Sunday, November 17, 2019

Why Silicon Valley Embraces Socialism

It seems odd that tech entrepreneurs would embrace left-wing causes, but in reality, many "progressive" causes benefit big businesses more than individuals.

In my last posting, I pointed out how these "tech-that-are-not-tech" companies exploit workers in the "gig economy" by treating them as "contractors" with no base pay, benefits, sick leave, insurance, retirement plan - nothing.   They act like the corporate robber-barons of the late 1800's, in their business practices.  But in their politics, many lean leftward.

Or do they?  Is Left the new Right?

Consider food stamps and Walmart.   I have written about this before.   People on the Left decry Walmart for paying so little that their workers have to "go on foodstamps" and receive other government largess.   People on the Right decry these assistance programs entirely, claiming that the poor are sponging off society.   Both are, of course, wrong.

Government assistance to low-wage employees is not assistance to the employee but to the employer.   With all the government programs available (Section-8 housing, Obamaphone, Obamacare, SNAP, ADC, etc.) a low-wage employee can have the equivalent income of a lower-middle-class employee, as I illustrated before.   This in turn allows Walmart to pay people less, taking a huge burden off their payrolls.

When Congress talks about cutting foodstamps, the talk is usually pretty short-lived.  Not only are farmers in favor of the program, many large corporations are as well.   If they can off-load a lot of their employee costs to the government, they make more money.

In may foreign countries, this is already the case.  They have nationalized health insurance, and thus employers don't have to pay this cost.   Your contract with your employees is based on hourly wage only.  Anything else is their own responsibility - or the government's.

 And that, in part, is why we have a "work requirement" in many States for these benefits.  It is not, as Republicans claim, to encourage good-old-fashioned hard work and self-sufficiency (with the goal of getting people off assistance programs) but rather as a means of forcing people to seek out at least one part-time low-wage job in order to qualify for benefits.  The difference is subtle but distinct - few people end up working their way out of poverty as a result of these programs, work requirements or not.  But the line for job applicants at Walmart and other low-wage employers is always full as a result.

Now think about this and apply it to these socialist silicon valley robber-baron billionaires.   Why do they favor things like "guaranteed annual income" or "single payer health care" or "affordable housing" and the like?  Why would someone making billions of dollars care one iota what the guy working for him as a "gig" contractor has to go through?

And the answer is clear:  The "gig" worker who is the backbone of many of these new "tech-that-are-not-tech" company schemes is not going to stand for slave wages forever.   If the government can provide healthcare, housing, and even a little spare change, then the "gig" worker can work for long hours at low pay and not feel exploited - as much.

It turns out that these benevolent billionaires are embracing socialism because it is good business.   If the government doesn't pick up the tab for these costs, they will have to, which means their cost of labor would skyrocket, and their entire business model would collapse.

Of course, one has to ask the pointed question, why did companies in the past pay for health insurance in the first place?   Why did having a "job" mean not only being paid an hourly wage or a salary, but having a pension plan, health plan, and other "benefits" as well?

And that is a good question and could be the subject for an entirely new posting.   But long story short, back in the day - the 1950's for example - the cost of medical care was a lot less because there was a lot less medical care to be had.  You got sick, you died.  Penicillin was a new thing.   Polio was still around (and apparently back again today).  There were no life-saving operations, no transplants, heart bypass, stents, cancer treatments, and certainly no sex changes.

So it was easy back then to offer "health insurance" as it was relatively cheap, and you could do this as a way of getting striking workers back to work.   Promises of retirement pensions were cheap to make - particularly in an era where most workers died within 10 years of retirement.   But over time, these benefits crept up in complexity and cost.  Health care exploded.  People lived longer and retired earlier (often offered "early outs" by the companies - something I never fully understood)l.

That's the gist of it, which is why today we have Obamacare and the 401(k) - or the go-fuck-yourself plan.

So, maybe these benevolent billionaires have a good idea, at least in part.  Because when your health insurance is predicated on your job, you can't quit your job (or get fired) if your wife or kid has cancer (and I've seen this happen, firsthand).   And if you work for a small company or are self-employed, maybe you have no health insurance or can't afford it.   Maybe your employer shouldn't be the one in charge of your health insurance.