by Chris Hughes
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Notes
Introduction
5 income floor of $500 per month: The Institute for Taxation and Economic Policy estimates that 18.5 million people would be lifted out of poverty with an expanded Earned Income Tax Credit (EITC) paying $500 to every adult living in a household in which total income is less than $50,000. They use the Supplemental Poverty Measure and calculate the rate using their proprietary model. This would lift 11 million more people out of poverty than the current EITC. The California Budget and Policy Center’s national model comes to a similar conclusion, estimating that 19.9 million people would be lifted out of poverty with a benefit of this size. Both of their models were prepared at my request and should not be interpreted as an endorsement of the policy. See https://itep.org and http://calbudgetcenter.org/.
Two
29 the size and power of government consistently grew: Income inequality also hit a record low in 1973, not an unrelated event. See U.S. Census Bureau, “Gini Index of Money Income.”
29 Government was largely perceived to be a trusted force for good: Pew Research Center, “Public Trust in Government, 1958-2017.”
30 businesses transformed . . . the American Enterprise Institute and the Heritage Foundation into ideological juggernauts: Jacob Hacker and Paul Pierson examine this pivotal moment in depth in their book. See Hacker and Pierson, Winner-Take-All Politics, 96.
32 There are over 2 billion smartphone users in the world today: eMarketer, “Number of Smartphone Users Worldwide.”
33 The company assembles all of these parts with labor in China and designs the devices from its headquar
ters in California: Apple Inc., “2017 Supplier List.”
34 The average user spends nearly an hour a day on the platform: Stewart, “Facebook Has 50 Minutes of Your Time Each Day.”
34 create a “social utility”: Locke, “The Future of Facebook.”
34 nearly 80 percent of all the world’s social traffic is routed through Facebook’s servers: Taplin, “Is It Time to Break Up Google?”
35 in the past 15 years, most venture capital firms have not posted much better returns than the public markets: Cambridge Associates LLC, “US Private Equity Funds Return 0.2%.”
35 venture capitalists and independent early stage investors invested $80 billion in new companies: Cornell, “Startup Funding.”
37 “Over recent decades, technological change, globalization and an erosion of the institutions and practices that support shared prosperity in the U.S. have put the middle class under increasing stress”: Freeland, “Rise of the Winner-Take-All Economy.”
37 Robert Frank and Philip Cook: See Frank and Cook, The Winner-Take-All Society.
38 “All of a sudden”: Lewis, “Don’t Eat Fortune’s Cookie.”
39 “We all know we don’t succeed”: Zuckerberg, “2017 Harvard Commencement Speech.”
40 Families that have more than $10 million in assets: P.K., “Who Are the One Percent?” There are many ways to calculate who is literally part of the top one percent. You can slice the numbers by looking at individual or household income, or by looking at the accumulated wealth of an individual or household. I use the term “one percent” broadly to describe the wealthiest Americans, households with assets of more than $10 million or incomes of $250k or higher.
40 the average doctor in my hometown last year made $189,000: Salary.com, “North Carolina Physician-Generalist Salaries.”
40 CEOs at S&P 500 companies who today, on average, are paid 347 times more: American Federation of Labor and Congress of Industrial Organizations, “Highest-Paid CEOs”; Mishel and Schieder, “CEOs Make 276 Times More than Typical Workers.”
40 96 percent of the ultra-wealthy one percent are white: Moore, “America’s Financial Divide.”
41 the Waltons, all of whom inherited their wealth from the Walmart empire, now controls as much wealth as the bottom 43 percent of the country combined: New America, “Monopoly and Inequality.”
41 The chasm between the rich and the poor has not been so wide since 1929: Saez and Zucman, “Wealth Inequality in the United States Since 1913.”
42 Before the second half of the twentieth century, work was more likely to be at home on the farm or in a short-term stint somewhere: Lebergott, “Annual Estimates of Unemployment in the United States, 1900–1954.”
44 Employees with 15 years of service or more received medical care for life: Wartzman, End of Loyalty, 105–107.
44 This period of stable jobs and nearly full employment was a brief historical exception: I think this is largely because the people who write our collective narratives and histories tend to be white men, the exact demographic best served by the labor market of this period. See Wartzman, “Populists Want to Bring Back the Blue-Collar Golden Age”; and Oxfam America and Economic Policy Institute, “Few Rewards.”
45 “For workers, the American corporation used to act as a shock absorber”: Wartzman, End of Loyalty, 5.
46 the numbers show it isn’t just millennials doing contingent work: Baab-Muguira, “Millennials Are Obsessed with Side Hustles.”
46 A quarter of the working-age population in the United States and Europe engage in some type of independently paid gig: Manyika et al., “Independent Work.”
46 the number of people working in contingent jobs balloons to over 40 percent of all American workers: Pofeldt, “Shocker: 40% of Workers Now Have ‘Contingent’ Jobs.”
46 of all the jobs created between 2005 and 2015, 94 percent of them were contract or temporary: Katz and Krueger, “Rise and Nature of Alternative Work Arrangements.”
46 Many of these jobs of the new economy pay poorly: Dews, “Charts of the Week”; Vo and Zumbrun, “Just How Good (or Bad) Are All the Jobs Added?”; Picchi, “Vast Number of Americans Live Paycheck to Paycheck.”
46 Some of these workers may get to choose when they work: Campbell, “RSG 2017 Survey Results.”
47 Uber drivers make barely $15 an hour: O’Donovan and Singer-Vine, “How Much Uber Drivers Actually Make Per Hour.”
48 General Motors, made twice as many cars in 2011 as it made 55 years earlier: Hind, “Economics after Scarcity.”
49 Walmart employees working less than 30 hours a week have no benefits: Tabuchi, “Walmart to End Health Coverage for 30,000.”
49 a factory worker who, at least in one region of Ohio, used to make $40 an hour or more: Salpukas, “Young Workers Disrupt Key G.M. Plant.”
Three
55 “What we’re talking about here is a community that is barely surviving”: Munk, The Idealist, 47.
60 she discovered that the computers had never been connected to the Internet: Ibid., 201.
60 researchers at the Center for Global Development at the World Bank noted that it was impossible to measure the villages’ impact: MacDonald, “Evaluating the Millennium Villages.”
60 The lead economist at the World Bank’s development group called Sachs’s assertions of the impact “baffling”: Clemens, “Millennium Villages Evaluation Debate Heats Up.”
60 the director of monitoring and evaluation for the Millennium Villages was forced to resign: Oransky, “Millennium Villages Project Forced to Correct.”
61 latrines were full; garbage was piled high: Munk, The Idealist, 199.
61 “stunning transformation of 500,000 lives”: Millennium Promise, “Millennium Promise 2010 Annual Report,” 46.
64 “We scoured the Internet”: GiveWell, “Case for the Clear Fund.”
65 “Here, more than in NYC . . . I could arguably carry out a mini ‘cash transfer’ program”: Karnofsky, “Should I Give out Cash in Mumbai?”
66 “By donating a relatively small amount of money”: Singer, The Life You Can Save, Loc. 128.
70 digital money can be converted to traditional paper currency: Even without other basic necessities, almost all Kenyans have a SIM card that can be inserted into any mobile phone to text, call, and transfer money to one another. If a recipient doesn’t have a phone, GiveDirectly offers to sell them one by deducting it from the transfer amount.
73 “People who received the money were happier”: Weller, “Here’s More Evidence.”
74 researchers compared the responses across different groups: Haushofer and Shapiro, “Short-Term Impact of Unconditional Cash.”
75 Most studies show no effect on the amount of time adults work: Bastagli et al., “Cash Transfers: What Does the Evidence Say?”
75 no evidence that cash transfers affect drinking or smoking behavior: Evans and Popova, “Cash Transfers and Temptation Goods.”
75 “WFP takes the view that it is the people”: World Food Programme, “Cash-Based Transfer for Delivering Food Assistance.” Cash also breaks the structure of donor and beneficiary by strengthening local markets. It will never make sense for a local peanut farmer to invest in her crops if aid organizations just distribute free peanut butter from America. The way to build resilient, sustainable economies is to create a market for the goods. When the participants in that market see a meaningful boost in their spending power, they are able to buy and sell goods and create stronger incentives for local entrepreneurs to invest and expand their own work.
75 up from around 6 percent: International Rescue Committee, “The IRC’s Cash Strategy, 2015-2020.”
75 amount of cash benefits that humanitarian organizations provide is still small: Harvey, “Cash Transfers: Only 6% of Humanitarian Spending.”
76 GiveDirect
ly raised more than $90 million: GiveDirectly, “Our Financials.”
Four
79 The Precariat: Precariat is a portmanteau word referring to the “precarious proletariat”—an emerging social class who struggle to get by, bouncing frequently between unemployment and underemployment. The term was made famous by British economist Guy Standing in his 2011 book of the same name, but dates back to a group of French sociologists who coined the term (précariat) more than 30 years ago after noting a marked increase in unstable jobs across Europe.
82 “In terms of artificial intelligence taking American jobs”: Soergel, “Mnuchin ‘Not At All’ Worried.”
82 Nine out of ten economists, a University of Chicago survey found, agree: The University of Chicago’s Booth School of Business assembles a panel of expert economists who are meant to be representative of the field and polls them from time to time to “inform the public about the extent to which economists agree or disagree on important public policy issues.” A 2014 poll found 88 percent of economists agreed with the statement, “Advancing automation has not historically reduced employment in the United States.” Another 8 percent were unsure, and only 4 percent disagreed. See IGM Forum, “Robots.”
82 “about 95 percent of the people in the United States who want a job at a given point in time can find one”: Furman, “Is This Time Different?”
82 A report written by prominent academics, journalists, and technologists called the “Triple Revolution”: The Ad Hoc Committee, “The Triple Revolution.”
84 financial instability and the challenges that come with weathering the ups and downs of unpredictable income are just as problematic: Morduch and Schneider, Financial Diaries, 7.
85 “Without basic economic stability”: Ibid., 4.
85 the Pew Research Center asked more than 7,000 Americans to balance the trade-off between reliable income and more income: Pew Charitable Trusts, “Americans’ Financial Security.”
86 She cut up her ATM card: Morduch and Schneider, “Power of Predictable Paychecks.”