[w1ntermute]

> Do you have an idea for a business that scales that could pay relatively unskilled folks better than minimum wage?

The problem with this lies in the nature of most service sector jobs - they require physical proximity to those people being served. Contrast this with manufacturing jobs, where a factory can be set up in a remote town (or on the other side of the world, which is precisely why they no longer exist in America in large numbers) and the products shipped en masse to consumers.

Unfortunately, in America, our zoning laws/NIMBYism and poor public transit have made it extremely difficult for service sector workers to cheaply and efficiently serve the burgeoning upper middle class. Nowhere is this more apparent than in SF. If the Bay Area public transit system were better and if housing were much denser, then more unskilled workers could afford rent in/near the city and have short commutes to service jobs.

Rather than raising minimum wages, we should be working to lower the cost of living for those not as well off. Our cities are currently so inefficient that you could squeeze a great amount of sheer waste out of them.

[lsc]

>The problem with this lies in the nature of most service sector jobs - they require physical proximity to those people being served. Contrast this with manufacturing jobs, where a factory can be set up in a remote town (or on the other side of the world, which is precisely why they no longer exist in America in large numbers) and the products shipped en masse to consumers.

The service sector jobs I have experience with; technical support, can often be done from anywhere.

Of course, having done tech support both in person and over the phone/email, I can tell you that the experience is vastly better for all involved when you are there physically. Besides the fact that it's quite often technically easier to solve the actual problem, the customer is way less likely to get crazy abusive to someone who is physically there and obviously, you know, a human being.

So... okay, point taken. I hadn't thought about that, but having remote tech support is often one of those choices where you optimize for price at the cost of good service. I guess that's the idea behind apple's "tech support in the store" model.

I remember during the first dot-com, shortly after I was promoted out of phone support, hearing the boss talk about how he wanted to do a startup for 'high end tech support' that would send people out in person to set up your internet, rather than making you talk on the phone with us.

>Unfortunately, in America, our zoning laws/NIMBYism and poor public transit have made it extremely difficult for service sector workers to cheaply and efficiently serve the burgeoning upper middle class.

I think we have a negative feedback loop here. The rich don't want public transit near them because they don't want the poor near them, because they aren't used to in-person service jobs. Now, I think most of this is the fact that most middle-class Americans are super weird about class. I mean, that's not to say that the British aren't super weird about class, but they are weird about class that allows the middle/upper classes to acknowledge the existence of the lower classes. The American middle and upper classes want to pretend that the lower classes don't exist, and plan their cities accordingly.

The thing is that we now have this purposely useless public transit infrastructure, which makes it really difficult to rehabilitate the idea of more in-person service jobs.

[w1ntermute]

> The service sector jobs I have experience with; technical support, can often be done from anywhere.

The problem with this type of service sector job (remote technical support) is that, since it can be done from anywhere, it is just as amenable to outsourcing as manufacturing. Think about it this way - if a job can be "outsourced" to the Midwest, whether it be manufacturing or service sector (i.e., tech support over the phone), it can be outsourced to China or India.

So to be clearer, when I said service sector jobs, I meant those that require physical proximity. After all, the basic problem we're facing here is that a lot of American workers simply have no competitive advantage over foreign workers (after factoring in the lower wages paid abroad). Therefore, those workers need to be in an industry where they can exploit an unassailable advantage of theirs - they can be physically proximate to the people they're serving in a way that no one in another country can.

But such an industry doesn't exist right now (at least not at the size necessary to support all those unemployed people), because of our housing and public transit policies. If those policies were changed, allowing for cheaper and better services to reach the upper middle class, you would see the rapid growth of a new market, one that would really help funnel money from the upper middle class down to the lower classes.

Of course, in the long run, using physical proximity as the sole competitive advantage is not a good social policy, since it will lead to social stratification. Therefore, we also need to quickly reform our education system to ensure that the next generation of workers is broadly competitive with foreign workers, rather than only the top 20-30% of American workers doing jobs that could be outsourced but aren't, because the American workers are truly better at it than their foreign counterparts. But in the short run, we can't reeducate all those people in their 20s, 30s, and 40s, who still have decades of work ahead of them, but have long since exited the educational system. They need jobs, and they need them now, if you don't want mass social unrest and economic collapse.

> The American middle and upper classes want to pretend that the lower classes don't exist, and plan their cities accordingly.

I think a lot of this has to do with white flight and high levels of lead in gasoline coupled with high rates of driving, which led to very high crime rates in cities in the mid-20th century. But crime rates have been dropping in urban locales all across America for the last couple of decades, and affluent youth are more willing to live in (and even raise their own kids in) urban environments than their parents or grandparents were.

For example, this article[0] was posted on HN just a day or two ago. If this trend spreads across the nation (which would still require a concerted and extended effort), we could see a dramatic paradigm shift that allows both the upper middle class and the lower class to coexist in urban environments.

0: http://www.citylab.com/commute/2014/06/how-denver-is-becomin...

[lsc]

>Of course, in the long run, using physical proximity as the sole competitive advantage is not a good social policy

I believe that in the long run, standards of living will somewhat equalize. I mean, there will be differences, but I hope those differences will be like the difference between San Francisco and Denver, not the differences between San Francisco and rural Vietnam.

[on transit]

>If this trend spreads across the nation (which would still require a concerted and extended effort), we could see a dramatic paradigm shift that allows both the upper middle class and the lower class to coexist in urban environments.

What I was trying to say is that I believe the problem isn't technical; we have the money and ability to create good transit systems. We need the will to create good transit systems. We need a reason for the politically powerful classes to want public transit in their backyards.

[w1ntermute]

> I believe that in the long run, standards of living will somewhat equalize.

I think that it will depend on whether or not we reform the education system so that we don't create a permanent "servant underclass." Just as we once established an education system that effectively prepared the citizenry for manufacturing jobs, we have to now establish a system that prepares the citizenry for a knowledge economy. The last thing we want is a postmodern Downton Abbey-style society.

> We need a reason for the politically powerful classes to want public transit in their backyards.

I agree with that - the problem is not, and has never been, a technical one. But I think the social obstacles are falling away with the younger generation, because they didn't grow up in a world where urban areas were seen as blighted and crime/poverty-ridden as they were 2 or 3 decades ago.

[lsc]

>I think that it will depend on whether or not we reform the education system so that we don't create a permanent "servant underclass.

I find it really difficult to argue against good state-subsidized education; some people really do learn useful stuff in school.

But... I don't think good education is going to make the problem go away all by itself.

I really hope that what I am about to say is wrong.

I don't believe that education has as much to do with success as people say. Education correlates with high income, yes, but education also correlates with having high income parents. I think having the sorts of parents who encourage and help you to get an education also correlates with both getting an education and with getting a successful career.

Nearly everyone in my family has a degree of some sort, many have advanced degrees. I have no degree, and no significant time spent at college, and am the highest earner of my siblings. Hell, almost all of my siblings have worked for me at some point.

From what I've seen? My life (and my income) is more like that of my "class brothers" than of those I went to high school with who have my level of "educational attainment" - The conclusion I am drawing from this is that having parents like mine was important to my success; most people with parents like mine are going to go to college, sure, but the college itself is less important than those parents.