It amounts to the government giving a strongly worded message saying "You got fired, so you're no longer a responsible adult citizen. You can't be trusted with the money meant to benefit you, or to know how it would best benefit you." I think the effect has been documented, and my wife has heard it again and again from people on public assistance. Destroying people's dignity makes it harder for them to sell themselves in an interview, you know?
Sales tax isn't really a good idea either, because sales taxes (except arguably luxury taxes) are highly regressive - they increase the burden on people who can't afford it. For example, a $300 dollar tax on HD TVs might look like a good idea, but what it's actually going to do is mean that poor families can't have access to news or other TV, rather than actually generating revenue. Plus, overall sales go down in the face of too-high sales tax.
Income tax is actually one of the least repressive on economic growth, because it doesn't effect purchasing, and is easily staged across different income levels to keep it from being damaging to well-being. It's irritating, but it is also functional - or would be, if we'd increase it to sane levels. We also really need a capital gains tax.