I chose to work in the public sector of Denmark because I’m ideologically inclined that way. That was decades ago, today I would chose to work here because of how much less hours I work compared to my old university friends in the private sector. They earn more money than me, but except for one of them who founded and now manages a successful company, it’s not that much more money. In fact when you calculate in all the extra hours they work, my extra weak of paid vacation, my better paternityleave, the two extra paid child’s sick leave days I get (per time your child is sick), the two yearly extra vacation days (per child under the age of 7) and my pension, I probably only earn around 10-20% less than them, and I get to spend so much more time not working. Hell I even bumped my hours to 30 a week for a while when my daughter was born. That was expensive, but it’s something you aren’t offered in a lot of private sector jobs.
I can’t begin to imagine how you guys in America get through life working so much. Let alone how on Earth you raise a family, maintain a relationship and have time for yourselves while you do it.
I feel like you are incredibly privileged that you can afford to to have a family while working so little hours in the public sector and I suspect your situation is not the norm in DK.
Friends of mine who moved to SE/NL/DE/DK are definitely working the full 40h/week and sometimes more since, as they say, living there is very expsensive.
From my experience, the Europeans who toot their "life is so good here, why do other people work so much?" horn are privileged enough to have a hand-me-down property bought/inherited from their (grand)parents, and since rent/mortgage is the biggest expense here, with property prices rising 8 times faster than wages, that property ownership early in life, which they take for granted, gives them the clear advantage that allows them to not bother with the rat race and could even live comfortably on minimum wage.
That of course, is not the norm for everyone and especially not if you've just emigrated here, so anyone wishing to own their own property one day has no choice but to jump in the meat grinder and join the rat race.
For what it's worth I live in Denmark, working a private sector full time (37/week, usually less) job with a nice salary - though nothing out of the ordinary for my education and experience. Came from a middle class family: My mom is a nurse and my father is an engineer. No life-changing inheritance from grandparents (~$10.000).
My wife stays at home with our 2 year old daughter.
We own an apartment in Copenhagen that we bought some 5 years ago, though we're obviously still paying a mortgage on it (0% loans definitely made that easier!). We're paying it down aggressively, though still have quite a bit of cash left to invest.
From my experience it's about priorities. We rarely go out to dinner and don't own a car - hopefully never will. Rarely buy new clothes.
While it might not be the norm, it's not something that's completely unheard of.
One major factor though is probably student loans. When my wife and I left the university we both had savings of roughly $15.000. A year later, we bought the apartment. That would have been impossible if we had debt we needed to overcome first. If your friends moved here with significant debt, they're definitely playing catch-up compared to their peers.
This is true logically, but it's important to understand that most people behave based more on emotion than logic. Being debt-free brings a peace of mind that you don't get with rational maximization of returns while maintaining debt unless you are particularly mathematically inclined.
There definitely are investments that have a better risk/reward ratio than carrying a 0% interest debt on a mortgage.
e.g. savings accounts with 1% interest in the EU which are government insured up to 100k. Plus mortgage debt tends to have fiscal benefits in most countries, too. That's a better idea than paying off a 0% mortgage. Especially past a certain point where there's plenty of equity in the home.
There's generally virtually no financial reason to pay off a 0% debt apart from some edge cases here and there. People do it for peace of mind, which is of course fine, but it only works because of financial illiteracy as it's not the most financially optimal decision to make. (even not the least risky).
The problem with "financially optimal" strategies is that tend to ignore the fact that income can be lumpy. If everything is steady-state then it's "optimal" (as in better returns) to run highly leveraged. The problem is that life for individuals is not steady-state: you might lose your job, the economy might crater, the currency might get devalued, the property/stock market crash, etc. A 0% loan on a residence can be quite a problem if your income is 0 for some reason. Unlike a CEO who still gets his golden parachute if his highly leveraged, "financially optimal" company encounters "unforseeable" "turbulence" and ends up bankrupt, a bankruptcy in Me Myself and I, Inc. could be disastrous. Like, family on the streets disastrous. Individuals opting for peace of mind are minimizing downside risk, not maximizing "upside potential". Financiers can afford to take risks that end up with them blowing up, but when it's your life that blows up if some problem comes, minimizing the downside is a pretty maximizing strategy. The fact is, we know there we be periods of difficulty, we just don't know what the specific difficulty will be in advance.
I've got no clue how that's really meaningful in this case. I just mentioned there's a 1% interest government-insured savings account available, i.e. if the bank goes bankrupt, you still get your money. The only instance where you don't get your money is when the government goes bankrupt and doesn't honour its obligations. In that scenario, your mortgage debt would be even more screwed.
Meanwhile, getting 1% return on a 30 year mortgage puts you in a much safer, financially cushier position, than having had 0% returns for that period in time. Would you rather have 40k saved + 10k interest saved up in savings saved up in a government-insured savings account when you lose your job, or would you rather have a 40k lower mortgage debt and slightly lower payments or a lower time-to-payoff? Particularly given that mortgage payments can be furloughed and negotiated in times of payment difficulty. The answer is very clear. Choosing 0% returns over 1% returns in this case is the riskier choice.
Is it though? if you have a 0% loan wouldn't it make more sense to pay as little as possible to the loan, and the surplus you save invest in something that gives you a return on your money?
Loan is structured in 2 parts: Bankloan and mortgage.
Mortgage is at roughly 0% and has a fixed payment for the duration - I cannot pay it differently than the initial agreement.
The bankloan is at (I believe) 3%. I've roughly doubled my contributions to this loan, making it roughly equal to the amount I'm investing each month. I'm missing ~$10.000 on it now, so I think i'll just pay it down and have that out of the way.
Being ahead also means that I'll have a way easier time if I ever need to buy something big one month - I can just choose not to pay that loan and not invest this month and I'll have plenty of money to spend. It's nice having some free cash flow :)
That's not true in my experience -- at least in the Netherlands. My friends and family have wages that would be considered low in the US, but they live very comfortable lives and many of them work four days a week.
I looked it up and the average work week in the Netherlands is apparently 29 hours a week [0]. The average inheritance in the Netherlands is €23K [1], and as another commenter mentioned many people don't receive an inheritance until they're in their 40s or 50s.
So many people in the Netherlands are able to live a comfortable live while working part-time, without having to
rely on an inheritance.
EDIT: However, as you pointed out, rising housing costs are an increasing issue in the Netherlands. The issue is that not enough houses are being built. I hope that that's something that'll be addressed soon.
> EDIT: However, as you pointed out, rising housing costs are an increasing issue in the Netherlands. The issue is that not enough houses are being built. I hope that that's something that'll be addressed soon.
This is often said but I'm not sure it's true, I'm not sure if housing costs rising is really because of too few houses being built.
There's a few things to untangle. First is housing costs. They've not actually risen so dramatically as people think. Home prices have increased, but interest rates have sharply decreased. From a peak of 13% in the 80s, to 5% prior to the 2007 crisis, to around 1% today.
To put that into perspective for a 30 year mortgage: in the 80s on a 13% interest rate, you were paying the full mortgage price every 7 years, just in interest alone. Today, you pay the full amount in interest alone just once every 100 years.
Second, nominal prices increase a lot, but nominal wages do, too.
The better approach to look at housing costs is not to look at prices (which the media and regular folks go crazy about), but a simple indicator: % of wages spent on housing. And this metric hasn't really gone up radically. It's been on the rise again recently, but it's also below historical peaks.
But then we still don't know if we simple don't have enough homes, or enough homes to satisfy new desires and cultural norms. I think it's the latter. The number of homes in the Netherlands has outpaced population growth the past 50 years. The number of households has also outpaced population growth. And the average number of people per home has decreased. And the average home size has only increased. In other words, it's not necessarily a housing problem, it's more of a luxury problem, at least when compared to the past. We've got more housing per person than ever, yet we feel as if housing is unattainable. In large part that's because we don't want to share housing as much anymore. There's a ton of people, even in relationships, who prefer to have their own home instead of share like Dutch people did much more in past generations. That's okay, I do too (and live by myself, I prefer it), but that's a choice of luxury, not some kind of human right. Home-ownership has never been higher.
Lastly, there's location. You can have a trillion square metres but if it's not in Amsterdam, we'll still have people say there's rising housing costs because they can't live in Amsterdam. There's actually a lot of affordable real estate in the Netherlands, it's just not going to be in the capital in cycling distance from work. And again, that's a choice/preference, not a human right. Living say 45m or an hour from work is seen as a lot in the Netherlands, in many countries that's quite normal. A lot of what we see as high housing-costs in the Netherlands, are considering prime locations. When talking about affordability, with Dutch public infrastructure, you'd have to look at 30-60 minutes away from work. Most of that real estate is very affordable.
That's not to say housing costs aren't on the rise or that it's all fine or without any issues... there's definitely issues. But I think a bit of nuance is important, too. People (not you necessarily) act as if the Netherlands has a housing crisis and sometimes it gets overblown.
As for your link on inheritance, I think median figures would tell a very different story. I'd guess that the bottom 50% inherits basically nothing, and the top 30% a lot. Many of my friends who went to uni have parents who own a home that's >500k, a pension fund, investments, some cash. A lot of these will at some point be getting a very large handout that basically covers their retirement goals and means they really don't have to do any kind of saving on the side (apart from the employment pension package) and can spend every penny they earn. That technically also allows people to work less.
Anyway, so much for the pedantics.... On your larger point, I fully agree. It's absolutely quite possible and quite normal too, to work parttime, even those without any inheritance. I currently work 40 but I could easily do 32, even 24, financially speaking.
I think you might have to be privileged to never work full time, but I know plenty of people of different backgrounds in Europe who in their late 20s early 30s started reducing how much they work for one reason or another and were able to do so. On the other hand, I know very few in my age group (mid 30s) that live in a hand-me-down property. If there is such a property in the family it is usually where the parents live.
Of course reducing work, comes with compromises what you can afford and is not feasible for a lot of jobs. And yes, for certain goals/timeframes there is no choice but to jump in the meat grinder, at least for a while. But there often are alternatives to stay out of it and live a comfortable live.
Also if you move to a country from abroad it will take you a while to live there efficiently. E.g. many of the expats I met in Switzerland complain about how much of their salary they spend on restaurants, services, etc. Sure it's very expensive, but they also use them like ten times more often than a Swiss would. Same for me as a Swiss living in Colombia. I regularly overspend just by being used to do things a certain way and being ignorant of the tweaks.
> Europeans who toot their "life is so good here, why do other people work so much?" horn are privileged enough to have a hand-me-down property bought/inherited from their (grand)parents
Most people never get any inheritance before their parents die; you're basically retired when it happens.
People with a decent job in Europe (such as engineering) have a pretty comfortable life without considering any inheritance, even if they're paid less and work less than American equivalents.
In Norway, you can "slave away" while paying the equivalent to a $1500/month rent on a small-to-medium apartment, or pay down mortgage on a $400k "starter" apartment in the city.
But if you're lucky, you can find a more rural job, where you only pay like $500/month rent, or could just buy a whole house for the same price that'll get you a small 1 bedroom apt in the city.
There's a ton of variance in the prices here. But then again , larger cities = more jobs. Especially in tech.
> but it’s something you aren’t offered in a lot of private sector jobs.
To an extent isn’t this because these types of benefits aren’t affordable? The pension, extra vacation, etc wouldn’t be possible without the tax revenue raised from your friends who are working more hours.
In America there is a saying “good enough for government work.” I think a lot of public sector jobs get a bad rep because they hand out middle class lifestyles (arguably maybe even upper middle class in Washington DC metro area) at the expense of the private sector.
A lot of government employees (and contractors) just got paid to sit at home for 3-4 months during the pandemic if they worked in secure areas (can’t take classified information home). That’s a benefit that the private sector just can’t provide.
I guess I don’t really agree with the article. We need hard work, it’s what keeps the system going. We have it so much better than other parts of the world and we shouldn’t take that for granted.
> That’s a benefit that the private sector just can’t provide
They actually can. Businesses have a lot of profit that they pump directly into the hands of investors in the form of dividends and stock buy backs. They have massive capital expenditure projects. Many or all of these things could be put on hold or slowed so that cash-on-hand to handle expenses can be saved.
Business practices seem to say that saving money for a rainy day is a dumb move for the business, because profit is the only goal or money saved is wasted because it’s not doing anything productive. That line of thinking is just plain wrong. So much of the recessions that impacted so many and required massive government bailouts could have been prevented by increased cash-on-hand. The implication that you’ll go out of business guaranteed if you aren’t constantly investing in growth at the highest possible level is asinine.
Fiduciary duty is to the shareholders. There is a misconception that you are not a shareholder. Do you have a 401k? A pension? Any investments? Everyone benefits, even if you're only getting a few dollars from the dividend payment.
Rates are at historical lows, sitting on piles of cash is bad business. Those massive capital expenditure projects are as cheap as ever.. the point is to encourage spending when the economy is struggling. If you want to blame someone you should blame the fed for years of artificially lowered rates.
> Fiduciary duty is to the shareholders. There is a misconception that you are not a shareholder.
You seem to have a misconception that fiduciary duty must be to shareholders. Plenty of people (although it's a lot more common in Europe than the US) hold the viewpoint that companies have a duty to their employees. IMO our economy would end up a lot more balanced if companies paid higher wages rather than passing that money on to shareholders.
> You seem to have a misconception that fiduciary duty must be to shareholders.
Fiduciary duty for a public company is to the shareholders, by definition. The board and officers of the corporation serve as the agents of its owners, their principals, without whose investment the corporation would not exist. Of course there is usually some overlap between the shareholders and the employees, and the company has other kinds of duties toward its employees in the form of contracts as well as a less formal stake in employee retention and goodwill. If you want a co-op structure where the shareholders and the employees are one and the same, that sort of thing does exist and can sometimes work out reasonably well but there are some obvious trade-offs when it comes to raising capital. In particular you can't fund growth by selling equity, only by going into debt, which means the co-op and its shareholder-employees are taking on the lion's share of the risk if the venture should fail.
> Under the U.S. legal system, a fiduciary duty is a legal term describing the relationship between two parties that obligates one to act solely in the interest of the other
As far as I'm aware fiduciary duty actually has a broad meaning as above. Of course under our current legal system, fiduciary duty is to shareholders. But there's no reason why we have to setup society like that.
Co-ops are a good way of organising things, but as you say they have downsides. But there are lots of in-betweens. For example, we could require that a proportion of the board (say 25%) are employees. The markets have shown that they are willing to invest a lot of moeny in companies like Facebook where preferential shares allow non-majority shareholders to retain control of the company.
Going by your broader definition, then: If there are shareholders, and there is any kind of fiduciary duty at all, then it must be to the shareholders. The officers of the corporation cannot act solely in the interest of more than one master. If they must act solely in the interest of some other party with mostly opposing interests, such as the employees, then there will be no non-employee shareholders. It would defeat the point of holding an equity stake in the company.
The officers and board represent the shareholders because the shareholders own the company. The employees do not own the company. Their relationship to the company is transient at best; they have an ongoing and hopefully amicable relationship but no real stake in the company's future. Either side can terminate the employment contract at will with at most a few weeks' notice and some minor payout (or payback) of (un)accrued benefits. If a given employee wants to take an equity position in the company and obtain some influence and a portion of the profits they have only to purchase some shares, but in practice they would probably be better off investing that same money in a more diversified portfolio. I myself could hold a "democratic" share in my employer (market cap divided by number of employees) right now via my 401k if I put most or all of it in company stock, but I'd really rather not take that kind of risk.
Everything you said is true, and at the same time misses an important nuance. Yes, your obligation is to maximize shareholder value, but there are an infinite number of ways to do that. Treating your employees like crap and paying them the minimum you can may temporarily maximize your returns for a quarter, but your hiring and training costs will rose as employee turnover goes up. “We treat our employees well because we believe that that maximizes our organization’s long term productivity and profitability“ is a perfectly reasonable approach to addressing your fiduciary duty to your shareholders.
Companies have a lot of leeway in deciding how to execute their fiduciary duty. They can honestly say "We believe giving our rank-and-file employees generous benefits and compensation is good for the long-term health of the business." and it couldn't be challenged in court. Some companies do in fact operate that way; for example, Costco. They don't all have to operate the way they do because of "fiduciary duty".
The private sector doesn't just fund the public sector. It's a misconception to assume that this is a one way street.
Every dollar that is spend in the public sector flows into the private economy as well. For instance, the wages paid to civil servants and employees in the public sector ultimately gets spend in private businesses: food, clothes, entertainment, housing and so on. Public investments in public infrastructure also create wealth in the private sector: public procurement is a prime example, public funding and grants are another example. The there's the creation of value through education (schools & universities), ensuring security (law enforcement & justice), mobility (roads & bridges), health (hospitals),... which create the affordances for private enterprises to become successful (no Silicon Valley without skilled/schooled workers, right?)
Also, let's not forget that 'money' is above all a token of exchange that represents economic value, it's not the economic value proper. Government and the public sector aren't competing with the private sector: the primary goal is governing the distribution of wealth in society according to a prevailing economic framework or ideology, and managing the supply/volume of money in an economy is an important lever to do just that.
> A lot of government employees (and contractors) just got paid to sit at home for 3-4 months during the pandemic if they worked in secure areas (can’t take classified information home). That’s a benefit that the private sector just can’t provide.
No. But at the same time, unemployment benefits are in essence the public sector directly stepping in because the private sector runs out of liquidity.
> We need hard work
This is true. All of the above doesn't negate the work that happens in the private sector or private businesses. On the contrary. What we ought to remember is that value creation is equally, if note more, important as wealth creation.
Put differently, there's no point in gazing at the trillions of dollars that get shifted around if the entire discussion becomes detached from any tangible value which gets created and consumed. Whether it's the bread of the sandwich you ate for lunch, or whether it's the leather in the shoes you're wearing.
The thing that worries me more then discussing who gets an arbitrary amount of money and who doesn't, is supply chains, manufacturing, businesses,... all of that shuttering due to this health crisis. The one thing that truly drives people to the street and bloody riots is a scarcity of something as basic as wheat and bread.
I appreciate your points. I should have re-read my post before I submitted. My intention wasn't to bash the public sector, but to try to point out some of the philosophical differences between the two.
> To an extent isn’t this because these types of benefits aren’t affordable? The pension, extra vacation, etc wouldn’t be possible without the tax revenue raised from your friends who are working more hours.
Not really. My terms are actually widely available in a lot of private sector jobs, just not in software development. If I was a HR consultant in a private company, I would have basically the same rights as I do now.
It’s because the rights come from unions, and being in the public sector as a software development puts you on the same category of unionisation that any other white collar public worker. So my rights are the same as anyone else in the administration.
Software development in the private sector never really unionised in Denmark. Partly. Because there was never really a need as there were always more jobs than developers.
There are a few private companies that try to attract developers with benefits, but the vast majority of them do it with money.
>To an extent isn’t this because these types of benefits aren’t affordable? The pension, extra vacation, etc wouldn’t be possible without the tax revenue raised from your friends who are working more hours.
They just told you that their still making 10-20% less than colleagues in the private sector - when all benefits are factored in. So obviously those benefits are basically as affordable as employing someone at private sector type wages . Of course they are in Denmark, so the benefits for the private sector are also a lot better than you get in the U.S - at least for non-FAANG (I believe for FAANG as well but haven't researched)
Sure, but if his friends had to work 20-30% more then there is an obvious disconnect.
Individual A and B both make $200k a year. Individual A made that by giving an hour long speech. Individual B made that by working all year. On paper they are treated the same, but their reality is drastically different. You can't just tell person B "you don't need to work so much." They wouldn't be at the same level as person A without having done so.
Everyone is different. Some people are insanely smart. Incredibly efficient. Ridiculously productive. For every person out there that is making as much as you and working less there is also someone working more and making less. "We don't need to work so much" is a privilege, and in my personal opinion, is unrealistic.
The reason why public sector jobs are so unproductive, imo, is because there are no real bosses. Everyone's an employee, all the way to the top. No one's remuneration is affected whether you do more or less, better or worse. The logical course for all concerned is to always take the path of least resistance. As long as the paperwork is in order there's nothing to worry about. And even if it's not, there are ways around that too.
Best quote I ever heard from an government employee was an unopened letter often answers itself
The public sector isn’t in general unproductive, except maybe in the US where one major party has been working hard to sabotage it for the last 40 years or so. What might surprise some people is that remuneration isn’t what foremost motivates , e.g., teachers or nurses.
Big companies are often as unproductive as the public sector, with whole departments often existing just to make some managers feel important.
This, so much this. I have been working as a cunsultant at both large companies and the public sector. And they are often unproductive - and for the same reasons. Loads of middle management that needs to be included in every decision-making, but noone that dares to actually make a decision without first asking their managers.
In my eyes, the reason much of the public sector is unproductive is not because it is not motivated by profit. But rather that it is too similar to large companies with loads different management-levels.
I once worked in the public sector when they embraced real autonomous teams with leaders that could actually make decisions when the team needed it. It was just as efficient as the best agile teams I have worked at in the private sector.
The real insight here (which you allude to) is that (all else being equal) large organisations are inherently inefficient. If you take the classic libertarian view that government is inefficient and extend the logic to apply to all large organisations (and indeed individuals who control large amounts of wealth) then you end up at a very interesting political position that can provide a unified critique of both modern capitalism and soviet style communism by explaining the failings of both as being due to concentration of power (state power in the case of communism, economic power in the case of capitalism).
Neither is inherently inefficient. It’s just that both types of organisations can afford inefficiencies, while a small private company usually can’t afford it.
That doesn’t mean that small companies always are more efficiently run in all aspects. I expect my local McDonalds be much more efficient than the small sushi place around the corner, which can afford being inefficient due to low rent and probably close to minimum salary for the owner.
My brother works in HR at a fairly high level at HUD. He reminds me that most large government agencies have to expect that 1/2 of their employees have below average talent and motivation. So they design many of their processes to function under this assumption.
While HUD is certainly less productive (per capita) than a small team of highly talented people, turns out that in most large organizations half the people are below average talent/motivation. And designing for this instead of pretending that all of your staff is above average allows them to have higher productivity.
That phenomenon is the reason old established big companies get disrupted. No one disrupts the public service, they are the permanent only business in their sector.
> No one disrupts the public service, they are the permanent only business in their sector.
That's not necessarily true. Governments frequently intervene in the running of public companies. Also, many public companies compete against privately run businesses.
I think you misread. The "public service" here is a reference to the government, not to public companies (which are still privately-run businesses despite being listed on public stock exchanges).
Large private enterprises, publicly-traded or otherwise, that fall prey to inefficiency get disrupted. Governments do not get disrupted short of foreign invasion or revolution, so the inefficiency remains entrenched.
Hm. I can't think of any significant examples here of a company owned or run by the government. I know that such things are more common elsewhere, but at least in my mind I tend to classify them as extensions of their respective governments rather than as anything like private corporations. I suppose the real question in this context is whether that government would let them be disrupted and replaced with a competitor they perhaps have less influence over.
> And also elections.
Sure, in theory. I suppose if an election actually changed things enough to be considered "disruptive" then you could consider that a form of revolution, but disruption of that sort generally has exactly the opposite effect: Everything becomes much less efficient as the new party struggles to take control, and then gradually returns to baseline as they realize that it's the masses of unelected bureaucrats that really run things on a day-to-day basis. Even if they were explicitly running on a platform of improving the efficiency of public services, it's not as if there is any actual competition in the provision of those services. People aren't choosing between two or more proven service providers; at best they have the current entrenched system with its known issues and a bunch of vague promises regarding a half-cooked proposal for a replacement which the candidate may never see implemented and which probably wouldn't work as advertised even if it were.
> The public sector isn’t in general unproductive, except maybe in the US where one major party has been working hard to sabotage it for the last 40 years or so.
Do you realize that (1) half of all government spending is at the state and local levels; and (2) many states and cities have been run by “the other party” (not the bad one) for decades? Cities like Chicago, Philadelphia, San Francisco, Baltimore, etc., have been run by Democrats for longer than many posters on HN have been alive. If there was any truth to the notion that the US public sector is poorly managed because “one major party” “sabotages” it you should see a marked difference in the states run by the other party. But you don’t. Indeed, the major population trend in the US is people leaving Democrat-run states and moving to Republican-run states.
Last time I checked, more than the majority of what I pay in taxes go to the federal government, not state or local, where it is re-distributed to other parts of the country most of whom have elected representatives from "the other party" and whose disproportionate representation changed a national election.
You're overlooking sales, property, and business taxes that folks don't see directly (e.g. property taxes built into rent), which go to the state and local governments. But overall, about half of all government spending in the U.S. is at the state and local levels: https://www.oecd-ilibrary.org/sites/reg_cit_glance-2018-41-e....
For many of the things people complain about (transit, housing, education, policing) 90% of funding and 99% of oversight authority happens at the state and local level. Republicans in national government have pretty much zero say over say affordable housing policy in California. Trying to pin California's failures in those areas on Republicans in Kansas is specious.
First of all, you're only talking about income taxes, which as you rightly pointed out are concentrated in the Federal government. Once you factor in property and sales taxes, the distribution is roughly 50-50.
Second of all, even if you only take into account income taxes, Federal income taxes aren't re-distributed to other parts of the country in the way that you think.
The biggest line items in the Federal budget is (in decreasing order) are:
- Social Security
- Medicare + Medicaid
- Defense
Social Security isn't really "distributed" to other parts of the country, it's mostly concentrated in regions where retirees happen to live. Ditto Medicare.
You could argue that Medicaid is "distributed", however it is funded by both States and the Federal government[1].
The comment to which you are replying is correct: most public sector services like education, electricity, water, sewage, libraries, law enforcement, fire departments, etc are all funded predominately at the state and local level.
Under funding and subsequently under staffing federal organizations to "defang" them or to show them as being ineffective to support a position of reorganization and subsequent merger with another organization to alter who has oversight (as a power play) or to just remove them completely has been a long-time page in the political playbook. This is an sub element of the "starve the beast" approach and has been well documented [1]. To be clear, I'm not here to argue the efficacy of this approach but merely to point out it is real and is happening.
When rayiner says unproductive I think he means inefficient. And understaffing and budget cuts shouldn't drive efficiency lower, if anything they should drive it higher. Similar to how corporations get more efficient after layoffs.
“Starve the beast” is a rhetorical boogeyman. Conservatives tried it, and we just decided to run a structural deficit instead. Nobody’s budget ever gets cut. CDC’s budget, for example, has tripled since 1992, adjusted for inflation.
But my point is, even if you think that phenomenon actually exists in practice rather than theory, shouldn’t Democrat-run state and local-level places be a counter-example? School, police, transit, etc. are all mainly state-level services. In places like Illinois and New York and California, it’s Democrats that set the taxes and Democrats that set the budgets and Democrats that oversee spending. In those places, you should see a marked difference between federal services (where big bad Republicans have a say) and state and local services (where it’s all controlled by a one-party Democratic system). But you don’t.
I don't think the case you're trying to make is as clear as you want it to be. Most cities have mayoralties dominated by Democrats; Democrats are the urban party. Pennsylvania has bounced back and forth between the Democrats and Republicans for decades; people are leaving San Francisco because it's too successful. Chicago and Illinois are, to their detriment, run by a Democratic machine, but I think that's the best example you have, and it's not like there aren't basket case Republican states for me to rebut with.
Whenever people point out how poorly government services are run everywhere in America, someone replies (like OP) that it’s because Republicans “sabotage” the operation of government. My point isn’t that Republicans could run it better; my point is that you can’t blame dysfunctional government on Republican “sabotage” when so many state and local government services controlled by Democrats is also dysfunctional.
We’re seeing this happen with police. Police funding and administration is almost entirely a local matter. If Chicago PD is running CIA-style interrogation sites (or what’s happening in Baltimore or Atlanta or Minneapolis) you can’t blame Republicans. If schools aren’t good or transit is bad, or housing is expensive, you can’t blame Republican “sabotage.”
It’s a perverse argument. It’s saying to disregard Democrats’ obvious failures to run government services—it would all be better if you just gave Democrats more power. (That is not to say that Republicans would run things better. For the most part, they wouldn’t even claim to, and would point to that as justification for doing less. My recently-red/trending purple Maryland county has pretty good government services, but mostly because it doesn’t try to do much.)
That you are wrong about small pieces of this is what makes your comments interesting. :)
I take your broader point that it's unproductive to pin the productivity concerns of the public sector on Republicans; especially in state government, I probably agree with you in sort of assigning good governance and management to the GOP, and expanding public employment and benefit rolls to Democrats.
But, like, I think you'll have a hard time making the argument that run amok policing isn't at least somewhat attributable to Republican voters. It's not "sabotage", in the mostly-mythical Grover Norquist sense, but it's a public policy mistake they mostly own.
> But, like, I think you'll have a hard time making the argument that run amok policing isn't at least somewhat attributable to Republican voters. It's not "sabotage", in the mostly-mythical Grover Norquist sense, but it's a public policy mistake they mostly own.
I’m not sure I understand. Baltimore just revealed a new budget that contains zero cuts to the police budget.
Blarg. Half thought. I mean, Baltimore just revealed a budget that contains zero police cuts. All 15 council members are Democrats. How is this Republicans’ fault?
You can massage the data to tell any story you want.
To your point about city mayoralties, on average, Republican-led metros have lower inequality and higher cost-of-living-adjusted incomes than Democrat-led metros[1][2].
There isn't really a strong correlation between successful government and the predominant governing party. What you'll find is that things are not so simple that you can pin all of our problems on a single party in a neatly packaged way.
> To your point about city mayoralties, on average, Republican-led metros have lower inequality and higher cost-of-living-adjusted incomes than Democrat-led metros[1][2].
Isn't it just that they are smaller and less successful?
There doesn't appear to be a size/population correlation.
> less successful?
That depends on what your criteria for "success" is. San Francisco has among the highest per capita GDP of any city in the Union as well as a thriving technology economy, but also has the highest rate of homelessness, as well as the highest percentage of people living below the poverty line. What does "success" mean?
It seems a little weak, for instance, to call out the success of Provo, which is indeed Republican-led, but is part of the Democratic-led SLC combined statistical area. Yes: lots of suburbs and exurbs are Republican-led! They're also drafting off the larger economies of other urban areas.
I'm not sure that it's fair to say that Provo is drafting off of the Salt Lake economy. It's not just a bedroom community for Salt Lake; it's got its own universities (plural), hospitals, and tech scene. About the only thing it doesn't have is an airport.
It's as far from SLC as Elgin is from Chicago. Claremont has a bunch of different colleges; it's still part of LA metro. The point is that Provo wouldn't have the economic advantages it's taking advantage of without the economy of SLC in close proximity.
All true. And yet, Provo is far more independent than your examples, both geographically and socially/economically.
How big is Claremont? How big is the LA metro area? How big is Elgin compared to Chicago? Provo is maybe half as big as Salt Lake.
When you're in Claremont, and you want a night out, do you stay in Claremont? Do you in Elgin? In Provo, you're more likely to stay local than go up to Salt Lake. As I said, it's geographically more distinct, but there's also a more insular mindset. "Claremont" is a legal entity, and it's a collection of colleges, but it's not much of an entity in peoples' minds. It's just part of the LA metro area, sharing LA's smog. Provo, in contrast, has a separate identity from Salt Lake, and even has separate smog.
All right, let me put it this way. Provo isn't just a suburb of Salt Lake. Provo has its own suburbs (most of Utah County). Claremont doesn't. (I don't know about Elgin.)
Colorado Springs does. It has a much more independent existence. It's across the Palmer Divide from Denver. It probably depends on the Air Force at least as much as it depends on Denver. In the same way, Provo probably depends on BYU as much as it depends on Salt Lake. (Whereas Elgin and Claremont are much more tied in to Chicago and LA, respectively.)
How many residents of Elgin work in Elgin? I suspect the fraction is much higher in Provo (and Colorado Springs).
Are people leaving San Francisco because the city government is too successful? That doesn't seem to be my understanding from reading and talking to people from that city.
It seems to me the biggest reason people are leaving San Francisco seems to be the rent is too damn high which is a pretty straightforward effect of the city's housing policies.
I think it's pretty clear that the Republicans party doesn't have a monopoly on poorly run government at the city and state level. (At the federal level there does seem to be a large gap in the ability to govern between parties.)
One small correction, which is that the housing crisis in SF is a function of the region's housing policies, not just the city's failures. Some of the governance problems here are just structural, that there's no one with authority to tell Palo Alto that they can't be a leafy suburb anymore and need to build high-rises.
Local spending is generally where I see the most obvious productivity from government spending.
Local government spending is what educates the children, paves the roads, keeps my house from burning down or getting robbed, runs the parks and libraries, etc.
Neither Apple or Microsoft are managed by the original founders - and they seem to be doing OK. I've worked for public companies that are pretty old (50+ years) and they had superb management.
They have both had to adjust to competitors along the way and faced disruption.
Apple nearly looked like going out of business at one stage before they brought Jobs back.
They operate in a world where the Mac and the iPhone have to compete with a major rivals.
Microsoft have had to develop their Cloud business as Windows becomes less important.
The Public Sector never needs to do anything like that.
I'm not sure that my experience of the public sector and the private sector in the UK quite aligns with the ideological position that private sector automatically means better managed, better services and better motivated people.
In fact, the most insanely motivated people I've ever met were in the public sector.
You have been selected as one of the few people in the society who we will pay way above market rate.
Someone like me would probably need to work 80hrs a week just so that my children can catch up with the level of comfort that you have.
And I'm not one of those people who tell others to "check their privilege". It's great to be where you are, and yeah, the government jobs here where I live pay double the market rate for half the work.
But if everyone worked the same way as you, then the world simply wouldn't exist.
All of the good stuff was created by people who worked overtime.
>All of the good stuff was created by people who worked overtime.
What if those creations were largely responsible to lazy people who had time to think of innovations instead of grinding away? I think it takes all types, honestly.
Some people like working you know. When you have small children it's really tough to work 40 hours (I have two little ones) per week but children grow up very quickly. Before you know it you're back where you were, more or less.
I used to have a lot of free time (working in academia), and I switched to a software engineer role in the private sector. I miss the free time, but I'm also learning new things and I feel I have more space to grow and more opportunities overall.
As for the salary, I earn twice as much. Practically, my lifestyle hasn't changed but I save all my extra income. I could work part-time and still earn more than before but
I'm concerned about the future (retirement, medical expenses... all these things which are covered by the state now, but who knows where we'll be in 25 years). I'd rather earn money now when I have the chance. I'm not sure it will last.
That being said, I still have good work life balance (living in a "socialist" country).
Every time I hear this question asked of someone who isn't a workaholic, I try to fathom the complete lack of imagination that the asker must posses, and I fail.
Spend it with my family. Doing hobbies, I’m a big blood bowl nerd so that takes up a lot of my free time. Read books, watch movies, have fun with friends. Stuff like that.
Sometimes I program for fun.
I also work as an external examiner for CS students. Though that is only during finals, so twice a year. Mostly to keep up with what’s happening, but I’ll admit it’s a nice side income.
My former boss used his spare time to get an MBA and build a startup that he later sold before he moved on to higher management somewhere else. So you can also do that sort of thing if you’re so inclined. He didn’t have any children though. ;)
That's very similar in most government jobs in Europe, I believe. I don't know about the US, but I expect it's similar there as well.
I'm afraid that it works out great for you because others are working more. Individually, that's a good decision for you, but it's not a model you can make society run on, at least not at the same level of output we're currently providing. If everybody had the same circumstances you have, we couldn't afford everything we can afford now, unless there's some explosion in productivity, which is hard to believe for the majority of jobs where it's not about "coming up with the right idea".
I don't think this is true. In my experience a lot of work time is just wasted time. Often nothing is accomplished. A lot of extra hours for meetings are not productive at all. A lot of extra hours looking into that bug ("so we can fix it today") is not productive at all..
I think you have the impression that working longer means being more productive. I don't believe that. I am often more productive if I have a shorter work day.
Also your argument doesn't make too much sense to me because OP already says that he is paid less. So it's not like he gets the same for less work. He gets less for less work.
My old neighbour taught me a valuable lesson back when I was a teenager fixing his computer problems: you don't get paid for the time you spend on something, but for the time you save the other person.
For me fixing his computer was easy work, not worth getting paid for at all for the time it cost me. But he insisted paying me because I was saving him evenings of work if he had to fix it himself.
This does not apply to every sector though and you will need to spend a lot of time (eg: my entire childhood "playing" with computers) to be of actual value to someone else.
> I don't think this is true. In my experience a lot of work time is just wasted time. Often nothing is accomplished. A lot of extra hours for meetings are not productive at all. A lot of extra hours looking into that bug ("so we can fix it today") is not productive at all..
So instead of having all this time wasted being "your" time wasted, try to maximize the value per hour you can bring to the right person so you can use the rest of the time to do the things you love (which might as well be chasing after that bug).
> I don't think this is true. In my experience a lot of work time is just wasted time. Often nothing is accomplished. A lot of extra hours for meetings are not productive at all. A lot of extra hours looking into that bug ("so we can fix it today") is not productive at all..
I would say equal amount of time is being wasted even if you work less hours but public sector tolerates less being done.
For example your morning windup routine is the same, your lunch takes the same time, you need to go to bathroom, pointless meetings are still there - I don't really see what would improve about my productivity if I worked less hours - what would I be able to eliminate in order to shorten my time at work ?
Even if time is "wasted" with breaks at work this time is between events - not at the end of the day - and I usually don't have the ability to compress it.
And also the economics of working more hours once you become a critical contributor are very different from a person staying in late for appearances - adding a person to take over the load has multiple costs - hiring risk, training and on-boarding time, extra sync and communication slowing things down.
I see. I don't have experience with the public sector myself but what I meant is this:
If I have only a 4 hour workday, people(bosses) think twice about wasting my time with useless meetings. Also it gives me energy to start into a day with only 4 or 5 hours ahead instead of 8h+.
Of course having a shorter workday doesn't make it 100% productive. But my personal experience is that it is MORE productive. Sadly most of my days are 8h+.
I also want to add that a tired, worn out developer might even cost productivity by introducing flawed code into the codebase. Did you ever do a serious code review while being tired? I don't see how that works. Then others have to deal with all this stuff afterwards.
But he said specifically that he earns 10-20% less than his friends (and probably a lot less than the one who founded his company), so in fact he can afford less than them. It's just that he is content with that much.
On the other hand, many private companies don't contemplate (on don't look favorably upon) employees who work part time or anything below the standard 40 hoours/week, so if you do work in the private sector you don't have much of a choice. If everyone was magically allowed to reduce his/her working hours and salary by the same percentage I wonder what would be the outcome.
He earns 10-20% less but they work significantly more than 10-20% more. If they worked (and had worked) the same hours per year, they'd make significantly less money than he does.
That's expected, the state pays it's employees very well for a multitude of reasons, but primarily: to buy their loyalty, to make them less susceptible to bribes, and to encourage stability. It also has no reason not to, there's no competition.
I don't know the Danish situation, but e.g. a teacher in Germany will have a pension that is higher than the salary of 70-80% of the population.
The question does not make sense to me. It‘s a market. You require a masters degree and an additional tough 1.5 years of training? Better pay me well, through salary or benefits. Let‘s not kid ourselves: most of us (highly qualified) white collars in the private sector enjoy some additional retirement scheme and can reach much higher salaries.
Why shouldn't a teacher have a high pension? I can't think of a job that's more important to the long-term viability of a country than that of a teacher.
A high pension is one thing. A pension that's higher than the salary of most of the population is quite another.
I'm not arguing that teacher shouldn't be paid well, I'm saying that the state is paying it's officials very well. Not because of the jobs they do, but because of who employs them. Teachers in Germany that are not employed by the state get significantly less.
> But he said specifically that he earns 10-20% less than his friends (and probably a lot less than the one who founded his company), so in fact he can afford less than them.
If he has a defined benefit pension and they don’t he’s probably going to come out ahead if he lives long enough. Given he’s in government and they’re not that’s a reasonable assumption.
Having worked in software industry for too long, I've come to conclude that the majority of the workforce today is spent on experimentation (i.e. "let's try project X" in corporate and "a new startup to try X"). There is so much money available in the hands of the rich (angel investment, venture capital) to fund these experiments.
That's the US though, and this is Denmark. European countries, and especially the Nordic countries are set up very differently with regards to income equality.
But generally, it's a hard thing to determine that exactly. How much is that 10% gain in life expectancy worth? How comparable is the life of 1970 with that in 2020? Inflation is a difficult thing to tackle.
But sure, changing wealth distribution is an option as well. Unless that happens though, somebody else has to work more to cover what another person works less.
If you look down that thread there's a first valid argument against this : breaking down the "productivity increase" by industry shows the huge growth comes from software, also if you look at how they track productivity in manufacturing it's also misleading - if you account for stuff like outsourcing the only sector that's seeing huge real growth is computer related.
And software/computer economics are a story of their own.
That's because every day has 16 hours of living in it. Every hour is precious. 16 hours is enough to do all of those things.
About my favourite thing about Europe vs America (maybe even just SF) is how much the people I work with care about doing things. It's not even for anyone else. It's like that scene in The West Wing where Sam Seaborn is told he doesn't have to finish a speech, but he looks up and says, "I just. I just want to nail this."
An interesting take on life extension is stimulant drugs. TANSTAAFL but if you live the crucial years of your life at 100% instead of 75% and you die at 60 instead of 80, you actually break even in how much life you led, even though you had 20 fewer years.
> I think two hours with my loved ones over one hour with my loved ones is a quantifiably superior option.
It's not that simple though. There are so many assumptions in this statement, that aren't easily proven/disproven. Is two hours of kissing your partner really better than a minute of kissing? Are the circumstances also relevant? Maybe two moments aren't even comparable at all?
You seem to have (as so many people do nowadays) the assumption that all of life is completely quantifiable, measurable (as soon as we have the technology). Theory of science shows that this is a belief, which can never be proven or disproven.
Personally, I believe the opposite, that no matter how great our technology gets, there are certain things, that will never be measurable.
So I disagree with your above statement, that one of them is the quantifiably superior option. I think they can't be compared at all.
In English, "how much" is used to express degree. So, for instance, if I said "A marked difference I noticed between driving in San Francisco and in Mumbai was how much honking I heard in the latter" what that means is "There was significantly more honking in Bombay than in SF". Concluding "there is no honking in SF" would be reaching beyond what is stated.
And I'm suggesting exactly what I said. I didn't make any claims about nationality or ethnicity. It isn't some racist claim that a European can't do it. It's a claim that in Europe I didn't see this as much as in SF (where way more people were like this irrespective of national origin).
But all this is a waste. The sentence structure is a classic from the '90s: Are you really saying "thing that person wasn't saying"?!! Are you really comparing "thing that no one was comparing" with "other thing"?!
I can’t begin to imagine how you guys in America get through life working so much. Let alone how on Earth you raise a family, maintain a relationship and have time for yourselves while you do it.