Socialism in America

by Ingrid Robeyns on February 12, 2014

Paul Krugman has an interesting piece in which he argues that huge disparities in incomes undermine the dignity of the worst-paid workers. This sentence struck me most:

we live in the age of the angry billionaire, furious if anyone should suggest that his wealth doesn’t entitle him to acclamation as well as luxury.

On that topic, I’m inviting all American billionaires to attend a talk at the Stanford Center for Ethics in Society on Thursday where I will be arguing that the billionaire has a duty not to be rich. [If you’re not a billionaire, you’re equally welcome.] I think there are a couple of good arguments to give for this view, including arguments along the line that Chris wrote here recently. I’ve presented these arguments before to British, Dutch and mixed European audiences, and am curious whether the reactions of Americans will be different.

I’m prepared to be surprised. Even more so given a scene that happened on Sunday at a plantation in Louisiana that I visited, after a great tour in which I learnt a lot about the horrible conditions under which slaves had been working so that the plantation owners could build their wealth:

Me [asking a sales person in the plantation shop]: “How much should I tip the tour guide? What is the custom?”
Sales person: “Whatever you feel like.”
Me: “But I have no idea. I live in a country where we don’t tip anyone.”
Sales person: “Really? That’s not a good idea!”
Me: “We don’t tip because we pay decent wages.”
Sales person (with voice raised) “But that is socialism!”

Now if even an ordinary American, working on a former slavery plantation where he is every day reminded of a past of exploitation and gross violations of human dignity, believes that ‘decent wages’ implies ‘socialism’, then I start to understand that Krugman faces an uphill battle generating a reasonable debate about income inequality and human dignity. Let’s just hope that my encounter at the plantation wasn’t representative for the range of categories in which people are thinking.

{ 159 comments }

1

David 02.12.14 at 4:22 am

Just don’t let the billionaires see the plantation. Might give them ideas.

2

rootlesscosmo 02.12.14 at 4:25 am

Warum gibt es kein Sozialismus in den vereinigten Staaten?

3

Chris Warren 02.12.14 at 4:44 am

What’s the problem?

Socialism does imply decent wages (whatever this means).

You only get decent wages under socialism.

You do not get decent wages in OECD economies except for a few strata and this only during a period whichappears to be coming to a close.

4

adam.smith 02.12.14 at 4:55 am

Not to make too much of this (and mostly because I’m continuously fascinated by the topic) — I think the “socialism” that your salesperson referred to was the absence of tips, not so much the decent wages. Because how can you expect people in the service industry to provide good service if their livelihood doesn’t depend on it. (Incentives, will no one think of the incentives!).
There are various articles by restaurant owners that faced a surprising(?) amount of resistance from customers when they tried to get rid of tipping. Americans* are really attached to tipping. My hypothesis for why is that they is the perceived power to punish by not tipping or tipping low—which then gets you even closer to the plantation…

*”Americans” is used loosely here for a large number of US-Americans, obviously not all of them. The people trying to run tip-free restaurants are no less American. Well, except that they’re socialists.

5

Witt 02.12.14 at 5:07 am

Further to 4: Here is the first of some interesting articles by a restaurant owner on tipping:
http://jayporter.com/dispatches/observations-from-a-tipless-restaurant-part-1-overview/

Now if even an ordinary American, working on a former slavery plantation where he is every day reminded of a past of exploitation and gross violations of human dignity,

I think you are being too charitable. Not everyone connected with a plantation is willing to acknowledge the horrors of the slavery that took place there, and some actively work to misinform visitors.

Case in point: A while back there was an uproar when left-leaning singer/songwriter Ani DiFranco scheduled a songwriting retreat on a southern plantation. Among the many eloquent critiques of her decision was one woman who took apart the plantation’s own PR materials on its website.

The plantation and its tour guides apparently bragged that the slave owner treated enslaved people relatively well, and even shared a special meal with them on New Year’s Day. The critique pointed out that this was NOT a kindness — rather, it was a coldhearted recognition that Jan. 1 was the day that enslaved people found out who was going to be “hired out” to different plantations as part of owners’ rebalancing of labor needs in the coming year.

Since the transfers of people (i.e. separating family members, spouses, etc.) wouldn’t take place until Jan. 2, a slave owner who had dinner with the people he owned on Jan. 1 wasn’t being nice — he was being CAREFUL.

(I just spent 20 minutes looking for the original article — if anyone can find it, please link so we can credit the writer.)

6

Straightwood 02.12.14 at 5:13 am

The American population is largely a self-selected band of misfits and fortune seekers who have incubated a culture of selfishness and cruelty. There is a minority faction that favors unpopular notions like human dignity, a living wage, and the public good. These people are vilified by the greedy strivers – not because they are a real political threat, but because they implicitly reject the values of the majority.

These unhappy facts are described in great detail by Morris Berman in “Why America Failed.”

7

Sancho 02.12.14 at 5:22 am

Most developed countries are more socialist than the US, but in the US, the term “socialism” doesn’t enjoy any significant distinction from Soviet communism.

8

Ingrid Robeyns 02.12.14 at 5:28 am

adam.smith: interesting. I really hate tipping. And I don’t think a good society turns all relations between people to economic ones run by incentive structures. But that’s material for another post.

Witt: many thanks for that, very interesting. Yes, I try to be charitable, I am a guest in this country :-) No seriously, I did in fact visit two plantations one after the other, and the difference between the two was already quite striking. The tour of the first hardly mentioned the slaves at all, but the second was very informative, and described in objective terms how cruel the owners were towards the slaves.
Anyhow, Europeans are not much different in their attempts to try to deny (or be silent about) their colonial history.

On socialism: EU countries are capitalist, of the welfare state type. Capitalism with some corrections, and as far as I can tell more corrections than the US form of capitalism. But that’s still a far distance from socialism.

9

David 02.12.14 at 5:31 am

Agreed. Redistribution of wealth, however extensive, is not socialism.

10

notsneaky 02.12.14 at 5:41 am

@5 that jayporter person knows what they’re talking about. In restaurants it’s always cook vs. waitress/waiter vs. dishwasher or waiter vs waiter. And all of it has to do with divvying up the tips and can destroy a decent restaurant. (Also, read that stuff while thinking about what kind of effect a rise in the minimum wage is really going to have)

11

Hix 02.12.14 at 5:50 am

Socialism, the actual thing is quite unpopular in Europe. The cold war was much closer here. The 50+ center right people still claim lots of hyperbolic nonsense about it. Adequating every deviationon from manchester capitalism with a socialist hellhole however, as shown in this anecdote is quite another category of crazy.

12

Karl ❤ Rosa 02.12.14 at 5:51 am

What surprises me even more is how thoroughly this American attitude and its institutions have established itself in the EU; not just with poison like charter schools. I’m particularly horrified by the intentional humiliations inflicted on constituents by e.g. the UK job centers or the notorious Atos disability scandals.

13

adam.smith 02.12.14 at 6:04 am

And I don’t think a good society turns all relations between people to economic ones run by incentive structures.

in case that wasn’t clear, I was being sarcastic. Beyond the broader societal issue, as @5 and @10 point out, making tips in restaurants a major part of waiters’ earnings is a _terrible_ idea even if you think in terms of incentives.

14

Lewis 02.12.14 at 6:10 am

So how is “socialism” defined? Ingrid Robeyns seems to suggest that the popular American idea has been slurred towards meaningless. I’ve worked a tipped job and my manager used the tips as a direct substitute incentive for better pay. Also, one black coworker told me he felt like the tips were pity money and offensive.

15

ingrid robeyns 02.12.14 at 6:22 am

oh sorry adam.smith – I didn’t get the sarcasm. I wish I could blame jet lag but it’s probably just my poor sense of humor [a fact I've accepted a long time ago, so no surprise there].

16

Ingrid Robeyns 02.12.14 at 6:29 am

Lewis: no, that’s not what I suggest. Rather, I suggest that decent pay is something that one could also have in a capitalist economy; and that socialism requires much more than merely decent pay (namely also collective ownership of the means of production, price controls, etc.). The more general point is that if someone believes that under capitalism there cannot be decent wages, and that there are only two economic systems (namely American-Style capitalism and socialism), yes, then it follows that continental European countries are socialist. But they really are not: they are also capitalist, just of a different kind.

I have never worked a tipped job, but I am not surprised by what you report that your coworker felt, and your own experience is precisely a reason to oppose ‘tipped jobs’ (in any case if they do not come on top of a decent wage).

17

Lewis 02.12.14 at 6:34 am

Sorry, if that wasn’t what you were trying to suggest that was just my interpretation, but I don’t think I’ve ever met any American who thinks of socialism in the Webster’s Dictionary sense.

18

Tom West 02.12.14 at 6:37 am

Straightwood #6
> The American population is largely…

Wow, do you have any similarly pithy summaries for other nationalities? I’m sure your characterizations of the French, Germans, Chinese or Egyptians would be just as charming.

19

hix 02.12.14 at 7:01 am

To be fair, i recall people that really should know better (e.g. a political science Prof) adequate wealth taxes with socialism as a self evident proof that such a policy is not viable. The IWF and the Bundesbank must be run by socialists in that case. My guess is that there is a huge country variation in Europe. France has a mainstream political party that is not at all socialist outside rethoric. Here in Germany in contrast, the major left party calls itsself Social Democratic. The term “socialist” until some years ago was used by the precedessor of the East German regime party, which asociates the term with all the atrocities of that ugly dictatorship, not just the economic inadequacies. Ironically, that party is by no means socialist either.

20

Lewis 02.12.14 at 7:11 am

I think the definition is important even if it’s vague. Europeans in general look to have more specific ideological interpretations of the term than I’ve ever heard spoken of in America. There’s a real gulf. If anyone here has a preferred definition it would be appreciated.

21

adam.smith 02.12.14 at 7:31 am

The Wikipedia definition is quite good:

Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy

The Palgrave Dictionary of Economics similarly defines that

[a] society may be defined as socialist if the major part of the means of production of goods and services is in some sense socially owned and operated, by state, socialized or cooperative enterprises.

Most definitions are along those lines. In the US, parts of the political right calls every economic policy they don’t like “socialism,” even if it consists entirely of the regulation of privately owned enterprises (think banking regulation). That should be appropriately ridiculed and not be cause for a re-definition of the term.

22

Lewis 02.12.14 at 7:37 am

Webster calls it first and foremost “a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies.” That is a huge leap in America from co-operative.

23

adam.smith 02.12.14 at 8:42 am

Not sure what your point is? Co-operative ownership refers to something like this: https://en.wikipedia.org/wiki/Worker_self_management as attempted e.g. in Yugoslavia
I don’t think that’s any less radical than government ownership and it still has nothing to do with what the American right labels socialism.

24

Salem 02.12.14 at 10:23 am

“What surprises me even more is how thoroughly this American attitude and its institutions have established itself in the EU”

There is nothing specifically American about this attitude.

25

Sasha Clarkson 02.12.14 at 10:36 am

I have long thought that, for many, the true purpose of political debate is render your opponents’ ideas unthinkable. Thus in the US, socialism is merely a dirty word. Alas, this is also even true for some in the UK Labour party.

26

Patrick S 02.12.14 at 11:04 am

Here in Melbourne, Australia, one of our popular morning radio talk-show hosts Jon Faine on the national public broadcaster (ABC 774) ran a segment focusing on tipping practices and wages in the hospitality industry.

As some people have pointed out in recent pushes for a higher minimum wage in the US, we do have quite a high minimum wage for adults, almost $17 / hour if this graph by folks in the Isocracy political interest group is accurate. This includes hospitality workers.

Anyway – the point of this segment was the usual neoliberal-influenced folk arguing for deregulating minimum wages and going to a more tips-based system. And the great thing:- there was really strong pushback against this idea by the majority of the callers from the public. Admittedly I think Faine’s audience is mostly more centrist/liberal or even a bit left-leaning rather than one of our right-wing shock-jock stations. But I think it also represents a fairly strong view in much of Australian society – stemming from our strong Labourist party and values over the last century, even if this is under fire recently same as elsewhere. In contemporary Australia – a man or woman’s home may be their castle, but most of us don’t like the idea of our local cafe being a semi-feudal playground!

27

mattski 02.12.14 at 11:19 am

adam.smith @ 4

My hypothesis for why is that they is the perceived power to punish by not tipping or tipping low—which then gets you even closer to the plantation…

Krugman linked some months ago to a blogpost–a very good one!–by Aimee (?) @ I Spy With My Little Eye (?) making this point.

As far as defining Socialism goes, I think it’s a murky idea. Raise the tax rate sufficiently and most Americans will howl “socialism!” regardless of where the revenue is spent.

28

MPAVictoria 02.12.14 at 11:31 am

In America it is really quite simple, Socialism is just shorthand for bad. Anything the government does that I don’t like is Socialism and anything they do that I do like is NOT Socialism.

29

Zamfir 02.12.14 at 11:39 am

with regard to the anecdote: if American people in service jobs typically like a tip-heavy pay system (as the anecdote implies), is it a bad thing when they work in such a system? The problematic part seems to people who don’t like such a system, but are in it anyway.

30

Chris Warren 02.12.14 at 12:00 pm

“Adam Smith”

You have to be careful with different definitions. Marxist socialism is based on abolishing wage-labour.

Rightwing definitions of socialism propose nationalisation or state ownership etc.

The wikipedia defn. you cited is the rightwing version. Co-operatives can operate as capitalists.

Yugoslav self-management showed the viability of socialist economics, but also showed a lack of competitiveness with short-run capitalism. It also showed that some cooperatives could grow wealthy ahead of others – not through wage-labour, but through monopoly power.

31

JW Mason 02.12.14 at 12:03 pm

The heavens themselves, the planets and this centre
Observe degree, priority and place
… O, when degree is shaked,
Which is the ladder to all high designs,
Then enterprise is sick! How could communities,
Degrees in schools and brotherhoods in cities,
Peaceful commerce from dividable shores,
The primogenitive and due of birth,
Prerogative of age, crowns, sceptres, laurels,
But by degree, stand in authentic place?
Take but degree away, untune that string,
And, hark, what discord follows!
… The general’s disdain’d
By him one step below, he by the next,
That next by him beneath; so every step,
Exampled by the first pace that is sick
Of his superior, grows to an envious fever
Of pale and bloodless emulation…

32

Pierre Corneille 02.12.14 at 12:37 pm

@adam.smith:

“There are various articles by restaurant owners that faced a surprising(?) amount of resistance from customers when they tried to get rid of tipping. Americans* are really attached to tipping. My hypothesis for why is that they is the perceived power to punish by not tipping or tipping low—which then gets you even closer to the plantation…”

That’s probably the main reason or at least an important one. But I suggest that some (probably not a majority, but “some”) oppose restaurant owners’ ending tipping out of concern for the workers. A restaurant might say it now pays its workers a living wage, its view of a living wage might be lower than my view of one.

There are also cultural concerns. Tipping for a certain segment of people in the US (and to be fair to you, you go out of your way to point out you’re generalizing when you talk about “Americans) is so ingrained a practice that the idea of not tipping just seems weird. At least that’s how it feels to me. Whenever I decide whether I have enough money to go out to eat at a sitdown restaurant, I always include the likely cost of tip (say, at 25%) in my reckoning. I don’t believe I have ever not given a tip, and I believe I always will, short of the waiter setting fire to my shirt or something bad like that.

I agree that tipping is a weird thing. I don’t like the idea that a server’s salary is dependent on the discretion and goodwill of those he or she serves. I dislike the power relation involved in which a server can do all the work of which he/she is required, and then still theoretically get less than the minimum wage. I also dislike the idea that I as a customer have some sort of prerogative to judge the server. (If I don’t like the service, I’ll just not return.) That’s one reason I approach tipping as something almost automatic and I try to disentangle it from my judgment of the server’s performance. My own approach is not perfect–it can become a condescending, cloying, and paternalistic thing–but I think it’s right, at least for me.

33

Trader Joe 02.12.14 at 12:50 pm

I’ve worked plenty of tip jobs (particularly bartender) and can say that the idea that they support good service is bunk. What it really promotes is the avoidance of bad service and a lot of “pleasant attitude” whether it’s deserved or not.

As a result when some dude (and its always a guy, never a woman) thinks his $8 glass of house wine “tastes a little off” even though you know good and well that it doesn’t taste off at all, its just crappy wine. You smile and tell him “No problem sir, let me pour you another or perhaps you’d like to try a different one?”

You do this to make sure that you protect your tip and he leaves you $10 for the $8 glass…in fact that’s why the wine is priced at $8 instead of $7, since no one would leave $3 for a glass of crummy house wine. The bar owner gets an extra dollar and the bartender has a better chance at getting a $2 tip (25%) instead of a $1 tip (14%).

I don’t know that its exactly the plantation, but there is a certain amount of “Yes massa” involved. Far better to just charge $9 for the glass, pay the bartender better in the first place and if by some chance the customer feels I have in-fact given excellent service and he chooses to give me the extra $1 – then that would be his choice and a reward for doing actual good, rather than just being mediocre. As a tip payer I hate feeling obliged to tip for truly ordinary service simply because its expected (i.e. the bartender who simply uncaps a bottle of $4 beer and who I give $5 to as a tip for doing nothing but applying physics).

34

Tim Worstall 02.12.14 at 1:28 pm

“making tips in restaurants a major part of waiters’ earnings is a _terrible_ idea even if you think in terms of incentives.”

I was a waitron unit for near a decade and I think the tipping system’s just great. The effect might not be quite where you think it is though.

It’s really on how waitron units get sorted into the particular places they work. For a more expensive place (or, alternatively, a place with very high turnover of tables) will mean that those tipped are going to be earning more money. So, those with aptitude for the job self select into those two types of places as they pursue higher incomes.

Back in 1980s money working around DC you could move from somewhere earning perhaps $15 to $20 in tips a shift (say, pancakes at Denny’s) to $50 to $80 a shift in Old Town Alex and much more in the seriously expensive places. But obviously those “better” jobs were harder to get.

35

Jim Buck 02.12.14 at 1:37 pm

There are restaurants in the eastern part of Berlin that let you eat, drink, and pay what you like. No tipping. Admittedly, the drinks menu ranges wider than the al a carte does. My merry and bright wife once paid 180 euros, there, for a meal–identical to mine;and for which I paid 30 euros.

36

MPAVictoria 02.12.14 at 1:48 pm

Is anyone else really tempted to post the Tipping Scene from Reservoir Dogs?

37

DaveL 02.12.14 at 2:17 pm

Maybe the “socialism” comment was prompted by opposition to the government setting wages (even minimum ones). That’s a pretty common sentiment in the US, and one that has little or nothing to do with tipping.

Although “tipping” as a topic always makes for a lively comment section anywhere it comes up.

Are there any countries other than the US where tipping is common?

38

St. Peppa 02.12.14 at 2:18 pm

The last few years have been turbulent in the US/European labor markets, but for this American, “socialism” means such great (high) minimum wages and protections from firings, that Europe is willing to live with a 50% youth unemployment rate. Due to generous state benefits, the riots of this class of people is relatively rare. The US could not survive with a 50% youth unemployment rate. Europe can. That is not a good thing to say about either system …

39

MPAVictoria 02.12.14 at 2:23 pm

“Are there any countries other than the US where tipping is common?”

Canada.

40

Anarcissie 02.12.14 at 2:48 pm

MPAVictoria 02.12.14 at 11:31 am @ 28:
In America it is really quite simple, Socialism is just shorthand for bad. Anything the government does that I don’t like is Socialism and anything they do that I do like is NOT Socialism.

Yet there have been polls taken in the last few years in which a substantial number of Americans said they thought socialism was a good idea. No one who reported the stories seemed to know what the socialism-favoring Americans thought ‘socialism’ meant, however.

In my own experience in the industrial workplace, which ranged from the most abject grungework to upper-end-of-the-working-class stuff like computer programming, systems design, and project management, I found that if I described socialism (as the ownership and control of the means of production by the workers) without mentioning the word, it elicited neither horror nor enthusiasm. People just weren’t very interested in the idea. It may be that those who would have been interested had already been drawn off into self- or small-group employment.

41

jake the snake 02.12.14 at 2:51 pm

@notsneaky #10. You make a good point. There can be a great deal of hierarchism among restaurant workers. My son recently worked at a local restaurant where an assistant manager insisted that the sushi chef perform a cleaning function normally done by bus and wait staff. The sushi chef refused and walked out taking several of the
other staff with him. The quality of food and service in that restaurant suffered for quite a while. If a job function could cause that much disruption, it is certain that money could cause a lot more.
I suspect that the most accurate representation in Downton Abbey is the hierarchy/status consciousness of the servants.

42

LFC 02.12.14 at 2:52 pm

J.W. Mason @31
As you may know, those lines you quote from Troilus and Cressida are quoted by (the late) Samuel Beer in the opening of his classic British Politics in the Collectivist Age (pbk. ed., 1969), to illustrate the assumptions of what he calls “Old Tory Politics.”

Ok, back to the topic of the thread…

43

Ciaran 02.12.14 at 3:02 pm

Youth unemployment is of a similar magnitude in Ireland which has a extremely “flexible” labour market. ( especially considering the levels of emigration)

44

kjs 02.12.14 at 3:06 pm

@6. Straightwood:

Good to see a fellow WAFER, albeit I wish Berman would strike his silly Union vs. Slaveholders narrative from the tome (there was nothing noble about the South, absolutely nothing), his flippant idea that anyone can just pack up and leave this Armed Madhouse, and his tired Rufus T. Firefly joke.

His friend, Hedges, can be a naif, too, but ‘Death of the Liberal Class’ makes some decent points on Useful Idiocy.

45

SamChevre 02.12.14 at 3:22 pm

I would second adam.smith at #4. The obviously-unfavorable “that would be socialism” is much more likely to be a statement on no tips, not better wages. The idea that doing extra well should not get you anything–rather, you get what you get no matter whether you do anything or not–is what Americans’ hostility to socialism usually reflects.

46

SamChevre 02.12.14 at 3:23 pm

The Jay Porter no-tip restaurant article was really interesting. Did anyone else notice that one of his major complaints was that (tipped) waiters made too much relative to everyone else?

47

MPAVictoria 02.12.14 at 3:34 pm

“Yet there have been polls taken in the last few years in which a substantial number of Americans said they thought socialism was a good idea.”

By Americans I meant REAL Americans. Not pansy liberal elitists. Duh!

48

dbk 02.12.14 at 3:53 pm

Having lived in a non-tipping country for nearly forty years, I now feel extremely uncomfortable with obligatory tipping in U.S. restaurants, for many of the reasons cited above.

Thinking about it, it seems to me that this custom is yet another instance of “socializing costs, privatizing profits”, viz. customers are de facto required to assume a substantial portion of one of the traditional costs of employers, viz. labor (as in “living wage”). Seen in this light, tipping is simply an everyday case of consumers footing the bill on behalf of the ownership class, so that the latter’s profits can be enhanced.

Now I think I understand a bit better why it makes me so uncomfortable.

49

chris y 02.12.14 at 3:56 pm

“Are there any countries other than the US where tipping is common?”

Britain, although the standard tip is about half what it is in the US.

50

novakant 02.12.14 at 4:01 pm

However one might think about this issue $2.13 as a base wage to be augmented by tips is just plain ridiculous:

http://www.bloomberg.com/news/2013-04-25/waitresses-stuck-at-2-13-hourly-minimum-for-22-years.html

51

TM 02.12.14 at 4:05 pm

In the US, these terms (socialism, Marxism, whatever) are totally meaningless. Even left-leaning people who say they are sympathetic to socialism (they do exist, cf. 40) tend to use the term in the same way as the mainstream media and the right: socialism equals social security and universal health care, and also whatever they have in Sweden (there are no tips in Sweden right?) It’s useless trying to correct people and explain what the terms really mean. It’s totally useless to try to insert historical perspective, like “the father of social security and health insurance is actually Bismarck, and he was an anti-socialist”. You just have to accept that when everybody agrees to calling a table “beer mug”, you can’t argue with them, you have to call that damn thing beer mug.

Oh and by the way, liberalism and conservatism are also meaningless terms. Nowadays liberalism denotes a weaker form of “socialism” (i. e. beer mug) whereas conservatism denotes an ideology advocating the systematic dissolution of the social fabric. You get used to it after a while on US soil.

52

TM 02.12.14 at 4:16 pm

Regarding the “tipless restaurant” article, I found this bit confusing:

“Due to poorly cohering laws in many Western US states, using a service charge has typically been the only legal way for a restaurant business to balance wages between servers, bartenders, cooks and dishwashers.”

Why can’t they pay everybody a fixed salary and charge customers a fixed price? Are there laws against that?

As a customer, I don’t like the service charge any better than the tip obligation. What I would prefer is the menu to spell out the actual price, including service and taxes. Why is that so totally out of the question in America?

53

Corey Robin 02.12.14 at 4:18 pm

On the question of tips and socialism, you all might be interested in some of these little data points from a report by Gordon Lafer issued last year by EPI.

1. In 2011, lawmakers in Wyoming introduced a bill that would have allowed restaurants and other employers to force their wait staff to pool their tips. Tips would be redistributed among the non-wait staff, who could then be paid the subminimum wage.

2. That same year, Maine legislators passed a bill declaring that “service charges” were not tips at all. Because they aren’t tips, they don’t belong to the wait staff. Employers can pocket them—without informing customers—and redistribute them to the non-wait staff (or keep them as profit).

Seems like confiscation and redistribution is okay, so long as it’s the employer who’s doing it.

http://www.epi.org/publication/attack-on-american-labor-standards/

54

MPAVictoria 02.12.14 at 4:41 pm

“2. That same year, Maine legislators passed a bill declaring that “service charges” were not tips at all. Because they aren’t tips, they don’t belong to the wait staff. Employers can pocket them—without informing customers—and redistribute them to the non-wait staff (or keep them as profit).”

My god thats crooked.

55

LFC 02.12.14 at 4:52 pm

TM @51

In the US, these terms (socialism, Marxism, whatever) are totally meaningless. … It’s useless trying to correct people and explain what the terms really mean.

There is no single ‘true’ meaning of the word “socialism.” Rather, there are a range of definitions within the ballpark of reasonable definitions (though I am one of those who thinks that the ‘actually existing socialisms’ e.g. of the Cold War era weren’t socialist at all). Asserting that the term “socialism” has one single correct meaning is absurd. Pretty much the same goes for “Marxism,” since there are varieties of Marxism.

Btw since a lot of W. European socialist parties, over the years, came to favor social democracy and not much beyond that, it’s understandable that some or many people in the US think socialism=social democracy, though that is not TM’s preferred definition. It’s not that everyone in the US is so stupid and has never heard of Bismarck, or whatever TM wd like to suppose.

56

Donald Johnson 02.12.14 at 5:13 pm

“I have long thought that, for many, the true purpose of political debate is render your opponents’ ideas unthinkable. Thus in the US, socialism is merely a dirty word. “

This. In fact, in America even “liberal” is a dirty word.

57

Gorgonzola Petrovna 02.12.14 at 5:24 pm

I was recently surprised to discover that “anti-colonial” is a dirty word as well.

58

JimV 02.12.14 at 5:43 pm

My guess was and is that the “That’s socialism!” response referred to a government telling business owners how much they had to pay their workers. After all, in countries where people don’t tip it’s the people’s cultural choice, not the government telling them that they can’t tip (no one will arrest you if you do tip), so the connection to socialism is even more tenuous than for my guess. But perhaps I’m giving the responder too much credit.

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TM 02.12.14 at 5:52 pm

LFC: I don’t know what you think is my “preferred definition” of socialism; I haven’t told you. There certainly is a range of meanings. But that doesn’t make it arbitrary, unless you are willing to agree that one might as well call it beer mug or abracadabra.

“It’s not that everyone in the US is so stupid and has never heard of Bismarck, or whatever TM wd like to suppose.” Do you ever talk to Americans about these things?
I once asked a college class where they think Social Security came from and nobody even named FDR. Certainly some Americans do know a bit more than that about the history of the welfare state but I would be very surprised if more than a tiny fraction know in what country and century the first social health and retirement insurance model was instituted, let alone name Bismarck. Seriously if Americans had even the most basic knowledge in that area, the whole Obamacare debate could never have played out the way it did. It is precisely because Americans don’t know – really genuinely honestly don’t know – the difference between socialism and mandated health insurance a la Switzerland that the extreme right has been able to exert such a huge political influence in the US. Let’s not fool ourselves – these labels do matter a lot in the political debate.

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Bruce Wilder 02.12.14 at 6:03 pm

We use hierarchy and domination to organize economic activity, because it can achieve a high level of efficiency. Doesn’t have to, but it can, and where it does, it is a potential source of abundance. That choice, because of the power it entrusts to managers and owners of capital, presents hazards, for distributional fairness.

The owners and managers of restaurants, where a service charge has been imposed along with a policy of no-tipping, would argue that tipping undermines their ability to manage the restaurant, provide a high and consistent level of service, by undermining management’s ability to manage the compensation of the staff. It is not an unreasonable argument, and one that can, no doubt, be supported with abundant evidence.

It would be great if two ideas — the benefits and the hazards — could safely fit into the same thought.

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TM 02.12.14 at 6:05 pm

Also LFC, it is relevant in that context to mention that Americans have been told Obamacare was invented by either Lenin or Hitler (probably both, since they were both socialists). This may be a fringe opinion but you can believe that such silly propaganda wouldn’t be peddled if there weren’t plenty of takers for it. You have to face the fact that a sufficient segment of the American people is really that stupid uninformed. It’s not in just in our imagination.

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Bruce Wilder 02.12.14 at 6:35 pm

Plenty of people seem to confuse Obamacare with good policy.

In America, every one is stupid, confused and uninformed, but in varying, individualized, personalized proportions, served at an everyday low price.

Have a nice day.

(Just leave anything you feel like in the tip jar, honey.)

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MPAVictoria 02.12.14 at 7:05 pm

“Plenty of people seem to confuse Obamacare with good policy.”

Or with being the best policy that could get through the Senate at the time, but we have had this argument here many times.

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roy belmont 02.12.14 at 7:07 pm

Well charitably probably the tipping thing began with a desire to reward the extra nice service of someone. Then became an incentive toward rather than a reward after.
Then like a lot of things it became a built-in.
The most money I ever made per hour in a wide-ranging employment history was bartending at a high-end restaurant on New Year’s Eve.
It wasn’t even really service related. More alcohol and festivity. And that the customers were affluent and stuff.

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parse 02.12.14 at 7:09 pm

I dislike the power relation involved in which a server can do all the work of which he/she is required, and then still theoretically get less than the minimum wage

As I understand it, theoretically that cannot happen. I believe the minimum wage law regarding service workers is that they can be paid less than minimum wage when their tips actually, rather than just potentially, make up the difference.

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TM 02.12.14 at 7:16 pm

BW, that remark was off topic and I would like to stay on-topic. Let me just put this out: whatever your definition of “good policy” is, it is likely to be attacked as evil socialism and that has a material bearing on its likelihood if ever being implemented. I don’t know what to do about it either but can we at least agree on the facts before starting the name-calling? I don’t think your “every one is stupid” is very helpful in this respect.

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TM 02.12.14 at 7:17 pm

likelihood OF ever being implemented [sorry]

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TM 02.12.14 at 7:25 pm

parse: Interesting, I didn’t know that (here’s an overview http://www.dol.gov/whd/state/tipped.htm). I wonder how well this is actually enforced.

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adam.smith 02.12.14 at 7:48 pm

TM @68 – quite generally wages and hours enforcement in the US is a complete joke and rules are violated routinely. Here’s a report (PDF): http://www.nelp.org/page/-/Justice/2010/JustPayReport2010.pdf
States actually use lax enforcement as a competitive advantage so there is some degree of race to the bottom (see. e.g. http://web.law.columbia.edu/attorneys-general/policy-areas/labor-project/resources/state-and-hour-laws ).

I’d imagine this particular case to be relatively rare, but where it does occur, independent enforcement is fantastically unlikely; given the power differentials in the types of tip-dependent jobs where people are actually likely to fall below minimum wages, employees are both unlikely to know about this and even if they do unlikely to demand payment, let alone report employers; finally, given the above, even if they report this, it is relatively unlikely to lead to enforcement action.

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Trader Joe 02.12.14 at 7:55 pm

“The most money I ever made per hour in a wide-ranging employment history was bartending at a high-end restaurant on New Year’s Eve.”

That was my best too, until I tried bond trading (The per hour wins are great, but watch out for the per hour losses). New Year’s Eve was always the best. Weddings at posh clubs were always good gigs too if you could get them – the best part in both cases in 90% of the time all you were doing was pouring or opening, hardly any actual drink making. Bartending is really one of the most basic of all rentier jobs – alcohol on one side, money on the other, a literal bar in the middle. If you want my alcohol to cross this bar you will pay.

Notwithstanding the crummy service charge rules in a couple of western states, most restaurants have some formal or informal system that the people who receive tips (usually wait and bar staff) contribute a portion of their take to those that support them but don’t directly face the customer – like busboys, runners, dishwashers etc. Essentially a tip from a tip. How that allocation is made, who deserves it, what tips it should be based on etc. are the backbone of countless hours of ‘behind the wall’ intrigue.

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LFC 02.12.14 at 7:58 pm

@TM
I concede that a fairly substantial segment of the US pop. is prob. uninformed on these matters. Your initial statement struck me as a bit more sweeping than that, but I agree there is no doubt a fair amt. of ignorance out there.

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Bruce Wilder 02.12.14 at 8:33 pm

TM @ 66

Propaganda in America is pervasive. But, you are sadly self-deceived, if you imagine only “they” consume it and are manipulated and misinformed by it.

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Anarcissie 02.12.14 at 8:58 pm

LFC 02.12.14 at 4:52 pm @ 55
‘… Asserting that the term “socialism” has one single correct meaning is absurd.’

Of course, words are conventions and can have any number of meanings. Some definitions are more useful than others, however. Also, that the definition of a perfectly reasonable concept like ‘the ownership and control of the means of production by the workers’ has no word to represent it for most of the population may be a problem.

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SoU 02.12.14 at 9:00 pm

@68, re: servers and minimum wage
“I wonder how well this is actually enforced.”
as far as i understand it, it is up to the slighted individual to take these issues up themselves. all the attendant issues of ‘rocking the boat’ with your employer follow close by.

all i have to work off of on this is anecdotal evidence, but afaict, enforcement is incredibly rare.

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Barry 02.12.14 at 9:09 pm

Tim Worstall 02.12.14 at 1:28 pm

” I was a waitron unit for near a decade and I think the tipping system’s just great. The effect might not be quite where you think it is though.

It’s really on how waitron units get sorted into the particular places they work. For a more expensive place (or, alternatively, a place with very high turnover of tables) will mean that those tipped are going to be earning more money. So, those with aptitude for the job self select into those two types of places as they pursue higher incomes.”

Even for you, this is bad. Every job I’ve had has been untipped, and you know what?
Sorting gets done anyway.

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TM 02.12.14 at 9:10 pm

“But, you are sadly self-deceived, if you imagine only “they” consume it and are manipulated and misinformed by it.”

Bruce, I would really appreciate if you refrained from speculating about the things I (or anybody else) might imagine. I’m sure you have better uses for your time and so does everybody else. Thank you.

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TM 02.12.14 at 9:15 pm

SoU, adam.smith – I guess what I’m wondering is whether wage theft in tipped jobs is more pervasive than elsewhere, owing to the fact (new to me) that the employer is required to make up a lack of tips.

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adam.smith 02.12.14 at 9:22 pm

yeah, I don’t know what BW is doing in this thread. This postmodern “there is no truth, everything is propaganda” thing is really bizarre and doesn’t strike me as his position otherwise. Did you smoke pot and watch The Matrix?

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adam.smith 02.12.14 at 9:39 pm

TM – I’m informedly guessing here, but the answer is likely that it depends on how you measure.
I’m pretty confident that wage theft for people who make below minimum wage is near-universal in tipped jobs. So if someone isn’t making her/his $7.25 with tips, I’m pretty sure that less than 50% of employers will pay the difference.

But if you think about a restaurant job, the $5.13 gap between total minimum wage and tipped wage are roughly the tips for $25. This is calculated on a weekly basis—so basically an employee would have to average less than $25 of sales an hour during a workweek to be affected by this. I haven’t worked in tipped jobs myself, but my wife has done so a lot and this strikes me as a rare occurrence.

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mattski 02.12.14 at 10:37 pm

BW @ 60

It would be great if two ideas — the benefits and the hazards — could safely fit into the same thought.

In the minds of the wise they do, they do.

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someguy88 02.12.14 at 10:51 pm

In California servers are not exempt from minimum wage laws. In most states they are. Restaurants can only pay so much in labor and still stay in business. That means that it is much harder to attract decent kitchen staff. You can solve this by charging a service fee and distributing more money to the kitchen staff. But in most states it is not a problem because a server’s minimum wage is much less than the regular minimum wage, 2.13 an hour.

Tips are better than pay. No one reports the full amount of their tips. This difference is tax free. The BLS median hourly wage is 8.92. But the BLS is collecting data from employeers. Based on years in service industry as a crappy server in crappy restaurants 8.92 an hour is way too low a figure. They are using server’s self reported numbers. I could be wrong but that is what I am thinking. Which means the real median hourly wage is probably about at least 12 – 13 an hour. Not a lot of wage theft.

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Peter T 02.13.14 at 12:10 am

“Restaurants can only pay so much in labor and still stay in business”. Yet restaurants pay much more in labour relative to the US in Australia and most of Europe, yet remain in business. No shortage of restaurants here in Australia.

More broadly, complex divisions of labour do not institute themselves, nor is the distribution of the fruits of such division intuitively obvious or natural. These things are socially constructed (within bounds).

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notsneaky 02.13.14 at 1:42 am

Servers, even those who technically make below minimum wage, tend to make way above it in practice, certainly more than cooks and dishwasher. This is also reflected in your standard restaurant hierarchy with servers>cooks>dishwashers. It’s not the servers who get screwed and I seriously doubt that ANY restaurant where the employer is engaging in any kind of “wage theft” survives for any period of time. Read that jayporter article at the beginning, it lays out pretty well.

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someguy88 02.13.14 at 1:46 am

Peter T,

‘Yet restaurants pay much more in labour relative to the US in Australia and most of Europe, yet remain in business. No shortage of restaurants here in Australia.’

Yes because American consumers make up the difference in pay with tips. Once you include those largely tax free tips it is no longer so clear that ‘restaurants pay much more in labour relative to the US in Australia and most of Europe’

We could one up you and pay all restaurant workers $30 an hour and we would still have lots and lots of restaurants in the US. Just not nearly as many. That is because restaurants can only pay so much in labor and still stay in business.

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Sancho 02.13.14 at 2:35 am

As MPAVictoria said, Reservoir Dogs springs to mind. Here’s the clip. Maybe not everyone’s seen it.

Warning: contains foul language and Steve Buscemi teeth.

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Sancho 02.13.14 at 2:48 am

Whoa! I didn’t realise it would open in-thread.

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Corey Robin 02.13.14 at 2:50 am

On the question of wage theft and the enforcement of wage and hours laws, I suggest you all take a look at the EPI report I posted at 53 above. Enforcement of the laws is, as someone else mentioned up-thread, a total joke. One of the studies cited in the report — which is a multi-city study — found not only a tremendous amount of wage theft but also that almost a 1/3 of the employers who are found guilty and are forced to pay penalties continue to violate the law because the odds of being caught (plus the level of penalty) are so low that there’s little incentive not to. Also, many states have inspector staffs in the single digits. Florida has none. Louisiana has two. Oregon has three. Missouri has six. Finally, when localities have tried to pass ordinances against wage theft, and have come up with credible and viable enforcement mechanisms, state legislatures have shot them down. That happened in Florida.

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notsneaky 02.13.14 at 3:52 am

I suggest you all take a look at the EPI report I posted at 53 above

Yeah, not sure about the methodology that’s based on (referring specifically to the parts of the report having to do with tipping and wage theft, not the whole thing in general). To the extent that study picks up significant wage theft, that’s due to 1) looking at “hard reach” populations such as illegal migrants, who yes, get screwed over a lot and 2) lots of overtime not being paid.

In 2011, lawmakers in Wyoming introduced a bill that would have allowed restaurants and other employers to force their wait staff to pool their tips. Tips would be redistributed among the non-wait staff, who could then be paid the subminimum wage.

This is a good idea for reason explained above in the jayporter article. The non-wait staff is the one who usually gets royally screwed under the existing tipping arrangement (your conclusion doesn’t follow btw). In some places they’re considered “tipped workers”, which means they can ALREADY be paid minimum wage, but since the tip out is controlled by the waiters, they don’t get what they’re supposed to, and employers can’t do jack about that (at least as far as tipping goes).

That same year, Maine legislators passed a bill declaring that “service charges” were not tips at all. Because they aren’t tips, they don’t belong to the wait staff. Employers can pocket them—without informing customers—and redistribute them to the non-wait staff (or keep them as profit).

Again, read the jayporter article. This is a good idea. And again the “or keep them as profit” is not in the EPI study (except as sort of implied speculation) and does not follow.

Wait staff typically makes x3 or x2 the wage (accounting for tips) that the non-wait staff does. Non-typically, in certain types of establishments that ratio is probably much higher (though that’s probably where we start getting into non-minimum, not-that-low sector of the food industry)

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Corey Robin 02.13.14 at 4:14 am

notsneaky: I’m not convinced that the solution to the very real problems of non-wait staff are laws allowing employers to pool tips.

You seem to be under the impression that waitstaff are doing rather well, at the expense of non-waitstaff. But as that EPI report makes quite clear, that’s just not the case.

It states: “The poverty rate for waiters and waitresses—who comprise the bulk of all tipped employees—is 250 percent higher than that of the workforce as a whole. Furthermore, the share of waitstaff in poverty is directly related to state wage laws. In states where waitstaff receive the full minimum wage, 13.6 percent are poor; in states with a tipped wage set somewhere between $2.13 and the federal minimum, waitstaff poverty is 16.2 percent; and in states that apply the federal subminimum wage of $2.13, waitstaff poverty rises to 19.4 percent.”

Pooling tips would simply allow employers to pay more non-waitstaff the subminimum wage, and on top of that take what is already a fairly limited pot of money (tips) and have it be redistributed among a larger group of people.

Incidentally, I’m amused by your questioning the methodology of the EPI report when you urge us instead to read a first-hand account by a restaurant owner, who operates a fairly high-end locavore “gastro-pub” in San Diego with entrees that go for as much as $30, checks for a party of four that would easily run in the hundreds, and thus high tips. Not exactly representative of your typical restaurant in America. The reality is that there are more than 3 million men and women who work in the food establishments with tipped employees, and most of them are not working in those kinds of establishments, generating those kinds of checks, and thus those kinds of tips.

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Ken_L 02.13.14 at 4:19 am

Many Americans are very uncomfortable if they are told NOT to tip. In The Philippines, where tipping is neither normal nor expected by ordinary people, American tourists insist on scattering 100 peso bills around to all and sundry, because it’s “only a couple of bucks” (but half a day’s wages for many Filipino workers). The practice causes a lot of problems not only for local businesses who have to manage the staffing problems that arise when everybody wants to serve the Kanos and ignore the local customers and expats from Asia, but also for tourists from European countries and Australia who all get treated as rich Americans. Nevertheless, even when advised of the harm they are doing, many Americans keep doing it.

Then they complain that every time they set foot in the street they are set upon by beggars, pickpockets, bag snatchers etc. Redistributing the wealth is fine if done as an exercise in condescension, apparently, but not as a result of a sense of entitlement.

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notsneaky 02.13.14 at 4:59 am

Corey,

“The poverty rate for waiters and waitresses—who comprise the bulk of all tipped employees—is 250 percent higher than that of the workforce as a whole.”

What is the “workforce as a whole” here? Minimum wage workers or all workers? If the latter then, given that, the food industry isn’t made up of doctors, lawyers, accountants, or bankers – it is a low wage industry – that statement is fairly meaningless. Of course low wage workers will have higher poverty rates than non-low wage workers. I might be wrong about “workforce” means here though.

“Furthermore, the share of waitstaff in poverty is directly related to state wage laws. In states where waitstaff receive the full minimum wage, 13.6 percent are poor; in states with a tipped wage set somewhere between $2.13 and the federal minimum, waitstaff poverty is 16.2 percent; and in states that apply the federal subminimum wage of $2.13, waitstaff poverty rises to 19.4 percent.”

This doesn’t control even for per capita income in a given state, never mind average low skilled wages. When the authors state “directly related to state wage laws” they are grossly exaggerating (that’s what I mean about questionable methodology, and other things too). All they mean is that there’s a correlation between poorer states and states that have subminimum wages. The distribution of states with each kind of of wage floor is non random. Even without looking it up I’m willing to bet most of the “apply the federal subminimum wage” states are in the South. Mississippi, Louisiana, Alabama, probably Georgia (these are guesses but I’d put money on the table and bet I’m right). So all that correlation shows is that in poorer states there’s more poor people. Well, yes.

Pooling tips would simply allow employers to pay more non-waitstaff the subminimum wage, and on top of that take what is already a fairly limited pot of money (tips) and have it be redistributed among a larger group of people.

First sentence is not necessarily true. Even if it was I’d be willing to bet that your average dishwasher or cook would much prefer to get the subminimum wage + a fair share of the tips than minimum wage + get stiffed on the tips by the wait staff, which is what usually happens. And I base that on personal experience. I worked at some places where the culture was such that the wait staff pocketed pretty much all the tips (in fact, one place, it was so bad the owner would “pay” the kitchen staff extra, mostly in kind (i.e. mostly free beer after work) out of his own pocket to keep up the morale and ease the constant tensions) and I worked in places where we got the subminimum wage and fair tips (mostly due to the fact that there was some, uh, romantically involved couples working on both sides of the kitchen window) and the pay was so much better.

That sort of brings me to the last point. Yes, jayporter’s experience is that of a fairly “high-end” restaurant (though it depends on your definition of “high end”). But even these places employ low wage workers (note the wages he talks about in the article). My experiences aren’t that “high-end” but they pretty much completely align with what the author is describing. How many low wage jobs have you worked Corey?

And oh yeah. I did have my wages stolen. Not by some evil corporation (though I’m sure that happens) but by your storybook “Mom & Pop” that some people get so enamored with. Turns out Mom & Pop can be as greedy as the next guy (another matter is that these people aren’t exactly rich, usually pulling in something in the range of 40-70k a year, ignoring the unrepresentative tail of that distribution). Actually that restaurant went bankrupt after about 6 months, which is fast even by industry standards. Mostly because word spread around they were up to some shenanigans.

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notsneaky 02.13.14 at 5:01 am

The other sketchy/annoying thing about that EPI report is that something like 80%+ of the references is to other EPI reports. It’s not exactly like citing oneself in a paper but close. I don’t think even stuff published by Cato is that self-referential and self-enclosed.

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hix 02.13.14 at 5:32 am

Tip jobs can be nice when youre a healthy young college student with upper class parents. Such students can also say no to the new iphone and not work at all. They dont have to work the tip job anymore when they are older and thus less physically attractive which lowers tips. And they always have access to the better tip jobs in the first place. Stories along those lines are dont make a culture with jobs where one depends on tips for a living any better.

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Corey Robin 02.13.14 at 5:37 am

notsneaky: Taking your points in reverse order.

1. There are 314 footnotes in that report. For 80% (forget 80%+) to be references to other EPI reports, no more than 63 footnotes would have to be references to non-EPI sources. Yet counting back from the last footnote — #314 — I found 100 footnotes with references to non-EPI sources. And I had only gotten to footnote 209. That means…you’re full of shit.

2. “What is the ‘workforce as a whole’ here? Minimum wage workers or all workers? If the latter then, given that, the food industry isn’t made up of doctors, lawyers, accountants, or bankers – it is a low wage industry – that statement is fairly meaningless. Of course low wage workers will have higher poverty rates than non-low wage workers. I might be wrong about ‘workforce’ means here though.”

You see, there’s actually an easy way to answer this question. Follow the footnotes! If you do, you’ll see that it “workforce as a whole” refers to all workers.

3. “This doesn’t control even for per capita income in a given state, never mind average low skilled wages. When the authors state ‘directly related to state wage laws’ they are grossly exaggerating (that’s what I mean about questionable methodology, and other things too). All they mean is that there’s a correlation between poorer states and states that have subminimum wages.”

Uh, no. First, how you would even know what the methodology is if you don’t follow the footnotes is beyond me. The author — not authors — gives you a citation where, if you actually follow it, you’ll see that he is not referring to poor workers overall in a poor state but rather to tipped workers — in states that are both richer and poorer — and how their wages vary in proportion to wage laws in those states. See pp. 8-9 of the cited report. Moreover, there are only six states that don’t have some version of a subminimum wage for tipped workers. In other words, 44 do have some version of a subminimum. You think they’re all Mississippi, Alabama, and the South? The notion that this is about poor v. rich states doesn’t fit the data.

5. “So all that correlation shows is that in poorer states there’s more poor people. Well, yes.”

Well, no.

And then a lot of hand-waving about where you worked vs. where I worked.

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Corey Robin 02.13.14 at 5:46 am

Sorry, one more point. While the report cited in the footnote says that wages for all workers are higher in states with no subminimum v. states with subminimums — a fact that might point in your favor — it goes onto show that the disparity between the two types of states is much higher among tipped workers than it is among workers in general. In other words, the issue is not one of poorer v. richer states but of public policy regarding subminimum wages.

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QS 02.13.14 at 6:23 am

Not all restaurants are the same. I was a busboy in high school and made about $10/hour. That was good money at the time (late 90s), double the minimum wage and what I would’ve earned at Subway or the like. Why? Because the servers shared their tips. We, however, were unionized, which I suspect had something to do with it :)

Only now do I realize how rare it is to find organized labor in the restaurant industry.

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notsneaky 02.13.14 at 6:32 am

For 80% (forget 80%+) to be references to other EPI reports, no more than 63 footnotes would have to be references to non-EPI sources. Yet counting back from the last footnote — #314 — I found 100 footnotes with references to non-EPI sources. And I had only gotten to footnote 209. That means…you’re full of shit.

Ok, you want to argue about details rather than the point. Sure. You’re right, I was wrong. I looked at a particular section of the footnote list and noticed lots of references to epi sources. So my 80% was a quick estimate which is wrong. Most of the footnotes are either links to government documents or newspaper articles. Fine, you win on a technicality?

You see, there’s actually an easy way to answer this question. Follow the footnotes! If you do, you’ll see that it “workforce as a whole” refers to all workers.

So… I was right that the comparison is meaningless? But hey! You scored a “point” because you told me to “follow the footnotes”. I guess you can get a bonus point for the condescending tone too.

Uh, no. First, how you would even know what the methodology is if you don’t follow the footnotes is beyond me.

Well, because usually the methodology is explained in text, as in “controlling for X we find that…”. There is a footnote here and I’m looking at the source and… well first, it turns out that I was right, the states with only the Federal subminimum wage are in the South, like I said. Are you disputing something here?

you’ll see that he is not referring to poor workers overall in a poor state but rather to tipped workers — in states that are both richer and poorer — and how their wages vary in proportion to wage laws in those states.

Umm, the report itself says: “Furthermore, the share of waitstaff in poverty is directly related to state wage laws. In states where waitstaff receive the full minimum wage, 13.6 percent are poor; in states with a tipped wage set somewhere between $2.13 and the federal minimum, waitstaff poverty is 16.2 percent; and in states that apply the federal subminimum wage of $2.13, waitstaff poverty rises to 19.4 percent”

Here is what I said: “This doesn’t control even for per capita income in a given state, never mind average low skilled wages.”

You seem to be completely missing my point. I did not say that the report was referring to poor workers over all. I was specifically saying that the report, when considering the wages of *tipped workers* is not *controlling for* the general wage level in a given state.

And of course he’s looking at both rich and poor states, how else would get variation in the data here? The *whole point* is that in richer states a smaller share of the waitstaff is gonna be poorer, minimum subwage or no.

Sorry, here it’s just you not understanding some basic rather than me making any kind of error (but I didn’t look at a footnote!)

Moreover, there are only six states that don’t have some version of a subminimum wage for tipped workers. In other words, 44 do have some version of a subminimum. You think they’re all Mississippi, Alabama, and the South?

Look at figure C. You don’t see a spatial pattern here? The only Southern state which is not in the “Full tip credit” category (i.e. states with laws “enabling payment of the lowest subminimum wage ($2.13)”) is Florida (which is not South anyway). Yes, the South and the general income level of states – not tip law legislation – is driving a good chunk (if not all) of that correlation, you don’t even have to run a regression to pick that up. So, well, yes.

You seem to focus on this whole “ha ha ha you’re not looking at the footnotes” but when one actually look at the footnotes, it seems I was right.

And then a lot of hand-waving about where you worked vs. where I worked.

You brought it up in relation to the jayporter article with the objection that that only applied to “high end” restaurants (which still hire low wage workers). I only pointed out that, no, that wasn’t true. (and yeah, I’ll take my personal experiences and precise, intelligent analysis of other people who know what they’re talking about over an EPI report any day. If you have some more serious data analysis, something not from a politically driven advocacy group, then we can talk)

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Plume 02.13.14 at 6:34 am

Socialism is just common sense. It means the people own the means of production instead of a tiny minority of persons. The populace entire. It means the economy is democratized as well. This immediately makes it more likely that what is produced will benefit the whole; how it is produced will benefit the whole; and how everyone is compensated will benefit the whole.

Our system, OTOH, is set up to benefit the few at the expense of the many. Our system sets up an instant conflict between owner and worker, owner and consumer, and owner and the environment. We have several recent examples of that conflict with the environment in West Virginia and North Carolina, respectively.

Capitalism, too, requires “collectivism,” that dreaded four letter word for right-wingers, who seem to think it only happens with socialism. Capitalists collectivize workers on behalf of ownership; they collectivize consumers on behalf of ownership; and they collectivize nature on behalf of ownership.

In short, the collective works to make a tiny percentage of the population rich, instead of working for itself.

With socialism, the collective works for the collective. It works on behalf of the collective. It works to sustain, enhance, benefit, vivify an improve quality of life for the collective.

That’s just common sense. It’s actually quite mad to have any system wherein the vast majority works to improve quality of life, power, wealth, privilege and prestige for a tiny few. It’s completely insane.

99

nick s 02.13.14 at 6:38 am

I’m not going to engage with the Internet Tipping Argument That Never Bloody Ends.

I will say that ‘socialism’ in American English is a word like ‘stinky’. It’s not a dirty word, so much as a word used by spoilt children, especially young bullies. ‘You’re stinky!’ ‘No I’m not!’ etc.

100

notsneaky 02.13.14 at 6:46 am

While the report cited in the footnote says that wages for all workers are higher in states with no subminimum v. states with subminimums — a fact that might point in your favor — it goes onto show that the disparity between the two types of states is much higher among tipped workers than it is among workers in general.

It does say that doesn’t it. Except there’s no “much” before that “higher”. And the way they show that is by adding up two insignificant differences to get what appears to be a significant difference.

As we move from Low to Medium to Equal Treatment:

For “All Workers” wages increase by 5% as we move from Low states to Medium states. For “Tipped Workers” wages increase by 6.1% as we move from Low states to Medium states.

For “All Workers” wage increase by 8% as we move from Medium to Equal Treatment states.
For “Tipped Workers” wages increase by 9.3%.

You think these differences are statistically significant?

(Nevermind that in situations where there’s a lower subminimum it’s standard practice not to report all of one tips so as to avoid paying taxes. Which is why tipped workers very much prefer cash tips than tips put on a credit/debit card)

101

notsneaky 02.13.14 at 6:52 am

Compare the above % changes in the median wage by group, as you move from Low to Medium, and Medium to Equal Treatment, with the % change that one observes in the poverty rates among the waitstaff, which is about 20%.

102

Plume 02.13.14 at 6:55 am

It was always a pretty stupid idea, and incredibly naive to think that if we left economic decisions up to business owners (a tiny minority) whose interests lie in screwing over their workforce, and consumers, and the earth that some how things would work out just fine.

Liberals are fine with the bargain, generally, as they’re often a part of the technocratic management class, really don’t feel the worst aspects of the system they support, and can assuage their guilt in other ways. Belief in a social safety net and a welfare state in general gets them through, even though none of that alters the radical immorality of a system which depends on economic apartheid to function. Even though logic tells us it would be far better to have a system that didn’t need a social safety net in the first place.

(Of course, American conservatives are worse, not even wanting that social safety net in place . . .)

They’re often in the top 20% of earnings, so they think it’s “working.” And, in a sense, it does — for them and their bosses, but not for the vast majority of the world. It works for that top 20%, which also gets roughly 85% of all resources thrown its way and that percentage of production. The bottom 80% is left with 15% of the remaining resources and remnants of production.

Capitalism, contrary to what its cheerleaders say, is actually quite horrible at allocation of resources or any sense of logical distribution of compensation or reward. It pretty much top loads everything. And its cheerleaders tend to be in that part of the pyramid, either unaware how the bottom lives, or too brainwashed to care. But it’s just a lot easier to work things that way, to satisfy a much smaller percentage of the world, rather than trying to make things right for everyone.

And when “failure” is judged and discussed? Failure to make everyone’s life better is judged far more harshly than capitalism’s failure to do more than good things for the top 20%. The bar for “success” is so much lower for the capitalist system, which helps it survive as well.

103

notsneaky 02.13.14 at 7:06 am

Here’s something more serious:

http://ftp.iza.org/dp7092.pdf

They *do* find that increases in the subminimum wage increases the take home paid of tipped workers but the effect is small. And it reduces employment and hours worked.

(but be sure to look at footnote 19!)

104

js. 02.13.14 at 7:09 am

it is a low wage industry – that statement is fairly meaningless. Of course low wage workers will have higher poverty rates than non-low wage workers.

So… I was right that the comparison is meaningless?

So, you are completely in agreement that servers are low wage workers who, practically by definition, make much less than most. And you are opposed to better wages/wage protection for them because… oh wait I missed that part. Could you explain again?

105

notsneaky 02.13.14 at 7:53 am

js.

You missed a lot of parts. Of course I agree that servers are low wage workers, who make much less than most. No, I am not opposed to better wages for servers. I am simply opposed to policies which do not increase their wages (more precisely, hardly at all) but likely decrease the wages of non-servers, who are also employed in low wage jobs. Is that hard to follow? Explanation sufficient?

106

Tim Worstall 02.13.14 at 9:36 am

There’s another point about tips. The tax wedge.

In the UK tips are subject to the income tax. But not to either of the two national insurance taxes (employers’ and employees’, 14% and 13% roughly) and not to VAT (20%).

In the US tips are subject to income tax and social security but not any state sales taxes.

In terms of final income tips are thus a much more efficient method of increasing server incomes than raising prices and then paying a higher base wage.

107

John Quiggin 02.13.14 at 10:13 am

The flipside of rightwing willingness to denounce as socialist just about anything that promote equality and justice is that there is remarkably strong support for ‘socialism’ in the US, at least among the young

http://www.people-press.org/2011/12/28/little-change-in-publics-response-to-capitalism-socialism/?src=prc-headline

108

Jules 02.13.14 at 11:49 am

I have a theory that the anger / fear of the wealthy is that at some level they are consicous that the pendulum has swung a long way already, and they are marking time until it comes back the other way.

The laws of mathematics, let alone economics or democratic politics dictate this – growth in personal wealth cannot outpace the growth of the whole system forever, it can only be allocated to more or fewer hands.

The higher the level of inequality, the shriller the rhetoric – because the deeper the fear that ‘this is it’.

But particularly as pace Plume’s comments about the top 20%, the size of the naturally supportive middle class is shrinking.

We’re top 10% by income, and that gets us what historically would be categorised as a lower middle-class lifestyle – a small 3-bed terrace, a mid-range family car, and enough disposable income to not worry about food or heating – but certainly not the lifestyle that an 18 year old me would have associated with ‘in the top 10%’.

By which I mean, I don’t think our lifestyle would have been any different, more that it’s indicative of falling living standards and the concentration of wealth that lower-middle class is now within the upper decile.

109

QS 02.13.14 at 12:48 pm

John, given the total nebulousness that is socialism (as an ideology) in America (remember how Obama is a socialist?), I really wonder what “socialism” those young people are supporting.

110

MPAVictoria 02.13.14 at 1:26 pm

“John, given the total nebulousness that is socialism (as an ideology) in America (remember how Obama is a socialist?), I really wonder what “socialism” those young people are supporting.”

The well paying jobs with benefits, cheap post secondary education and affordable health care socialism.
/Which really is all that most people want.

111

notsneaky 02.13.14 at 2:03 pm

The well paying jobs with benefits, cheap post secondary education and affordable health care socialism.
/Which really is all that most people want.

…and which, except for the second one, never existed in actually existing socialism.

112

Random Lurker 02.13.14 at 2:33 pm

@nonsneaky 111
Well it depends on what do you mean by “socialism”.
If you think that welfare-state like postwar western europe is “socialism”, then it provided good jobs and good healthcare.

The problem is exactly that some people conflate capitalist welfare state with the Soviet Union or China with a very fuzzy meaning of the term “socialism”.

Anyway, actually soviet Russia provided free healthcare for all its citiziens (I don’t post the link for fear of moderation, but just search for wikipedia > healthcare in Russia > history); I think the same happens in Cuba (at least formally, from the wikipedia article on cuban healthcare it appears there is a big “black market” in it), so it’s two on three.

Also, for what I know, differences in income were small in soviet states relative to capitalist states, so when you say that actually existing socialism didn’t deliver good wages, you basically mean that those economies weren’t very productive, not that they didn’t give good wages relative to their capabilities.

I agree that the soviet states were on most metrics worse than (welfare) capitalist ones, but this is not a good reason to make them look worse than they actually were.

113

MPAVictoria 02.13.14 at 2:47 pm

“…and which, except for the second one, never existed in actually existing socialism.”

Oh go away.

114

Barry 02.13.14 at 3:13 pm

notsneaky 02.13.14 at 1:42 am

“It’s not the servers who get screwed and I seriously doubt that ANY restaurant where the employer is engaging in any kind of “wage theft” survives for any period of time. Read that jayporter article at the beginning, it lays out pretty well.”

You forgot to say ‘it’s just Econ 101′.

115

Anarcissie 02.13.14 at 3:18 pm

@112 — A reasonable argument can be made that the Soviet Union, China, and Cuba were and are not examples of socialism, insofar as socialism is different from capitalism. When Lenin and his friends came to power in Russia, they instituted a system Lenin called ‘state capitalism’, in which the management structure remained, but the government took the place of private capitalists in owning and controlling the means of production overall. The pyramid of authority remained unchanged. Lenin recognized that this arrangement was unsatisfactory (from a socialist point of view) and urged the development of local cooperatives, but he died before he could do anything about it, and his successor found the centralized authoritarian quasi-capitalist system much more to his liking and so it continued and was imitated elsewhere. While the good old will to power was probably their main motive, one should recognize that during most of its career the Soviet Union was being attacked or threatened militarily and economically in an almost fanatical, jihadist manner by the capitalist and fascist states, which considerably restricted the choices of its rulers and made a centralized system look necessary. The same has been true of China and Cuba.

116

notsneaky 02.13.14 at 3:18 pm

Well it depends on what do you mean by “socialism”.
If you think that welfare-state like postwar western europe is “socialism”, then it provided good jobs and good healthcare.

You’re right it does depend. I don’t consider postwar western europe as “socialism” anymore than I consider, say, Obamacare, “socialism”. Just good ol’ capitalism with government provision of some public goods and some regulation.

Anyway, actually soviet Russia provided free healthcare for all its citiziens

The question here is really of quality. Though I’ll grant that countries which became socialist in places where there was any modern healthcare system to begin with, were somewhat successful – up to a point – of improving the general state of health.

Barry,

Nah, it’s mostly the personal experience of someone who’s actually worked low paying jobs, rather than a bunch of folks who haven’t, but who like to pontificate about people who work low paying jobs.

117

MPAVictoria 02.13.14 at 3:28 pm

“Nah, it’s mostly the personal experience of someone who’s actually worked low paying jobs, rather than a bunch of folks who haven’t, but who like to pontificate about people who work low paying jobs.”

Oh? You know the job history of everyone posting here? That is extraordinary. However extraordinary claims require extraordinary evidence so tell me what job I did for 4 years will putting myself through University. And be specific.

118

Vanya 02.13.14 at 3:31 pm

Tipping is a middle-class/upper middle class issue. Most workers in the service industry in the US work in fast food establishments like McDonalds, Subway or KFC where no one tips. Tipping is not customary in pizza/sub shops either, although thanks to the coffee shop trend you will now often find a cup on the counter. Most Americans probably go through life tipping only on very rare occasions.

As an American living in Europe, I can certainly see the advantage of tipping from a customer perspective. In America family owned restaurants can afford to staff up during busy times without incurring a lot of overhead – you let the customers cover most of the cost of the extra employees via tips- it’s a variable cost model. In Austria restaurant owners don’t have that option. Every waiter is an employee – as a result having a wait staff of only two people (and no bus boys) to handle 15-20 tables during busy evenings is not uncommon in Vienna, and the service can be frustrating for people used to American speed and friendliness. Europeans will often counter that tips encourage the wait staff to generate turnover and “push” you out the door in America – I’ve honestly never found that to be the case.

119

Curmudgeon 02.13.14 at 3:34 pm

Not sure about socialism or any of the usual labels. But to get back to the original premise, I think that once you get past a certain income/net worth, it’s really just a matter of keeping score against your peers. You don’t even think of the lower strata, it’s where you rank on the Forbes 400 list that matters.

People often think that a certain income/net worth buys you personal freedom, but it really just buys you more chains. That’s why the Janis Joplin line of the 60’s resonated with us: “Freedom’s just another word for nothing left to lose.”

120

notsneaky 02.13.14 at 3:47 pm

MPAVictoria,

That wasn’t addressed to you.

121

MPAVictoria 02.13.14 at 3:55 pm

“That wasn’t addressed to you.”

And these unspecified people it was addressed to, you know them personally? Well enough to know their work history?

122

bob mcmanus 02.13.14 at 4:01 pm

Mediations Evan Mauro Death and Life of the Avant-Garde

the rise of immaterial labor, or the transformation of previously
semi-autonomous spheres like intellectual and cultural work, as well as the very
production of subjectivities, into a new source of the production and accumulation
of value. Put differently, demands for personal or collective autonomy can no longer
be positioned as critiques of an impersonal and alienating wage-labor system, but
are instead requirements of the system itself. From the proliferation of personalized
goods and service economies, to the demand to view one’s own employment as the
never-ending expansion of human capital and transferable capacities under flexible
employment regimes

As all our proletariats become precarious entrepreneurs, is the Fordist family-wage consigned to the dust-bin of state socialism and welfare capitalism? Yup.

Listen to the workers. This waitress is right and the academics and liberals are wrong. We are not getting it back. History doesn’t move backwards.

123

Plume 02.13.14 at 4:19 pm

Hope everyone hit by the snow is safe and warm . . . .

On the issue of tips. I worked far too long in restaurants, putting myself through three rounds of university that way, and doing restaurant work too long after graduating with my first degree. Could not find a decent job with a degree in Art. Later went back to get something more “practical.”

I bar-tended, waited tables, was a bouncer. In two restaurants in my experience, the owner forced us to give back a portion of our tips to pay for his credit card costs. I quit both, in anger, after learning this. Others would try to get money back to pay for uniforms and other items. As far as I knew, they didn’t ask this of their other staff, though they were making so little they couldn’t have afforded it.

It’s important, especially for reasons of solidarity, to know first hand how the other half lives. I have two college degrees, and have never made much money. I’ve done working class jobs my entire adult life, from carpentry, to mason’s helper, to bouncer, to warehouse work, to restaurants and then, finally, 15 years in Internet tech support.

Some might find the latter to be out of the “working class,” but if pay is any measure, it’s not. Especially if you throw in scheduling, odd hours (I worked until midnight for the shift diff), etc.

Socialism in America: As Steinbeck was reported to have said, it would never take hold here because we’re all just temporarily embarrassed millionaires. I think there is something quite brilliant in that insight.

124

Random Lurker 02.13.14 at 4:21 pm

@notsneaky 116

“The question here is really of quality.”

I think that the question is really of quantity, not of quality.
The problem is that, due to industralisation, living standards increased a lot in the last centuries. If you say “decent healthcare”, you mean something that, for example, Abraham Lincoln can only dream of.
Since we live in a much more affluent world, our opinion of what is a decent healthcare is different from Lincoln’s opinion; ditto for real wages.

The question is, when you say that soviet real wages were low in real term, what is the benchmark? If your benchmark is today usa, or the contemporary USA of the time, you sure are correct, however it is not obvious to me that this is a good comparison because russia was poorer than the USA before communism, during communism, and it is still poor in comparison today, so it is not obvious to me that it is a good comparison.
One could say that Russia/USSR is and was 80 years late vs. the USA and that with this benchmark the USSR was good (I don’t think this would be a better benchmark, but it is not less logical than keeping contemporary USA as a benchmark).

from the wikipedia page “List of regions by past GDP (PPP) per capita” (still no link because of moderation):

GDP (PPP) per capita in 1990 International Dollars

____________ (first attempt of HTML coding) ____________
Country|Ƒ|1820|Ƒ|1870|Ƒ|1913|Ƒ|1950|Ƒ|1973|Ƒ|2003
USSR|Ƒ|688|Ƒ|943|Ƒ|1,488|Ƒ|2,841|Ƒ|6,059|Ƒ|5,397
USA|Ƒ|1,257|Ƒ|2,445|Ƒ|5,301|Ƒ|9,561|Ƒ|16,689|Ƒ|29,037

____________ (second attempt of HTML coding) ____________
Country 1820 1870 1913 1950 1973 2003
USSR 688 943 1,488 2,841 6,059 5,397
USA 1,257 2,445 5,301 9,561 16,689 29,037

125

Random Lurker 02.13.14 at 4:23 pm

____________ (third attempt of HTML coding) ____________
Country  1820      1870      1913     1950      1973       2003
USSR     688       943      1,488     2,841     6,059      5,397
USA      1,257     2,445    5,301     9,561     16,689     29,037

126

Plume 02.13.14 at 4:33 pm

MPAV #121,

It’s been my experience that conservatives, when directly confronted with the results of our obscenely immoral economic system, generally attack the person who brings the stats and the anti-capitalist analyses. The less sophisticated usually push the “Get a job!” meme, or “You’re just jealous!” The more sophisticated trot out the latest billionaire-funded lie from Heritage.

In recent times, though, I’ve been saddened by the degree to which liberals jump into the mix. They tend to support the stats on inequality, but refuse to take the next logical step, which is to dump the system that creates the inequality in the first place. They still hold firm to the idea of tweaks and reforms, and if someone proffers those, they remain in good standing. But if they propose stronger medicine, then those same liberals can be every bit at ad hominem as conservatives.

Suddenly, it’s no longer the system on trial. It’s the person wanting a better world.

I moved from liberal to leftist once it finally dawned on me that my analyses of our economic, political and social maladies called for much stronger medicine. As a liberal, I deduced what was wrong, but couldn’t bring myself to “let go” of the very system that caused those social, economic and political ills. Nothing has been more liberating for me than to dump both capitalism and its cheerleaders. Well, prior to that it was the escape from organized religion, which began for me at age nine when I first read world mythologies.

127

Plume 02.13.14 at 4:38 pm

The belief in capitalism, or that it can be reformed, tweaked or tamed, is all too much like religious subservience. Which is in keeping with the way businesses are set up in the first place — if they aren’t co-ops. All hail the leader!! I will put all my faith in him or her!!!

Instead of “Jesus take the wheel,” you have “Capitalist bossman or bosswoman take the wheel!!”

128

Plume 02.13.14 at 4:51 pm

Anarcissie #115,

Well said. All of it.

As mentioned before, people often forget how dictatorial so-called “liberal democratic” states become when faced with existential threats via world wars, etc. They pretty much all dump their constitutions and go autocratic.

Is it any wonder that Russia, China, Cuba et al did so? Especially when there was really no let up in their being under siege from the rest of the world. We’ve had our embargo on Cuba, for instance, for more than 50 years now.

Counterfactuals: Just what would have happened in those countries if the world had truly embraced their revolutions? What would have happened if the world actually sent them humanitarian aid, instead of trying to crush them? What would have happened if the world had found a way to accommodate alternative economics? Personally, I have no doubt that the majority of those countries would have managed their way out of state capitalist, autocratic, dictatorial hell.

If they ever had any intention of establishing actual socialist states, full on democracy is a requirement, including the economy. Full on ownership of the means of production must go to the people — not to political parties, dictators or private entities, etc. etc. All of that means an end to autocracy.

129

Ronan(rf) 02.13.14 at 5:06 pm

There are, of course, different seasons of this stuff. I wouldnt be surprised if most people here hadn’t at some stage worked a minimum wage job, or considering the forum done the ‘7 years on 16k at grad school thing.’
Obviously, though, this is completely different in every way than working in a low paid job with X (where X is..with no real opportunity of moving out of it ..or paying off debt.. or bringing up children.. or dealing with some class of addiction..or struggling with a serious medical condition.. or dealing with a feckless partner )
Which is why we need to look at the totality of the situation, which is an obvious and largely inane point, but still..

130

Anarcissie 02.13.14 at 5:12 pm

bob mcmanus 02.13.14 at 4:01 pm @ 122:
‘… As all our proletariats become precarious entrepreneurs, is the Fordist family-wage consigned to the dust-bin of state socialism and welfare capitalism? Yup. …’

Since the bourgeoisie historically exerted control over the proletariat and other lower classes mostly through the wage/welfare nexus, the transition of large numbers of workers to petit-bourgeois status (‘precarious entrepreneurs’), however precarious, suggests a loss of ruling-class authority and control, that is, a possible onset of anarchy or ‘lawlessness’. Is there evidence of such a trend?

131

Plume 02.13.14 at 5:22 pm

Ronan #129,

Well said. But increasingly, even those with higher ed and middle class backgrounds aren’t assured of anything — of working their way out of debt, etc.

I worked hard to get my first degree, couldn’t find a decent job, decided to go back for a Masters, and then became homeless. I was on the edge enough that the loss of one crappy restaurant job pushed me over the brink, I could no longer afford even a room with a bunch of students, and had no where else to go.

Belongings in my car, or stuffed in lockers at my university, I showered in the gym, slept (illegally) where I could on campus, and tried to take classes while all of that was going on. It was too ironic that one of my classes was French Existentialism and Alienation in Literature, etc. etc. I felt like I was living through a Beckett novel or some absurdist play.

And that was in the 80s. Things are far worse now.

132

bob mcmanus 02.13.14 at 5:30 pm

130: Probably not.

Used to be you stopped at the stoplight, even if no one was there, because you internalized the hegemony.

Since they have now added cameras to the signals, they no longer need to manufacture consent.

And it isn’t petit-bourgeois status, except maybe for the top 20% who will be citizens. The rest of us are sub-proletarians, almost abject.

133

Anarcissie 02.13.14 at 5:54 pm

bob mcmanus 02.13.14 at 5:30 pm @ 132 — Speaking of which, one of the things I thought might be evidence of a loss of control is the vast, absurd upsurge in surveillance, governmental, corporate, and private.

134

MPAVictoria 02.13.14 at 5:56 pm

“Obviously, though, this is completely different in every way than working in a low paid job with X (where X is..with no real opportunity of moving out of it ..or paying off debt.. or bringing up children.. or dealing with some class of addiction..or struggling with a serious medical condition.. or dealing with a feckless partner )”

Damn straight.

135

bob mcmanus 02.13.14 at 6:21 pm

133: I don’t necessarily see a loss of control so much as a loss of Foucauldian discipline, a loss of hegemony. I am honestly trying to think if there is any kind of upsurge in extra-legal resistance, crime, underground economy. Bittorrent? I honestly don’t know. I suppose I would predict a decentralization of discipline and punish or control structures. The producers of Dallas Buyers Club are themselves searching out and sueing 31 downloaders. So maybe yes, more anarchistic, with facilitating institutions available for use and abuse. Part of the point is that is difficult to impossible to get a grip on, totalize, create a narrative that sustains.

Endnotes, No 3 I think, has an exhaustive description of 2011 British riots, history and causation, etc. There is much that is interesting there.

136

nick s 02.13.14 at 8:59 pm

In terms of final income tips are thus a much more efficient method of increasing server incomes than raising prices and then paying a higher base wage.

Always good to see Worstall seeking whatever justification he can for modern-day serfdom.

137

js. 02.13.14 at 9:32 pm

I am simply opposed to policies which do not increase their wages (more precisely, hardly at all) but likely decrease the wages of non-servers, who are also employed in low wage jobs.

Oh, right! I’d forgotten the bit about how the minimum wage is really the worst thing that’s ever happened to low wage workers. Thanks for reminding me! Thanks too for reminding me how the years I thought I’d worked in low wage jobs are really a figment of my imagination.

138

Chris Warren 02.13.14 at 10:35 pm

Random Lurker

It seems strange that someone would upload data without citing the source or context.

You have to remember that the USA exists at one pole of a imperialist economic empire and could not achieve the figures by mere capitalism. Where you only have capitalism in America (eg little imperialism), you get dire poverty, low wages, few services, and social decay.

When you look for a benchmark, you have to ensure that your data is not affected by artificial circumstances.

Why did you not look at the USA capitalism in Micronesia, Yam, Marshall islands, Marina islands, Guam, Virgin Islands, Pueto Rico and satellites Philippines, Mexico, etc.

139

JPL 02.14.14 at 3:03 am

Commenters and even the OP have turned to the long-running tip thread and to the conception of the term ‘socialism’ in the US, but the very interesting question at the heart of the OP needs to be addressed at some point: Does the billionaire have a duty not to be rich? Does it violate ethical principles to pursue money beyond necessity? I would say yes, and that a sound ethical argument could be provided to support this answer: that to have the pursuit of money as the goal of one’s actions, after the point at which one has enough to live in reasonable comfort and security, is indefensible ethically. In my comment under Chris’ post I mentioned the problem of the tendency of excess money to corrupt the public policy making process through the tendency of the power principle to override the application of ethical principles (of equivalence of value of agents before the ethical laws and of equitable results, of harm and benefit), citing the Deaton interview, but it’s also indefensible (I think Chris’ point) for someone to possess enormous excess wealth just so they can feel big about themselves while millions of people are suffering; the excess money could probably be used for public goods (to e.g., give free universal access to a university education and to lifelong learning by providing free access to all scholarly output (books, scholarly journals, etc.)).

Related to this question is the problem of the quest for status in response to a conventional view of what is valued. We need to detach the idea of accumulation of wealth from the definition of ‘success (in life)’. Extremely wealthy people should not be glorified, but vilified as morally grotesque.

Then the question of motivation for action and effort: the field of economics seems to accept the absolute and timeless validity of the profit motive as a reason for why anything gets done. People at the current time as a matter of fact do seem to follow this principle in their economic related activities; but the quid juris question always arises: is it right for us to have as our main reason for action the pursuit of money? I would say no. The motivation intrinsic to the activity or the desire to act on the need to reduce human suffering are not only preferable but effective. (E.g., we have good teachers who are not motivated by lust for wealth). A serious CEO has the duty not to demand but to refuse the astronomical and unbalanced compensation packages they are offered; and when they don’t refuse, they should be criticised.

The ethical principles underlying these conclusions can be stated explicitly. Philosophers should be able to do this. Let’s have the fully articulated argument; the ideas need to be refined. The current imbalance of wealth and opportunities for a decent life is unsustainable.

140

Anarcissie 02.14.14 at 3:55 am

Either everybody gets the same (communism, at least of the social product) or some get more than others, in which case you’re on the slippery plutocratic slope.

141

Plume 02.14.14 at 4:21 am

Actually existing capitalism:

I really don’t see a legitimate rationale for leaving the vast majority of humanity behind, all so the top 20%, give or take, can feel good about the tradeoffs they’ve made — because they reap the rewards. There is really no moral or ethical rationale for someone making a ton more money than someone else, and no way to explain that massive difference logically. It’s arbitrary, even within the system of capitalism, even according to its own rules and history — it’s arbitrary.

Of course capitalism isn’t the universe, and it’s not the world, and it hasn’t encompassed all of history, so we really can view it from outside its closed doors. And the view from outside shows how positively whacked it is to even want a system based entirely on economic apartheid, that naturally undermines democracy, naturally creates mountains of waste, debt, pollution and dislocation and does so to benefit the few at the expense of the many — and the planet.

Now, one can understand plutocrats wanting such a system. They set it up for themselves in the first place. If triangles worshiped a god, etc. etc. But it’s completely illogical and irrational for those left behind to want it, and even those struggling to keep from being left behind.

Capitalism, at best, has a natural constituency of the top 20% — at best — and a natural opposition of the bottom 80%. Socialism is roughly the reverse of that, depending upon how close one can get to the real thing. And the real thing would pretty much bring along all but the top 1% after people got used to the idea of not having to make those tradeoffs anymore, having a full say in one’s economic destiny, having equal access to all the goods of society, etc. etc. It wouldn’t take long before the natural constituency for real socialism rose to roughly 95-99%.

It’s unlikely the truly privileged elite will ever want it. But, ya know, why on earth should we give a shit? That’s just more of that bizarre tradeoff nonsense.

Conservatives say, “We should be willing to let everyone but the 1% drown, just for the chance at the brass ring.” Liberals, being slightly more sane, say, “We should be willing to let 80% drown, for a shot at a good life for the 20%.”

Actually, and obviously, we shouldn’t even have the power to write off other people, especially not 80% of humanity. Write yourself off if you want. We don’t give you permission to do more than that. Stop thinking your tradeoffs are worth the misery and poverty and ecological disasters that come with your chosen economic system. It shouldn’t be your call.

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Plume 02.14.14 at 4:49 am

And note the difference here:

Choosing real socialism over capitalism means no one drowns. Even the top 1%. The worst they can do under the new dispensation is receive all the great benefits others in society receive. They will lose their perch on top of the mountain. That’s it. But they won’t go hungry.

The reverse tradeoff doesn’t offer that, of course. It says, screw the bottom 80% or more so we at the top can live like kings and queens. Or, so a few of us just below that can rise to living like kings and queens. And that’s supposed to be worth it all.

To whom?

It’s a no-brainer. Construct a society that leaves no one behind, even the formerly rich . . . or one that leaves the vast majority behind just so a tiny few can make it to the top of the mountain.

Seriously, how could any thinking, feeling human being choose the latter?

143

Chris Warren 02.14.14 at 5:26 am

Anarcissie

Huh?

Under communism, given certain conditions, everyone does not get the same. They get what they need.

Under socialism some get more than others if their productivity varies. This is not plutocracy.

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Anarcissie 02.14.14 at 2:15 pm

@143 — ‘Need’ is problematical. Clearly, human productive capability by far exceeds basic biological needs like minimal food and shelter. Above this level, need begins to look more and more like desire, and whose needs/desires should be given the greatest consideration? Better to divvy up the goods and services more or less equally.

As for ‘to each according to his work’, that is, productivity, I think anyone who studies social production closely, as in a corporate environment, is likely to agree that the set of people who actually produce, those who appear to produce, and those who are rewarded for producing, are three different sets of people, ordered by political skills and powers. In the case of the first set, it is usually impossible to determine who is actually most productive, because often the skills and energies brought to the project are so radically different: politicking, management, accounting, design, execution, administration, worker services, policing, ‘fixing’, serving as scapegoat, and so on, don’t look much like one another and are not commensurable. Pretending they are, and declaring ‘to each according to his work’, results in the political leadership getting the nicest dachas, just as in liberalism-capitalism (although maybe without the grotesque accumulation of unconsumable numbers).

145

Random Lurker 02.14.14 at 2:33 pm

@Chris Warren 138

Random Lurker
It seems strange that someone would upload data without citing the source or context.

Uh? I said: “from the wikipedia page “List of regions by past GDP (PPP) per capita” “
Here is the link:
http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)_per_capita

I agree with you, though I think that soviet socialism was still an underperformer (but not as much an underperformer as it is usually made to be).

146

Plume 02.14.14 at 4:26 pm

In society wherein the people — literally, the people — own the means of production, would toxic slime be allowed in our food?

Uh, no.

In a society controlled by the rich, one that puts profit at the top of all things, this is our norm. From Alternet:

Five messed up things in your food

And, of course, this is only the tip of the iceberg. The article just lists five. And that’s just stuff that goes directly in our food, put there on purpose. It says nothing about all the crap that finds its way into the food and water chain by accident, cough cough.

Again, our system is absolutely insane. To put soooo much power into the hands of people whose number one goal is to enrich themselves — societal good be damned.

147

Ronan(rf) 02.14.14 at 7:03 pm

Plume @131

Only seeing this now, fair points. Sorry to hear about the difficulties you had ….

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Plume 02.14.14 at 7:15 pm

Ronan @147,

Thanks. It was a very tough period of time for me, and I was so close to the edge. Must go on, can’t go on, must, can’t, etc. etc. Luckily, I was still young enough to have a bit of fight left in me, and I eventually pulled through. But I do know first hand what it’s like to be homeless and hungry and very close to losing all hope.

149

Chris Warren 02.15.14 at 4:21 am

Random Lurker 02.14.14 at 2:33 pm

Good, – got it.

Around 1990 I did the same exercise using data from the UN Human Development Reports. The Soviet data was quite respectable given that so much manpower was diverted to the military. The Russian Academy of Sciences felt that this was a deliberate tactic by the USA. However in the mid-1980’s Soviet officialdom was concerned about an emerging slowdown.

150

hix 02.15.14 at 7:22 am

Reading the headlines today, it really is incredible. VW workers just voted against unionisation (spot 1 on German google business news, not shown at all in US google news…) and Tom Perksin thinks billionaires should not just keep their money, but get more votes for it as a bonus priviledge. To be more precise, he thinks he can get away saying what he thinks in public.

151

Fu Ko 02.17.14 at 1:09 am

On the rarity of servers actually making below the minimum wage in tips — this might be rare *on average*, but is very frequently the case during many restaurant’s “slow” periods. And it’s important to note that it is by no means random which servers serve during the “slow” periods. It is very common for restaurants to use the threat of assigning hours during slow periods as a mechanism of maintaining worker discipline.

Regardless of the minimum wage laws, this creates a mechanism by which all servers are subject to large swings in pay at the whim of management — swings which probably do, when they occur, frequently dip below the minimum wage.

Incidentally, another very common practice is for servers who are making less than the minimum wage to be assigned non-serving duties (e.g., cleaning), yet not receive the minimum wage during the performance of those duties.

152

Main Street Muse 02.17.14 at 1:20 am

Tipping, Obamacare, Reservoir Dogs and Socialism! This is quite a thread…

“Me: “We don’t tip because we pay decent wages.”
Sales person (with voice raised) “But that is socialism!”

I see now why the Tea Party can plant such deep roots in the fertile soil of the American psyche….

153

LWA (Liberal With Attitude) 02.17.14 at 1:50 am

A very late comment to a good thread, but I wanted to get some feedback on something here.
Do property rights even exist, on wealth above that which is tied to one’s labor?

I can see the moral logic of asserting a natural right to property that is the fruit of one’s labor and effort.
But even the most wealthy superstar performers in virtually any field are compensated only in the tens of millions, not billions.
To get a billion, you need to invest, i.e., gamble, and get lucky. The rewards, the value accumulated, aren’t the result of effort on the investor’s part, but by the labor and effort and talent of thousands or millions of others.

This isn’t to suggest that investors are entitled to nothing- but it does suggest that increasingly high wealth can justly be claimed by society, rather than the investor.

154

LWA (Liberal With Attitude) 02.17.14 at 1:56 am

Oops- posted before reading JPLs comment at 139

155

Shirley0401 02.17.14 at 4:50 pm

Bit late to the party, so I’m not sure if anyone will see this, but I wanted to put my $0.02 in…

@139
“Does the billionaire have a duty not to be rich? Does it violate ethical principles to pursue money beyond necessity?”
I’ve given a lot of thought to this question, and I would agree the answer to both questions is “yes,” but add that there are a lot of definitions of “rich.” But I think a lot of people would say no to both (possibly with the qualification that we add “as long as it doesn’t hurt anybody else,” which is only more problematic when one considers the cumulative impact of everyone seeking extra wealth seemingly all the time). There is a real difference in worldview reflected in how one answers these questions, which is one of the reasons people on the Right and people on the Left seem to have such a hard time even considering that the other side’s arguments even have the potential for merit. Having lived in South Carolina for a few years, I’ve gotten to know more conservatives and libertarians than I would have ever expected to know, and for lack of a better phrase, they just think differently. While often kind and generous in personal interactions, they’re often incredibly self-centered when it comes to making decisions and practicing ethical behavior. As religious as many of them are, their treatment of other people can be very instrumental (if that’s an appropriate use of the term). And they assume everyone else is like them, and will try to screw them over (the way they would) if given the opportunity. But, yeah. Back to the question of wealth: I know a lot of people who would assume you’re being manipulative by even asking, as their assumption is that EVERYONE wants to be rich, and anyone claiming otherwise is probably lying. When you think this way, it’s easy to justify your own selfishness. (Note: There’s also the whole religion thing: dominion, belief that God will never allow humans to destroy the planet, &c. Which I’ve discovered is a belief that people actually have.)

“The motivation intrinsic to the activity or the desire to act on the need to reduce human suffering are not only preferable but effective. (E.g., we have good teachers who are not motivated by lust for wealth). A serious CEO has the duty not to demand but to refuse the astronomical and unbalanced compensation packages they are offered; and when they don’t refuse, they should be criticised.”
This is an interesting point, and one I don’t see being made as often as is warranted. As an educator, I’ve known so many teachers who were burned out, fed up, or otherwise no longer in it for what most people would hope are the right reasons. Wouldn’t it be better, for all involved, if they could transition to doing something else, without the threat of default or destitution? And re: CEO pay, if anything does a better job of providing evidence that the market system naturally favors those who have already been favored, I don’t know what it is. Are governments corrupt? Sure, some are, but at least they have to hide it, and answer for it when it comes to light. But the corporate structure of many companies is explicitly designed for the extraction and upward-funnelling of value. It might not be illegal, but it sure is corrupt.

“The current imbalance of wealth and opportunities for a decent life is unsustainable.”
This, for me, is the one about which I find it so hard to even picture feeling otherwise. The trends we’re following (more consolidation, more regulatory capture, more privatization, fewer public services, more income disparity), if we continue to follow them, really do point towards some disastrous consequences.

@142
“Construct a society that leaves no one behind, even the formerly rich . . . or one that leaves the vast majority behind just so a tiny few can make it to the top of the mountain. Seriously, how could any thinking, feeling human being choose the latter?”
Unfortunately, many would answer your question, which I think you meant to be rhetorical, with something resembling the following: “Because without the possibility of attaining great wealth, we won’t strive as hard or make/do as much, and the human spirit will resolve into a shadow of its former greatness.” And then maybe top it off with something about how we “need to accept that there will be losers if we want there to ever be winners.”

Oh, and re: tipping, I think the alternative minimum wage has managed to last this long because it works for the both the employer and the employees affected. (Every waiter I’ve ever known probably underreported their tips as a matter of course.) I actually worked at a restaurant where we pooled tips, and split them up at the end of the shift. It worked great, but we were a small restaurant, where we could see the benefits of doing so in action (all staff helping one another out). We also didn’t have a lot of turnover. I could imagine it would not go over so well at a larger restaurant, where there might be feelings that so-and-so wasn’t pulling their weight, &c. But as far as employers calling tips something else, and keeping the money, or redistributing as they see fit, I think most patrons of most restaurants would be offended to find out that was happening.

156

Fu Ko 02.18.14 at 7:56 am

“Because without the possibility of attaining great wealth, we won’t strive as hard or make/do as much, and the human spirit will resolve into a shadow of its former greatness.”

Indeed, that is the argument put forth. Of course, it presumes a world-view where the image of “the human spirit striving for greatness” is not (say) Einstein or Hilbert or Da Vinci, not Beethoven or Proust or Van Gogh, but Steve Jobs, Rockefeller, Sam Walton…

157

JPL 02.18.14 at 10:40 am

FuKo @156
Right. That “argument put forth” has always struck me as morally corrupt. If something is worth the effort, is a good thing to do and needs to be done, you should do it and make the effort anyway without the irrelevant “reward” of excess riches; if it’s not a good thing to do and you would only do it with the expectation for excess money as a result (e.g., securitizing home mortgages, merging two cable giants, etc.), you probably shouldn’t be doing that.

It’s part of a larger problem. Economic interactions should be viewed as subordinated to ethical principles; but as it is now, with the reigning market absolutism, we don’t have that: “rational action” means maximizing wealth (“greed is good”), and the profit motive is taken as axiomatic. But this can’t be the only possible foundation for economic activity for the whole future of the human spirit.

158

GiT 02.18.14 at 11:55 am

@135 “To get a billion, you need to invest, i.e., gamble, and get lucky. The rewards, the value accumulated, aren’t the result of effort on the investor’s part, but by the labor and effort and talent of thousands or millions of others.”

Well, the investor would deny the “i.e.” and posit that making good bets does require labor and effort, as well as facing risk and often incurring losses. Which is all true, to an extent.

Following 155 on @139…

“Does the billionaire have a duty not to be rich? Does it violate ethical principles to pursue money beyond necessity?”

I agree that the answer to (1) is unambiguously yes. Don’t agree about (2) though. Of course certain pursuits which generate money are unethical, or only ethical in a state of dire necessity. But “pursue money” often just means “pursue things other people will pay you to do,” e.g. “pursue others’ desires.” There are good ways and bad ways of doing that, and money has its merits and demerits as a proxy guiding the pursuit, but all that only means that orienting one’s economic activity to wherever one can get a high return is only conditionally good or bad.

@156 “Indeed, that is the argument put forth. Of course, it presumes a world-view where the image of “the human spirit striving for greatness” is not (say) Einstein or Hilbert or Da Vinci, not Beethoven or Proust or Van Gogh, but Steve Jobs, Rockefeller, Sam Walton”

You give the argument too much credit, in suggesting that Steve Jobs, Rockefeller, or Sam Walton offer any evidence in its favor; none of them were likely to have been any less industrious in the face of diminished wealth and income.

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Fu Ko 02.18.14 at 9:02 pm

It’s not just a matter of ethics, but facts. Are the people who strive and accomplish the most identical with the people who make the most money? You can only get there by having literally no independent standard of accomplishment but money-making. (Which is not even logically consistent, since the price of things can change. Or are we to believe that Van Gogh added no value to those canvasses, but the art speculators who eventually sold them for millions did the real work?)

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