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Thread: Anyone take a look at Google's Schmidt's middle class wage increase challenge?

  1. #1
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    Default Anyone take a look at Google's Schmidt's middle class wage increase challenge?

    Goal is to raise 100,000 middle class workers' salaries by $10k each by end of 2021. They just extended the date to December. Here are the details.

    Looking through it, though, I realized the goal covers total compensation. If healthcare costs rise by about 8% per year on an average cost family plan, you're halfway there. Get about a 3% inflation rate too on a $50k salary, and you just might be able meet the goal without increasing real wages at all. Cynic in me wants to copy/paste standard union contract with 3% annual wages and submit it as my "unicorn idea."

    But it is another interesting way to look at why wages never go up in America. It can easily cost a billion more to employ 100,000 people at median wage with constant health benefits by the end of 2021 than it does today, and all that without employees seeing any real benefit from it whatsoever. Maybe half of that will be eaten by inflation. The rest will be sucked into the voracious maw of the healthcare sector. A broken arm will cost double what it does today in 10 years, and costs double today what it did 10 years ago. And it's the same x-ray and 5 minute application of a roll of shitty fiberglass that it has been for 40 years.

    In so many ways, the central problem of the American economy is healthcare. We've got to get off this merry-go-round and make the madness end. We're so addicted to the market, or even illusions of the market, that we're willing to sacrifice all our upward mobility and discretionary income to it. It's madness.
    Last edited by dcarrigg; 11-17-18 at 03:19 PM.

  2. #2
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    Default Re: Anyone take a look at Google's Schmidt's middle class wage increase challenge?

    Quote Originally Posted by dcarrigg View Post
    Goal is to raise 100,000 middle class workers' salaries by $10k each by end of 2021. They just extended the date to December. Here are the details.

    Looking through it, though, I realized the goal covers total compensation. If healthcare costs rise by about 8% per year on an average cost family plan, you're halfway there. Get about a 3% inflation rate too on a $50k salary, and you just might be able meet the goal without increasing real wages at all. Cynic in me wants to copy/paste standard union contract with 3% annual wages and submit it as my "unicorn idea."

    But it is another interesting way to look at why wages never go up in America. It can easily cost a billion more to employ 100,000 people at median wage with constant health benefits by the end of 2021 than it does today, and all that without employees seeing any real benefit from it whatsoever. Maybe half of that will be eaten by inflation. The rest will be sucked into the voracious maw of the healthcare sector. A broken arm will cost double what it does today in 10 years, and costs double today what it did 10 years ago. And it's the same x-ray and 5 minute application of a roll of shitty fiberglass that it has been for 40 years.

    In so many ways, the central problem of the American economy is healthcare. We've got to get off this merry-go-round and make the madness end. We're so addicted to the market, or even illusions of the market, that we're willing to sacrifice all our upward mobility and discretionary income to it. It's madness.
    I don't disagree with your point regarding healthcare DC but your thesis may be too narrow and you're blaming the messenger. Healthcare cost in the US can be ridiculous but it's not the only basic modern requirement that is out of control. Borrowing for education in the US has created a huge burden for the middle class and these are full recourse loans. For most people, you pay them off or die to resolve them. Transportation is an almost equal burden but as everyone here should know, you don't borrow money to buy a car. The largest burden for most families is rent/mortgage. Consumer mortgage debt is 5-6X student loans, auto loans or credit cards. But these are all symptoms.

    If incomes in the US had continued to move up commensurate with productivity increases we wouldn't be having this conversation. Teachers et. al., would be making $100,000 a year. But we don't value people who do valuable work for the great majority of the population, we only value and pay for innovation. I don't see any change in this direction.

  3. #3
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    Default Re: Anyone take a look at Google's Schmidt's middle class wage increase challenge?

    Quote Originally Posted by santafe2 View Post
    I don't disagree with your point regarding healthcare DC but your thesis may be too narrow and you're blaming the messenger. Healthcare cost in the US can be ridiculous but it's not the only basic modern requirement that is out of control. Borrowing for education in the US has created a huge burden for the middle class and these are full recourse loans. For most people, you pay them off or die to resolve them. Transportation is an almost equal burden but as everyone here should know, you don't borrow money to buy a car. The largest burden for most families is rent/mortgage. Consumer mortgage debt is 5-6X student loans, auto loans or credit cards. But these are all symptoms.

    If incomes in the US had continued to move up commensurate with productivity increases we wouldn't be having this conversation. Teachers et. al., would be making $100,000 a year. But we don't value people who do valuable work for the great majority of the population, we only value and pay for innovation. I don't see any change in this direction.
    Circle Medical, among others, seem to be moving in a positive direction towards refining the primary medical health care business model.

    Applying AI/ML in partnership with mobile primary care physicians is something worth experimenting with and exploring:
    https://www.circlemedical.com/

    Disclosure, I’ve bought in hook, line, and sinker.....but more importantly, so have some serious heavyweight Angels.

    But I don’t see it solving the problem of non-primary, non-preventative, and pharmacology based healthcare.

  4. #4
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    Default Re: Anyone take a look at Google's Schmidt's middle class wage increase challenge?

    Quote Originally Posted by santafe2 View Post
    I don't disagree with your point regarding healthcare DC but your thesis may be too narrow and you're blaming the messenger. Healthcare cost in the US can be ridiculous but it's not the only basic modern requirement that is out of control. Borrowing for education in the US has created a huge burden for the middle class and these are full recourse loans. For most people, you pay them off or die to resolve them. Transportation is an almost equal burden but as everyone here should know, you don't borrow money to buy a car. The largest burden for most families is rent/mortgage. Consumer mortgage debt is 5-6X student loans, auto loans or credit cards. But these are all symptoms.

    If incomes in the US had continued to move up commensurate with productivity increases we wouldn't be having this conversation. Teachers et. al., would be making $100,000 a year. But we don't value people who do valuable work for the great majority of the population, we only value and pay for innovation. I don't see any change in this direction.
    If you think innovation is valued or well paid, you should talk to more scientists making $70k per year to toil in obscurity to make some MBA or College President rich. Money's about perceptions of power, not merit. If it was about merit, inheritance would be illegal. This is also why kids who clerk for supreme court justices for $70k per year get hired by firms a year after earning more than the President makes, and lobbyists make more then Congressmen. Actually doing the work or wielding the power isn't worth as much as the illusion of influence.

    You're absolutely right about the productivity piece. So maybe healthcare's a second-order problem behind that. Still, it's the leading cause of middle-class bankruptcy and the easiest way to get wiped out, on top of an income-share hog that keeps growing vs other compensation. Other countries do not make going to the hospital a high-stakes game of financial russian roulette. Of all the problems in the US, and there are myriad, this one seems among the easiest to fix. Hell, if the Truman admin had the Roosevelt admin's skill at whipping votes in the Senate, or if Roosevelt had lived just three more months, we probably wouldn't be having this conversation right now.

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