Why are US corporate profits so high? Because wages are so low - <AUTHOR> http://blogs.reuters.com/macroscope/2014/01/24/why-are-us-corporate-profits-so-high-because-wages-are-so-low/ <comment><USER2> So just off the bat reading the title, I was expecting numeric evidence for a very numerically based claim.

The data the article provides does not support the author's claim, to say it nicely. For one to claim there's an association between wages dropping and corporate profit increasing, you'd need an area graph over time of corporate expenditures with with worker wages and other common expenses listed. Neither of the graphs included support his claim, as there's a multitude of other variables that could explain their trends. The second claim the author makes is that this is occurring specifically for US companies. There is no data at all cited for this claim.

I wish people would at least "try" when publishing articles with a political motive. All this article will do is reinforce the belief that wages need to rise for people who already believe it.

<comment><USER3> Looks like it's just summarizing what the Chief Economist at Goldman Sachs thinks. There is lots of other reporting about it on the news.

Do you have a theory on what political motive GS might be pushing? Promoting worker wages with made up arguments and unfairly criticising corporate profits doesn't seem to fit their agenda.

<comment><USER4> What is the macroeconomic effect of workers 401K stock investment plans? Stock transactions. You get to skim a little off the top both at purchase and sale. Back in the old days when more people were working, on average having higher income, they'd skim more commissions.

There is an interesting secondary effect of small retail players having been net purchasers of stock via retirement plans, which is to push the market up. You can rely on the fed lowering interest rates to push the market up until rates hit zero, you know, like now, then that stops. Hmm what happens to stock prices when more baby boomers are selling than millennials are buying... Maybe their only hope is to get as many people contributing to retirement funds as possible to at least reduce the blow.

Stocks are fundamentally kinda like real estate in that sellers can stamp their feet and pout and demand whatever rate of return they like, but in the long run, the median sales price is going to be whatever the median dude can afford, and "the market" doesn't care what the sellers "need" it only cares what the buyers median income is, which has been falling for a couple decades depending on who cooks your numbers.

In the long run, not just next quarter, GS badly needs a lot more workers contributing to 401K and other retirement options. Maybe they're too heavily leveraged up to survive not having more workers to transactionally skim off of.

</comment></comment></comment><comment><USER5> What's particularly disturbing is the sheer greed being shown in pursuit of these profits. There was a recent article about an auto plant in Michigan that went through near-bankruptcy but is now making a $2bn/year profit. The profit was attributed in part to $50m/year in reduced wages that were extracted from the union in exchange for not closing the plant. Those concessions represented over one third of the wages but only 2.5% of the resulting profits. That's just disgusting. They should have kept the wages steady and enjoyed their more-than-sufficient 1.95bn/year in profits.

<comment><USER6> Business income is volatile. The business made a $2B profit in one particular year, whereas in other years they made losses that nearly destroyed them. Somehow I suspect when the business took losses, the employees did not return their wages.

Unless you want employees to share the downside of business income volatility, it's unreasonable to expect them to share the upside.

<comment><USER7> > Unless you want employees to share the downside of business income > volatility, it's unreasonable to expect them to share the upside.

This is an incredibly dishonest statement. Employees DO indeed share the downside of business income volatility by being forced to take pay cuts when their company is going through a rough patch. I see it all the time and I've had it happen to me.

Why are we pretending this is not the case?

<comment><USER6> I'm confused. You signed on to be paid $X/month, you worked a month and were paid $X. Later you renegotiated the contract to be paid $Y < X/month, you worked a month and were paid $Y. If you want to work elsewhere for $X or $2X or whatever, you can.

Downside risk: you signed on to be paid S shares/month or P% of profits. You worked a month and the share price tanked. You already took the loss.

<comment><USER8> Employees are negotiating from a vulnerable position when the options are "take pay cut or good luck finding a new job".

<comment><USER9> You left out an option: start your own business. What the Reuters article tells me is that there is a large pool of available labor for new businesses to use. Why aren't more people taking advantage of this opportunity?

<comment><USER10> Funny that you post that question on a forum full of people who know well from first-hand experience how difficult it is to start a successful business.

<comment><USER9> I didn't say it wasn't difficult. Of course if the choice is between having a steady, reliable job and starting your own business, it's a lot easier to choose the steady, reliable job. But the whole point of the article in Reuters is that the job is _not_ steady and reliable any more; that changes the relative risks involved.

Also, to the extent that it's hard to start a business because of government regulation (which is a _large_ extent), the obvious response is to remove the regulations that make it hard to start a business. That would mean more people starting businesses, hence more new jobs available for other people who are currently out of work. Funny how the Reuters article doesn't mention that.

<comment><USER10> > _the whole point of the article in Reuters is that the job is not steady and > reliable any more_

That's circular reasoning where this thread is concerned. People are saying here that corporations should be sharing the upside with employees. You are saying that since they are not, people should start businesses. You're changing the subject and giving the corporations a pass.

> _to the extent that it 's hard to start a business because of government > regulation (which is a large extent), the obvious response is to remove the > regulations that make it hard to start a business._

Sorry about the delay. Took me a while to wipe the vomit from keyboard.

Seriously, while these regulatory complaints are something that we tend to hear from people with certain political affiliations, I challenge you to cite references to actual regulations that are to any "large extent" preventing actual small businesses from starting. In fact, the implication in the Reuter's article is that businesses are doing just fine in the current regulatory environment. They are more profitable than ever at the expense of the worker.

And, I think the HN populace exemplifies the _actual_ difficulty in starting _successful_ businesses. I doubt many here will cite regulations as a key challenge. Instead, it's actual business problems, such as product development, finding market-fit, competition, marketing, lack of capital, inability to scale, etc.

<comment><USER10> Hmm. Downvoted, but no one actually refuted my assertions. Nice.

<comment><USER11> >Sorry about the delay. Took me a while to wipe the vomit from keyboard

Not nice.

<comment><USER10> Ah. Style points. I get it.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER12> I had to comment on this due to the large amount of misinformation in this thread.

Many people think that companies should be kind, and pay more than the market wage for their workers. This is false and unreasonable. Companies try to minimize their costs, including wages.

Now if in some industry, some company is making huge profit margins, and paying low wages, what is the cause, and what is the solution? In economics, profits go down until they reach 0 or close to 0. Why? because if there are huge profit margins, more firms come in, to compete. Therefore in all industries, profits go down to a lower level.

Now why doesn't this happen in practice? The answer is artificial barriers to entry. Political agreements and regulations benefiting the big companies. So what is needed here is an easier path for new companies (Which are people after all). This will always ensure that profit margins stay low, and wages approach the true market rate.

The solution is not donation. Why would a company pay 9 dollars to a worker who is willing to work for 8? Why aren't YOU donating money to poor people in Africa? The answer is not minimum wage either. This distorts markets. If you want to alleviate poverty, in a more economically reasonable way, do it though universal income.

<comment><USER13> Your intuition is correct, but unfortunately, it doesn't actually work that way, because on a per-employee basis, big business is ~4x more efficient.

That is, for every $1 in revenue an SMB brings in, big business brings in $4. (These numbers are averages, but the basic relationship holds across industries.)

I personally do not see how SMBs can compete when they are paying 4x more for labor.

The reason big business is so efficient is IT investment, and the problem with IT investment is that you need to be big in order to really take advantage of it. The amount of improvement SMBs get for a proportional amount of investment is low. You have to spend a lot to get anything, really, and SMBs just can't afford that.

So, to recap: big business profits stay high because SMBs actually can't force prices downward, due to the huge imbalance in labor costs between SMBs and big business.

If we could get the same IT advantage to SMBs at a cost that is proportional to their revenue, then the dynamic you expect to be occurring would, in fact, happen.

<comment><USER14> Consider your statement in the light of looking at the 10 largest corporations in America on a decade by decade basis. Go back a few decades, and I bet you won't even recognize the names.

Again and again, small companies have displaced can't-fail big ones.

<comment><USER15> Here, go nuts, looks like you're way off:

[http://money.cnn.com/magazines/fortune/fortune500_archive/fu...](http://money.cnn.com/magazines/fortune/fortune500_archive/full/2000/)

[http://money.cnn.com/magazines/fortune/fortune500_archive/fu...](http://money.cnn.com/magazines/fortune/fortune500_archive/full/1990/)

[http://money.cnn.com/magazines/fortune/fortune500_archive/fu...](http://money.cnn.com/magazines/fortune/fortune500_archive/full/1980/)

[http://money.cnn.com/magazines/fortune/fortune500_archive/fu...](http://money.cnn.com/magazines/fortune/fortune500_archive/full/1970/)

[http://money.cnn.com/magazines/fortune/fortune500_archive/fu...](http://money.cnn.com/magazines/fortune/fortune500_archive/full/1960/)

<comment><USER14> Take a look at this page:

[http://en.wikipedia.org/wiki/Historical_components_of_the_Do...](http://en.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Industrial_Average)

<comment><USER15> It's interesting, although the Dow Jones index is sort of arbitrary in its choices; it's certainly not the "largest corporations" as you stated, although of course some of the largest will end up in it.

In fact, I'm not really able to find what it is that actually determines what companies are in the Dow Jones Index. If you know or find something I'm curious.

<comment><USER14> I've seen in print listings of the largest by market cap for each decade, but after considerable time on google was unable to find it.

The DJ is a reasonable proxy of it, though, as it's meant to be representative of the economy, and so by its nature will mean the biggest ones.

</comment></comment></comment></comment></comment></comment></comment><comment><USER16> In all industry, the trend goes one way: The wages of working people (including white-collar, I hope, that is the right word) have to go down, and the earnings from investments (pure money makes money business) have to climb.

There are only very few exceptions: One are lawyers, as mentioned in an other thread, and the other are people that work in the investment business (investment bankers, traders, ...). The reason for the second exception is obvious: their work is needed to make even more money from the money and every trick is played, to have the smartest, best guys getting the job done ... and get it done better and better.

Problem is: The whole thing breaks our society. Middle classes are already melting massively in many countries. The possessions of the worlds are concentrating in the hands of very few people more and more. Those people make our laws! The other people become poorer, even in the situation that the overall worlds possessions expand massively. The countries are already so much in dept, that many of them can not pay even the interest. Even the US is so much in dept, that there seems to be no possibility to get ever rid of it.

Nobody seems to realize, that while we are talking, investment companies are roaming the world for land, for houses, for companies to buy them, exploit them and throw it away when not needed (and not useful) any more. The wealth of the world gets accumulated in the hand of investment companies and the super-rich.

By rising the value of pure money investments, the value of human labor (to a more and more extend even high-paid and high-value labor) is degrading.

<comment><USER17> > In all industry, the trend goes one way: [...]

If that was true, wouldn't we have had to have a mythical past of zero earnings from investments and 100% of revenue going to labour?

<comment><USER18> that's kind of how it was. there were no earnings from investments when there was no investment; when everybody was working it was workers who took all of the gains because there was nobody else involved.

<comment><USER17> Yes, but grand parent said it's all going in the same direction. Ie 18th century was better than 19th century was better than 20th century.

<comment><USER19> ???

In what way was the 18th century better than the 19th????

<comment><USER17> I agree with you, that the 20th century was better than the 19th and the 19th was better than the 18th. Thus I disagree with PythonicAlpha, who said

> In all industry, the trend goes one way: The wages of working people > (including white-collar, I hope, that is the right word) have to go down, > and the earnings from investments (pure money makes money business) have to > climb."

I guess my argument by contradiction relied too much on the context higher up in the thread.

</comment></comment></comment></comment></comment></comment><comment><USER20> Oh, so NOW correlation is causation. Great, I'll go correct my notes so I don't forget, it's always so confusing.

There's one thing lacking here, and that is, of course, a causal link. It would be nice if they went down the line and compared employee wages relative to corporate profits on a per company basis. It might be that there are different things at play here.

There's a lot of data missing from this incredibly shallow analysis. Not that I dispute the results, but the argument isn't well backed by the data.

Edit: as a side note I think a lot of problems with employment in the developed world today are due to extremely outdated labor laws that prove to be more damaging than helpful. The expectation of the entire system is that workers will be locked into employment at a particular company for life, will work 40hr/wk on average week in week out, and will rise in pay incrementally over their career. Those assumptions result in worker benefits being tied to employers. They're why the government can get away with hiding half the tax rate of the payroll tax from workers behind the "employer contribution". They're partly why savings rates have fallen so badly over the past few decades. And so on. A lot of which is ultimately to the detriment of the individual worker. If workers were more independent and more mobile, able to self-employ more easily, and so on then they'd tend to have much higher wages on average, I'd wager. The current system doesn't reward independence, it punishes it, but independence is precisely how workers gain an upper hand once they've built up a considerable amount of experience.

<comment><USER21> When you cut the pie into different size pieces and one gets more than before and one gets less, causality is trivial.

<comment><USER20> Classic zero sum game fallacy.

</comment></comment></comment><comment><USER22> I don't agree with this article (wages may be low, but that's _exactly_ why corporate profits are so high). I think the internet and new technology has helped companies expand their profits at incredibly low cost. Consider the recent article about Stripe joining The Billion Dollar Club [1]. It's an absurd fact that such a small and new company can become so successful in so little time. If that is the effect that tech is having on small companies, imagine what effect it is having on large companies. The internet is like steroids for business.

[1] [http://online.wsj.com/news/articles/SB1000142405270230463220...](http://online.wsj.com/news/articles/SB10001424052702304632204579337043662898228?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304632204579337043662898228.html)

</comment><comment><USER23> Quite simply, "productivity" is the sum of all real goods and services produced in the economy, while "wages" are simply the share of that produce brought home by the workers who produce it. The difference is profit. If productivity increases (as it has since the 1950s) and wages flatline (as they have since the 1970s), then the result must be rising profits. You can see this graphed in the brief "The wedges between productivity and median compensation growth" at [http://www.epi.org/publication/ib330-productivity-vs- compens...](http://www.epi.org/publication/ib330-productivity-vs- compensation/)

The question left unanswered in this article is why are wages in the US falling relative to productivity?

Since wages are the "price" of labor, and prices are set by supply-and-demand, falling wages imply either (1) an increasing labor supply or (2) a shrinking demand for labor (or both). So here are some specific reasons for stagnating US wages:

INCREASING LABOR SUPPLY \- Slave labor, prison labor and child labor in countries like China. \- Immigration from Latin America after NAFTA. \- Liberated women entering the paid US labor force starting in the 70s.

DECREASING DEMAND FOR LABOR \- New labor-saving technology, computers and robots that work faster, better and cheaper than humans. \- Financialization: Investors can make more money from asset bubbles in housing, bonds, and dollars than they can from labor. \-- ZIRP: With real interest rates heading to zero (or less), why should I continue to pay high interest on the money I borrowed a decade ago to build this US factory? Liquidate the factory, fire the workers, and relocate somewhere cheaper; or better: simply use the money to buy bonds and bet on falling interest rates. \-- High housing prices: An employer needs to pay his workers subsistence wages, which means enough to buy a place to live, but with housing prices so high, this is impossible. Better to bet on the housing bubble than buy labor.

<comment><USER17> > INCREASING LABOR SUPPLY - Slave labor, prison labor and child labor in > countries like China.

China had enough farmers moving into industry. Slave, prison and child labour may happen, but they are not particularly efficient and so don't make much of a dent in overall figures.

<comment><USER23> For there to be equilibrium between supply and demand, several conditions must be met: perfect competition; perfect information; no economies of scale; no barriers to entry; no negative externalities; and no cheating.

Things like slave labor, prison labor and child labor are cheating. There's a lot of evidence China cheats the free market in these ways, and that's why I singled them out.

For example, "Apple has cut ties with one Chinese supplier that was found to have 74 workers under the age of 16." Source: globalpost.com (January 26, 2013) [http://www.globalpost.com/dispatch/news/business/technology/...](http://www.globalpost.com/dispatch/news/business/technology/130126/apple- uncovers-child-labor-drops-supplier)

Foxconn's factories in China installed suicide nets to catch workers jumping off the roof, which sure makes them look like forced labor camps. Picture here: [http://news.cnet.com/2300-13579_3-10013733-14.html](http://news.cnet.com/2300-13579_3-10013733-14.html)

<comment><USER17> If being cheated means being able to buy cheaper consumer goods, come by and cheat me any time you like.

Just because a market is not perfect, doesn't mean it provides no benefit.

<comment><USER23> So its OK if Chinese workers are cheated, as long as you get a bargain?

The ultimate impact of foreign slave labor on US free labor boils down to this: Is free labor superiority per hour more than counterbalanced by labor that can be flogged, worked to death, and quickly replaced? Is there slave labor with which no free labor can compete? If your answer is no, then go on buying cheap goods produced by slave labor, because it will have no consequences for the US standard of living. But if the real answer is yes, then buying slave-made goods paves the road to slavery for America.

<comment><USER17> Frankly, my dear, I don't give a damn about the US standard of living. If anything, the more numerous Chinese deserve around 5 times more caring.

(And for the record, the Chinese are not making inroads because of slave labour. They make inroads in spite of some slave labour.)

<comment><USER23> "deserve": Are you arguing economics or social justice?

I'd like to see everyone's standard of living go up. But when equilibrium doesn't exist because of cheating, Pareto optimality no longer obtains, and some people profit at the direct expense of others. Slavery is a prime example. It shouldn't exist at all.

I'd recommend anyone reading this thread take a look at "Apple (and America's) Chinese Slave Labor Problem" by Karl Denninger at [http://www.financialsense.com/contributors/karl- denninger/20...](http://www.financialsense.com/contributors/karl- denninger/2012/01/23/apple-and-america-chinese-slave-labor-problem)

<comment><USER17> > "deserve": Are you arguing economics or social justice?

Social justice. I am not from the US of A after all (and even if I was, I don't see the point about worrying about some accident of geography / history).

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER24> Before the inevitable globalization, free trade, and we-should-get-rid of-the- minimum-wage arguments erupt, please keep in mind that the article is talking about, and the second chart (the wage one) is showing, average annual changes by percentage. So this applies to ALL jobs (including yours, Dear Reader) not just the usual suspects of manufacturing and low-skill jobs.

So ask yourself: how much has my pay gone up in the past year? How about in the last 5 years?

<comment><USER25> but it's gone up right? Why hasn't that been enough? Last year as a (relatively poor) postdoc, I made 40k/year. But if my grandfather had made 40k at age 31 he'd have been a happy camper.

remember, macroeconomics says that because of the phillips curve, inflation is a way to goose employment (because of sticky wages) in other words, the purpose of the policy of inflation is to screw laborers out of the real value of their labor.

<comment><USER26> I don't understand your argument. 40K in today's purchasing power buys you 1/20 of a house in San Jose. It is about real wages not nominal wages. And I think for many people in the middle class, we might be earning less than our parents did in their 20s and 30s (in real wage terms).

Addendum: what's more ... if someone in your pervious generation had a PhD, they likely would be able to get tenured jobs at Universities. That is a bit harder these days.

<comment><USER25> that's exactly my argument. These are all consequences of policies, not economics.... And, while research science may be a odd case, I am definitely making less than my dad did at my age.

</comment></comment></comment></comment><comment><USER27> Could the correlation be due to "the dreaded third thing"?[1] (a common cause)

Perhaps large corporations are now deriving a large portion of their income and profits from government-derived sources, and relationships between executives and government officials or regulators; if this is true, there is no reason to give raises to employees, as the low-level workers are relatively unimportant.

[1][http://www.econtalk.org/archives/2013/10/oster_on_pregna.htm...](http://www.econtalk.org/archives/2013/10/oster_on_pregna.html)

</comment><comment><USER28> _Companies have been unable to raise prices much because of the economic recovery has been fragile._

Perhaps related to a lack of disposable income and consumer confidence?

The concentration of wealth is starting to become genuinely worrisome from a societal perspective. There must be some sort of tipping point where real life crosses into dystopia, but I don't know quite what it would look like and what the longterm implications would be. The US political process is already buckling under the unseemly influence of contributions from a small number of donors. At what point are you awoken from your sleep and then realize that things really are going to be bad? What does "bad" look like, beyond what we're already seeing, such as long-time residents being priced out of San Francisco?

</comment><comment><USER29> If this goes on too long, it might get bad. Manhattan will become a closed island where you won't be able to go onto until you live there because there will be too many protesting attempts. Easy to do with all those bridges.

People will start to assault people in suits. You will either swallow the blue pill and join a select club of salesmen, or die with your dreams.

I don't like to have those ideas and I hope they're stupid, but right now I would not be surprised to see terrorist groups that try to attack individuals who have some sort of a public, very long shadow, like Dick Cheney or the Koch Brothers. Any important kind of people who blatlanty shows their disrespect for poor people in general and their unhidden narrow minded view of the world.

Right now I'm not suprised to see so many conspiration theories, people are pissed and they want to burn witches, and I'm sure you can find some. It's bad, but I don't see any political future that is trying to make things a little better. At least during the cold war, the US had to be better than the communists and prove how markets are liberating. Now it just seems communism had good ideas and that capitalism is going to slowly fail.

</comment><comment><USER6> I've graphed employee compensation and business profits on the same graph. Not seeing much correlation. Compensation mostly goes up. Business profits go up and down.

[http://research.stlouisfed.org/fredgraph.png?g=rnM](http://research.stlouisfed.org/fredgraph.png?g=rnM)

I don't get it.

<comment><USER30> Could it be pensions? After bankruptcy they can dump those expensive plans. (Like the city of Detroid and other states already did).

<comment><USER6> Nowadays you are only allowed to underfund government pensions (USPS excluded). Private sector pensions must be fully funded - i.e., if an employee has vested a pension with an actuarial value of $20k, the company must put $20k into a separate fund to pay for it.

(Some old pension plans are grandfathered to escape this, however.)

<comment><USER31> Except that $20K today may not have the same value as $20K in 30 years.

<comment><USER13> So, lobby the government to enact a law that adds X newly-printed dollars to each pension each year based on the government's own inflation calculation. Then the value of the pension each year would stay the same, and even better, the pension would not need to invest in risky assets. (If you want, mandate that the pension invest in T-bills, and then cover the difference.)

This kind of approach involves no new taxes, and there's absolutely no reason to "borrow" the money from the Federal Reserve either, or future generations, or the general public via T-bills. Literally, you just need to change the amount of money each pension "has" on the books. The banks are regulated, and they'd be forced to except the updated balances by law.

</comment></comment></comment></comment></comment><comment><USER32> This reminds me of the Marx's theory of Surplus Value, which implies that "profit" equals the "stolen" labor.

[http://en.wikipedia.org/wiki/Surplus_value](http://en.wikipedia.org/wiki/Surplus_value)

<comment><USER33> This _resembles_ Marx's theory of Surplus Value. This is _evidence for_ Marx's theory of Surplus Value.

<comment><USER34> I still doubt the theory, but yes, it's valid evidence.

Just don't jump onver a conclusion too fast, because it's still evidence for substitution of production factors (that leads to competition between them), an idea almost completely opost to the labor theory of value. (Did I already tell you that I hate economics?)

</comment></comment></comment><comment><USER21> Wage's share of GDP have been in decline in all OECD countries since mid 70's. U.S. is just leading the way.

</comment><comment><USER35> The second graph seems to truncate the first 15 years. I wonder if the data exists, or if it didn't actually support the author's point. Also, I think the author oversimplifies this issue.

I just don't see the connection where the direct cause of large corporate profits is low wages. Are the wages adjusted for inflation?

</comment><comment><USER36> Is there any way for an average working schmuck like myself to capture some of these windfall corporate profits?

Invest in stocks with sizable dividends?

<comment><USER37> The returns are so paltry as to be laughable. Five percent a year? Yeah, enjoy that retirement.

If you really want to take advantage, start a business. Guess what? There's some cheap fucking labor out there, and you can easily undercut a dinosaur. Share profits with your employees and advertise it. Try to get ahead of a movement that is almost surely coming in favor of companies that treat their employees well.

</comment></comment><comment><USER38> It's almost like importing a million legal immigrants and another million illegals every year has some downward effect on wages.

<comment><USER39> dey took our JEEERBS

<comment><USER38> Go back to reddit.

</comment></comment></comment><comment><USER37> So, we've done the environmentally-conscientious boycotts. We've done the healthy food boycotts. You know where I'm going with this...

Is there anywhere we can find out whether a company provides its employees meaningful wages and benefits (in relation to its corporate earnings)? Also, if anyone's knowledgeable on this, is it generally more beneficial to just buy from privately-owned companies (vs. publicly traded)? I would love to start buying exclusively from co-ops.

<comment><USER40> I'm not sure about corporate earnings, but there are a bunch of lists on the internet that compare average worker compensation with CEO compensation and CEO compensation usually correlates pretty well with company profits.

Here's one such list: [http://go.bloomberg.com/multimedia/ceo-pay- ratio/](http://go.bloomberg.com/multimedia/ceo-pay-ratio/)

<comment><USER37> This is _exactly_ what I was looking for. Thank you!

</comment></comment></comment><comment><USER41> "But they've still managed to boost profits beyond anything ever seen before because they've got away with employing as few workers as possible at as low a rate as possible."

I think there are other factors.

1\. US _effective_ corporate tax rate has been declining as corporations have found ways to keep profits in offshore tax havens. This is a huge contributor.

See for example this article about AAPL whose effective tax rate is 14% which is much lower than the US nominal corporate tax rate of 35%.

[http://www.bloomberg.com/news/2013-05-23/apple-tax-rate- igno...](http://www.bloomberg.com/news/2013-05-23/apple-tax-rate-ignores- profit-shifting-offshore.html)

2\. Outsourcing to lower cost centers. This is also contributing to lower US wages; If a company can move the work to India, Brazil, China, etc. at a much cheaper cost, they will do that. This has been going on for decades, but advancements in telecommunications and internet has made outsourcing to far away locations more efficient and cost effective over the past 10-15 years.

3\. Federal reserve keeping short term rates at 0% and manipulating other fixed income rates with the QE program, e.g. buying $100BLN worth of MBS and US treasuries every month. This had the effect of creating record-low interest rates for corporate and junk bonds. This lowers interest costs for companies and also increases business demand because more companies are able to borrow $$ than otherwise.

Some of the revenues and profits are increased just because corporate and public debt has increased abnormally.

</comment><comment><USER42> So another angle on this that I've heard is one of increased efficiency. The economic downturn forced a lot of companies to get more done with less. Once the revenue picks up again, the business realizes that they didn't need all those extra resources in the first place.

That could mean they hire fewer employees. It could mean they hire less skilled employees.

Admittedly speculation, I just wanted to throw it out there as an additional explanation.

<comment><USER43> That's where my thought was going too. If profits are high while unemployment is also high, then it can't be that employers are far less socially responsible than they used to be. They were never that charitable about hiring workers to begin with. It must just be that they don't really need the workers.

</comment></comment><comment><USER44> What I feel is missing from their analysis is a breakdown of corporate profits per employee, along with some hard figures, e.g., how much profit these companies make per capita. It might or might not be enough to make a dent (for example, $100 million split among 100k employees only comes to around $1000/year for each of them).

</comment><comment><USER45> Is there causality really going on with both trends? Maybe the US stopped being a great place to invest and hire people...

</comment><comment><USER46> If wages in the US were low, they wouldn't be outsourcing labor to other countries. Reuters must not have realized how many things have "Made in China" stamped on them.

<comment><USER47> And those things don't count as part of the US' GDP. And only count as part of the GNP if they're owned by a US company.

<comment><USER48> The value of imported goods are subtracted from GDP, but their sales price is added to GDP.

</comment></comment></comment><comment><USER49> If wages are low, does that somewhat signify that many of the corporation's business functions are staffed with skilled workforce that is in oversupply?

</comment><comment><USER50> Isn't this really a problem of corporate/investment taxes so low (and full of loopholes) and taxes on everyone else so high?

For the average person once you add up federal income tax, state income tax, social security, medicare, medical, sales tax, gas tax and all the other government fees we end up paying its like 50% of your income going to the government.

We could essentially double most of the countries pay overnight which would have a stimulating effect on the economy as a whole creating more consumers for more products and thus more jobs and more returns on investments.

<comment><USER51> By eliminating all personal taxes? Yeah, easy win ... Unless you like crimes to be punished, fires to be put out, kids to be educated, people not to be dying of poverty, and oh, a couple of other things.

<comment><USER44> A lot of those are currently funded (in the US) from local taxes: property and sales tax (at least that's how it is where I live, in a California county). School, police and fire departments are locally-funded. Getting rid of income taxes would not impact these. (EDIT: the GP was proposing abolition of all personal taxes, but the one that comes up the most in discussions is the personal income tax; we could just eliminate that one).

<comment><USER52> For the record, ~10% of California's K-12 budget comes from Federal funds, $5.5 Billion in 2009.[1] The Feds pay hundreds of millions per year in grants to local Police forces[2] and similarly large amounts to firefighters.[3]

[1] - [http://www.cbp.org/pdfs/2009/090202_SFF_HowSchoolsGetTheirMo...](http://www.cbp.org/pdfs/2009/090202_SFF_HowSchoolsGetTheirMoney.pdf)

[2] - [http://www.cops.usdoj.gov/Default.asp?Item=2367](http://www.cops.usdoj.gov/Default.asp?Item=2367)

[3] - [http://www.fema.gov/welcome-assistance-firefighters-grant- pr...](http://www.fema.gov/welcome-assistance-firefighters-grant-program)</comment></comment></comment></comment>


Brazilian government signs up to develop OpenOffice and LibreOffice - <AUTHOR> http://www.h-online.com/open/news/item/Brazilian-government-signs-up-to-develop-OpenOffice-and-LibreOffice-1275068.html

<comment><USER2> Brazil has had a big-success with their free-software initiatives.

Government departments are required to try to buy free-software solutions and try to find local companies that can provide support for those solutions.

Besides any contract-development goverment signs must be realeased as free- software.

They call it "software publico" (public software) since they consider a duty of the government to provide their solutions in a free-software form.

I think they are an example for any developing country economy.

<comment><USER3> Too bad it only applies to desktop software. They are still one of the top purchasers of proprietary network/server software in Brazil.

<comment><USER2> [citation needed] On this past month I went to a couple of conferences where they showed how they build their infraestructure and their software as a service.

And seems that their commitment to software public is very real from the highest level of goverment.

President Lula DaSilva was mentioned several times.

<comment><USER3> For 6 yers I worked as a network engineer for Cisco, primarily with the government and Serpro (Federal Data Processing Service), the biggest IT service provider in Brazil. I can tell you from first-hand experience that there's no server/networking open source focus there.

</comment></comment></comment></comment><comment><USER4> Good, although with caution. Governments are not exactly known for being great with software development.

<comment><USER5> In this particular case, neither is Microsoft.

I'm from a Spanish-speaking country and multi-language support for Office behaves weirder with every release since I can remember using it. It likes defaulting to English or Spanish in a paragraph basis even when you already told it to use another default language for all documents, and it likes to do it in the middle of your writing. I believe that support for Portuguese is equally lacking. It is my hope that Brazil's investment results in better multi-language support in Open and Libre.

</comment></comment><comment><USER6> Why on earth does any large government on earth not do this?

<comment><USER7> Because it is not its core business? Look, anywhere you look, the government could, in theory step into production of X and save money. The government's version would always cost less, since you can subtract profits and the costs of features / expenditure to support other customers.

Why doesn't the US gov just create a telco? Or any large supplier, really?

This sounds good in theory, but in practice it tends to put the state machinery in charge of managing things it's largely incapable of.

I'd much rather the government would show support either by donations (and let Apache Foundation / whomever manage their own thing), or just creating stimulus plans with the money saved (say, for example to make sure computers did not costs 3x as much in Brazil as they do in the US).

The public sector has many restrictions (elections every few years changing management, very much subject to political pressures, larger bureaucracy etc) that make it a bad competitor in a number of business.

<comment><USER8> I fail to see where the article implies Brazilan government would try to control either office suite. What I read was they would work together and support. If they hire a dozen developers (and, from my experience with FLOSS within the Brazilian government, they would be very clever people) we should be happy, right?

I also see this commitment would go a long way in creating and documenting the means to support OOo an LO in very large installations, helping develop the technologies companies would use to deploy them.

<comment><USER7> The language of the letter is pretty vague, it mentions "creation of a collaboration group to develop" which can be pretty munch anything (or nothing at all, actually).

I am not sure the Brazilian gov hiring developers is the best course of action. I'd much rather have it fund Apache Soft, Mozilla, or any other organization that knows how to do it.

In my experience, pretty much ever govt software I've interacted with (imposto de renda, nota fiscal paulista, the portal brasil fluke?) is incredibly bad. I fail to see the hand on clever people in them.

</comment></comment></comment></comment><comment><USER9> Good news, but I don't understand why both? Why don't they choose one (preferably LibreOffice)?

</comment><comment><USER10> Brazilian government is using open source software for several years, and almost every software made by the government uses Java. The open-source initiative is nice, but the software produced use to be mediocre at best.

</comment><comment><USER11> They are just trying to find more ways to waste my taxes

</comment><comment><USER12> This is a real win-win deal!</comment>


Loaderz, a modern, blazing-fast asset-loader using promises - <AUTHOR> https://github.com/TotomInc/loaderz <comment><USER2> Looks really good, I love that it adpoted typescript!</comment>


Show HN: Sidekick-App, a swiss army knife for drivers - <AUTHOR> A driving assistant that includes dash cam, trip logging, emergency assist, speed limit display, navigation w/ComfortRoute and a HAM radio like feature that enables drivers to communicate with each other.  https://itunes.apple.com/us/app/sidekick-your-personal-driving-assistant/id957252199?mt=8 <comment><USER2> I like the concept.</comment>


Show HN: C Style - my favorite C programming practices - <AUTHOR> https://github.com/mcinglis/c-style

<comment><USER2> A few things I disagree with / question:

* The comment includes, this leads to state, you now have to manage what you comment.

* Bool hides the data type.

* ++ vs +=... really?

* VLA usage is debatable.

* There are many more warnings that are useful

<comment><AUTHOR> > The comment includes, this leads to state, you now have to manage what you > comment.

True, but I think it's better to have explicit state that provides information for the reader. It's also harder to determine if you can remove a header or not, if it's hard to work out what it gives you.

> Bool hides the data type.

I consider `bool` an abstraction that's useful and standard. You generally shouldn't need to know the data type under a `bool` anyway.

> ++ vs +=... really?

Yes..? I said this on Reddit: `++` and `+=` both as simple as each other. They both do the same thing. The differences are:

\- one is useful for other, similar, situations, and the other isn't

\- one is more readable to people with no programming experience, and the other isn't (if you say C isn't for new programmers - why can't it be?)

\- one has complicated evaluation rules, and a twin brother

\- one encourages state changes in expressions, like `xs[ i++ ]`, and that way lies madness

That's why I don't like `++` and `--`, but I knew this would be a hard sell when the language is founded on the examples in K&R :-)

> VLA usage is debatable.

I've heard that. Besides not being able to be initialized, why?

> There are many more warnings that are useful

I started out with every warning I could find for C, but I removed them as I came across trivial situations that raised warnings - in which case, I didn't consider them worth it.

What other warnings do you work with?</comment></comment>


Be Happier with Zero Expectation - <AUTHOR> http://bobbyong.com/blog/be-happier-with-zero-expectation/

<comment><USER2> This is true but it's just not realistic. There are situations in life where expectations are totally appropriate. I'd even argue that expectations drive us forward. And if you have no expectation of an outcome, how can you be happy or sad at all at the end? Or how can you tell there has even been an outcome?

If I have to drive somewhere and have no expectation of arrival time then I'll neither be happy nor sad when I get there. I'll have just gotten there. However if I severely lower my expectations then I can be happy when I get there.

But I'm being pedantic here so I'll bring this back to reality now. Disappointment, heartache, sadness, and gloom are part of life and should not be avoided. We often find the motivation or drive to change and improve through our negative emotions. Sure, it sucks to feel that way but it's just as important as being happy and one shouldn't run from those feelings.

If you have good coping skills you can face disappointment head on, feel shitty for a bit, and then plow through and find some happiness or a silver lining. If you've got poor coping skills you'll be running away from all negative emotions and totally stunting your emotional growth because of it.

I know the author wasn't trying to write an authortitative piece on happiness so I won't criticize him. What I will do is add a little wrinkle to his whole point which is: Eliminate or lower expectations when the outcomes aren't important. So, for example, traffic is actually a perfect example. If you can eliminate your anger and frustration over being late or being stuck in traffic you're doing yourself a huge favor as being upset over it isn't doing anything for you. However feeling upset and having expectations about your career or a promotion or meeting a pretty girl one day can be quite helpful. The negative feelings associated with not getting any one of those things should push you to change your situation and get them somehow.

So all in all, I guess the TL;DR version would be: Apply the article's wisdom wisely, not broadly.

<comment><USER3> "And if you have no expectation of an outcome, how can you be happy or sad at all at the end? Or how can you tell there has even been an outcome?"

I've had a problem with this for most of my life, sad to say. It works really well for blocking out sad times but it obviously blocks out happy times as well. I have not yet figured out a way to correct this because it's well ingrained. Have any HNers worked out solutions for this?

<comment><USER4> I've found it works out like this: Make plans, not expectations. The difference is subtle. I make plans, I even consider potential outcomes and how to handle them. But I don't pin all my reactions on a belief about the outcome. (I think a good definition of expectations is: belief that a particular outcome is the just or deserved one). So when everything goes sideways, I'm not stuck in some place of disappointment or shock. I just try and roll with it. When focusing on a belief that a specific and single outcome is the right thing, it is easy to miss opportunities to pivot to a better, unplanned outcome. It is easy to miss opportunities to reach a not quite as good outcome but avert disaster.

Basically, the idea is: shit happens, unexpected things happen, reality gets in the way of plans as a matter of rule. So be adaptable. Expectations of certain outcomes take away adaptability.

You can still be happy when your plans work out, you can be happy because you had a goal of "making money" or "getting a better job", or whatever, and you an be sad because "i didn't get a job i wanted, but ended up with this almost as good one over here". Basically, I find it silly to tie emotions to one specific expectation rather than as a reaction to what is actually happening.

<comment><USER3> Yes, I once read "be flexible in approach, but sure of the destination", but what I seem to do is to be flexible in approach, and flexible in the destination. In essence, there are many ways to the moon, but "...if you miss, at least you'll land among the stars," thus I end up dividing what I really want into smaller positive eventualities and I try to be happy with whatever I get. I suppose the real issue is a mix of lowered expectations, drive and enthusiasm. Being hungry for that one thing and going after it. In a sea of possibilities, it's tough for me to choose that one thing, though I wouldn't expect otherwise from someone like me, a generalist and an INTP.

</comment></comment></comment></comment><comment><USER5> There is this German saying: "Happiness equals results minus expectations". And I have to agree, expectations are easy to miss, especially when you don't learn to lower them. I used to constantly get late to basically anywhere because I just did not factor in the time to shower, reading emails between putting on clothes, etc. And boy did this stress me out. When I started to pay more attention to my life in general (focus on the current moment and such), such stressors just disappeared because I learned to not get into such situations.

<comment><AUTHOR> Pretty cool German saying. Care to write it in German? I did learn a lil German n would be interested to know it :)

<comment><USER6> Glück ist Wirklichkeit minus Erwartungen.

(As far as I know think this saying originated in Hinduism in the first place and found its way into the german linguistic area somehow)

<comment><USER5> I know it as "Glück ist Erreichtes minus Erwartetes.", pretty much the same.

</comment></comment></comment></comment><comment><USER7> This doesn't work at all for me. I love having expectations. I love looking forward to things.

I'm going on a trip in May, and I expect it to be great. If it sucks, I might be a bit disappointed, but the vacation is a week, and the time I can look forward to it is several months. If the vacation turns out to be great, I'll feel great about it. Would I feel even greater if I had no expectations? Don't know. I really don't think the delta of getting pleasantly surprised outweighs the months of looking forward to the trip.

Being able to accept what you can't change (e.g. being stuck in traffic) without getting overly frustrated is conducive to happiness, no doubt. I'm not sure what it has to do with expectations; if I expect to be stuck in traffic all morning, that doesn't make it more fun when it actually happens.

<comment><AUTHOR> I got back from a 10-days backpacking trip to Thailand and Laos a few weeks back and I totally enjoyed it partly because I went with zero expectation. I did not know what to expect (no research) and I did not expect anything. I did not book any hostels and just went with the flow.

I have no must-see travel list nor do I have any must-do travel stuff. Anything interesting was a net positive feeling for me during the trip. Anyone interesting I met was a net positive feeling for me. If I had expected to see a certain place or do a certain thing and could not accomplish that during the trip because of bad weather or schedule, I will be disappointed. I did not feel disappointed at all for 10 days.

Well, different people might like to plan their life differently and you can feel right in having expectations if that's what you prefer. I just found it awesome to see a place without knowing what to expect.

<comment><USER8> This illustrates the way I see the "thing" with expectations: "They come from previos experience(including research as previos experience)". The Zen's mind, begginers' mind books suggets to keep your mind open to all outcomes, despite your experience (easier say than done, however).

It's hard(at least for me) to control expectations (I have evidence[bayes] that supports those expectations). In the other side, the outcome, is what actualy happened so you should add it to your evidence and update your prior beliefs for the next time.

TL;DR avoid expectation (not the real point); accept the outcome and update your experience (could be a better aproach)

</comment></comment></comment><comment><USER9> Amazing how we the more we advance civilization, the better we are at ignoring 10,000 years of human wisdom. I suppose it's never a bad thing when someone rediscovers these tidbits for themselves.

</comment><comment><USER10> This is reminiscent of the Taoist virtue "to hold fast to the submissive is called strength." Or in other words, if a person never competes, he can never suffer defeat.

</comment><comment><USER11> Yeah, I hear this a lot. And I'm sure that for most people the pendulum should swing more in that direction. But like everything you have to strike a balance. ZERO expectation really? To just take one example, what if you're a boss? I know I would be happier if I didn't expect anything out of my subordinates and they probably would to, but I'm guessing the shareholders might not be down with my new zen attitude.

<comment><USER12> I think you are conflating two things: What outcomes you are attached to (what triggers your emotions etc.) vs. what you work towards.

It is perfectly possible to work hard towards a goal, including motivating others to do the same, but not be personally attached to the success or failure of the outcome.

I lift weights. I go into the gym every day and try to do better than last time. I struggle with increasing my bench press at the moment. But I still go in and try my hardest and vary my progressions to try to overcome my sticking point.

But I don't leave after a bench session all stressed out over not hitting the next weight up: I'm not attached to the outcome.

</comment></comment><comment><USER13> Reminds me of why the Danes are said to be very happy--low expectations.

[http://opinionator.blogs.nytimes.com/2009/07/19/lowered- expe...](http://opinionator.blogs.nytimes.com/2009/07/19/lowered- expectations/)

<comment><AUTHOR> Great article. "Danes would make good Buddhists. They live their lives as the Buddha advised: in the present tense, not grasping at some future happiness jackpot."

Also the quote by @manmal is mentioned. "Happiness equals reality minus expectations." Given that neat formulation, there are two ways to attack the problem: boost our reality or lower our expectations.

Interesting stuff.

</comment></comment><comment><USER14> I don't think this is something you can just "turn off" and/or change. I think your personality can either allow you to do this, or not. You can tell me all day to not have expectations, but that means nothing to me. I don't understand how to "flip off that switch." I'm not saying the author is wrong, but I just don't think I can agree that anyone can just not have expectations. I know I have times where I didn't have expectations and things worked out great and I was happy, but it's not like I can tell my brain to always react that way. It's just how I am, and I wish I could change that, but I honestly don't know how.

Does anyone have any _real_ suggestions on how to achieve this "zero expectation" mindset, other than as vague as "just change your mindset" or something to that degree?

</comment><comment><USER15> The Bard said it well:

"O God, I could be bounded in a nutshell, and count myself a king of infinite space—were it not that I have bad dreams."

</comment><comment><USER16> "In the beginner's mind there are many possibilities, but in the expert's there are few." – Shunryo Suzuki

</comment><comment><USER17> Haven't read the article yet (I will), but I recognized your site due to my work with userena :)</comment>


Interactive infographic - Large tech financials - <AUTHOR> http://220.127.116.11/Infographics/Sep2011/Sep2011.aspx <comment><USER2> There are so many problems with this way of drawing charts, but here are some of them:

1) Bars need to be drawn from the axis. In this chart, the down-facing bars actually start at a positive number, which makes them look longer than they should be.

2) Comparing two sets of numbers by mirroring them across the X axis is a bad idea because it's visually difficult to compare them. Made even worse by #1.

3) Using buildings to represent bars, really? Why do that when the black bar used for the negative bars is so much more readable?

4) What are the coloured discs at the foot of each building for?

</comment><comment><USER3> Silverlight required. Great!

<comment><AUTHOR> I know. Was quite reluctant to download it too.</comment></comment>


Awesome is Not a Business Model - <AUTHOR> http://thelostjacket.com/social-media/awesome-business-model <comment><USER2> I'm guessing cocky isn't either, so the author may want to try something else.

I have most definitely paid people for being awesome. I'm a big fan of "Donate" buttons.</comment>


Boeing 747s receive software updates over floppy disks - <AUTHOR> https://www.theregister.com/2020/08/10/boeing_747_floppy_drive_updates_walkthrough/ <comment><USER3> i'm surprised that people are surprised by this.

i work for aerospace, and this is fairly typical -- albeit not floppy disk examples, but we keep a bunch of old laptops running win 7 and other examples around, hound around for them and spare parts. these machines are off the network, etc.

these systems were developed 20+ years ago and per contract the a manufacture is obligated to maintain them for the service life, so unless these are obsoleted these are to last 20-30+ years.

the costs associated of porting all tools from win 7 to a newer system and re- verifying 50K+ test cases to do a similarity analysis run into astronomical in terms of $ and months (years) of work. no one really wants to poke that bear so you have situations like these.

<comment><USER4> It is interesting that people don't think on these scales. What percentage of the HN crowd has developed something that has had (or will have) a 10, 20 or 40 year life span?

Because I've seen a bit of that and it's what makes the world go round. There's certainly a lot of bad/crazy stuff out there but wonder if the ephemeral fashions of today will stand the tests of time.

<comment><USER5> I have built applications that have been around for 10 to 15 years.

The only thing that would have been good is to know in advance which ones will last that long - one was a temporary proof of concept!

<comment><USER6> The jerks always say that it will be 'temporary' and we can redo it later. HAH

<comment><USER7> This is why at my last job we had a rule that said prototypes could not be shipped as production software. It _had_ to be either completely rewritten, or at least completely code reviewed and the "bad" parts rewritten.

<comment><USER8> I approach this by writing exploratory prototypes with good modular boundaries, but stub/hacky implementations. Keeping it simple lets me throw modules away as I refactor, until everything's been rewritten and then I ship it.

<comment><USER7> Sure, and that works great for a _personal_ approach to _code_. But when your lifecycle from requirements through release needs to be validated, something more scalable is required. Sometimes that scalable thing is "anyone shipping prototype code will be fired."

</comment></comment></comment></comment></comment></comment></comment><comment><USER9> I worked in HAWK missiles in the Marine Corps for many years. This doesn't surprise me one bit. In 1994, Block II launchers were still effectively using vacuum tubes. In fact, I still recall the one that faulted the most, from its label in the FM: relay K-9! Ninety-percent of launcher issues were attributed to that old relic of a tube.

Then, in 1995, Raytheon came out with Block III updates, which replaced the entire trunk filled with hardware (about as crowded as a standard engine bay of a modern car) with about 3 PC graphics cards-sized modules, each with an NSN price tag of $170,000 per (don't worry, you're paying for the IP, not the physical cards themselves, which iirc were MIL-spec versions of your standed PCI card from back then).

Made my job as a tech so easy, since the launchers never really broke down much after that, save for a hydraulic leak or two out in Dugway or White Sands during a shoot or Red Flag exercises at Nellis AFB. Didn't see aliens out there but quite a lot of Soviet gear, which we acquired shortly after the USSR's downfall. MiGs are really cool and reliable, though pilot/user comfort/convenience was not on their MVP list.

<comment><USER10> > each with an NSN price tag of $170,000 per

This is why we don't have decent public health care. That's obscene.

<comment><USER11> not really - how many software and hardware engineers do you think you need for this? probably minimum 10, maybe 20-30 realistically. At SV salaries (you need the best engineers, right?) that's $9m USD/annum.

You need to ship at least 50 of these devices to break even. To get a proper margin and cover all the other costs (manufacturing, sales, marketing, compliance, accounting, yada), you're probably going to need to create and sell a couple hundred, every year.

<comment><USER12> They produced approx 40,000 between '59 and '94, so around 1,000 a year. So I would assume they broke even.

<comment><USER13> That's not the device in question.

</comment></comment></comment></comment></comment><comment><USER14> Did it work? Yes.

Was it secure? Yes.

So, what's the problem? Updating 30-year-old gear with media from its era seems to make sense.

If they were really wedded to digital media and needed to bridge that gap, Sony used to make a floppy disk that you could jam a memory stick into and it would read in a normal 3½ inch floppy drive. Very cool gadget.

<comment><USER15> Frankly, provided you have error checking logic and don't store them next to a magnet... floppy disks are pretty damn bulletproof. I've had _way_ more issues per-use reading a thumb drive or a CD/DVD-ROM than I ever did reading floppy disks.

<comment><USER16> Really? I'm not doubting you, but I'm surprised. I only used them up until I was maybe 10 or 12 years old, but I still vividly remember often having to go through a couple of floppies from my drawer to find one that was working. And yelling at my little brother for putting a bad one back in the drawer.

Are they really that robust? Was I just storing them stupidly maybe? Or maybe it was because all the ones we had were used ones from work.

<comment><USER17> I have similar memories from around the time when USB sticks started gaining popularity. I think floppy disk manufacturers started slacking off on QA through the last few years of large-scale manufacturing. They certainly didn't used to be that bad.

<comment><USER18> The final years of 3.5" floppy manufacture were bad. I think the quality was tailing off from the mid nineties. But it could equally be poor quality of the drive manufacture as well.

Certainly 5.25" floppies from the late 80s and early 90s were nearly bulletproof in my experience. 1.2MB was a bit flakier than the 360KB though. All were still perfectly readable 20 years later, though at this point they all got thrown in the bin due to their obsolescence!

</comment></comment></comment></comment></comment><comment><USER19> While this probably wouldn't pass muster with whoever certifies the 747's avionics, over in the retrocomputing world the solution to "It only uses floppies" has been the cheap Gotek floppy emulators that read from a USB stick running this free firmware: [https://github.com/keirf/FlashFloppy](https://github.com/keirf/FlashFloppy)

It has a great number of hardware mods that give it a display and a rotary encoder for better disk selection: [https://github.com/keirf/FlashFloppy/wiki/Hardware- Mods](https://github.com/keirf/FlashFloppy/wiki/Hardware-Mods)

<comment><USER20> Agreed. Not for avionics, but I cannot overstate how much of an improvement the Gotek/Lotharek/various other Floppy Disk/scsi to SD solutions are over finding NOS/still working storage media from that era. Ive a couple of old samplers from Emu and Ensoniq that I can continue using and not worrying (as much) about data loss and storage.

</comment></comment><comment><USER21> Not surprising at all, and not really a problem either provided it works.

More modern aircraft use things like USB sticks but often with old file formats and they can't use a stick bigger than 2GB (actually hard to find if you want to buy one). Aviation engineering vastly prefers "old but works" over "new and fancy" and this article is just one detailed example of that.

<comment><USER22> I get why prefer old but works over new and fancy, but what about new and works? They could trial new technology for five or ten years in parallel with the old before switching gaining both the stability of old and proven and the future-proof-ness of "new and we think it will stick but it might not". The reason why it isn't done this way is probably cost, but at what point will the difficulty of sourcing the old tech and people who know how to use it become the more expensive option?

<comment><USER23> You can still buy new, still shrinkwrapped, recent production floppy disks and new drives. I'd imagine if you're supplying parts for these, a warehouse with a stack of known-to-work floppy disk drives isn't much of an expense and certainly not difficult.

Even if it became a problem, you reasonably have the margins to ask a manufacturer to setup an assembly line and run a new batch just for you - <USER2> only downside is that you're likely spending a lot of warehouse space to house the new parts.

<comment><USER24> I remember reading a news story ~4 (or more?) years ago that the last manufacturer of floppy disks stopped making them. I'm not surprised to learn there's still plenty in circulation, but I'm a little confused by "recent production", unless my memory is just wrong...

</comment></comment></comment></comment><comment><USER25> At one point in my career, I was working on maintenance software for the US Air Force's C-130 Cargo plane. Floppies weren't used to update the flight software (the Mission Computers didn't have floppy drives). A ruggedized portable computer was used to load the Mission Computer software over a wire connection. The software doing the loading was held to the same MIL-Spec standards as the flight software itself, and we spent a lot of time convincing the reviewers that the checksums used to verify the integrity of the load were sufficient to the task.

If the software doing the load is performing its integrity checks to a sufficiently high standard, then I don't see why using a 3.5" floppy disk would be a problem.

</comment><comment><USER26> So? There's nothing wrong with diskettes as a medium. They're not used much any more, but they work OK.

F-16s still use PCMCIA cards to load combat flight plans. Obsolete, but small and reliable. Also big enough to handle on a flight line while wearing gloves. An SD card would be too small. A USB stick might accidentally get plugged into something it shouldn't be plugged into.

<comment><USER27> > but small and reliable.

PCMCIA cards may be. Floppy disks are not reliable at all. But I assume there will be safeguards in place.

</comment></comment><comment><USER28> Note that the article covers the 747-400, which first flew in 1988. Using 3.5" floppies for updates made sense then, and aircraft avionics tend not to be updated unless absolutely necessary.

</comment><comment><USER29> The Panavia Tornado fighter jet famously used cassette tapes for mission data. I guess aircraft are a product of their time and because of stringent safety requirements why try to update something if it works fine?

<comment><USER30> Yep, same for the F-14...

"...Then there was the computing power on the aircraft—or lack thereof. It was a Commodore 64 with wings on it ...For example: the mission computer loaded off of magnetic tape.

That magnetic-tape computer had so little memory that its crew had to switch programs depending on what the jet was doing at the moment—the RIO would hit a switch to bring up the bombing program, and then after the bomb-dropping ended, they'd reload the air-to-air program"

[https://nationalinterest.org/blog/buzz/navy- deathmatch-f-14-...](https://nationalinterest.org/blog/buzz/navy- deathmatch-f-14-tomcat-vs-fa-18-super-hornet-who-wins-74651)

<comment><USER31> The F14 actually had a neat processor, with an architecture which remained classified for a long time (arguably far too long at the end, but it was plainly justified at the beginning)

It was very old so, yes, I'm sure it had plenty of limitation though.

</comment></comment></comment><comment> dis-sys US nuclear weapons relied on 8 inch floppy disks until 2019.

[https://www.nytimes.com/2019/10/24/us/nuclear-weapons- floppy...](https://www.nytimes.com/2019/10/24/us/nuclear-weapons-floppy- disks.html)

<comment><USER32> > The Air Force completed a replacement of the aging SACCS floppy drives with > a highly secure solid-state digital storage solution in June

So probably an SD card adapter.

</comment></comment><comment><USER33> The headline is misleading. According to the story text, the floppy is used to load a new _navigation database_ , which is important to be sure but not a critical software update.

<comment><USER34> Navigation is not critical? It seems like a pretty dangerous turn of events to try a low-visibility landing based on outdated navigation data.

<comment><USER33> Navigation data is _important_ , which is why it's required to be refreshed within 28 days (this was a big worry during the recent Garmin outage BTW), but whether it's _critical_ depends on often domain-specific definitions. AFAIK it doesn't meet that standard by either software or aviation standards. Also, it's definitely not software, so "critical software updates" is still incorrect.

<comment><USER15> On an airliner that can land in cat III approaches (ultra low visibility down below 100') then this data is _critical_ since it's used in automated systems to help land the plane.

</comment></comment></comment></comment><comment><USER35> And I feared they would use 5¼" floppies, those were terribly unreliable.

<comment><USER36> When 3.5" floppies (stiffies) were introduced, the big selling points were that (a) they could fit in a shirt pocket and (2) you could toss them across the room and they'd still work.

At my first job, I kept a 5¼" floppy with "only copy of important data" written on the label hanging off my filing cabinet with a magnet.

<comment><USER35> They were before my time, but I had an old drive I "examined" (destroyed) as a kid. It was unclear to me how such a large thing could hold so little memory.

<comment><USER36> Your younger self would have been fascinated by these: [https://www.ibm.com/ibm/history/exhibits/storage/storage_335...](https://www.ibm.com/ibm/history/exhibits/storage/storage_3350.html)

</comment></comment></comment></comment><comment><USER37> When I worked for a major pharma company in the mid-to-late 2000s, their entire security system (IE, the door badge ACLs) was run on an old vaxstation that had its own full rack. It worked, they said.

<comment><USER38> Polish railway operator had last of their 1970's ICT-1900 clone decommissioned in 2010.

</comment></comment><comment><USER39> I work on aircraft that up until last year received updates via _ZIP DISK_. Do you know how hard it is to find a working ZIP disk and/or ZIP drive?

Luckily we convinced the owner to update their avionics and now it uses... CDs? DVDs? A laptop? I honestly don't know. Something that isn't ZIP disks. We also have aircraft that need floppy disks.

</comment><comment><USER40> The article said the floppy drive is kept behind a locked panel. The article doesn't mention if the updates fit on a single floppy or a stack of 20 floppies. I don't see a fundamental problem as long as the data has checksums to make sure that it transferred successfully. I used to get tons of errors on floppy disks transferring data back in the 90's using Sun workstations and PCs. I started making my own checksums to make sure my transfers were correct.

<comment><USER41> > a stack of 20 floppies

Well now I'm having flashbacks of installing "Strike Commander".

<comment><USER42> I got so much exercise trying to install Slackware from >20 floppies. Disk 5 has read errors. _go copy another, start over from disk 1_. Disk 8 has a read error.

(By the time I was done I didn't have enough disks, so I had to go to the lab in the middle)

<comment><USER40> I installed Slackware 2.1 with kernel 1.1.59 in the fall of 1994.

I only had about 15 floppies between me and my roommate. I remember getting the "a" series of disks and then the "d" series for development and so on. I had to run back and forth to the computer lab about 5 times over the weekend.

</comment></comment></comment></comment><comment><USER43> The bigger story in the article is how little security review the software on these planes get

> "Aircraft themselves are really expensive beasts, you know," said Lomas as > he filmed inside the big Boeing. "Even if you had all the will in the world, > airlines and manufacturers won't just let you pentest an aircraft because > [they] don't know what state you're going to leave it in."

<comment><USER42> The physical floppies use the same chain of custody that any other part of the system use. Every floppy has essentially been signed off dozens of times before it ever sees the insides of an airplane, and there is nowhere between the manufacturer and a flying plane where there isn't a person who is officially in charge of it.

From what I understood, there is (was) a real danger of a part that was used in a stress test ending up in a bin full of spares. So every 'part' has an identifier, responsible parties, and a tagging system that keeps the streams from ever crossing. A floppy is physical, so they just did the same thing.

Imagine trying to convince a bunch of people who have always ever done things physically to use electronic distribution.

<comment><USER39> The good news is that any new avionics system is going to have the ability for electronic distribution. Mostly due to reduced cost (cheaper than mailing out disks/CDs/DVDs) and better ability to correct any bad updates that are released.

</comment></comment></comment><comment><USER44> I cannot remember where I saw it a few days ago. They basically just use an emulator and a fake floppy disk, just like people could play cd's over a cassette player.

I assume they don't have to go through certification for the loading device(the floppy drive), just the process of loading data instead (through the emulator)

</comment><comment><USER45> Only slightly surprised; domains where failure is really expensive aren't likely to experiment with technologies. If it ain't broke, don't fix it.

I read something similar about the computers that control the US nuclear arsenal: They're extremely primitive and can only be updated by floppy disks.

</comment><comment><USER46> If it ain't broke, don't fix it

</comment><comment><USER47> The software that really matters, like _really matters_ (not talking even about something like Google Search or Gmail)... is usually like this, since it's built to be almost never changed, since changing it is so high risk that it's almost never worth the cost.

</comment><comment><USER48> How many 747s are still in operation? I thought they were being phased out

<comment><USER49> 400ish

[https://en.m.wikipedia.org/wiki/List_of_Boeing_747_operators](https://en.m.wikipedia.org/wiki/List_of_Boeing_747_operators)

<comment><USER50> Looks like a lot of them are cargo operators.

</comment></comment></comment><comment><USER51> Is the 747 the only plane that uses floppy disks or are there newer ones that do have the same?</comment>


List of pangrams - <AUTHOR> http://en.wikipedia.org/wiki/List_of_pangrams <comment><USER2> Had to post this, not related to pangrams though. This is an amazing sentence.

 _I do not know where family doctors acquired illegibly perplexing handwriting nevertheless, extraordinary pharmaceutical intellectuality counterbalancing indecipherability, transcendentalizes intercommunications' incomprehensibleness_

Guess what is unique about it? Nth word is N letters long.

</comment><comment><USER3> I've always preferred "waltz, bad nymph, for quick jigs vex", as it's the shortest one that uses simple words and has a straightforward sentence structure.

</comment><comment><USER4> Gee, what a valuable post. Except that it isn't.</comment>