[tossaccount123]

>To prime your intuition a bit, consider how woman and minorities more than doubled the work force from the 1960s to 1990s with no loss in jobs or lowering of wages.

You do realize there hasn't been a raise in real wages since the 70s when you account for inflation right? Coincidentally during that same time period the income gap exploded because the wealthy had plentiful cheap labor and were able to pocket the productivity gains as pure profit because workers had no leverage to demand higher wages because there were 0 labor shortages. American's used to be able to support large families of 4+ kids with only 1 working parent. Now you have households with both working and they can't afford to have kids.

http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-...

I support high skilled immigration because it benefits the country but let's be real, if we dropped 10 million software engineers in Silicon Valley from around the world, guess what? Wages would drop massively because it would be a buyer's market for tech companies, they could pick and choose the most talented for pennies

[jayd16]

By this logic, any increase in productivity is bad because it reduces labor scarcity. That's just not how it works.

> if we dropped 10 million software engineers in Silicon Valley from around the world, guess what?

Guess what, we'd get a lot more overseas clients as they wrestled with the labor shortage abroad. (Although, the real problem would be the humanitarian crisis in housing 10m more in SV overnight, ha)

[ThomPete]

The h1bs salary requirements allowed large companies to import cheap workers and compete with American labor.

It's not a coincidence that the biggest numbers of applications went to some of the big Indian IT companies.

It's a good thing they will be changed so that the cost get equalized rather than allowing big companies to import cheap and skilled labour. If it's skilled it should be paid the same of course not less.

This has been known for a long time to be a problem but was mostly ignored until recently.

https://www.nytimes.com/interactive/2015/11/06/us/outsourcin...

[rjzzleep]

This hits the nail on its head. The reason why SV is so attractive to potential immigrants isn't because of its living standard of thousands of homeless people the healthcare, transportation or housing system.

It's because the scarcity of that particular labor makes it on one of the best paid tech sectors in the world. Most people go there for the money even if they may stay for other things. Well that, and the fact that other highly skilled people compete for those few spots available, which means you might be surrounded by interesting peers.

China for example has 10x as many communication network engineer graduates as the whole of Europe altogether. That's ignoring the fact that a significant number of graduates are migrants themselves. I believe China and India have the longest Green Card waiting lists.

[geggam]

Problem is finding actual talent vs talent on a resume that doesn't work well.

[howard941]

Like the market for used cars. All other things remaining equal the problem restrains pay for top performers.

[pasabagi]

>any increase in productivity is bad because it reduces labor scarcity

Isn't it? Increases in productivity, normally called automation, must reduce labour scarcity unless demand for the product is proportionately increased. There are plenty of sectors where this is exactly what happens, and some where it isn't.

[tobltobs]

> Increases in productivity, normally called automation

That is a wrong assumption to start with. Inventing the wheel wasn't automation.

[tomrod]

Actually...

Production has three components: capital, labor, and technology. Automation, as I understand it, both improves technology and lowers the cost of capital.

If I recall right, this strand of economic lit is called Total Factor Productivity.[0]

I believe the Wheel falls squarely in the technology bracket.

[0] https://en.m.wikipedia.org/wiki/Total_factor_productivity

[mediaman]

Inventing the wheel absolutely is automation.

Why would the wheel, which allows the movement of goods with much less labor, be any different in concept than the transistor, which allows e.g. the accounting of a corporation to be done with far fewer accountants?

Or the assembly of a car with robots?

All productivity gains (expressed as production per person-hour) is a result of either (1) advancement in technology or (2) the increased use of existing technology through capital investment or (3) quality of labor (education, training, etc).

The invention of the wheel, the invention of fire, the invention of the steam engine, and the gas engine, the solar cell and the transistor all fall under (1) and the expansion of their use falls under (2).

[llsf]

One could argue that the invention of the wheel is actually automation. Instead of carrying goods on your back down to the river, now put it in a cart, and kick it to roll downhill... It is possibly the most basic automation, it does free human labor with a mechanical mean.

[conanbatt]

"If you wanted to increase the salaries of the lumberjacks, you would only need to pass a law that no axe could ever be sharpened" - Bastiat

[tw04]

>Guess what, we'd get a lot more overseas clients as they wrestled with the labor shortage abroad.

So exactly when is it that India is going to become a major client? You seem to think that a country with high unemployment or underemployment that exports a portion of their workforce won't quickly absorb that "shortage". That's a pretty poor assumption.

[AlexTWithBeard]

Guess what, we'd get a lot more overseas clients as they wrestled with the labor shortage abroad.

India produces more than 20 million undergrads every year. I don't think 10 million will make a dent in developers supply in India.

[TeMPOraL]

> By this logic, any increase in productivity is bad because it reduces labor scarcity. That's just not how it works.

Yes, this logic is perfectly sound. Increase in productivity has both good and bad impacts on a system within which it happens - the whole difficulty of managing a system (like a job market) is to find ways to pocket the good, and mitigate the bad.

[mberning]

It is hard believe so many people still don’t “get it”. You cannot inflate the supply of labor, regardless of the means, and get a good result for the average working stiff.

[snikeris]

Hmm...how about: inflate the supply of labor, price of goods goes down and better goods are invented, then average working stiff benefits when buying these goods?

I understand your point that the average working stiff might experience wage loss or lose their job altogether, but I'm not sure you're considering the benefits to consumers, which is another role of the average working stiff.

[bdcs]

Wages and salaries (and, perhaps, prices) would not go down. Your argument and the parent of it, is falling for the lump of labor fallacy. By adding supply of labor, the demand for labor goes up as well. It is actually well-agreed on by economists, but I see many smart people, on the left and right, get it wrong.

I implore you both to read and listen about it (google/"lump of labor").

[rileyphone]

That's the entire point of the real wages statistic: the price of goods has remained relatively pinned to wages since that point.

[joshe]

This is perfect, this is exactly what I'm arguing against!

Does this statement also seem true?

"It is hard to believe so many * economists * don't "get it". You cannot inflate the supply of labor, regardless of the means, and get a good result for the average working stiff."

What do we think economists are doing with all their data sets and papers and conferences and stuff?

[soared]

See climate science, anti-vax, etc for the answer. Some significant percent of people will disagree with experts no matter what.

[mberning]

Opinions of economists vary. But neverminding that, if swelling the labor supply was so incredibly beneficial to the economy we would not be $21 trillion in debt and 40% of the population unable to muster $400 for an emergency. Give me a break.

[solveit]

First, it's unclear whether the debt is actually a bad thing. Note debts for countries don't work like debts for individuals, especially if said country controls the world's reserve currency.

Second, the idea that immigrants and women getting jobs is a major factor in 40% of Americans not having significant savings is so completely ungrounded in reality or even popular thought as to make me wonder if you're being deliberately dishonest.

[conanbatt]

What is hard to believe is that the mercantilist mindset has been vanquished 200 years ago, and you still need to instruct adults into why it doesn't work over and over again.

[staplers]

There must be some people out there earning more wages on the 10x increase in stock prices, investments..

[joshe]

That's super interesting, I didn't know that about hourly wages. I tend to think of income gaining from 1950 to 1990 and flattening from the mid 1990s to now.

Though it does look like total compensation (adding in benefits) did actually increase recently, they don't have anything for back to 1960. So maybe the story is that wages stayed flat, but benefits accounted for most of the income increase. Not an economist so I don't know how to tease this out.

Heath care does go up from 5% of gdp in 1960 to 18.2% today, maybe most compensation gain is going there? Plus retirement benefits.

But... from 1960 to 2000 the civilian labor force increased from 70 million to 141 million [1]. With all those new workers, by your link, compensation didn't actually shrink. That's weird huh? Also real median family income grew from $41K to $72K [2].

And sure 10 million software engineers added to SV tomorrow would lower wages. But maybe not long term? If it was 10 million countrywide? What would an economist or a careful wage survey say? Anyway we're talking about 85,000 jobs all over the country.

The main point of my comment is that when economists spend 10 years looking at data and arguing out every detail, they conclude that immigration is increasing jobs and increasing wages. They usually conclude that for specific wage markets too.

Maybe we can't rely on some anecdotes in the media to refute their conclusions?

[1] https://www.bls.gov/opub/mlr/2002/05/art2full.pdf (table 5)

[2] https://fred.stlouisfed.org/series/MEFAINUSA672N

[irrational]

So, it went from one person making $41K to two people making $72K ($36k each)? That doesn't seem like a growth situation.

[joshe]

Not quite.

From 1974 (they don't have data before that) to 2000, real mean personal income goes from 32K to 43K. [1], that's for individuals. The graph is useful to look at.

This is complex, for example there are also more single parent / single person households which tends to lower household incomes.

[1] https://fred.stlouisfed.org/series/MAPAINUSA672N

[servercobra]

I generally agree with what you say, but the median family income growing seems like it would be due to most households moving from one to two workers. Looking at it that way, it makes wages look even flatter over the time period.

[abakker]

Yes, this is right. Large increases in the workforce have increased the supply, reducing real wage growth, household earning has grown by adding a second earner. More work is getting done to get the same economic outcome. Put one way, this is terrible for wage earners, out another it is excellent for spenders since the thing you can buy have gotten cheaper through plentiful labor.

[roselan]

With children staying with their parents into adulthood and earning a wage, we might even speak of 3 wages per household.

This might be compensated my the raise of monoparental households.

[bradleyjg]

Your third paragraph is it. This is mostly an out of control health care cost growth story. Three areas of cost growth--health care, education, and housing costs--have now eaten the gains of two entire generation of Americans and none of the three look set to stop their cancerous growth rates any time soon.

Way back in the ACA debates, when people talked about bending the cost curve, many people's eyes may have glazed over but that's exactly what we need to figure out a way to do. Not have a debate over immigration.

[hnaccy]

>Wage trends over the past half-century suggest that a 10 percent increase in the number of workers with a particular set of skills probably lowers the wage of that group by at least 3 percent. Even after the economy has fully adjusted, those skill groups that received the most immigrants will still offer lower pay relative to those that received fewer immigrants.

>Immigration redistributes wealth from those who compete with immigrants to those who use immigrants—from the employee to the employer. And the additional profits are so large that the economic pie accruing to all natives actually grows... But behind that calculation is a much larger shift from one group of Americans to another: The total wealth redistribution from the native losers to the native winners is enormous, roughly a half-trillion dollars a year. Immigrants, too, gain substantially; their total earnings far exceed what their income would have been had they not migrated.

https://www.politico.com/magazine/story/2016/09/trump-clinto...

Unless you're an immigrant or high up in tech business why would you cheer more high-skill immigrants? It will depress your wages and the economic gains will not accrue to you.

[arcticbull]

I don’t believe jobs are finite. I believe skilled immigrants improve competitiveness and create jobs across broad swaths of the economy, some even start very successful businesses. Many Fortune 500 founders were immigrants, and locking them out may have cost the country many hundreds of thousands of jobs.

[conanbatt]

Because there is a moral compass in the human being that takes into account non-economic benefits as well.

Why would you cheer against slavery if you could buy some up?

[ben_w]

Either the work is done in your country, where you:

* control minimum wage laws etc.,

* collect the taxes,

* benefit from most of the money being spent locally,

or it’s done abroad, where a foreign government collects all the benefits.

Import duties don’t do much to fix that. And if you have most or all of the workforce, then you get to lobby against other nations’ import duties.

[arcseco]

You don't really get to control min-wage laws, working standards or environmental regulations over the long term in a tariff free world. US trade deficits are growing and will inevitably have to be normalized. When that happens the US will have to become a lot more competitive with nations that don't have these standards in place. Stagnated wages are just the beginning and are borrowing time before labour standards and environmental standards are forced to equalize with the East.

[tomatotomato37]

This is why we need to start including a tariff with labor or environmental regulations. The point of those regulations is that we as a nation are accepting a decrease in economic efficiency for a (hopeful) net gain in general quality of life; if companies are allowed to just offshore their shit to some place that doesn't care without compensating in some other way than you're stuck the economic disadvantage without the accompanying benefit.

[pauljurczak]

> The main point of my comment is that when economists spend 10 years looking at data and arguing out every detail, they conclude that immigration is increasing jobs and increasing wages.

Economists look at the past and extrapolate into future, often with really poor results. With increasing amount of automation, software development is probably safe from paradigm change for a short while. Given that, it is always risky to claim that immigration will increase jobs and wages in the next decade, because it did so in the previous one.

[TylerE]

The population grew from 179M to 281M so the workforce didn’t really double. More like a 50% increase

[joshe]

The workforce grew, look at the link and table 5. Basically woman and minorities joined the workforce. Worker to population ratio went up and the total number of workers went up faster than the growth in population.

[AlexTWithBeard]

Correct me if I'm wrong, but I'd say pretty much all the minorities have always been a part of the workforce.

[joshe]

Women were most of the increase, but minorities increased their participation too.

You can see the tail end (looks like they didn't survey it until 1980) of it here: https://www.bls.gov/opub/mlr/2002/05/art2full.pdf Table 4, look at Black participation rates from 1990 to 2015.

For intuition think of extended families living together, being incarcerated, and being the last hired and the first fired (so out of work longer).

[AlexTWithBeard]

Thank you.

Exactly the answer I was looking for!

[FiveSquared]

Jim Crow laws, blackballing, and redlining. You ant allowed to work in certain jobs, if you speak out (see Kapernick), no job for you! And you can’t even live within reasonable distance of work!

[joshe]

I did find personal income growth from 1974 on. That gets rid of the 2 income household problem. I think maybe they only surveyed households til 1974.

From 1974 to 2000, real mean personal income goes from 32K to 43K. [1]. The graph is useful to look at.

I do think some of the story is that most compensation gains went to benefits, especially our crazy expensive health care (again 5% to 18.2% of gdp). So the hourly wages stayed the same, but benefits went up. I think the original point, that more workers did not lower income, still holds.

Really I can't do an Econ Phd to respond to this thread. So I'll outsource to economists, who say more workers do not lower income.

[1] https://fred.stlouisfed.org/series/MAPAINUSA672N

[e3b0c]

That would probably be true if all other conditions held constant.

However, Silicon Valley can pay handsome money because many companies located there run well and outperform their competitors for a fertile global market. And those companies can beat their competitors because (at least part of the reasons) they have the best talents available. If the skilled engineers from China, European, India all went back to their home countries, would the competitiveness of those SV companies be no different relative to their foreign competitors? If companies in SV were losing its advantage to another tech hub outside the united states, would they still be able to pay so well? I doubt that.

[wolco]

If labor/labour supply doubled wages would drop for most of the market.

[e3b0c]

That assumes the demand and the supply are independent variables.

More people would mean smaller pieces if the size of the pie held constant. But what if there are also fewer people making the pie?

In reality, it's even more complicated in that the contribution of the pie making is not proportional to the headcounts either.

[itsfun10213123]

> That assumes the demand and the supply are independent variables.

When the argument is that an increase in supply causes lower wages your counter argument doesn't make any sense at all. For wages to rise the demand has to grow faster than the oversupply. The primary way to increase demand is by lowering the price of a service aka workers get paid less. In other words it is possible that even with an extreme amount of immigration everyone still gets a decently paying job but in the end wages across the market have fallen.

Whatever pie analogy you're trying to pull doesn't matter. I don't know why people keep getting nerdsniped by that word and often even use their own hyper specific definition of it which doesn't match the definition of the other person. There is no law that says people always benefit from a growing economy and there is no law that says people can never benefit from a shrinking economy.

[femiagbabiaka]

Software engineering isn’t most professions. Salaries have been going up more than a decade accounting for inflation.

If 10 million software engineers dropped in Silicon Valley, a lot of things would happen (for one there’s nowhere for them to live). But that’s not what’s happening.

[tossaccount123]

It was hyperbole to show the effect of supply and demand

More and more I notice how similar software engineers are beginning to sound like the "Made in America" factory workers who said China could never do their job. Never take the present comfy situation for granted

[wycs]

Anyone who thinks China is not full of extremely talented software engineers does not know anything about China.

[femiagbabiaka]

so true -- they're even kicking our ass in many fields of CS research.

[Buge]

If we want stuff to be made in America instead of China, we should increase the number of skilled immigrants allowed in.

[gesman]

Import tax on crap would solve it.

[Buge]

By "stuff" I was actually referring to digital products, digital technology, websites, technology companies, etc. An import tax on those would be harder than for physical products.

[madengr]

Yes, mostly crap.

[logfromblammo]

It would not. An import tax reduces imports, but also reduces exports by a greater amount. An export tax on real estate transfers to foreign persons, cash or cash-equivalents, luxury goods, artwork, and technology--such as engineering documents and diagrams, manufacturing machinery, and firmware source code--would also not solve it, but it would bite a bigger chunk out of the problem.

Imports are paid for by exports. The US is currently paying for the manufacturing that it exported with dollars and documents. It could be paying with cars, and airplanes, and espresso machines, and in-sink garbage disposals, and novelty CNC lathes for engraving wooden pencils and chopsticks, and rapid refrigeration devices for single canned beverages, and maybe even non-imaginary 8K OLED television sets. If you make the specific exports that produce the most internal economic activity the cheapest way to pay for imports, increases in imports would encourage more exports.

If you're covering a trade deficit with cash, that impacts the same currency you use to conduct domestic trade--you're giving the trade partner leverage over your whole economy. What you really want to do is make a note spent in your own country buy far more than the same note spent elsewhere, so that the notes stay in the country, and the goods and services get exported instead. But you also want the rest of the world to have high demand for your currency, so that you can bring in a lot of imports, or go on lots of cheap tourist vacations. So devaluing your currency is not the best option.

But if you had, say, a 50% tax on foreign money transfers, if someone were to buy a $1 doodad from Elbonia, they would have to pay $2 for it in cash--$1 for the importer, and $1 for the tax. But they could also pay for it by purchasing a $1 doohickey locally and trading that for the $1 doodad, avoiding the tax, and keeping the $1 circulating in the domestic economy, and the Elbonian money circulating in Elbonia. Instead of taxing the trade itself, tax imbalanced trades and trade deficits.

Of course, any real-world implementation would be politicized to Hell and back, and chock full of loopholes, but it works just fine between imaginary countries.

[gesman]

As a consumer I don't corporations outsourcing manufacturing to China and then bringing back crap, charging me full price and keeping the difference.

As a patriot I'd rather pay higher price for domestically made products and know that our local workers made it.

There is a balance of course between killing imports and selling country short and flooding it with crap - but certainly China was having a party paid by north american consumers for last 3 decades.

[aswanson]

There already are import taxes on "crap" like electronic components. Browse around digi-key for "tariff pending" or "tariff applied". All its doing is making bills of material more expensive.

[PedroBatista]

If they did the same, US exports would tank.

[femiagbabiaka]

Software engineer salaries have been rising in a globalized market. Companies can already hire wherever they want. Many do.

I have no doubt that if companies can pay workers less then they will. But that’s not what’s happening.

[pishpash]

Rising compared to what? Junior engineers are doubling or tripling up to live near work in metropolitan areas or face crushing commutes. It's a sign that even in software engineering, capital is crushing labor.

[femiagbabiaka]

You're describing two different problems. Housing supply in the Bay Area and New York -- the areas I'm assuming you're talking about, because most other metropolitan cities are building to keep up with supply just fine -- is incredibly low. In addition, in the Bay Area especially, the incredibly high salaries in combination with that supply is causing skyrocketing prices.

[emiliobumachar]

Be aware that Silicon Valley is an extreme global outlier in real estate prices.

[AYBABTME]

Not really, there's cities all over the world with conditions that lead to crazy high real estate/housing costs. Most every metropolis ends up with a similar situation. Slightly different settings that all sum up to "high demand low supplies". NYC, London, Vancouver, Hong Kong, Tokyo, ...

[harimau777]

Is this true when you are comparing similar conditions? Something along the lines of: Large cities with significant multiculturalism, high tech jobs, significant culture (arts, media, entertainment, museums, etc.), public transportation, and openness to various ways of life

[C1sc0cat]

Not Compared to London though - London does have a much better transport system so living 60-70 miles away and commuting isn't as bad as it would be in SV.

[pishpash]

Indeed. An argument could be made that given the astronomical living costs of Silicon Valley, the wages should have already been higher given how much profits the companies are making.

[olalonde]

More and more? I recall software engineers were panicked over outsourcing just over 15 years ago. Have you watched Office Space? This is not a new phenomenon.

[dmichulke]

> You do realize there hasn't been a raise in real wages since the 70s when you account for inflation right

This also coincides with the end of the gold standard ('68) and subsequently cheaper interest rates and (thereby) access to much more and cheaper capital for those who already have enough capital to begin with.

Also, lower interest rates beget higher inflation.

[tomrod]

Standard of living arguably continues to increase as well.

[dmichulke]

Technological advance is a confounding factor for basically any empirical discussion about economics and standard of living.

Any smooth annual negative impact below the rate of technological advance is very hard to detect due to this.

[tomrod]

I reckon if standard of living improves, so does my dollar per unit of happiness ratio improves, then a flat real wage isn't a terrible thing.

Of course, this belies the fact that wealth inequality increases. This means though the median may stay stable, the tails get fatter: or, in other words, the standard of living isn't necessarily getting better for everyone.

[Ar-Curunir]

No, wealth inequality increased because we stopped taxing rich people.

[adventured]

Wealth inequality has increased mostly due to the massive expansion of the global economy, which was a large benefit to capital owners and was a detriment to US labor (whose wages were artifically very high in the post WW2 decades). Global labor competed, capital benefited. Federal Reserve policies since ~1970 have also overwhelmingly favored capital, asset holders, and not workers.

The US tax code has gotten more progressive over time, not less. The very high tax rates from the past were quite narrow in scope, they covered few taxpayers.

The top 25% are paying 85-88% of all income taxes in a given year. The top 10% are paying 70% of all income taxes.

The top 1% yield 20% of all income and pay 39% of all income taxes.

How do you qualify that very progressive tax code as "stopped taxing rich people"?

Simultaneously the US welfare state has massively expanded since 1970. Poverty and homelessness have declined by a lot, while healthcare coverage expanded dramatically. The US spends the equivalent of 20% of its GDP on social welfare programs. That's higher than Canada and Australia, just slightly behind the UK at 22%. All of that is paid for by the top 25% of income earners.

[reissbaker]

> The US tax code has gotten more progressive over time, not less. The very high tax rates from the past were quite narrow in scope, they covered few taxpayers.

That's not how that works. The U.S. has become massively more disparate in income and wealth, which alone would explain why more taxpayers fall into high tax brackets: the middle class is evaporating, leaving a somewhat larger upper class (more high-income taxpayers paying a lot!) and a massively larger lower class (also more low-income taxpayers paying very little), thus shifting the balance of how much the wealthy pay for the poor: with less of a middle class, the wealthier are the originators of a higher percentage of the tax revenue just by mathematics. That's not the tax code becoming "more progressive over time," that's the US having more inequality over time.

But it didn't happen alone. It also happened under repeated tax cuts for the wealthy. The U.S. tax code has become demonstrably less progressive over time, just as the U.S. has become demonstrably less economically equal.

> The US spends the equivalent of 20% of its GDP on social welfare programs. That's higher than Canada and Australia, just slightly behind the UK at 22%.

Right, but that's because the health care system of "no preventative care for the poor, but massive spending on medical procedures once you're already dying" is incredibly inefficient. Single-payer healthcare is cheaper than what we have, demonstrated by almost every large country with it spending less (while often getting better results). It's not because the tax system is progressive, or because the social safety net is somehow better or larger than countries with free healthcare and cheap higher education.

[kortilla]

Medicaid covers the poor and preventative services. Adjust your political rant accordingly.

[reissbaker]

Medicaid only provides preventative care to children... Providing adults with preventative care is optional and varies (heavily) by state. https://www.kff.org/medicaid/issue-brief/coverage-of-prevent...

[AlexTWithBeard]

Are you saying that Medicaid doesn't cover preventative care?

[rjf72]

There's been another major shift as well. This [1] graph is critical. There were more self employed workers in the US in 1948 than there are today. The population since then has increased by more than 220%. And the trend increases the further back you go. I mention 1948 only because that's as far back as FRED's data goes! The US used to be a land largely driven by self employment.

We had large numbers of mostly independent economic centers populated with local businesses owned and operated by local individuals. In many ways it's something akin to what you can find in many parts of the developing world today. And it's awesome. But as the economy 'globalized' we've reached a point such that an urban business streetscape in California can very often look effectively identical, in terms of businesses in operation, to one all the way on the other side of the country in New York. You're never going to have anything even vaguely resembling economic equality when a handful of companies control immense amounts of the entire economy.

This also distorts governmental systems since extensive wealth means the reach of companies is practically unlimited. Civil servant versus a company sitting on billions of dollars with international connections spanning the entire globe and the best legal and public relations teams that money can buy? That's not even David vs Goliath, that's ant vs foot.

[1] - https://fred.stlouisfed.org/series/LNS12027714

[hippich]

Anecdotally, whenever I post something about my business on social media, it is mostly ignored. But if someone posted something about new job they got - it is celebrated. So I see there is also social attitude supporting employment over self-employment. Not sure if it was the same in 1948.

[geggam]

Regulation has killed small business.

[lotsofpulp]

Efficiencies of scale killed small business. People had the choice of patronizing small business or large business, and they chose the latter.

[clarkevans]

Lack of capital investment killed small businesses. Everyone now has to pay a tax penalty to take your earned capital and invest it into local main-street businesses. This capital instead, though 401k, goes into trans-national firms.

[clmckinley]

i cannot upvote this enough. The regulation has very little if anything to do with the closure of the vast majority of small businesses. Access to larger/more efficient companies that provide better service to cost has killed the demand for the services that small businesses provide.

[isostatic]

> All of that is paid for by the top 25% of income earners.

How exactly is that worked out? Income taxes ($1.6t) and payroll taxes ($1.2t) are a similar level, and rich people tend not to pay payroll taxes as they aren't on a payroll.

Payroll taxes cover social security payments ($1t), so that leaves income taxes paying for things like Defence ($1.2t for military and veteran affairs), which wealthy people disproportionately benefit from.

Medicare and medicaid are the unusual ones, for the cost of those two alone ($1t, or $3000 per head) you could afford universal healthcare in other western countries.

[logfromblammo]

Removing the higher-taxed brackets, and the slow creep of inflation, which has pushed lower-earners into higher brackets, and made more people subject to AMT, has made income tax less progressive over time. The introduction and removal of tax-advantaged loopholes, that are only exploitable above a certain level of income, has made the progressiveness of the tax more volatile and harder to assess.

Focusing on how much the wealthy pay, as a proportion of all taxes paid, is rolling up the progressiveness of the tax code with the income inequalities that already exist. Why do you rob banks? That's where the money is. Why do you tax the rich? They're the ones who can afford to pay.

I really don't see why income tax can't be defined as a polynomial equation in a single variable (for gross income) and an additional constant, equal to median income for the previous year. With a floor function to obviate negative taxes.

The tax can be zero up to the median income, ramp up quickly to an inflection point at about 30% for the dollar at 3x median income, then increase at a decreasing rate to asymptotically approach 100% for infinite income. For the purposes of argument, I'll say that the dollar at 100000x median income would be taxed at 90%.

As long as it's a continuous and increasing function--after the first "median income" amount of one's income--every additional dollar of gross income is still a positive amount of additional net income. Only the winners pay. It's always worth something to increase your gross income. It could also be a viable strategy to reduce your own taxes by spending a lesser amount on increasing median income--i.e. pay your below-median workers more money.

[jgalt212]

> The US tax code has gotten more progressive over time, not less

your math is way off because your're mixing nominal, ordinal, interval and ratio[1]

e.g. ten people in econony 9 poorest make $100/year 1 richest makes $200/year

poor tax rate: 5% rich tax rate: 20%

rich pay 42% of taxes 40 / (40 + 45)

now, lower tax rates on the rich and at the same time his income explodes (what's actually happened since early 1980's)

1 richest person makes $1000/yr rich man tax rate 15% rich pay 76% of all taxes (150 / (150 + 45)), which is much higher than before (your progressive argument)

but you claim that tax rates have become more progressive, when in fact and in example above they have become more regressive.

[1] https://www.mymarketresearchmethods.com/types-of-data-nomina...

[kortilla]

If that were true rich people wouldn’t be paying half of the taxes.

Even when the US had high marginal tax rates for the wealthy, there were tons more loopholes so the effective tax rate was significantly less. That’s the reason people were on board with lowering the marginal rate in exchange for the elimination of lots of deductions.

[tossaccount123]

The US didn't have an income tax at all until the 20th century, at least at the federal level

[isostatic]

Rich: having wealth or great possessions; abundantly supplied with resources, means, or funds; wealthy: a rich man; a rich nation.

Not sure how income tax would apply to that

[rswail]

It also didn't have any public entitlements. It's also 100 years later. So the point is not particularly relevant.

[skookumchuck]

If the US doesn't allow software engineers in, will they just disappear? Nope. They'll write code for foreign companies which will compete with Silicon Valley. I.e. the competition is there anyway.

[ramblerman]

> because it would be a buyer's market for tech companies, they could pick and choose the most talented for pennies

Not exactly too much of a price drop would negate the point of them wanting to come in the first place.

[mschuster91]

> You do realize there hasn't been a raise in real wages since the 70s when you account for inflation right?

Thank decades of union busting and neoliberalism for that one. When corporations only pay out the minimum that they can get away with instead of following the historic Ford mantra that people must be paid liveable wages, this is what results.

[SomewhatLikely]

You do realize that in the post war period we were the only large economy that was relatively unscathed helping out domestic producer margins?

[refurb]

You do realize there hasn't been a raise in real wages since the 70s when you account for inflation right?

That's true if you only look at wages. If you look at total compensation, it's grown quite a lot even adjusted for inflation - doubling between 1970 and 2006.[1]

[1]https://www.nber.org/digest/oct08/w13953.html

[thaumasiotes]

> American's used to be able to support large families of 4+ kids with only 1 working parent. Now you have households with both working and they can't afford to have kids.

I'm broadly sympathetic to your viewpoint, but this isn't accurate. Children are fundamentally not expensive. The problem is that couples believe they can't afford to have kids, not that they actually can't afford them.

[geggam]

Typical income is 50k a year and it takes ~250k to raise a kid you are looking at 13,888k a year for the kid, after taxes

Children are extremely expensive. I have raised 4. You are broke the entire time and can always spend more on them.

In the US you are 1 medical incident from not affording anything and relying on welfare

https://www.thestreet.com/personal-finance/cost-to-raise-chi...

[thaumasiotes]

You can always spend more on anything. That doesn't mean there's a good reason to do it.

[geggam]

You will notice the children who grow up to be the most productive tend to get the most support from their parents. I guess it depends on how much you want your kids to succeed vs how much you want to keep for yourself.

[ric2b]

Extra mouth to feed, extra room (bigger house), constantly changing wardrobe, yearly expenses on school materials and books, extra phone and computer, childcare, etc...

You must have a very weird definition of "cheap".

[bluedino]

My health insurance costs alone would almost quadruple if I had a wife+kid

[howard941]

Mine (through work) quadrupled when I got the wife even though we're childfree. The work benefit I was offered provided for either me alone or for my family with unlimited dependents.

[yardie]

Most of it would be on your spouse. Unlike you they are completely subsidized by your employer.

My current plan:

$100/mo - me

$125/mo - me + child(ren)

$350/mo - me + spouse + child(ren)

[ArtDev]

As a self-employed software developer, the CHEAPEST healthcare plan for my family is $1030/month ($10k deductible).

You are referring to a benefit you get from your salaried position. Nice but many developers do not have this luxury.

[dsfyu404ed]

Children are more expensive now because of societal pressure to raise kids to a higher standard because people have less of them.

Imagine all the hand wringing that would ensue if at lunch with my colleagues (which is a rough approximation of the HN demographic) I mentioned that I got a 5yo hand-me-down car seat instead of buying the latest and greatest. Generalize that pressure to pretty much every child raising related expense.

[SketchySeaBeast]

It looks like a lot of car seat brands are considered expired starting at 6-ish years, so yeah, I wouldn't suggest using a 5yo car seat.

[dsfyu404ed]

Good intentions or not that's exactly the kind of hand wringing I mean.

I know plastics become more brittle with age but a modern car seat that's expired is going to be tons safer than a car seat from 2000 (mostly because engineers now have better access to good simulation tools at lower cost). So what if little Jimmy isn't maximally safe. He's still a heck of a lot safer (from an unlikely edge case no less) than he would have been if he were born 15yr ago.

[SketchySeaBeast]

"I know plastics become more brittle with age but a modern car seat that's expired is going to be tons safer than a car seat from 2000"

How do you know this? Maybe there's technology (crumple areas) that only works when the plastic is relatively new or cushion areas that only are most effective before they degrade, thus making them less safe than good old fashion plastic. We see this with modern cars in their bumper technology - they take the first impact better, but they aren't as rugged as older models. Do you actually know the trade-off, or are you just assuming?

[dsfyu404ed]

There's a little bit of assumption about material design in there but it's obvious from the seat designs that they've come a long way. They're actually designed to fit the form of the body now (which is a big deal for safety). Old seats were little more than booster seats with integrated seat belts. It's like the difference between a 60s bucket seat and a modern racing bucket seat.

[chefkoch]

Only if your kids don't go to childcare, sleep on the kitchen floor and run around in rags.

[rdlecler1]

It to mention housing prices.

[blazespin]

Wouldn't everyone become a founder then?

[MarkMc]

> American's used to be able to support large families of 4+ kids with only 1 working parent. Now you have households with both working and they can't afford to have kids.

This statement isn't supported by the Pew Research article you linked to. If real average earnings are constant then a household which now has two breadwinners will double its income and be better off.

Also keep in mind longitudinal effects: native-born Americans have seen their wages rise but this is offset by immigrants who generally have lower-than-average wages - but still higher than in the country they emigrated from. Both groups are better off even though average wages haven't changed.

[wyclif]

Now you have households with both working and they can't afford to have kids

This strikes me as ridiculous as a broad-brush, general statement. It's not that Americans can't afford to have kids, it's that they incentivize different things than they did in the past. I don't deny that real wages haven't risen because of the supply of workers and dual-income families, but c'mon. There's been an increase in professional married people that want it all, and these DINKs refuse to sacrifice anything materially to have children. They have lots of adult toys and other conveniences, but somehow can't find the money to raise a child.

[hnhg]

Could you provide a cost breakdown of the first 10 years of raising a child in, say, SV or NY? I can't follow your thinking here at all. Childcare, from what I hear is immensely expensive, and after a certain age, you need a bigger home. Conversely, staying without kids means you don't spend on any of those things. What have I missed?

[thatfrenchguy]

You don't "need" a bigger home. You can perfectly have 2 children in a 900sqft 3 bedroom appartment.

[chefkoch]

But you don't need a 3 bedroom appartment for 2 people.

[chefkoch]

I'm sorry but you don't seem to know what kids kost. Rent, childcare, clothing, food plus only one income are in no relation to some electronic toys or a fancy holiday.

[wyclif]

I have two kids. I must be doing it wrong.

[mschuster91]

> They have lots of adult toys and other conveniences, but somehow can't find the money to raise a child.

I'm German and affected by this. It begins with being unable to rent an apartment with enough space for a kid and ends with "how to afford a car in this city".

[dsfyu404ed]

<tone-deaf> But Europe has good public transit everywhere. Surely you can take rail + bus + walk to get anywhere you want to go even with kids.</tone deaf>

Dragging toddler around on public transit is a massive PITA. One is doable but two is hell.

[adrianN]

The quality of public transit varies between cities. My parents for example raised two children without having a car.

[crispyambulance]

    > these DINKs refuse to sacrifice anything materially
    > to have children. They have lots of adult toys and
    > other conveniences, but somehow can't find the
    > money to raise a child.

Well, some DINK's don't want children. Not everyone has to reproduce. There's many different factors involved here than material comfort.

Also, in many American cities, public school is totally out of the question (if you actually care about having well-educated children). Families either have to send their kids to elite private schools at ~20K/per year OR they have to move to somewhere on the periphery of the city where schools are good but you have other trade-offs in time or money. These aren't selfish materialistic concerns they're real obstacles that cause people to defer having children.

[geebee]

Elite private schools in SF and NY are closer to 40k/yr. Catholic schools tend to be much less, with elite high schools in the 20-25k range, though it’s not an exact substitution. Catholic schools teach Catholicism, and while students are not obliged to be catholic, they must attend religious services. The catholic 20k tuition schools also tend to be larger than independent elite privates, though many of them are reasonably elite as measured by sat scores and colleges attended.

This all supports your point, other than to say it’s even more expensive than you’ve indicated.

[growlist]

> refuse to sacrifice anything materially to have children

There are also those that have the best motives for not having children - namely that the country is getting worse, and why inflict a negative future on them? Environmental destruction, overcrowding, pollution, insane property prices, worsening opportunities to get on in life, rampant crime and drugs with disinterested policing and lax punishment apart from against those that are legitimately defending their rights (who are punished harshly), general undermining of traditional values, etc..

Oh but of course I'm just a bigoted dinosaur for holding these thoughts.