Topical for me, as after recent travels in Latin America, was thinking about development failures and middle-income traps.
A lot of countries stuck in middle-income traps seem to have something to do with what Aaron is describing here: you have large sections of the labor force in the “informal economy” in which the costs of proper compliance with the law exceed the benefits, even though the strategies required to remain illegible to the government end up being costly and inefficient in their own right. Yet professionalized formal businesses are hampered with too much bureaucratic corruption and red tape to outcompete the inefficient informal ones.
In middle-income economies the informal sector can easily account for over 50% of the labor force. At which point, to paraphrase Anton Chigurrh: if the law led you to this, of what use was the law?
Even the US is this way for hiring low-skilled labor to do household-level work. If we cared about functioning more like a first-world country in the market for household labor, we would probably reduce barriers and promote incentives to doing this sort of thing on the books. Households would need to be treated less like businesses in the eyes of the law.
This is good. We must not forget the moral corruption exists not only in the government, but inside institutions.
Boeing recently payed a $1+ Billlon fine for lying 🤥 to the Federal Aviation Administration over the 737 airframes, produced at Spirit Aeronautics in Kansas .
The culture has become one where it’s okay to fire or transfer someone cause they won’t lie on paper to a government agency.
There were other employees stand by while this is happening, other managers. They lack moral courage, or the ability to distinguish the quality of their product.
The employees and supervision had families, they chose to protect their income. By remaining silent.🤫
The old morale tale still applies:
See no evil🙈
Hear no evil🙉
Speak no evil🙊
This is the world where assertive men with chests (virtue) get fired, where the three 🐒 🙈 🐵 get promoted.
I encountered the Nanny Problem. If you hire a nanny, you are supposed to not only withhold state and federal income tax, but state and federal workmen's compensation, and social security, and medicare, and maybe some other things. I think some of those amounted to $2/month-- but a very large amount of effort. I forget what I did. I think I told her to pay her income tax as an independent contractor, and skipped the rest.
The issue of "wanting to get paid off the books" is not merely an issue of illegal immigration and tax avoidance. It is also about government benefits. The system is designed to trap a person. Work too much and you lose your benefits. That sounds fair, until you realize that work is usually not that reliable a source of income on the lower and even mid levels. The government check is reliable. So you have to choose between reliable money or unreliable money. You don't want to jeopardize the reliable money, so you work your irregular and unreliable job under the table. Being a nanny can certainly be this way. Some weeks are busy, some are not. The nanny can't hold another job, or maybe they can. (and take a look at the household employee part of the tax code, to see how complicated this can be) So why jeopardize reliable government benefits? As to the other points in this post, many of these "systems" seem unfixable. Retreat does seem like a viable option. Getting paid under the table is a kind of retreat from the system.
Another element that factors in - when there's low institutional trust, and low buy-in to physical places, people don't seem to show up to compel improvement or good management. I was thinking about this last night, at our kids' school board meeting. We had a major issue come up this month that is very important to the future success of our school. I was the only parent who showed up to speak about it. At the PTO meeting last week, not even 20 parents came. It's very hard to hold professional staff accountable when community members (or in this case parents), don't do so. In my parents' day, they would have been there, and I feel strongly many in their generation would have, too. But there just seems so little willingness to hold institutions accountable, because it's very easy to exit or ignore them or people have just lost the habit. The sad result is, those institutions will just get worse - we all need accountability in some fashion.
They get worse by demographic replacement both by foreigners who dont care unless its already a highly rated school district or by the fact the community and by extension the country is top heavy with an older demographic that is more concerned with removing property taxes and building 55 and up communities.
Lol yeah I signed the petition to get removing property taxes on the ballot cause I'm homeschooling. Was talking to the guy collecting signatures he said yeah his kids are already out of school so why should he have to pay. When I asked if he was fighting to keep his parents from paying property tax when his kids were in school he gave me the most bewildered expression and I commented how amazing it is things are suddenly a problem when they affect boomers.
There is no generational solidarity in any capacity. Not in daily life or policy. Strip mine the nation and increase the competition of the next generation to make stock market and real estate go up. Make sure the federal budget maintains the young to old wealth transfer and dont rebuild or invest in the future. Gotta love the millenials and gen x who bought into it and now whine about childcare so they can get money for things and trips.
Completely agree, and this is where that all so critical faith should come in. Churches sing hymns about how they are content with a cabin down below cause we have a mansion up above and they are just a passerby in this world, cause their focus is on the next. Cool, sounds like you should be super willing to jump into a spiraling system and try to stop the tail spin. It won't be best for your material life, but that shouldn't bother you if you truly have placed your trust in eternity.
Re: Everybody knows we are better off with competitive elections, but people are moving to jurisdictions where others share their politics.
I am skeptical that political affiliation is any sort of conscious motive for where people move. It has never been so with me- and since becoming an adult I have changed address twelve times, including five interstate moves. I rather suspect that political concentration is a consequence of other reasons that influence people's choices: Housing cost, commute distance, school quality, child-friendliness, closeness to urban amenities (for some people); privacy and distance from neighbors (for other people)
Maybe your lifestyle is bs if it is dependent on borderline slave labor. I have no sympathy from striker professional freaks who depend on an underclass of helot workers to maintain their idiotic trips to Italy and pretend their nothing more than overcredentialed, mid iq tools.
If you have 5 kids, it's helpful to hire a nanny, even part-time. The nannies are glad for the job. If you have to fill out 20 forms, you may decide not to do it.
And raise your own children in an area surrounded by family and community instead of going to x major city because lifestyle or restaurants or sports all or opera or some other dumb reason.
All of the above. And we dont depend on illegal underpaid labor either or think spending ourselves into oblivion to be a regular striver freak who needs to live in one or three cities.
There are very few jobs that require one to actually live inside a city limits. Families generally live out in the metro area where housing is (somewhat) cheaper, schools are better and the environment more child -freindly.
Three city metros. I know the type who live Greenwich and Bergen and they do the same damn thing. Depend on their illegal and foreign labor at home and abroad to maintain their zip code
So called conservatives whether of the rural or urban variety conserve nothing. They import a helot labor class and ship off our manufacturing to foreign labor in other markets. The pitching and moaning about China or any other nation is farcical and pathetic given the rush to send our factories there and destroy communities in the process to enrich this morally deranged class that occupies nyc, la, chicago and dc. If there indian and mexican nannies are kicked out, all the better. They may have to care more about real communities than the fake financed ones they created by selling out their countrymen by using foreign labor at home and abroad.
Topical for me, as after recent travels in Latin America, was thinking about development failures and middle-income traps.
A lot of countries stuck in middle-income traps seem to have something to do with what Aaron is describing here: you have large sections of the labor force in the “informal economy” in which the costs of proper compliance with the law exceed the benefits, even though the strategies required to remain illegible to the government end up being costly and inefficient in their own right. Yet professionalized formal businesses are hampered with too much bureaucratic corruption and red tape to outcompete the inefficient informal ones.
In middle-income economies the informal sector can easily account for over 50% of the labor force. At which point, to paraphrase Anton Chigurrh: if the law led you to this, of what use was the law?
Even the US is this way for hiring low-skilled labor to do household-level work. If we cared about functioning more like a first-world country in the market for household labor, we would probably reduce barriers and promote incentives to doing this sort of thing on the books. Households would need to be treated less like businesses in the eyes of the law.
And grade inflation. If students expect As in classes, you get low reviews if you don't do that. Then you risk your job.
This is good. We must not forget the moral corruption exists not only in the government, but inside institutions.
Boeing recently payed a $1+ Billlon fine for lying 🤥 to the Federal Aviation Administration over the 737 airframes, produced at Spirit Aeronautics in Kansas .
The culture has become one where it’s okay to fire or transfer someone cause they won’t lie on paper to a government agency.
There were other employees stand by while this is happening, other managers. They lack moral courage, or the ability to distinguish the quality of their product.
The employees and supervision had families, they chose to protect their income. By remaining silent.🤫
The old morale tale still applies:
See no evil🙈
Hear no evil🙉
Speak no evil🙊
This is the world where assertive men with chests (virtue) get fired, where the three 🐒 🙈 🐵 get promoted.
See no evil, hear no evil, speak no evil.
I encountered the Nanny Problem. If you hire a nanny, you are supposed to not only withhold state and federal income tax, but state and federal workmen's compensation, and social security, and medicare, and maybe some other things. I think some of those amounted to $2/month-- but a very large amount of effort. I forget what I did. I think I told her to pay her income tax as an independent contractor, and skipped the rest.
It is clearly job-killing for the unskilled.
Not near as much as I would have thought honestly. May have to give it a go
The issue of "wanting to get paid off the books" is not merely an issue of illegal immigration and tax avoidance. It is also about government benefits. The system is designed to trap a person. Work too much and you lose your benefits. That sounds fair, until you realize that work is usually not that reliable a source of income on the lower and even mid levels. The government check is reliable. So you have to choose between reliable money or unreliable money. You don't want to jeopardize the reliable money, so you work your irregular and unreliable job under the table. Being a nanny can certainly be this way. Some weeks are busy, some are not. The nanny can't hold another job, or maybe they can. (and take a look at the household employee part of the tax code, to see how complicated this can be) So why jeopardize reliable government benefits? As to the other points in this post, many of these "systems" seem unfixable. Retreat does seem like a viable option. Getting paid under the table is a kind of retreat from the system.
Yeah, while ripping off the regular american worker and blowing the deficit.
I don't think a few dollars in undeclared income is really breaking the bank here. We could gut the entitlement system. Then what?
Compounded across the entire nation and illegal population plus the natives who do it, than yeah, it's a huge deal.
Another element that factors in - when there's low institutional trust, and low buy-in to physical places, people don't seem to show up to compel improvement or good management. I was thinking about this last night, at our kids' school board meeting. We had a major issue come up this month that is very important to the future success of our school. I was the only parent who showed up to speak about it. At the PTO meeting last week, not even 20 parents came. It's very hard to hold professional staff accountable when community members (or in this case parents), don't do so. In my parents' day, they would have been there, and I feel strongly many in their generation would have, too. But there just seems so little willingness to hold institutions accountable, because it's very easy to exit or ignore them or people have just lost the habit. The sad result is, those institutions will just get worse - we all need accountability in some fashion.
They get worse by demographic replacement both by foreigners who dont care unless its already a highly rated school district or by the fact the community and by extension the country is top heavy with an older demographic that is more concerned with removing property taxes and building 55 and up communities.
Lol yeah I signed the petition to get removing property taxes on the ballot cause I'm homeschooling. Was talking to the guy collecting signatures he said yeah his kids are already out of school so why should he have to pay. When I asked if he was fighting to keep his parents from paying property tax when his kids were in school he gave me the most bewildered expression and I commented how amazing it is things are suddenly a problem when they affect boomers.
There is no generational solidarity in any capacity. Not in daily life or policy. Strip mine the nation and increase the competition of the next generation to make stock market and real estate go up. Make sure the federal budget maintains the young to old wealth transfer and dont rebuild or invest in the future. Gotta love the millenials and gen x who bought into it and now whine about childcare so they can get money for things and trips.
Completely agree, and this is where that all so critical faith should come in. Churches sing hymns about how they are content with a cabin down below cause we have a mansion up above and they are just a passerby in this world, cause their focus is on the next. Cool, sounds like you should be super willing to jump into a spiraling system and try to stop the tail spin. It won't be best for your material life, but that shouldn't bother you if you truly have placed your trust in eternity.
Re: Everybody knows we are better off with competitive elections, but people are moving to jurisdictions where others share their politics.
I am skeptical that political affiliation is any sort of conscious motive for where people move. It has never been so with me- and since becoming an adult I have changed address twelve times, including five interstate moves. I rather suspect that political concentration is a consequence of other reasons that influence people's choices: Housing cost, commute distance, school quality, child-friendliness, closeness to urban amenities (for some people); privacy and distance from neighbors (for other people)
I feel competitive primaries could yield better politicians too, doesn't have to be competitive in November
The fact that neocon scumbag graham has to pretend to care about south carolina this time around is small proof of that fact.
Maybe your lifestyle is bs if it is dependent on borderline slave labor. I have no sympathy from striker professional freaks who depend on an underclass of helot workers to maintain their idiotic trips to Italy and pretend their nothing more than overcredentialed, mid iq tools.
If you have 5 kids, it's helpful to hire a nanny, even part-time. The nannies are glad for the job. If you have to fill out 20 forms, you may decide not to do it.
And raise your own children in an area surrounded by family and community instead of going to x major city because lifestyle or restaurants or sports all or opera or some other dumb reason.
Agreed that is the ideal, and people can move toward but they can't do it at the drop of a hat. Are you married, no name?
All of the above. And we dont depend on illegal underpaid labor either or think spending ourselves into oblivion to be a regular striver freak who needs to live in one or three cities.
There are very few jobs that require one to actually live inside a city limits. Families generally live out in the metro area where housing is (somewhat) cheaper, schools are better and the environment more child -freindly.
Three city metros. I know the type who live Greenwich and Bergen and they do the same damn thing. Depend on their illegal and foreign labor at home and abroad to maintain their zip code
Somewhat agree, which conservatives would tell companies to pull themselves up by their bootstraps as laborers.
So called conservatives whether of the rural or urban variety conserve nothing. They import a helot labor class and ship off our manufacturing to foreign labor in other markets. The pitching and moaning about China or any other nation is farcical and pathetic given the rush to send our factories there and destroy communities in the process to enrich this morally deranged class that occupies nyc, la, chicago and dc. If there indian and mexican nannies are kicked out, all the better. They may have to care more about real communities than the fake financed ones they created by selling out their countrymen by using foreign labor at home and abroad.