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The Truth About Net Neutrality Job Loss 187

Posted by Soulskill
from the watch-out-for-net-neutrality-death-panels dept.
snydeq writes "Robert X. Cringely investigates recent claims that passing net neutrality regulations will result in nearly 1.5 million lost jobs by 2020, finding the report at the center of these claims suspect. The report, put forward by The Brattle Group, conjectures that net neutrality adoption would curtail broadband growth by 16 percent, costing 342,065 jobs in that sector alone. The 'total economy-wide impact,' however, of such a policy would result in five times as many job losses by 2020, they say. The study is the latest of several weighing the economic impact of net neutrality, including those by law schools (PDF) and free-market think tanks alike. The Brattle Group report (PDF), however, should be met with skepticism, Cringely argues, in large part because the lobbying firm who paid for the report, Mobile Future, is anchored most notably by AT&T. Moreover, the report is 'based entirely on a single assumption: Regulating US telecoms in the late 1990s and early 2000s hurt them to the tune of about 15 percent per quarter, relative to the cable companies.' Yet, as he points out, regulation was not alone in causing this sector shrinkage. In fact, the Baby Bells' own bureaucratic intransigence was much to blame."
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The Truth About Net Neutrality Job Loss

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  • by Anonymous Coward on Monday April 26, 2010 @05:31PM (#31990536)

    At least 1,499,999 of them being lobbyists.

  • by Dalzhim (1588707) on Monday April 26, 2010 @05:35PM (#31990590)
    People learning more than one language in school cause job loss in the translating field. People learning how to cook cause job loss in restaurants. Free trade costs a lot of jobs at the customs. I mean, I can create a shitload amount of jobs by having people work on many stupid things. It doesn't make those things worth working on.
  • Re:FFS (Score:3, Insightful)

    by ProdigyPuNk (614140) on Monday April 26, 2010 @05:40PM (#31990692) Journal
    This has been going on for ages. Industries always pay for one-sided studies. They are still doing it. It must work to some extent, otherwise they wouldn't be spending the money. Hence the necessity of articles like this to expose this form of dishonesty to a few new souls.
  • by CyprusBlue113 (1294000) on Monday April 26, 2010 @05:45PM (#31990780)

    It costs them jobs the same way minimum wage, hours regulations, vacation time, health insurance, OSHA, and all of the other restrictions on whatever the hell you want to do business do. Just because its true doesn't mean its the right answer.

  • a simple idea (Score:5, Insightful)

    by phantomfive (622387) on Monday April 26, 2010 @05:47PM (#31990824) Journal
    Maybe they can take those people and switch them away from throttling people's bandwidth, and put them on the job of installing new fiber. It's a win-win situation. No jobs are lost, fiber is installed. Unless somehow these people aren't actually going to lose their jobs......
  • by NeutronCowboy (896098) on Monday April 26, 2010 @05:49PM (#31990862)

    So how exactly would passing a law that basically codifies current practices cause job loss?

    Not to mention that it isn't even job loss that they're talking about. They're merely speculating that growth will be 15% less than without regulation - and somehow, that translates into 300000 jobs that will not be created.

    Can we please, please stop talking about not getting what you think you should get as being the same as a loss or theft? Because if we're going to go down that route, I'm gonna argue that a lack of net neutrality regulation will cost me 2.74 gazillion dollars, and sue the Federal Government for that amount.

    Then again, we're talking about lobbyists here. If the money is right, they'll argue that cigarette smoke freshens your breath and turns babies into geniuses.

  • by Monkeedude1212 (1560403) on Monday April 26, 2010 @05:53PM (#31990930) Journal

    Exactly. What exactly is the benefit of a society where you are worried about "Job Loss" in a sector that won't promote any growth? Who is not going to have a job? People who are working against net neutrality, and that alone. Its not like the Lawyers don't have skills to apply law in other fields. Its not like Technicians don't have skills to work in other IT Fields. Its not like Lobbyists can't lobby in other fields.

    It's like the idea that we need to have a secretary for every employee because without it there would be job loss.

  • by PopeRatzo (965947) * on Monday April 26, 2010 @06:06PM (#31991126) Homepage Journal

    It costs them jobs the same way minimum wage, hours regulations, vacation time, health insurance, OSHA, and all of the other restrictions on whatever the hell you want to do business do.

    So in other words, it does not cost jobs.

    Remember, all those laws and benefits were in effect during a time when we had 4% unemployment (aka "full employment").

    Minimum wage does not cost jobs. Vacation time, benefits, OSHA, etc do NOT cost jobs. In fact, after OSHA went into effect, total employment in the US went up for decades. Vacation time and health insurance started showing up in benefits packages after the big war, and the most prosperous decades for the US and for the middle and working-classes generally were yet to come.

    Maybe it sounds "truthy" to you to say those things, CyprusBlue113, but that doesn't make it so.

  • by MickyTheIdiot (1032226) on Monday April 26, 2010 @06:16PM (#31991328) Homepage Journal

    This is the Telephone Operator fallacy. When automatic switching equipment was invented, operators whined that they would lose jobs. If we accepted that mentality we would now need to employ more telephone operators in the U.S. than the entire population.

    If you keep growing the network this "job loss" is negated by orders of magnitude. Again... another report that trying to exploit the ignorance and lack of reasoning ability in the masses (and our legislators).

  • by gangien (151940) on Monday April 26, 2010 @06:17PM (#31991342) Homepage

    Minimum wage does not cost jobs.

    umm yes it does.

    It's an increase in cost that has to be paid. whether that's not hiring an additional worker, firing a current one, increasing prices to customers or whatever. it certainly does cost jobs.

  • by Gr8Apes (679165) on Monday April 26, 2010 @06:18PM (#31991358)

    funny enough - hours regulations created more jobs in the factory sector. 40 hour work weeks meant that instead of having 2 workers per day for 7 days a week, they now had to have at least 3 workers per day for 5 days, plus extras to cover the hours on the 2 remaining days. So by my quick look - that was an extra 3 people employed, or 150% addition.

    Did it put a crimp in the employer? I'm sure it did. But so does having to pay their employees anything.

  • Some ISPs pay Disney for the right to show ESPN3.com and ABC News Now content that other ISPs don't get.

    That is not the main debate surrounding net neutrality. The primary concern of net neutrality is an ISP charging websites money in order for the website to be able to get through to the ISP's users, or an ISP not allowing video streaming protocols unless users "pay up" extra money.

    What you are describing is premium content. Hell I am all in favor of that. If an ISP wants to gain a competitive advantage by working in conjunction with some media provider who has a desired resource, then that is just called good business all around. Users can, if they so wish, choose an ISP which has a partnering agreement with some desired media partner, and that media partner has a revenue stream which allows them to offer services which they may not otherwise be able to profitably offer.

    Not everything can be supported by Adwords. :P I have no issue with people paying for premium content, I do have issue with ISPs holding content that is on the public internet hostage unless users or website operators pay up an additional fee.

    MTV has threatened to make it's website pay-by-ISP in the past, but has been convinced that'd leave MTV.com with no audience.

    Hey so the free market does work now and then. :)

    The status quo is NOT "net neutrality" in any way.

    The status quo is de facto net neutrality. Comcast pushes the boundaries now and again, but consumer backlash has so far been sufficient to halt further encroachments. Unfortunately smaller ISPs do not get the massive negative press that large ISPs such as Comcast receive, thus allowing the smaller ISPs to at times get away with BS that larger ISPs would get publicly chastised for.

  • by zifferent (656342) on Monday April 26, 2010 @06:48PM (#31991820)

    May cost actually jobs but ends in a net increase of jobs.

    Follow along, you might learn something.

    Thought experiment:
    Assume that we got rid of min wage, and according to your argument instead of hiring one person at min wage the business could get away at hiring 2 people at half minimum wage (it would never happen in the real world. ITRW a business would just cut wages and keep the employment the same; keeping the resultant increase in efficiency for themselves but whatever) Those two people would be earning much less and could only realistically afford to live in shanty-towns with barely enough money left over to feed themselves, much less add any utility to the greater economy. Hence, the money doesn't move around the economy. Hence, no multiplier; no extra goods bought and sold and importantly no jobs created upstream of the way-less-than-poverty wages.

    It might even be argued that wages below a certain level have a negative utility to the economy. The externalities not picked up by the slave-wage employer are passed on to society as a whole contribute to a net-loss of real jobs. Obviously this kind of thing can snowball and pick off previously higher paid jobs as it goes, pushing wages further down as unemployment rises. Creating a real world with haves and have-nots without a buffering middle-class.

    Keep believing that the free market fairy will come and magically make things right; leaving goodies under your pillow as you sleep.

  • by blackraven14250 (902843) on Monday April 26, 2010 @06:57PM (#31991948)
    No, it means that the business will have the same 5 workers at $7.50 instead of $0.03 per hour. Would you really want to have companies with the ability to keep pay rates the same for 60 years with nobody forcing them to pace with inflation?
  • by gangien (151940) on Monday April 26, 2010 @07:04PM (#31992068) Homepage

    Assume that we got rid of min wage, and according to your argument instead of hiring one person at min wage the business could get away at hiring 2 people at half minimum wage (it would never happen in the real world. ITRW a business would just cut wages and keep the employment the same; keeping the resultant increase in efficiency for themselves but whatever)

    You're saying that if a buisness could cut the wages of employees, keep the employees, it would then keep the money for itself, and all that would happen is the buisness would make more money? You're making a lot of huge assumptions there, that ITRW, would not happen.

    Those two people would be earning much less and could only realistically afford to live in shanty-towns with barely enough money left over to feed themselves, much less add any utility to the greater economy.

    And unless economic conditions were horrible, they would leave, or their production would fall. Or you truly believe you can get something for nothing, so easily? Hey why don't you start a buisness, you can hire only women as they only make 2/3s of what men make, you can make a killing and become rich. That obviously will not work, just like your situation.

    Keep believing that the free market fairy will come and magically make things right; leaving goodies under your pillow as you sleep.

    no need for any fairies. I'll type this on my computer that goes through the internet, then i'll leave work, drive in my car, to my apartment, eat some nice food, ect ect. Why? because of the market. Not because of some stupid belief that we can regulate success and a better life. Free markets are not perfect, but they are far better than anything else we've tried.

  • by Anonymous Coward on Monday April 26, 2010 @07:09PM (#31992148)

    ATT had not been broken up

    The AT&T that you speak of was a product of the Communications Act of 1934, not some unregulated robber barons run amok. That fact that you believe the latter is evidence of your indoctrination.

  • by PopeRatzo (965947) * on Monday April 26, 2010 @07:37PM (#31992534) Homepage Journal

    Thought experiment:

    Well said, friend.

    I only wish I could have made the point so clearly and convincingly.

    Conservatives just don't want to admit that the years of greatest growth and economic strength across class lines occurred in the US after some of the strictest regulations, most socialistic programs, and widest influence of organized labor were in effect. Social safety nets, strong regulation, public works and collective bargaining make for a better, more equitable society, but they also make for a more dynamic and successful private sector.

  • by Daniel Dvorkin (106857) * on Monday April 26, 2010 @07:38PM (#31992540) Homepage Journal

    I'll type this on my computer that goes through the internet, then i'll leave work, drive in my car, to my apartment, eat some nice food, ect ect. Why? because of the market. Not because of some stupid belief that we can regulate success and a better life.

    Oh, this is fun! Let's take this piece by piece:

    my computer

    ... based on technologies developed for government contracts ...

    that goes through the internet

    ... that used be called ARPAnet ...

    then i'll leave work

    ... at a company that relies on the courts to enforce its contracts ...

    drive in my car

    ... in a car that probably won't kill you because of DOT safety regulations, on roads built with public funds ...

    to my apartment

    ... that would be an unsafe rat-trap if not for housing regulations, and where you have a reasonable assurance that you'll be able to continue living because the government won't let your landlord throw you out on the street any time he feels like it ...

    eat some nice food

    ... that's been certified by the FDA ...

    ect ect.

    ... well, okay, clearly there are some failings in your education, but that's probably your fault, not the fault of the underpaid and overworked public school teachers who tried to drum some knowledge into your thick skull. The rest of it, you enjoy courtesy of your local, state, and federal government whether you are capable of understanding this or not.

  • by Moridin42 (219670) on Monday April 26, 2010 @07:55PM (#31992728)

    Follow along with this thought experiment.

    Lets say that minimum wage is $7 even. Joe is earning $7.50. Minimum wage is raised to $7.50. Joe probably isn't going to be getting a raise. But now prices have gone up a little to pay for the increase to the minimum wage earners who got a legislated raise. So Joe is poorer than he was before. And so is every one else who wasn't earning minimum wage, but you probably have more empathy for somebody earning on the low-but-not-minimum part of the pay scale.

    Minimum wage might be economically neutral (that is to say, gains by the minimum wage earners would be offset by losses to everybody not a minimum wage earner) if all work was entirely necessary. But minimum wage work probably isn't absolutely necessary. So if unskilled work that isn't necessary to a business is worth some flat amount of money, when minimum wage is raised, they'll respond by dropping a position to pay the remaining positions the new minimum. Or by keeping the staff, but telling them to knock off earlier. Any unfinished work, say sweeping the floors, is a non-monetary cost passed on to consumers.

    Actually, there are lots of ways to pass on the costs of minimum wage. As mentioned, dropping a position and having your current staff work a little less. Employers could also respond, instead of dropping minimum wage positions, by extending the period between renovation/redecoration. Such a response causes the job losses to be felt in construction and associated industry. There is also inflation, which obviously not controllable by the employer, but is a natural artifact of the prices of goods and services going up when no actual additional value has been contributed.

    Keep kidding yourself that legislating a raise in cost for anything, doesn't lead to less of something complementary in response. Minimum wage legislation can't make workers more efficient or more resources available. It could, but doesn't, mandate the number of positions or the hours those positions must work.

    the tl;dr of it: If workers don't become more efficient, or more resources (not money) are not available, legislation that raises the cost of labor will result in less labor. Either through fewer hires or fewer hours.

  • by ooshna (1654125) on Monday April 26, 2010 @07:57PM (#31992748)
    You never worked for fast food. Entry level shit job managers care about nothing but the bottom line knowing if, you don't like what they make you do for how much they want to pay you there are 100s of applications waiting in there office with the numbers of desperate unemployed people willing to do your shit job for less (at least for awhile before the cycle starts again)
  • by NeutronCowboy (896098) on Monday April 26, 2010 @08:19PM (#31992998)

    The fact that no one would return to a grocery story that consistently served spoiled food, keeps that from happening. The fact that no one wants to live in a horrible apartment, keeps the apartments nice.

    Unless, of course, you were working at Walmart in Mexico prior to 2008, or in mining and logging towns in the 19th century. You might want to look up the concepts of company towns and scrip.

    Obviously, I bow down to your superior intellect.

    I don't know about your intellect, but your knowledge seems to be a bit lacking.

  • Even if we presume everything you say is true, I would much rather live in the situation you describe than that of sweatshops paying a few cents an hour. This, too, would have negative ripple effects. By failing to set a "floor" on what a wage is, you lower the wages of higher wage workers as well. If fast food is paying fifty cents an hour, a buck an hour for management is a nice raise. It also limits the ability of corporations to "externalize" the cost of not paying a living wage to social welfare systems funded by the public, while enjoying all the benefits of cheap labor.

    At least with a minimum wage, it matters if you get hired or not. I'll gladly trade a slightly lower chance of getting hired for a better wage once I do. And if my hours are fewer, is that really a loss either? Am I better off working sixty hours a week at fifty cents an hour (with no overtime regulations), or forty hours a week at $7 an hour (with overtime if I'm periodically needed more)? Which would you choose, given the option?

    Reality isn't economic theory. The people being hired are human beings. Given that, there are interests of human dignity and basic needs, not just the "optimal economic outcome". If the "optimal" outcome crushes a bunch of people under its wheels, it isn't the optimal outcome. As it stands, until the economy hit the crapper, most people were able to find work just fine, minimum wage notwithstanding.

    The same is true of many other regulations. I'm very happy to take higher prices in exchange for safety in both products and the workplace. Lower prices don't do me a whole lot of good dead, and they certainly don't do me much good if I've got to regularly pay massive hospital bills to recover from illnesses and injuries caused from unsafe work environments and products and don't have a mechanism to recover damages from those responsible.

  • by mikael_j (106439) on Tuesday April 27, 2010 @12:23AM (#31995140)

    I know this is hard to believe but sometimes you don't have a choice!

    When I was straight out of college I didn't have mommy and daddy to pay for everything until I found a $70k/year job so I took a job where I was working part-time (everyone but management was part-time, best to keep the slaves hungry and scared), after taxes I was making ~$950/month and every day was filled with examples of the employer abusing the employees while mostly not breaking the law (thankfully the union was pretty aggressive so when they tried to make people work insane shifts or fire someone for doing what they were told the union got involved and threatened with legal action).

    So does that mean I'm an underqualified idiot? Well, no. These days I'm a software developer, but it took me two years of working shitty corporate troglodyte jobs with near-constant abuse before I found this job (it would have been slightly faster had I moved somewhere else but I didn't have the money for that since I was straight out of college and working jobs that barely paid food and rent (no, employers around here don't help pay for your move or help you find an apartment)).

  • by Xenographic (557057) on Tuesday April 27, 2010 @06:14AM (#31997138) Homepage Journal

    > But minimum wage work probably isn't absolutely necessary.

    Have you ever worked in a factory? They pretty much define the case where you have a ton of minimum wage earners and yet you need them if you want to get any production done. And no, you can't run a factory with no laborers, even if they are unskilled.

    I think that if you look around at minimum wage jobs, you'll find many that can be replaced by machines and many more than cannot (and believe me, we're trying... everywhere from clerks at checkout lines to assorted factory workers).

  • by phorm (591458) on Tuesday April 27, 2010 @09:45AM (#31999480) Journal

    You're saying that if a buisness could cut the wages of employees, keep the employees, it would then keep the money for itself, and all that would happen is the buisness would make more money? You're making a lot of huge assumptions there, that ITRW, would not happen.

    Wow, your glasses must be a real special tint of rose.
    Look in any big city. One thing you'll find is plenty of immigrants who cannot work legally, or can but don't know their legal rights. And the employers will f*** with them as much as they can get away with. Not all employers, mind you, but enough to be substantial.

    When I lived in Toronto (Ontario, Canada), my ex - who was a legal immigrant - had tons of job offers that were degradingly low for her skill level, and often illegally so. Heck, she had a lawyer offer her a job for a "daily rate" which was less than the legal minimum. Within the Asian/Indian community I found that there was tons of job-fraud going on. Companies that paid below minimum wage (and pocketed the difference), had illegal hours, required employees pay for all their work-required supplies/equipment (against the local laws), etc etc.

    There will *always* be people in vulnerable situations that can be taken advantage of. Often enough these are immigrants (and not necessarily illegal ones), because they're unaware of the laws, or because they're willing to spend years in near-squalor locally to send what is decent-money in the homeland back to support their families. Companies do cheap out and cut wages when they can manage to avoid being caught because when one people finally gets fed up, there's another desperate person to fill his/her place. Eventually that deck of cards may fall, but in the meantime you're reporting that profits are up, the shareholders are happy, and you eventually get to float away on a golden parachute or quit before the sh*t hits the fan and leave it to the next sucker to deal with.

  • by toriver (11308) on Tuesday April 27, 2010 @12:52PM (#32002284)

    Libertarian dogma that ignores the advances brought by collective solutions like interpersonal trade and even cities. Do you selfish apes never tire of using the safeties and niceties of the modern civilization to pine for the self-sufficiency of the stone age?

    Read some Adam Smith instead of Ayn "Freaky" Rand - or even Aleister Crowley.

"Consider a spherical bear, in simple harmonic motion..." -- Professor in the UCB physics department

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