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Producers vs Takers – if takers win, we all lose

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A village of 100

Let’s boil America down to a village of 100 people. They can easily be broken up into two basic broad brush camps — those who Produce — and those who Take from those who, you know, Produce. Let’s look at some undisputed facts about America’s population as it relates to Takers and Producers.

The Producers

We’ll start with who pays 70 percent of all personal income taxes. That would be just ten of the villagers. Let that fact sink in a bit before continuing. I, and many of my good friends are part of that group. Know what hurts, but more than that, galls? Those same ten people provide a super majority of the jobs in the village. Jobs providing food and shelter for their employees. So, let’s review what we know so far. Ten percent of our village’s population pay 70 percent of the taxes, AND provide by far, most of the jobs in the village.

Yet, many, somewhere between just under or over half of the villagers, claim those ten people aren’t payin’ their fair share. Think that’s a bit cheeky do ya? It gets better, much better.

46 of the villagers don’t even pay taxes. Hmmmmm. They love the current system. Are you surprised? In fact, they elected a new leader not long ago who sided with them completely. Those greedy Producers, all they wanna do is make more money and pay less than nearly 3/4 of all the village’s taxes. Yeah, they provide most of the jobs, but all that does is make ’em richer. Are we gonna stand by and let that happen?!! NO! Let’s make ’em pay more taxes, till at least they’re payin’ their fair share.

The Takers

The 46 villagers benefit from all that taxes pay for, without contributing. Water/sewer, education, electrical power, and the rest are all paid for by, well… not them. They take all those benefits though, and with a sense of righteous entitlement. They’re also horrifically close to achieving a plurality in the village. It’s been comin’ for some time now. If they can just convince a few more neighbors that the strategy of livin’ off the bounty of what they’re able to steal vote into tax law, taking from Producers, they’ll have finally won — and probably for good.

Which means sooner, much sooner than most realize, the village will end up with roughly 85 villagers, give or take. Most, if not all the ten who were payin’ 70% of the taxes? They’ll simply stop producing past the point of supporting their own families — or flee the village outright. A few others who make a bit less, but much more than most, will do the same.

California

It probably woulda been more accurate to have begun with my native state as the analogy, instead of America. It’s much farther along the path of ultimate economic failure. The Producers are leaving at an unprecedented rate. As mentioned above, fleeing would be the most accurate description. How else would you describe a family with multiple generations rooted in the state, leaving friends and family behind? Why would they choose to experience the financial and emotional upheaval that extreme option brings to bear?

The Takers never learn. What they know for sure, is that livin’ off producers has been workin’ most of their lives. Why change now, and mess with something that’s ‘produced’ such reliable results for so long? Indeed — why?

California recently exhibited this blindness towards reality. Since their Producers, people like you and me, plus hundreds of employers are racing to the nearest exits, they decided to tax Amazon’s ‘Affiliates.’ Now, Amazon has no presence in California. But, as the Taker role model state, it behooved them to tax California residents who were part of Amazon’s Affiliate program.

Amazon’s response was like Paul Revere — The Takers are coming!!

They immediately fired all California Affiliates. Boom! Tax that, California. Know what 100% of nothin’ is? The so-called Golden State just found out in real time in front of God and everyone. In fact, they just did a humiliating u-turn reversing that law, but with a condition. (laugh track inserted here) Amazon had to agree not to continue signing folks up to put a new proposition on the ballot that would’ve ended this forever. As it stands, the new law is only good for a year, as I understand it.

The real question

Anyone with an IQ of three digits, all of which are whole numbers to the left of, and before  hittin’ that pesky decimal point, can see the trend of our village.

Are you a Taker? Or are you a Producer? We’re all about to find out there is no middle ground. When there’s nothing left to plunder, the Takers, in a final act of abject ignorance, will blame the Producers. A crime when you think about it, especially when there are so many mirrors available.

When the Takers win, we all lose.

Jeff Brown specializes in real estate investment for retirement, has practiced real estate for over 40 years and is a veteran of over 200 tax deferred exchanges, many multi-state. Brown is a second generation broker and works daily with the third generation. With CCIM training and decades of hands on experience, Brown's expertise is highly sought after, some of which he shares on his real estate investing blog.

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31 Comments

31 Comments

  1. Erion Shehaj

    September 26, 2011 at 9:35 am

    The premise you started with is incomplete and it represents only half of the equation. The portion of the overall taxes paid by the top ten percentis a function of the fact that they make over 90% of the total income. This is after all an income tax… Put differently a tax on income. The more you make the more you pay. Just like the more you make the bigger your tax benefit when taxes are cut.

    As far as the portion of people that pay no taxes, there are several subgroups in that. First you have retirees on social security making under $20k a year. Even without a mortgage and income taxes its hard to make it on that. Second you have other folks working full time jobs and making the same. Same issue.

    The way I look at this debate is this: if we are trying to undo the deficit mess we are in, we need to reverse some of what created it. And that is, entitlements (reform), tax cuts (increase) and wars (wind down).

    What say you?

  2. Jody Cowdrey

    September 26, 2011 at 9:45 am

    Unfortunately, you can't "boil down" our country into a population of 100, and even further by some imaginary dividing line between good people and bad people. Using the phrase "undisputed facts" with such a generality is ridiculous.

    Until we, as a whole, start looking at reality instead of sticking our necks in the sands and pointing fingers, nothing will change. If there were in fact 100 people in America, simple solutions might work, but not with a population of 300+ million.

    As "Producers", a more "productive" route would be finding real solutions instead of "taking" the typical emotional talking points and rehashing them, but if you're set on having winners and losers with no grey areas, then I'm afraid your as much, or more, a part of the problem as anyone.

  3. Kim Hannemann

    September 26, 2011 at 10:24 am

    Right on, Jody and Erion. Exactly.

    I have heard Jeff's tired argument so many times, and it's so incomplete and inaccurate. I, like Jeff, also pay taxes – income taxes, in addition to all the other taxes that EVERYONE pays – but I, like Warren Buffett and unlike Jeff, believe higher income earners should be paying more relatively speaking.

    And that is the likely extent of my similarities to Warren Buffett, in case you were wondering.

  4. Jeff Brown

    September 26, 2011 at 11:02 am

    I stand by the post without reservation. Taker Nation is now being heard from via comments. They're welcome.

    The only question I have for them is:

    Considering the Taker slant in our federal gov't the last 50 years, and the economic trends having Takers in charge of the House/Senate for the vast majority of that period, and having the current Taker in Chief in charge lately – How are the bottom line results workin' out for ya lately?

  5. Timm Eubanks

    September 26, 2011 at 12:25 pm

    I do believe it actually does work with 100 people in a village or 300 million. Mr Brown has simplified for a reason. It seems that the problem is that people (commenters) want to make it more complicated like shell a game. If you tax me anymore as a business owner, I am out of here!! That also means my employees are unemployed. Is that simple enough? Good economic plan! There aren't more in poverty and our economy in the tank because of evil companies but a government that keeps growing and is "helping" people and adding regulations, fees (taxes) to companies.

  6. mike

    September 26, 2011 at 3:25 pm

    I worked roofing for years. my boss brought me back at 9.00 an hour. I was laying shingles that it usually pays at least 15.00. he doesnt do any work. who's the takers again?

    • Timm Eubanks

      September 26, 2011 at 8:25 pm

      Then Mike you worked for a Schmuck! Good, small business owners, who want great workers pay them well and treat them with respect. May I ask, were you ordered to work for him by someone? He didn't do any work? I as a business owner, I find that hard to believe. If that were true, wouldn't you want to start a roofing business?

  7. Jeff Brown

    September 26, 2011 at 4:14 pm

    Um, Mr. Eubanks appears to be a Producer. 🙂

  8. Ryan Schattner

    September 26, 2011 at 4:16 pm

    I don't mind paying taxes based on what I make if it was a flat rate. The problem I have is once you hit a certain point you have to give away almost half of your money. I am in CA and I had to pay something like $15,000 in the "self employed" section. That does not include all of the other normal taxes we pay. I think it would be fair to just pay a flat 15% for everyone instead of jumping all of the way up to 33%+7% federal tax.

    Then again, taxes aren't the real problem. I can hire people in any other country and have work done just as good at 70% lower cost. Good luck creating jobs with that kind of global competition.

  9. sfvrealestate

    September 26, 2011 at 5:54 pm

    Um, Jeff. A few points. At the risk of stating the obvious, we're real estate brokers. That makes us middle men and women. We don't create jobs. And we don't provide a market, so you can't call us "takers" either. Rather, we'd be the parasitic fleas on the producers and takers. Sorry, but true.

    And your 10% paying all the taxes? What about sales taxes? And property taxes? If you consume, and we all do, you pay sales tax. In L.A., it's almost 10%. The producers AND the takers pay that.

    As far as the producers go, do you think they'd have any sort of market for what they produce without the takers? And without a market, would they be producing anything? They certainly wouldn't be selling it.

    And where does Amazon fit in? I did not get this part of your argument at all.

    And who gets their electricity for free? Or their water/sewer charges?

    Jeff, face it. You just don't like to pay taxes. None of us do. But some people (like me) like having our roads paved, our soldiers supported, our food inspected, our pilots supervised, etc.

  10. sfvrealestate

    September 26, 2011 at 6:02 pm

    I forgot to ask two questions: since in the 100-person village, if it fits population demographics, probably 20 people are children who can't work and 10 people are seniors who can't work, can we just get rid of them to help balance the equation? Why support the scofflaws, eh, Jeff?

    And two: if I read AG and don't patronize the sponsors, does that make me a taker or a parasite?

    • Timm Eubanks

      September 26, 2011 at 7:15 pm

      Funny, see using the shell game. The classic, seniors and children. If you love children so much, why not cut federal taxes and fees so one parent can stay home or a single parent can not work as long of hours? As for Seniors, how about letting them keep more their money when they are in the job market so they can have enough for retirement? Why give the power to the Gov't to decide who and how much they will give back to us? You really trust the same people who have scandal after scandal on both sides of the isle to take from you and give to others? We should be able to run the Gov't on much less money. Just the hidden fees sales taxes should be plenty. Here is an example of my actual rental car form last week: 3 days at $65.13= $195.39 / CFC (consolidated facility charges) fees $10.00 / Vehicle Lic Fee 3x.42 = $1.26 / Tourism fee $4.56 / Airport Concession fee $14.47 / sales tax $14.23 for a total of $239.91. Did I mention I had to fill that car up before returning and the local, state and Fed Gov't received money as well? It's not that we aren't taxed enough, it's that our Gov't is pissing away our money. I would prefer to keep my money and help and donate to charities that I trust. My 2 cents, oh crap, they just took one of those cents for tax!

      • sfvrealestate

        September 26, 2011 at 8:42 pm

        Timm, nobody held a gun to your head and made you rent a car. You could have used a Sedgeway. Or hitched a ride with a Producer. Or walked. And what's with the extra "m" in your name? You're unnecessarily using up the universe's supply of "m's," you taker, you!

        • Timm Eubanks

          September 26, 2011 at 9:55 pm

          I love a good come back! Damn that "M"!!! THX! No no one did hold a gun to my head to rent that car. But if I wanted to run my business, I had too. A Sedgeway or walking from Oakland Airport to my photo shoot location 70 miles North with 200 lbs of equipment probably wouldn't work. Do you hitch rides with other Real Estate agents to show homes or do you take your clients on a Sedgeway? C'mon let's both lean!!! 🙂

        • Timm Eubanks

          September 26, 2011 at 10:21 pm

          Ha! I see you are using the extra "f's in the universe. 🙂

  11. Jeff Brown

    October 6, 2011 at 12:42 am

    Hey sfvrealestate — Let me ax you a question. When I hire assistants in CA and the other states in which I do business, what would you call that? Taking? Or — wait for it — here it comes — creating jobs? Real estate brokerages don't create jobs? That statement was either meant in jest or . . . never mind.

    Let's not forget the transaction coordinator who's paid thousands each year for one reason: I'm a broker and created the need for her time and expertise, and must pay for it. Wouldn't ya know it? Another job. Then there's the photographer, who, since it didn't say Red Cross on his forehead, charged me for the shots he took of the listing I was marketing. Another job.

    I'm in Texas as I write this. I'm not the only reason, but a very significant reason why my investment lender in this state had to hire a full time assistant this year. Oops, another job.

    Since I'm not a Raider, or a Taker, I'll avoid the 15 yard penalty, and stop piling on. Geez, Louise, Myrtle. Ya can't make this stuff up.

  12. MikeDevlin

    July 8, 2012 at 4:01 pm

    These statistics are misleading and don’t tell the whole story. They leave out payroll taxes that every worker pays to make sure they will have Social Security and Medicare when they retire, which fall disproportionately on the middle class. And they don’t mention that the share of the nation’s income going to the highest earners grew rapidly in the past two decades – at the same time tax rates fell for the highest earners.
     
    In fact, because of growing income inequality, the top 10 percent of American earners now earns 42 percent of the nation’s income, and when correctly calculated, pay about 50 percent of the federal income and payroll tax burden – not much larger than their share of earnings.

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Opinion Editorials

Learning in the workplace: An exploratory mindset can foster efficiency

(OPINION) A typical business model is to run a tight ship with fear of inefficiencies, but cultivating learning can bring the best out of organizations

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Left side of brain showing calculations and right side of brain with colorful paint, resembling creativity and learning.

Despite living in an ever-changing world, many people assume that learning, be it academic or vocational, more or less stops with the conclusion of formal education. Harvard Business Review’s John Hagel III posits that an exploratory mindset, rather than fear, is the most effective way to cultivate an ongoing interest in learning – something that, as Hagel reveals, is more beneficial to a modern world than business owners realize.

Inefficiency is perhaps the most common fear of any business owner, and for good reason- Efficiency is tied directly to profits. Because of this, the majority of industries focus on establishing protocols, training employees rigorously, and then holding them to their prescribed models of operation.

And while those models can be extremely restrictive, the fear of inefficiency prevents employers from fostering creativity and personal learning, prompting some to go so far as to penalize employees who color outside of the lines. Indeed, Hagel describes one such interaction affecting an acquaintance of his: “As someone who was excited about improving the company’s supply network, she created and began testing a new intake form to assess supplier reliability.”

“She was fired for not using the standard procurement forms,” he adds.

But Hagel’s acquaintance wasn’t acting maliciously, at least by his description; she had simply identified a bottleneck and attempted to fix it using her own expertise.

We’ve written before about the importance of trusting one’s employees, implementing flexible procedures, and even welcoming constructive criticism in the interest of maintaining efficiency in a growing market. This is exactly the point that Hagel drives home – that holding employees to standards that are optimized for maximum efficiency discourages flexibility, thus culminating in eventual inefficiency.

“In a rapidly changing world with growing uncertainty, front-line workers find themselves consuming much more time and effort because they have to deviate from the tightly specified processes, so scalable efficiency is becoming increasingly inefficient,” says Hagel.

The irony of rigidly efficient practices inspiring inefficiency is clear, but the process of moving away from those structures is fraught with missteps and a general lack of understanding regarding what truly motivates employees to seek education on their own.

Let’s be clear: No one is advocating for a Montessori approach to work, one in which employees spend more time licking the walls and asking questions about the sky than they do attending to the tasks at hand. But employees who have been encouraged to explore alternative solutions and procedures, especially if they are supported through both their successes and failures, tend to be more ready to “scale” to increasingly changing demands in the work environment.

Ultimately, those employees and their expertise will create a more efficient system than all of the best-thought-out procedures and guidelines one can muster.

“Cultivating the passion of the explorer enables innovative thinking in the organization at a whole new level,” Hagel summarizes. “But harnessing that opportunity requires us to move beyond fear and to find and cultivate the passion of the explorer that lies waiting to be discovered in all of us.”

It is both Hagel’s and our own hope that businesses will find ways to appeal to that same exploratory passion – if not because it is in the best interests of employees, then, at least, in the name of improved efficiency.

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Opinion Editorials

Art meets business: Entrepreneurship tips for creative people

(EDITORIAL) Making your creative hobby into a business is an uphill battle, but hey, many other people have done it. This is how they crested that hill.

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creative artist doodle

If the success of platforms like Etsy has proven anything, it’s that creative people can launch successful businesses, even with relatively few tools at their disposal – and for many hobbyists, this is the dream. That doesn’t mean it’s easy, though, and what pushes someone from creator to businessperson can be hard to pin down. In one study, the determining factor was encouragement by family and friends. Others make a slower transition from hobby to side hustle to full-time employment in the arts. Whatever the motivating factors, though, artists interested in becoming entrepreneurs need to hone an additional set of skills.

It’s All In The Plan

From one perspective, artists know how to follow a plan. Whether we’re talking about a knitter who can work through a pattern or a novelist outlining a chapter and building characters, creative thinkers also tend to be very methodical. Just because someone can create or follow a plan, that doesn’t mean they know how to develop a business plan. Luckily, there are plenty of guides to starting a business out there that contain all the basic information you’ll need to get started.

Business development guides are full of valuable technical information – what paperwork you’ll need to file, the cost of licenses, and other similar details – but they can also help you answer questions about your goals. Before you can even start writing a business plan, you’ll need to consider what service or product you want to offer, who your clients will be, and what differentiates your product from others out there. This last question is more important than ever before as more people try to break into creative fields.

Assess Your System

Once you know what your business goals are and what products you’ll be offering, you need to consider whether you have the ability to scale up that operation to fulfill market demand. There aren’t very many art forms that you can pay the bills with fulfilling commissions one at a time. The ability to scale up the artistic process is what made the famous painter Thomas Kinkade so successful during his lifetime when many others have failed. For the modern artist, this might mean asking whether you can mechanize or outsource any of your activities, or if you’ll be doing only exclusive work for high-paying clients.

Find The Right Supports

Every business needs support to thrive, whether in the form of a startup accelerator, a bank loan, a community of fellow professionals, or some other organization or resource. Artists are no different. If you’re going to develop a successful creative business, you need to research and connect with supports for working artists. They may be able to help you access tools or studio space, get loans, market your business, or connect you with a receptive audience. These groups are expert repositories of information and you don’t have to be in a major city to connect with them.

Find Professional Partners

You’re a talented artist. You have a vision and a plan. That doesn’t mean you have to go it alone – or even that you should. To build a successful creative business, you’ll want to partner with people who have different strengths. Not only will these people be able to lend their expertise to your operation, but they’ll make you a better artist and entrepreneur by lending a critical eye to your approach. Just like a major corporation won’t thrive if it’s composed of yes-men who are just along for the ride, your creative undertaking needs internal critics whose ultimate aim is to support you.

Stay Inspired

It’s easy to get bogged down in business logistics and lose your creative spark. In fact, that’s why many artists are reticent to monetize their work, but you shouldn’t let that fear hold you back. Instead, put in the effort to stay inspired. Read books about art and creativity, keep a journal, or go to museums. Experiment with new forms. Be willing to push your own limits and know that it’s okay to fail. Many businesses that aren’t tied to creative output flounder and struggle to find their way, and there’s no reason your business should be any different. Still, the surest path to failure is stagnation and losing your spark. That’s worse for any artist than a sloppy business plan.

Artists are often told that they aren’t meant to be entrepreneurs – but the most successful businesspeople are creative types, even if they aren’t typical artists. Use that outside-the-box thinking to your advantage and make a splash. If you want to do more with your art, you owe it to yourself to try.

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Opinion Editorials

Why tech talent is in the process of abandoning Austin

(AUSTIN TECH) There is no single reason Austin tech talent is packing their bags, but a handful of factors have collided to create a tenuous situation.

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austin tech talent leaving

“Nothing’s keeping me here” is a phrase we keep hearing around town. Being in the center of the tech space, we’ve been able to keep my finger on the pulse, and what we thought was primarily housing that is driving folks out of town turns out to be far more insurmountable than we could have ever imagined.

A perfect storm is brewing as the housing market collides with a dramatically transformed workforce that has become accustomed to working remotely and shifted priorities.

Last time Austin was bleeding talent, the year was 2011 and most investments were focused on early stage startups and there weren’t enough open roles that were senior level, so we started losing people to competitive markets. In response, we built a massive employment hub (the Austin Digital Jobs Group (ADJ)) and volunteered hundreds of hours to help make Austin a magnet for high quality employers.

This time around, we expressed to the Group of over 55K members that we were frustrated that people were confiding in us that they were leaving (or considering it). Some are even people that we all imagined to be part of the very fabric of Austin tech. We feel helpless this time.

Many of these talented people said that the soaring housing prices in Austin had them eyeballing smaller towns in Texas, or worse, their hometowns outside of the state. There are only so many times you can try to buy a house, get rejected, or get outbid on 22 homes before you start looking at other places. Only so many people will accept a billion percent rent increase at renewal time before thinking that going back home to Louisiana’s lookin’ pretty good.

This week, Austin CultureMap reported that Austin now ranks number two among the most overvalued home markets in America.

Tesla is getting ready to open their Gigafactory, Oracle is moving their headquarters to Austin, and Samsung is currently trying to get buy-in from city officials in Taylor so they can build their mega plant near Austin. Home investors and firms from all over are salivating.

It all feels both exciting, yet overwhelming when you’re going to buy a house here, only to get outbid by $150K over asking price from an investor in California. It’s been demoralizing for so many.

Because we also own a massive real estate publication, we’re firmly in touch with that sector, and brokers in Austin are telling us that the summer was out of control and overheated, but they’re already seeing that hyper-activity slow a bit.

Housing alone isn’t enough of a reason for an entire sector to be packing up or dreaming of leaving. So what gives?

At last count, a thread in ADJ on this topic is at 806 comments, and I personally received several hundred more via direct message with people in tech explaining why they’re leaving or considering leaving.

There are challenges within the city limits of Austin that have bubbled over like crime and separately, the contentious issue of houselessness – it’s an ongoing and very serious issue that has people leaving downtown, but not necessarily leaving the surrounding areas.

So if housing isn’t the exclusive driving force, how has that problem combined with the employment market shifts? How has the job market changed in such a way that talent is ready to hit the eject button on this town? It boils down to a changing talent pool, fractures in the hiring process, a shift in priorities, and a lingering brokenness in the entire process that is exacerbating all other conditions.

Let’s dig into that further.

Because of the global pandemic, remote work has become a staple in the tech industry, teams adjusted and realized the office is more of a luxury than a requirement, and many large brands swear that they’ll never require their employees to come into the office again.

For that reason, tech workers’ expectations have been forever changed. Fully remote options will drive the market for years to come, and hybrid options or flex work hours will also be how large tech firms attract and retain talent – ping pong tables and chill vibes will be less of an appealing sales pitch.

The pandemic has also shifted the talent pool to include everyone in America – if all workers are remote, employers no longer have to look just to the local workforce. This talent pool expansion is a double-edged sword – if an Austin tech company can look to Nebraska for workers, then remote workers can look outside of Austin to other budding tech hubs, potentially shifting the entire environment. That’s the main driver for Austin brands continuing to hire in Austin, lest the entire ecosystem fail.

All that said, a disconnect in the job market in Austin tech remains. Holdouts from attitudes and old systems of the past linger on.

A theme we continue to hear from high quality candidates is that employers have increasingly unrealistic expectations. You already know the stereotype of job listings that say they’re entry level but require a decade of work experience. But as budgets tightened in the face of uncertainty, Austin tech companies are becoming phenomenally great at hiring someone to do three jobs that pay less than one. One of our Group members asserted that employers are looking for turnkey employees. It used to be that employer job descriptions were a realistic wish list and that if you hit over 60% of them, you might get an interview. Now people believe that the requirements are becoming unrealistic and if you meet less than 100% of them, there is zero chance of an interview. Many have complained that hiring managers and recruiters continue to not be aligned, slowing the process repeatedly.

The timing of the acceleration of unrealistic expectations has locals feeling like the pandemic created conditions that allowed for employers to take advantage of job seekers who must be desperate since the world is upside down. I don’t personally believe this has anything to do with the pandemic, rather it is a continuation of an ongoing trend.

If you think this is an exaggeration, just this week a job seeker let me know that a recruiter sent them a job description that required the “ability to code in any language.” WTF. The recruiter was serious. Try telling me this isn’t out of control and I will laugh right in your face, friend.

Another serious point of contention in Austin is that salary levels are not increasing anywhere near the skyrocketing living expenses.

Many believe the salary levels are a decade old and simply can’t keep up with the market conditions in Austin and while we’ll leave the “you are a remote worker, you shouldn’t earn as much since you moved to a less expensive locale” debate to another day, we will firmly assert that this problem will hold back the tech innovation and the overall economy in Austin.

In that massive thread in our Group, one member asked, “So I guess a question is: do we accept the idea that Austin is now only for those making 6 figures??”

What is so disheartening about the salary conditions is that changing this couldn’t possibly be done overnight – it requires time and structural changes, and the bigger a company is, the slower it is to turn the proverbial ship.

Meanwhile, numerous people retired early during the pandemic, or began freelancing or consulting full time. Many of these people aren’t likely to return to the workforce under current conditions, and they feel like they have less roots in Austin – they can live anywhere now. See how remote work has caused a ripple effect?

Do you remember when some tech executives in Austin reluctantly sent employees home as the pandemic hit, flippantly warning that it wouldn’t be a coronacation!? Bad behaviors like this and other employee treatment during the pandemic haven’t and will not be forgotten – the memories will remain as fresh as the time you got shoved by that bully in elementary school. You may have forgiven, but you’ll never forget. Trust has been broken.

Trust was also broken during the pandemic when people lost what they believed to be stable jobs. It has created a certain trepidation in the marketplace.

The pandemic has forever altered all of our lives as individuals. Thousands died from COVID-19, and those of us left behind lost loved ones. We were all sent home with no job security. Many of us became homeschool teachers and somehow also had to keep up with our careers. We were forced to share spaces with our partners, our children, our parents, our family.

Some would think all of this is a recipe for resentment, but in the majority of cases, what has happened is a serious shift in priorities to favor the family, to appreciate quality time, to find solace in more quiet time and a less full calendar.

People tell us they don’t intend on going out for drinks after work when they’re called back into the office – it turns out we actually like our kids or partners now that we’ve gotten to know them, or that we value our newfound connection to old hobbies. The priorities aren’t fleeting – this pandemic has changed us.

Because of this fundamental change in who we are, ongoing problems in the employment market are now magnified.

“Isms” still plague the hiring process. Ageism continues to be a very serious problem in Austin tech, for example. People tell us that they’re still experiencing sexism, racism, ableism, and every other sort of discrimination. In 2021. It’s unbelievable. You can say all of that is simply perception, but in this scenario, perception truly is reality. And because our priorities have shifted, our giveashitters are pretty low when it comes to tolerating bad actors.

That same shift has also lowered tolerance levels for burnout. One member in the Group pointed out that after the market crash in 2008, resource levels were depleted – and here we are in 2021, they haven’t been restored. People were burned out before the pandemic, and now they’re moving to the country to work remotely and begin healing this burnout that is coming to a head.

It’s difficult to deal with ghosting (be it computer-aided or overworked recruiters) when you’re already burned out and thinking you’re the only one. It’s giving this sector a terrible reputation that is spreading.

Resources aren’t the only factor here that is stuck in 2008. Companies were so used to getting a flood of applications for every single job listing, their ATS (applicant tracking system) filters were implemented accordingly. The volume of applications has dropped, yet the filters remain overly restrictive. They put their ATS on auto-pilot once upon a time, and it remains that way, yet they continue to reach out to us in confusion, asking us where all the applicants are.

In the eyes of tech talent, the hiring process has deteriorated. Simultaneously, in the eyes of companies hiring, the process has been improved. Enhanced.

The disconnect here is not in the unrealistic expectations previously outlined, or the rising opacity in salaries, but in the actual mechanics of the hiring process. Even smaller companies have added additional rounds of interviews and ridiculous red tape in what is an effort in vain to compete with the Googles of the world. There’s a lot of what I would call “playing office” going on, with non-technical hiring managers hiring for technical roles, or unrelated staff being roped into panel interviews to weigh in on whether or not someone is a “culture fit.”

The process has become lengthy and demanding with endless personality tests, whiteboard tests, Zoom calls, questionnaires, more phone and video calls, aptitude tests, and so forth. Most people have come to accept these as hoops to jump through, but the practice of having job seekers do extensive unpaid projects as part of their job application is creating deep resentment and a growing resistance. No one expects to shake a hand and get a job today, but doing a 12 hour assignment that is due in 24 hours is unreasonable, especially unpaid and with no promise of their intellectual property being protected.

It started off as a way to aide candidates into demonstrating their true skills and it was simple. But over time, the practice has “evolved.” It feels to some like every Austin tech recruiter and hiring manager went to some evil underground conference a few years ago and were brainwashed into thinking that if they ALL assign abusive tasks, no one in the sector will notice because they’ll just accept that it’s “how things are done now.” But that’s not happening and the overly complicated process combined with other market factors is driving seriously qualified tech talent out of Austin.

The hiring process has continued to degrade and for no good reason. We actually built ADJ in a way that would directly connect hiring manager and job seeker, promoting the concept of simplifying the hiring process. Yet here we are.

The final nail in the coffin is that candidates and employers are blaming each other for a power imbalance, and thinking that their situation is unique. A feeling of isolation is growing due to peoples’ inability to openly discuss this process – both hiring folks and job seekers.

The bottom line is that numerous market conditions have converged to create a scenario where people are tired and simply won’t settle anymore. Expectations have changed. And we have changed as people.

We will inevitably get hate mail because of this editorial and folks will say that the very publication of this piece will push people out of town, but we would argue that if no one makes an effort to diagnose the growing illness, it will metastasize.

This editorial was first published here on September 09, 2021.

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