As long as these company investments are proximate to cities and towns where partners can find fruitful employment in other companies, children have access to good schools and activities and the various kinds of people required for life have easy access (medical, fire, cops, …). If the companies instead want a monoculture of single, childless workers it’s going to be (quite) unstable.
Having your employer as your landlord and the owner of the local shop shifts even more power to the employer. Maybe it would be acceptable with a very strong union.
"Oh can't work this weekend, that's a shame, your rent review is due"
Or of course the old "Oh no you can't drink alcohol here, we're a good company" favoured by company towns a century ago
"Selling" a modern house can come with thousands of different obligations too. Imagine a HOA, but it's actually a company.
The article specifies that the people are buying, not renting, the houses, and they're even subject to rules (probably an HOA) saying they cannot rent the homes to others. If they want to sell in the first 3 years, the company has an option to buy the house back for what it was sold for, and for four years after that, the company has right of first refusal to buy the house at market rate.
This sounds like a fairly reasonable compromise to me, though it's far from the only model that would make sense.
I did read that but it seemed pretty clear that the comment thread and the comment you were responding to were not in fact discussing one specific instance, but rather the broader phenomenon:
> these company investments ...
> If the companies ...
> Having your employer [not "having Cook"] as your landlord ...
Although given that your comment was clearly about the case study I should have made clearer that my intent was to communicate that just because Cook isn't renting the houses that the parent commenter's concerns are still valid because more companies are.
You're responding to things irrelevant to the article - the employers are not landlords, don't own shops. Nobody is renting anything. The company doesn't own anything.
"So a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy. "
When I worked at Google, there was a group for people to advertise apartments to each other in SF. I think 20% of them were rentals owned by VPs/Directors or other high level employees. that seems like an even bigger conflict of interests. When you rent from a megacorp, there’s realistically a million levels of bureaucracy between “work weekends” and “rent review”. When you rent from your skip level manager… your landlord can be directly approving your raises AND rent rates.
The company here is avoid this to some extent by selling the houses to the employees at a good deal. So they wont be paying rent for the rest of their lives to the company, and presumably they can sell the houses later. Basically sounds like they want to boost the housing supply in a small town.
How is this an argument, though? This is true of every small town that has one major company in it. The huge majority of people in town work for the company, and people don't really otherwise have much incentive to live there.
Though those concerns apply if the major employer in a non-diversified area picks up and moves, goes bankrupt, downsizes, etc. whether or not something is a "company town" in some formal way or not. Look around the US Midwest for examples.
First of all, the employees are not _forced_ to buy there, they can still commute like before. Speaking of moving, the company made quite an investment building those houses so it will be less motivated to move easily someplace else. But if it does, what's stopping other businesses stepping into a pool of workers which may - or may not, of course - be readily employable in that area?
It also doesn't sound like it went too badly either.
Quote from the wiki page you linked: Bournville is known as one of the most desirable areas to live in the UK; research by the Joseph Rowntree Foundation in 2003 found that it was "one of the nicest places to live in Britain".
Oh, don't get me wrong, it's beautiful. (I live very nearby).
But it's definitely not a village with affordable housing for the local factory workers. It's a pretty village where rich people live, and aspiring rich people want to live.
Isn't this similar to McDonald's point system? Workers get points as they work, different menu items cost a certain amount of points. They have to use all points (and eat their terrible food) before a certain period, else they lose them.
If McDonald's is taking money out of people's paychecks and replacing it with McPoints or whatever they call them, then yes.
Companies can give prizes or awards on top of paying their usual wages with actual money, but as soon as they start paying people less because they're compensating them with fake money it's a problem.
Headline: This isn't a company town and nobody is going into debt to the company.
I know it violates the guidelines but I suggest you actually read the article and reply to that, rather than just making things up in your head and replying to the fantasy.
>I know it violates the guidelines but I suggest you actually read the article and reply to that, rather than just making things up in your head and replying to the fantasy.
How deliciously ironic. How about, from the very article itself:
"So a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy. "
The article is about Cook Medical, which is having homes built and arranging for them to be sold to employees. Nobody is renting anything.
In fact, the line you quoted is from the first of exactly two paragraphs in the entire story that mentions any other companies (and the second is a historical reference).
I'm astounded that someone could read TFA, as I'm sure you did, and come away with that summary. Because it's the summary I might come up with if I read only the headline and was in a hurry to let the world view my hot take.
Guess it depends on so many factors. I live in an 8 story building and I hardly see my neighbors, so unless we could car pool some days I couldn't care less if coworkers past and present I like or dislike are living next door.
We have many blocks of old "company" apartments for the railway employees (used to be state owned, so even a little different) in my town (and probably in the whole country) - so they're technically co-workers in an org with many 10k of employees, but the chance your neighbor is visible in your daily life at work is pretty slim.
Kind of a non-story, but if it helps the employees it sounds good, not much to discuss I guess?
"Company towns" sets off all sorts of alarm bells and rants. But the reality is that, in a lot of smaller cities, there pretty much are one or maybe two dominant employers and everything else exists primarily in service of people working for those employers.
As in the case of one person I know, if you live in Bentonville you're probably working for Walmart and if your position is eliminated and you can't get a new one, you're probably moving.
It has to be paid for either way. Could be offered to rent by employees or simply provided as benefit. Probably tax rules will decide which path to take...
Companies already control workers by controlling access to their health care (wanna start your own business? quit a toxic work environment? can't because you can't afford losing healthcare!).
This is one solution to the lack of housing but a massive side effect is that we consolidate even more power in the hands of employers.
From one side you are correct and entitled to be able to do that. From another, and IANAPsychologist, I doubt the psychological effect of trying to emotionally isolate yourself from people you spend most of your time with is positive.
I am a huge believer in keeping my personal life as separate from my employer as I possibly can, for a whole host of reasons. I may technically spend a lot of time with my coworkers, but we're working, not socializing. My coworkers are acquaintances, not friends.
That's not the same as being emotionally isolated. You still (presumably) have friends and family.
I wouldn't really call my neighbours a "part of my personal life". They're just people who live near me and have relatively little impact on my life. If anything, I wouldn't be surprised if people working at my company are more similar/relatable to me than just a random set of people in the same socio-economic class that move next to me.
I'm buying the home from the company with a mortgage from a bank, which I assume is not the company's bank. I'd also assume that the utilities are covered by a third-party. And if I have to move somewhere where there's basically no utility companies outside of my employer to service the area, then moving there is basically putting all of the eggs in one basket anyways.
> They're just people who live near me and have relatively little impact on my life.
When shit hits the fan, you will suddenly hope they become part of your personal life. It is only in a relatively high trust society with a mostly working police/court/government that you can afford to exclude your neighbors from your personal life.
My parents taught me a saying from their native language that translates to the people physically closest to you are your closest family. They are going to be the ones who can help you in times of need (or harm you), so building and maintaining relationships with them is advisable.
But if your coworker says "yes, please!" to the company's free Thanksgiving turkeys and Christmas hams and cheap T-shirts with company logos and subsidized health care and retirement plan and such - that's their choice.
the problem is that if this becomes more common your argument won't be an option. It'd be akin to saying "just ignore the company's offers for health insurance" - well now our whole system is designed to account for and expect employer sponsored health insurance and you'll be at a massive disadvantage by not accepting it.
Some people don't have much of a social life outside work so colleagues become their friends and support system. It may sound depressing but many are perfectly happy living like this so in that context this sounds like a good deal to me.
Yeah if you all get on it you are in walking distance to work and all your friends! Downside is if you fall out with someone, there is no escaping them!
I think selling the houses is fine. Renting them out, brings up issues of company towns.
But as long as they are sold, I don’t see much of an issue.
If the company is large, it is likely that a significant number of people in any new housing development close to the company would be employees of that company.
In addition, with the ebbs and flows of employment, it is likely that the housing would end up getting sold later at market prices to people who did not work for the company.
In addition, having company built housing, ends up relieving the price pressures on housing in the area.
I think this overall is a good thing, as long as the houses are being sold, not owned and rented out by the company.
On the flip side, by buying the house you are taking on a lot of extra risk. If the company shuts down or moves its factory you will be left both unemployed and left with a virtually worthless house, since no one will want to buy a house in a place where the by far single biggest employer just left. If you're renting you'll just be unemployed and can easier move to where you can find a new job.
That risk exists for any home purchase in a small town/area with one major employer, not just homes the company helped build. If you work for the company and live in the town, you take on that risk, regardless of whether the company helped build the house.
Even though the article is about a home buyer, the article says at the very beginning, "a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy."
As if employer provided health insurance wasn't enslaving enough; now they want to bring back fiefdoms.
Ford did similar things... "The Ford Motor Company's interest in employee loyalty went far beyond the shop floor workers. Ford owned a great deal of land near Detroit and established a land development subsidiary explicitly for the purpose of erecting middle-class housing for managers and supervisors. These homes in Dearborn were completed in 1919."
Ford is not the only one, there are many examples (google the wiki page for company town for a basic example list). Almost all failed eventually due to changing economic instances or company malice and the end result is either incorporation into an existing town (the good outcome) or decline and eventual devastation. Wile less evident than the real town examples, we have here lots of smaller end 19th, early 20th century "communities" which have the same result. There is a name for the type of houses: Arbeiderswoningen (laborer housing). Eventually the government took over over from private or corporate initiatives and a rent system was created which was far less tied to the actual place of employment.
Honestly, give me the company town, the job for life, the fat pension, the regular promotions, the company schools, the company scholarships to send your kids to university and I will live next door to whoever you want.
Why do you trust the company will continue to provide said benefits? Someone new could come in and say, "hmm, let's raise the rent on the main street, close school canteens, add a co pay element on the universities..."
>Why do you trust the company will continue to provide said benefits?
Not sure if this is a great example from history. But my 87 year old grandmother still receives a monthly pension check from IBM from my late grandfather who passed away 6 years ago and retired over 30 years ago.
I'm sure IBM wouldn't be making these payments if they had any other option. I think the answer to your question is "because they are obligated to" via contracts signed with employees (and ex-employees, and even deceased employees).
One could counter that example with the multitudes of businesses who failed on meeting their defined benefit pension promises, resulting in laws like ERISA 1974 and PPA 2006, which resulted in businesses ceasing to offer defined benefit pensions because it turns out, predicting decades of future economic conditions and insuring volatility for that length of time is insanely costly.
Not to mention that IBM has been dying for a decade+. I certainly would not expect them to make good on any decent size DB pension in a few decades, and unless you are part of a politically connected group, you may or may not get fully bailed out by the feds (see General Motors pension renegotiations in 2008).
See also multi employer pension plans which have crazy regulations where if one employer fails, the other employers gets to pick up the tab.
What's to prevent that in a slightly less monopolized system? In some cases, players in a market may all even independently arrive at the same solution and decide not to undercut competition, they may add additional fees (e.g. tuition) to universities across the board. They may find canteens unsustainable with a profit motive.
Functionally, the consumer has the same problem: competition isn't giving them alternative choices and variety, policy and options are mandated to them. Providers may find school canteens too expensive so they close them, the one who thinks an opportunity may open one but be forced to charge a fee too high for participants to consider so ultimately lunches get packed anyways. In theory the market dictates these things from consumer consensus but consumer consensus is really just some degree of a manipulated majority opinion over w minitory. In practice I don't care who dictates it, my voice (dollar in this case) doesn't seem to matter all that much in contexts without healthy competition.
There's definitely some sort of threshold level of actual competition (however we define that) that has to exist to create a landscape of options for the consumer. As time progresses, the argument for private enterprise grows weaker, in my opinion. The solution is for markets to become less anti-competitive, to allow real competition (not sure how we achieve this). An issue is, no one wants to do this and is incentivized to be anti-competitive in every way they can.
I don't think it is a given that not relying on corporate pensions is reducing risk. I'm curious what percentage of people have been burned by unpaid/underpaid corporate pensions vs thinking they could rely on social security/government programs for retirement.
I grew up in a mining town in northern Canada where the company provided everything you mention, plus summer jobs at the mine, chartered plane to pick up students, train tickets for vehicles, and much more.
The mine was originally owned by a group that started in the area so they had incentives to make the area great for the employees. Which they did, my grandfather and father got great paying jobs that allowed them to support their families.
But then a massive mining company came in and bought majority shares in the mine and they have been scraping these benefits ever since.
My point is, you never know what's going to happen. So don't get to attached to these benefits. For most places that's alright because there are other opportunities, but in a mining town there generally is one employer.
This ^ but it's an employee owned company. And since the company is doing so many things, like running schools and towns and pensions and scholarships, we should have some of the employees represent all of the others to make sure all the voices are heard. We could vote on those representatives and even have two different sets to keep them in check.
Either a portion of each employees pay could fund all of this or since the company is providing everything then we could just do without pay entirely. Not sure which method is best really.
I think it’s interesting that all the people in this article that need housing assistance are clearly overweight, and the rich (presumably) ones are all thin.
It's not true, though. You can eat decently more cheaply than you can eat junk food. People just like junk food better, and stuffing your belly with high-carb "comfort food" is basically a compensation mechanism if not an addiction.
> You can eat decently more cheaply than you can eat junk food.
Whether or not that's true depends a lot on where you live. In economically depressed areas, just finding decent food is a challenge, let alone being able to afford it.
In the US, it's generally cheaper to buy processed foods that are heavy on salt, sugar, and fat than it is to eat fresh, healthy food.
There's also the issue of food preparation. Many (maybe most) people don't know how to cook from scratch in a way that is fast and healthy.
Right, and I'm not even criticizing those people. If you have a well-paid and fulfilling job, a nice home, and a rewarding social life, it's not that hard to turn down the triple cheeseburger in favor of a salad. If you're on the opposite end, that cheeseburger may be the most pleasure you can look forward to all day and it takes a lot more willpower to resist.
Raw veggies and basic foods can be cheap, but starting from real ingredients also costs time, something that can be hard to come by for the single mom working 60 hours a week.
Ask me how I know, and how I learned to cook really well.
It's not like that at all, considering in many other parts of the world, the opposite trend is present - the poor people are thin, and the richer people are fatter.
There's nothing stopping rich-country poor people from eating like poor-country poor people, except the lack of life skills and desire.
This phenomena is sometimes exemplified on certain reddit subs, where people will post complaints "Here's all the groceries I can buy in my budget of $X. Guess I'm going hungry this month". And then they post pictures filled with processed/packaged food which is far more expensive than if they made better purchasing decisions. eg www.reddit.com/r/Damnthatsinteresting/comments/10o985p
> There's nothing stopping rich-country poor people from eating like poor-country poor people, except the lack of life skills and desire.
This just isn't true as a blanket statement in the US. I've been both wealthy and poor, and my experience is that when I've been poor, it was simply unaffordable to eat decently. My problem was not a lack of skills or desire, but money.
But, as I said in a different comment, this depends quite a bit on where in the US you live.
While food deserts do exist, and increase the risk of obesity for residents in one, "only" 6% of Americans live in one. Access alone does not account for the incredible rates of obesity among the poor in America.
I was also poor at one point, and I don't really know what to say about our differing experiences - I couldn't afford to eat junk food. I subsisted on rice, beans, grains, sale fruits/veg, and cheap cuts of meat. At my local walmart(which is in a HCoL area), you can buy 3500 calories of rice, 2600 calories of beans, and 5000 calories of chicken for $15, or 750 cal/$. It is hard to find processed food with a better cal/$ ratio than that. For example, a bulk box of velveeta mac and cheese at the same walmart is 3330 calories for $7.47, or 450 cal/$.
Absolutely, if you don't know how to cook or prepare food, processed food might be your only option. But, that is a knowledge issue, not a monetary issue.
I think the disconnect here is that in the U.S. "poor" encompasses a whole universe of relative incomes and experiences. I grew up poor as a kid, but for the most part never thought much about food. Some days maybe all I could scrounge together would be toast + butter, but I rarely if ever felt deprived.
Except during one of our homeless stints, when we were staying with a family my mother met through (I think) a church program. We stayed at their house for only two weeks or so. My mother was working most of that time, and the wife made meals for her children, myself, and my little sister. It seemed like all we ever ate (or at least they let us eat--maybe they were worried we'd eat too much, though there wasn't much of anything else in the cupboards) was Bisquick pancakes. I was constantly hungry. I had never felt hunger like that before. And as a kid the situation felt so bizarre because this family lived in what seemed to me to be a beautiful, modern apartment (in retrospect, probably recently constructed public housing), yet they seemingly had no food. Also, the son was younger than me but weighed significantly more than I did--I was skinny but well within normal weight and height.
Fast forward about 15 years and as a young adult working in SF I became acquainted with a struggling older woman with a teenage daughter, and I'd sometimes drive her around town if she needed a lift--e.g. needed to make an appointment. (I forgot how we met, but growing up there was never anything strange about strangers helping out, and somehow I found myself on the other side of the situation and just went with it.) One time she invited me over to her apartment for dinner to thank me, and out comes a box of Bisquick and a dinner composed of Bisquick-related dishes.
Even today, in neither case can I really comprehend why Bisquick figured so prominently. I mean, from a dollar-and-cents standpoint, I can see the value, but I'm like 70% confident that in both cases neither families had no alternative but Bisquick. OTOH, you can't really second guess those decisions on the spot, and those periods are just snapshots in time. OTOOH, that doesn't imply people are making the most rational decisions.
In any event, I guess the moral of the story is that there's an immense diversity of experiences even at the bottom of the income and wealth brackets, and we should be cautious drawing broad conclusions one way or another.
Not to harp on it, but bisquick pancake mix perfectly exemplifies my point: The cheapest per unit bisquick they have at walmart is 6 lbs for $9.38. Keep in mind you still need to add your own milk and eggs to this anyway.
Compare to home made:
- 10 lbs bag of flour for $3.98,
- 1 8.1 oz can of baking powder - $1.98 -- you'd have a few tablespoons leftover but let's just allot the whole can to it
- 48 oz vegetable oil - $3.64 -- you'd use 20oz per 10 lbs flour, so $1.52 worth, with 28 oz remaining for other cooking.
So, you can have 6 lbs of bisquick for $9.38, or 11 lbs of homemade mix for $7.48. That's $0.68/lbs homemade, versus $1.56/lbs for bisquick.
You're paying about 2.5x in order to not dump a little bit of baking powder and oil into some flour. It's a bad financial decision to buy bisquick instead of the ingredients and DIY.
I just don't think that food was the wealth bottle neck for which these people were optimizing, for better or worse. A starving college student might deliberately resolve themself to eat frank & beans every day while completing their degree (setting aside that that's definitely not the optimal calorie/$ strategy), but someone living squarely in an impoverished environment is often focusing on other perceived limiters, specifically related to upward mobility or steady income.
That said, such an explanation doesn't lend any credence to the so-called food desert argument, either. Quite the contrary, it would explain why people often eat as-if they're in a food desert even when they're not--i.e. eat lots of junk food from the convenience store or fast food outlet down the block, rather than buying staples from the grocery that's a 10 minute walk away, behavior I've seen and experienced in many areas. Short-term and myopic thinking and behavioral patterns (variously described as rational or irrational, depending on how its contextualized) is a hallmark of poverty that has been rigorously shown time and again, notwithstanding that the concept of a "culture of poverty" has become taboo.
If there is one thing I can say about reddit, it's that they get particularly sensitive when talking about calorie consumption and weight. And there is definitely nothing they can do to stop eating so many calories.
I don’t think it’s related solely to income though. Rich and poor alike in Japan are thin as sticks. It must be something nutrition based, and something that the US has an abundance of but other countries do not.
To some extend I see it in the Netherlands, but not to the levels visible in the US.
It was a common practice in the XIX and XX century, because there were not good living areas near factories. Some big conglomerates build houses for their workers, and they assign them to employees based on category, family size or marital status. Example Berlin [1]
I think the people complaining in this thread would complain about anything.
When government won't allow construction of "workforce housing," complain, because nobody's big enough to try to push back and get concessions to make it possible.
But then when a company, which is big enough, especially relative to its small town, does do the hard work of negotiating construction contracts and helping people find financing so they can sell homes at cost by removing inefficiencies from housing production, complain about that too?
Some important points from the article:
1. The houses are being sold, not rented.
2. They're being sold at cost.
3. Anyone who buys one can sell it later to someone outside the company. The only restrictions are that if they sell within 3 years of buying, the company has the option to buy the house back at the previous sale cost, and for four years after that, the company has ROFR at market price.
Is it a perfect solution? Of course not. These are humans. Humans don't come up with perfect solutions.
But if you're going to complain, what would fix it for you? And is that just a matter of personal preference? 'Cause it's not like most of you are willing to live in a Midwestern small town with one major employer in the first place, but clearly these people are.
Yeah, I'm much more of a "yes, and" guy with regards to our housing shortage. Would I want to see this become the dominant model of housing? No. But if it helps someone, that's good! We just need more housing of all shapes and sizes in the places people want to live.
I think this is a tempting solution but a bad idea in the long run. Just like how employer provided medical insurance sounds good on the surface, but it gave employers an incentive to lobby against socialized medicine, which reduces worker mobility and hurts the economy.
What companies lobby against socialized medicine? Employer based health insurance is ridiculously expensive and the cost is usually hidden from the employee. You get quoted a salary net of benefits. And a lot of jobs are required by law to provide insurance which means the mandate could be a huge percent or the employees overall cost to the employer.
This is closer to employee 401k since you take it with you if you leave, which has been very beneficial even compared to pensions as you don't have to bet on your current employer being around and able to support the benefits 30 years from now
The law should require this disclosure upfront, or at least the proportion of premium of the metal level, such as employer will pay 50% of silver level plan within x network.
The employer is required to disclose total premium cost on the W-2 however, line 12 code DD I believe.
White collar employees that have marketable skills really benefit from being able to silo their risks in employer pools, because their healthcare costs are lower than those of blue collar workers.
I specifically remember people complaining about increasing premiums after Affordable Care Act because they would have to subsidize sicker people who simply did not have insurance in the first place, and I believe former Senator Lieberman from Connecticut, home to many health insurance companies, was able to capitalize on this and strip the “public option” from the Affordable Care Act.
The whole thing is an exercise in splitting the populace into various tribes of haves and have nots and pitting them against each other.
Another handout to big businesses by government is the pre tax purchase of health insurance premiums by a business for employees, but if an employee of a business that does not offer insurance subsidies buys it themselves, they have to pay with post tax income.
The health insurance companies? Both Ds and Rs collect millions in lobbying efforts from the healthcare industry; it's the 6th largest industry in terms of campaign contributions, more than the oil and gas industry.
It because a lot of people are already struggling with the cost of housing. It's hard to tell people they should be worried about this company exploiting them, when their only other option is to pay someone else even more money to keep a roof over their head.
Perhaps in theory. But how hard are we-don't-build-housing employers currently lobbying in favor more housing for their workers? And how many orders of magnitude would employers providing housing have to grow by, before any cutbacks in that lobbying could have a meaningful effect?
Sure. But "if this was scaled up several orders of magnitude, and continued for years, then there would likely be bad side-effects" is a argument against doing pretty much anything. Ever.
It's also a really good argument for not putting all our eggs in one basket and for avoiding total homogenization of the systems by which we live. This is not currently practiced at scale, as anyone who has boarded a plane in one state and lands in identical surroundings in another state can attest.
Depends very much on the employer. I've spoken at length with a small sample (13, to be exact) leaders of companies from SMBs to mid-sized enterprises and they're all for national healthcare, as taxation is a relatively predictable expense and reduces overhead in other ways (like paying for benefit management services). Its also likely a shared tax, and in some cases is a net benefit for them because it makes recruitment easier (this in particular with blue collar businesses and those that aren't what would be considered traditionally technology companies. Benefits is a big part of the recruitment tactics still)
I think health insurance companies run the biggest two faced business of all time, extracting money out of companies and individuals while line driving the cost down as much as possible without benefit to those who use their plans. Cigna[0] even uses automatic denials based on automated heuristics, a human doesn't even look at the file, for instance.
I know "Medicare For All" programs aren't a silver bullet either, but I think it would at least put everything and everyone on a playfield that is even enough to have smaller reforms over issues that get missed in these proposals
Speaking from personal experience Cigna's line employees will also lie directly to your face on a recorded phone call while you're taking notes because their policies are geared toward following the letter of the law vis a vis retention while ensuring that their arbitration process effectively blocks you from suing them effectively unless you sue them before trying to work with them.
We've been quoted 6 weeks to have a manager listen to a phone call, which is the exact period of time that their call recordings are retained. They're the worst health plan I've ever had the displeasure of using.
They will also from time to time edit your explanation of benefits, which is against the law. Don't trust them and keep all the paper copies of everything they send you.
Minor point that you also have the non-profit Blues (i.e. Blue Cross Blue Shield) in the US health insurance marketplace, who are literally obligated to return healthcare savings to customers in the form of rates.
They have their own problems, but profit-mongering is not one of them.
Many other OECD states feature private insurance that's (at least largely) not employer-provided. Private coverage may be the main coverage for a large proportion, or even majority, of the population.
How does it differ from the US?
1) Less emphasis on or no norm of employers providing healthcare (and this may not be encouraged through tax law, leaving little reason to do it versus just paying more money)
2) These are often more tightly-regulated than in the US—coverage minimums (we kinda have these now, in the US, sort of, so that's nice), disallowing for-profit insurance, et c.
3) There's often a government fallback plan
4) AFAIK every single other OECD state leverages price controls in some fashion, whether de facto or de jure (usually de jure, in the countries with strong private insurance markets), which affects everything, including the price of private health insurance.
The biggest misses were providing a government fallback plan (aka Medicare-if-no-other, which I don't think is part of it?) and regulating negotiations between providers and payers (so as to avoid payer combination into a few large companies, who can then get the best prices from payers).
I feel like a broken record, as I’m always saying what you’re saying when people discuss health insurance. Most folks want to trash public health care under the quick quip of “that’s socialism” or trash “privatized health care” with the current employer-provided system as a proxy for “privatized health care”. People get so caught up defending “their side”, that they forget the objective is to get a better health care system.
IMO, a huge number of the problems that exist with US health care (non-portability between jobs, people stuck with plans ill-suited to their needs, lack of access to affordable health care) could be easily addressed by a ban on employer-provided healthcare with a provision to ensure the costs are forwarded to the workers as monetary compensation. Workers can go choose a plan that works for them.
One example is Medi-Share (https://www.medishare.com). I'm sure plenty people will find some reason to hate it due to the explicitly Christian theme and I'm sure there are some downsides I am not aware of. I do not use it myself, but I know several people who do, and they have used it to cover their bills. To a person, they are quite pleased with the cost and idea behind it. I haven't dug into it, but I find no issue on the surface. Maybe they refuse to cover sex change surgery or something and that makes them Literally The Worst, I don't know. The idea of "everyone puts in a bit and when someone needs help they take some out" is the basis of insurance as a concept, and it seems to work if there's just a little bit of gatekeeping. ACA and coverage of preexisting conditions under the insurance model really fucked things up imo. Not that preexisting conditions shouldn't be cared for, but as an entirely separate model.
> I think this is a tempting solution but a bad idea in the long run.
The best part about this plan is it sounds like the company doesn't want to be in this for the long run. Selling the homes rather than renting them, and having a fairly limited term on restrictions means in the long run, these will end up being just regular homes with a historic tie to the company. IMHO, this looks like the company doing something good for itself and its employees in a way that's hard to manage otherwise. Building the housing as a bulk project makes it less costly and easier to manage shared costs, but it would be hard for the employees to organize that on their own.
The constraints are the political power of the ownership class. By discussing alternative solutions, we slowly build consensus, and eventually power to dismantle upper class power.
Another important point from the very same article, "a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy."
I think people who don't like it are just afraid of where this appears to be heading, and they are just resisting the idea of employers gaining anymore control of other aspects of peoples lives. Of course, the people who do this are technically choosing to give up this control to employers on their own volition, but it's possible to imagine a future where this becomes very normal and difficult to avoid
My objection is the additional leverage it grants over employees. If by reporting a safety issue in the workplace, harassment or even just landing on a bad boss I risk getting evicted from my house - I'm going to be far more motivated to suck it up and deal with it. Strike? Eviction. Complain? Eviction. Try to unionize? Turbo-eviction.
Now that's less likely when the employee owns the house as the article says, but that'll change too. And of course it ties your fates together. If the company goes under, your house becomes worthless too. If you want to move to a new employer chances are you'll have to relocate anyways.
I guess next step is company scrip? What's old is new again.
In the specific case above you have purchased and own the house. Nobody can evict you. So you're comparing company-owned rental housing to companies buying tracts of land and constructing housing for purchase by employees, which is totally different.
More likely you have a mortgage, and now there’s all the incentive in the world for the bank backing that mortgage to have a sweetheart arrangement with the company that “sold” you that property.
Has this ever happened in American history? That someone who was paying their mortgage was evicted because the bank had a sweetheart deal with someone? That's not how I understand mortgages to work.
- You buy your house from the company via a mortgage owned by the company bank.
- You start to build equity in your house.
- You talk on your lunchbreak with your coworker about whether a union would be a good idea.
- The company fires you for no particular reason.
- There are no other employers in commuting range, and your skill-set is not conducive to working from home. As a result:
- You fall behind on your mortgage. The company bank notes that you are delinquent and immediately starts foreclosure.
- The company real estate agency doesn't show your house to people. There are no other real estate agencies in this town.
- The company bank takes possession. You leave. The bank sells the house at auction. There is one bidder: the company-owned house leasing company. They bid less than the amount the bank is owed. The bank takes all of that money, as first creditor, and you get no money from the sale.
The company-owned house leasing company cleans it out and leases it or decides to sell it to another employee.
Fannie Mae just settled a foreclosure discrimination class action in which they where failing to maintain foreclosed properties in minority neighborhoods. This caused a chain reaction where nearby homes went underwater and were subsequently foreclosed upon.
Mortgage lenders have remarkable legal resources with which to make a homeowner’s life miserable. While they usually have a financial incentive not to, that doesn’t always pan out.
The trouble with owning a house in a company town is that it's hard to sell it.
If the company won't buy it back, and they're the only local employer, and employment is declining, you're stuck. This is the story of many coal mining towns in West Virginia.
There was a scandal in China where a company sold homes to the employees then fire them a couples of years later. Former employees stuck with mortgages they couldn’t pay. There are so many problems that happened, these homes were close to the workplace while being far away, very undesirable to outsiders
There's no reason the government can't do this either, except (and I'll speak for my city) they don't want to do any of the hard work to actually make this happen. We need better leaders.
Absolutely. The Singapore HDB model is a great example to follow. [1] Almost 80% of Singaporeans live in HDB flats.
But the reason the government won't build is the same reason they don't let individuals build. They are beholden to the voting land-owning class who doesn't want to see the value of their properties go down by adding new supply.
Here the people excluded are non-residents and non-citizens. So the system works for all residents and citizens, to whom the government is beholden. It could just as easily be extended to include foreign workers, and they've been moving in that direction already. This is an explicit decision not an implicit one. It's not that the system wouldn't be able to support them due to some fundamental or intrinsic issue, it's a choice. That isn't true of the US model.
To me it sounds like failure actually. Kind of like soup kitchens, it's great that they exist, but I wouldn't cheer if 80% of people used their services. Free markets are better providing variety and choice, while governments are better at providing consistency and a minimum floor on quality.
A successful government intervention would look to me like ~0% homelessness but >90% living in privately produced housing.
> I think the people complaining in this thread would complain about anything.
So much THIS!
If they were free, people would complain that you still have to pay property taxes/utilities.
Everyone LOVES to criticize but that same group rarely offers solutions, lest others criticize them.
Here (Ontario, Canada) housing is a major issue for the reason you list : Nobody is big enough to push back and make it happen.
Try and build anything here and you will be NIMBY to death. I ride my bike by an area where they are tying to build low-rise apartments and everywhere you look are signs protesting it.. where should they build?
Company towns have a pretty bad historical record in the USA. Try asking ChatGPT:
"What is a 'company town' in the context of late 19th and early 20th century America from the perspective of both business interests and labor organizers?"
I suppose nobody will be able to get away with paying workers in scrip these days, however. Also, the housing is actually owned by the employees as you note, so that's also an improvement over past arrangements. It's still a little creepy, I think.
> I think the people complaining in this thread would complain about anything.
This specific thing has a history all tangled up with bad company behavior during the labor movement. You'd get the same reaction about a company paying in scrip and having a company store, no matter how many paragraphs one may compose of reasoned arguments that it's a decent, or even great, idea. People's first reaction will be, "yep, seen this before, fuck that" and they'll not pay attention to all the words about what a good idea it actually is.
It isn't literally the same thing as a company town but the concept from the headline at least is close enough to cause a pretty visceral reaction. Honestly, even as explained in the top level comment I am uncomfortable with my corporate employer having any rights to my property after I leave their employ no matter how 'weak' they may seem. Work should be a fair exchange of labor or product for capital, imo. It's more a symptom of housing being used as an investment than as actual housing for humans that this is considered a good deal. If housing wasn't increasingly difficult to come by, this wouldn't even be on the table as a compelling offer.
The restriction that you have to own it for 3 years because you're getting it at cost seems aligned with nearly every government mortgage subsidy. They're normally loans that have to be repaid if you sell within a time period. And ROFR at market value after that doesn't seem like it has any negative effect on the seller.
And, to be clear, these restrictions would apply to someone who was still an employee and wanted to sell, not just to someone who wasn't an employee anymore. The restrictions are because of the financial considerations being offered at the purchase of the home, not because of the employment relationship.
Yeah. It's not super terrible. The restrictions are pretty reasonable to keep the company from being overrun with people that take a job, buy a house, and leave.
I don't think it's great for competition since smaller companies won't be able to offer the same incentive, but it does create downward pressure on the housing market and at least the employees end up owning a major asset.
Another way to look at it is the company providing enough total compensation for their employees to buy a house. It almost seems unnaturally altruistic which kind of freaks me out. Lol.
Throughout almost all of human history. An exceptionally few persons of any population owned their own dwellings, most people were a variant of servants/serfs/slaves to the landed gentry. Today's ruling generations decided that this order of things had to come back - and here we are again.
Companies built worker housing (and charged for it), paid workers in scrip that could only be redeemed at the company store. It became de facto slavery.
Generally exploitive features include: an exclusive buying right by a certain party (allowing them to set prices), incidentals and necessities of life only being purchased from a certain party, mortgaging future assets in exchange for current goods/services (often with steep or complex credit terms), and restrictions on free sale of assets to arbitrary third parties (preventing price discovery and realization of fair market value).
As GP observed, these specific modern agreements generally avoid those pitfalls.
Some examples are the TVA/Arthur Miller's Norris TN, Pullman Chicago, Fordlandia in Brazil and Lowell MA (mills), with the latter 3 being popularly known mostly for the associated labor strikes.
How about Ford, in Dearborn MI? They were really into controlling their workers' behavior outside of work. If Ring had existed in Henry Ford's time, he would have had surveillance cameras in every home, reporting to Ford's internal sociology department.
This is such a visceral "oh no" for so many people that I've seen part of the rising tension of multiple horror movies, including one released this year, be either revealing or highlighting that an employee will be sleeping on employer-owned property, which the viewer is expected to implicitly understand to be dangerous. Which, in the horror tradition, goes back to gothic horror—Dracula, the live-in governess, that kind of thing. It's a well-trod trope that this situation makes one vulnerable.
Now, none of this (and even my original post) means it's necessarily a bad idea—but that, the actual history and the way we read that situation in fiction, is why people are inclined to immediately have a bad reaction to such a plan.
Company towns still exist in China. Heck, I think my wife owns a duplex in an education related development her father worked for. Full blown SOE company towns (not just buildings or neighborhoods) are stranger but then again employment is pretty much guaranteed for life (iron rice bowl) if you get to live there.
> When government won't allow construction of "workforce housing," complain, because nobody's big enough to try to push back and get concessions to make it possible.
You'd make a great 19th century robber baron.
Arkansas just tossed out its child employment laws for 14 year olds, so it sounds like things are going your way.
Maybe if all the people in their 20s and 30s stopped watching the toktok and star comic and buying furbobbles and being too fat or too frail to work just got their act together and went to work we wouldn't have to hire 14 year olds!
I grew up in a Midwestern small town with one major employer. It’s not a sustainable way of life. When that employer inevitably pulls out, the taxpayer pays the brunt of their externalities and the people pay with their QALYs.
I see no reason to incentivize that kind of development no matter how badly some people think they want it.
Why not just sell these houses with no restriction even at a market profit?
If reasonably priced nice houses are required to attract talent, just solve that problem.
Healthcare shouldn't be tied to employment, WWII is over. Housing shouldn't be added to that list.
We don't need to have a Company Store model.
> Why not just sell these houses with no restriction even at a market profit?
Because they will be bought up by property management companies, headquartered in another state probably, who will turn them into rentals that the people there can just barely afford. Cook is trying to come up with an alternative to that.
It seems like that would only be viable if supply remains constrained. If they kept building for new hires plus a spare percentage, then holding tons of empty un-rentable properties seems like a bad return. It is a complicated question for sure.
Because of the restrictions do the homes show up as assets on the company's books? If so, what happen in bankruptcy? Something about the deal doesn't sit right with me but I can't put my finger on it.
You left out that the house cannot be rented out. So if you get fired in two years, you get to sell the house back to the company for what you paid for it (losing appreciation). Since you're not going to be able to stay in the neighborhood because there are no other jobs around.
Which means that the company can price in "forcing you to sell your home" into your salary discussion.
It's being explicitly sold to employees as a way to build wealth. Steve Ferguson, chairman of the board of Cook Group, the parent company of Cook Medical, said "And people don't build wealth living in apartments."
Seems like the guy who approved this project thinks its supposed to be an investment!
I mean, this is a company that has operated and expanded in this area for a long time. They are well established. Obviously nobody can predict the future but it's a pretty good bet that they will be there for another three years. That's a bet I'd take if I worked there. This is not an SV software company, it's a company that makes physical products, has a huge investment in the facility to do that, and have been operating in the area for decades.
Oh, I totally believe the company will still be there (although they could move the factory to another country, it's not unheard of.) My point is if you want to own that house, you need a job and they have most of the jobs. So if they fire you or you quit, you probably will have to sell the home back to the company. That's a lot of pressure they can exert on you.
Not in a 3 year period you don't build much equity. Equity is built more in the later years. After the first 3 years, on a 188k house at 6% interest over 30 years they will have accumulated a little over $5,800 in equity. Less than the realtor fees would be (except this was a direct sale). Not nothing, but at that point well worth crunching the numbers on renting vs. buying.
That's not at all what the article says, here is a direct quote from it (emphasis mine):
"So a growing number of employers around the country have decided to build their own housing for workers, _mostly for them to rent_ but sometimes to buy."
I would hope it's extremely obvious the major problem there is with linking your housing (through renting) to your employment. It's the 'company town' problem all over where workers can be exploited with the constant threat of homelessness if they're terminated.
> It's the 'company town' problem all over where workers can be exploited with the constant threat of homelessness if they're terminated.
I think people on conflating it with that, but there is some distinction. The company doesn’t appear to have a monopoly on all housing, commerce, entertainment, and employment within the area, but are working to provide some housing options for its employees. It’s kind of hard to draw a direct parallel to “company towns” where the company controls everything.
The problem the complainers want to solve: More housing, more affording housing specific, for as many people as possible.
The problem the company is solving, specifically when they rent the house and don’t sell it: employee retention.
If a company wants to become a real estate developer and sell the housing to its employees, that’s fine. Assuming they’re actually increasing housing stock and not just gentrifying at the expense of locals. But as we all see with the American health care system, linking basic living needs to your employment is a terrible plan, and renting a company house sounds like “company towns” for that reason.
Going from employed, housed and insured to the opposite of all 3 because you got sick of your boss demanding you work weekends is pretty dystopian and exactly where this plan would lead.
Tl:dr- we don’t need any more fucking rentals, we need more home owners (generally, idgaf about anyone’s personal preference for renting or owning. If you want to hire a parasite to fix your pipes 3 weeks after they break in exchange for paying his mortgage that’s between you and your god).
Who’s “they”? This is the important part from the article you’re not discussion: “So a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy.”
Renting from the company is bad, like my original post. It’s solving for employee retention, not affordable housing.
> Renting from the company is bad, like my original post. It’s solving for employee retention, not affordable housing.
If the rent is below market rate, it’s solving for both, at least temporarily during the employment period. Which may be ok or desired by the employee.
If the employee wants to stay within that area even after their employment ends, they can use the time that they are in the cheaper employer provided accommodations to find other housing. I think describing an employer provided housing for rent may really only be generally bad if the employer forces you to stay there and pay a captured rate as a condition of your employment.
Right, which is why I bring it up to directly refute the parent comment that it's not a company town because people have free will to simply live somewhere else. There is nowhere else they can afford, and that's the problem.
Exactly what did you refute? You downplay a company’s solution to a housing affordability problem by simply complaining that there is a housing affordability problem?
The company refuses to pay employees enough so they can afford what the market will bear for house pricing. Instead of--shocker!--paying employees more, the company is building housing to rent to employees so it can continue paying them peanuts. The entire system is broken and not in favor of the rank and file workers. The free market isn't working.
Ahh, so it’s apparent you didn’t read the story. The company is building new houses near a given plant that they are offering to sell to employees at a below market rate because local older homes are purchased quick by cash buyers. There is other housing in the area, but this company wants to give an option for a lesser commute to the plant for their workers. A quick Zillow search shows quite a lot of affordable rental housing at the same price point of a monthly mortgage of the company offered homes within a 15-20 mile radius from the Plant’s town. This is not an uncommon commute distance for a rural area.
If the employee leaves the company, they still own the home. The only caveat (and it’s understandable and reasonable IMO) appears to be that if the homeowner decides to sell the home within 3 years, the company has right of first refusal to buy the home at the same cost they originally sold it for to the employee.
You are making assumptions about the company’s motives that are based on your own biases. You seem to feel that the employee is somehow being wage abused for being offered a house to own at a below market rate. How is it that a) this situation describes a “company” town in the historical sense. And b) the employee is somehow abused for choosing to purchase a home below market value?
Ahhh you failed to read both the article and my original comment that started this entire thread. As I said there the first paragraphs of the article highlight that _most companies are buying property to rent, not sell_. They talk about a specific example of selling but the bottom line is more companies want to rent homes.
I read it, but I didn’t assume the article was about a single sentence literally found halfway in to the article that mentions the word “rent” (along with “buy” BTW).
At any rate, you want to complain about the problem, and claim that what appears to be a working solution for an employer and it’s employees is somehow spurious, but have offered zero solutions other than outrage.
We get it, you are mad about housing affordability and want to comment about your anger. Post a solution, both here and elsewhere in the conversation you seem to avoid that. So be it.
The alternative is the company pays employees enough to afford to live in the area without having to rent them company housing. The free market system is broken and not working.
It's not a problem of being unable to build. This article mentions the company is building an _entire neighborhood_ with 14+ homes all brand new. That clearly isn't some lack of space or zoning problem.
The problem is the housing market has been inflated to astronomical levels because the housing industry is a critical part of our country GDP. If the price of homes fails to go up then banks will lose money and fail (just like in the aftermath of 2008). It's not profitable to build cheap, affordable housing so it doesn't happen.
There is also a lot of money sloshing around in real estate due to previous sustained low interest rates and QE. The problem is that some people can afford the current high prices (and will bid up anything they want), just everyone else can’t. Increasing money supply went into real estate for far too long.
Restricting resales for 3 years would be OK if the company would agree to no layoffs, no facilities closing, and no takeovers of the company or the local
facilities for three years, etc, etc.
Creating neighborhoods according to short-term needs is surely short-sighted. Houses should be built to last at least 50 years, and neighborhoods longer. Whenever things turn bad for the company that has built a neighborhood for its workers, things will likely turn worse for the neighborhood. It would be extraordinary for a firm to create a community in its own image and have that image be long sustained as praiseworthy.
I've lived on military bases. You get subsidized housing. You get issued military furniture. You buy from the base PX. You follow the military's rules. This all goes away if you leave the military for whatever reason.
I don't recall anyone having a big problem with it, because if you did, you opted to live "on the economy". Your choice.
When you join the military you sign a friggin contract that gives up your rights. If you desert and run away _you can be killed_ by military tribunal and firing squad as punishment for example. Military housing and matters have absolutely no relevance here, unless you have some bizarre dream that we all live under a dictatorship with your employer at the top.
> It's the same in that you don't have to live on the base
Yes, you do. Unless you're married or are above a certain pay grade / rank. An awful lot of dumbass privates marry their hometown sweethearts and pop out kids just so they ain't gotta live in what are basically dorms.
And folks in the Navy often have to live on ship in the absence of the above options. The second my buddy from HS made E-4 him and 4 friends GTFO.
Military housing also has a lot of problems, and the water around several military bases (e.g. Camp Lejeune) is dubious; awful lot of EPA Superfund sites around bases...
Yeah, that's how indentured servitude works. The employer finances your purchases, then you owe the company.
> if they sell within 3 years of buying, the company has the option to buy the house back at the previous sale cost, and for four years after that, the company has ROFR at market price.
What if the company fires the employee after 2.5 years? The buyer could be seriously underwater. Heck, depending on the housing market, the buyer could be underwater even after 3 years.
Where I live (Ostrava, a heavy industry city which expanded massively during the 19th and early 20th century), there are some worker colonies left, which were built by the mining and steelworking companies around 100-120 years ago.
The houses are somewhat modest, but low-key beautiful (redbrick architecture similar to England and very rare in Czechia), and they were real houses, suitable for families and situated in a walking distance from the workplaces, schools, churches and marketplaces.
It seems to me that building them was a fairly good idea.
Yeah, I agree. You can see something like this as a clear signal of a market and regulatory failure and yet recognize it as an ultimately pro-social stop gap.
If this becomes routine, it will mutate. It's an absolute breeding ground for abuses. Thus it should not be seen as a reliable source of relief but as another catalyst for the urgency we need to have regarding the housing crisis which is rising to the level of an emergency. Policy makers are the only ones who can swallow hard and make the decisions which will get us out of this.
Well, it seems our return to "the guilded age" is complete with the return of company towns. It's only a matter of time before we start hearing the same horror stories that we heard in that era.
As the Panic of 1893 weakened much of the economy, railroad companies ceased purchasing new passenger cars made by Pullman. When his company laid off workers and lowered wages, it did not reduce rents, and the workers called for a strike. Among the reasons for the strike were the absence of democracy within the town of Pullman and its politics, the rigid paternalistic control of the workers by the company, excessive water and gas rates, and a refusal by the company to allow workers to buy and own houses.
Second paragraph states they are selling the homes, not renting them. You don't have to sell if you're fired, but the parent company gets right of first refusal at market rate for four years. So these concerns as articulated seem moot.
> So a growing number of employers around the country have decided to build their own housing for workers, mostly for them to rent but sometimes to buy.
> What about simply raising workers' pay? Median U.S. wages have long failed to keep pace with rising housing costs. But Ferguson says that raising pay won't create new homes.
> Only 10 of the first 14 houses found buyers immediately. Walker says some interested employees can't break their lease yet or need more time to improve their credit scores or save for a down payment.
If even when selling them at cost, the company doesn't have employees lined up and ready to purchase, then it sounds like their wages _also_ need to come up. They're not paid enough to have the financial stability to save even for a home being sold at cost.
Pay people enough to afford it? Lol, that would be socialism. Selling at cost means they can make some housing available but at no cost to themselves. It might still work out to be a better deal for the employees though--if they were paid more and bought houses from commercial developers, they'd probably have to pay twice as much for the house.
It also said something about a lottery, so I suspect there are enough buyers for them. "Immediately" likely meant that they had their down payment and everything else all ready to go. Others likely needed to make arrangements to sell their existing homes and other things before committing.
> improve their credit scores or save for a down payment.
That's really telling. The company who has hired them and are paying their salaries don't think that they are credit worthy. So they are literally admitting that they are underpaying their labour severely, or expect to do lay-offs.
Company housing is used in The Netherlands to pay people below minimum wage. Migrant workers (often seasonal) get paid minimum wage to work in agriculture, in fulfilment centers or similar jobs and have to pay a very high rent to their employer for renting subpar housing. That way the employer effectively pays less than minimum wage due to money flowing back in the form of rent. Terrible all around.
Due to the housing crisis and people not being open to rent out their home to migrant workers this is often their only option.
"The Group provided housing, schools, health clinics, swimming pools, and other recreational facilities in a system that became known as paternalisme (paternalism) or in more modern terms, societal or responsible support."
"Rather than relying on union representation, Michelin
management tried to foster the loyalty of employees through the generous provision of social benefits."
Aside: Many HN readers may remember that Basecamp's drama from 2 years ago [1] made mention of "paternalism" and how they planned to end the practice within their benefit structure. I recall the phrasing to be a source of confusion and argument. I think there were still a lot of folks (myself included) who saw this as a form of societal absenteeism in an economy with challenges that are often not easily overcome with simply more money at an individual level. I do, however, think this is a dicey area where companies can spend more efficiently on some paternalistic benefits rather than flatly increasing salary (which may have fewer tax incentives). This needs to be balanced with the fact that US corporations are not legally incentivized to maximize employee happiness, they're incentivized to maximize profit and without a legal entity around worker benefit, this form of paternalism can feel cheap or dystopian with callbacks to "company stores" and jumping through hoops and checking boxes to maximize your salary.
Regardless of whether or not it's a legal requirement of the board, I think even this confusion on the matter is evidence that not enough protection is in place for long term longevity or worker benefit in normal corporate bylaws. With LLCs you can offer bylaws, with PBCs you can offer a benefit charter, with LCAs you can offer direct worker ownership; there are other corporate entities besides C corps which can offer better protection that is more explicit and less prone to financial debate - that's my point.
If your employees can't afford to live Spencer-friggin'-Indiana, and your company name isn't "McDonalds", you're just not paying them enough. Now, granted, it's been a couple of decades since I've spent a lot of time in Spencer, but I cannot fathom that in the intervening years that Spencer (nice town as it is) suddenly exploded into a tech hub where no one can afford a house anymore. A quick glance at Zillow says that it is not hard to find what appears to be perfectly livable homes for <$200K. Many are larger, nicer, with a bigger lot than the ~$900K houses around me in Redmond, WA.
So I don't know what's going on in the leading example in TFA. On the one hand, it's not Mountain View, it's as-rural-as-rural-gets-in-Indiana with low CoL. And yet the company says, "we can't find people because they can't afford to live around here". Something just doesn't add up to me.
This is a good point, the motives for first party corporate housing in an inexpensive area without severe supply restrictions are going to be completely different than in an expensive area with those restrictions.
I still think it’s possible for it to be a win-win and solve a collective inaction problem. When a business wants to expand in a rural area, it may create an acute housing shortage which the market would only eventually address, and it requires each individual developer or buyer to go through the process of finding new housing. If the business knows it’s gonna need a 100 new homes they might as well start the process asap, and I don’t mind if they get rewarded for doing so as it incentivizes job creation and housing construction.
In the scenario where it’s not nefarious and just a smart win-win, it reminds me how Japanese rail recoups its costs by purchasing/developing land adjacent to stations. It’s just a smart way of capturing externalities from an economically beneficial endeavor, which reduces costs/increase the incentive for the good thing. I support it
In my opinion, if your employees can't afford to live Spencer-friggin'-Indiana, that's between them and their government. Your employees probably still wouldn't afford to live in Spencer if you didn't hire them. But unaffordable housing suddenly becomes your problem just because you hired someone, which strikes me as backwards. You didn't decide how much housing would cost, and unless you're a monopsony or close to it, you didn't decide what the market prices for their labor are. And in many industries, margins are so tight that it's impossible to stay solvent while paying much above market prices, because your competition certainly won't.
If those "market prices" are not enough to pay for somebody's housing, then they are not truly "market prices". Nobody is going to accept employment at that rate since they can't live off it. So it's not actually the "market price". It only is if there are recent deals made at that price.
It's like saying "well I'm only asking for market prices" when offering somebody to sell some stock to for 100 USD even though they and everybody around them only want to pay 50 USD. That doesn't make 100 USD the "market price". Only if you've seen some recent trades for 100 USD, then it's the "market price".
> If those "market prices" are not enough to pay for somebody's housing, then they are not truly "market prices".
Housing really is the unbalanced part of the equation. Yes, I agree that salaries should increase - a lot. But we can't turn a blind eye that there is a massive civilization-destroying crush of the population by the landed gentry, who demand that just about all surplus production of the continent becomes profit for them. Companies and labourers produce goods and services that benefit all, the rent seekers produce nothing and burdens all.
Those "rent seekers" are the investors that provide you with capital to build something in the first place. They don't produce anything physical directly with their own hands, but if they don't provide the funds, then nobody else would either. The HN crowd of all people should understand this. Your salady doesn't come out of thin air. It comes from somebody believing in that the thing you are hopefully going to produce will hopefully eventually produce a profit that flows back to them. Without this believe, there would not be an investment in the first place and thus no salary for you.
Of course this leads to accumulation of wealth, which can be an issue for society if it goes to far. And I agree that that's happening and that we can't turn a blind eye to it. But the solution here is not to make villains out of investors, but to tax profits. Seems to be hard to get that into peoples heads though, especially in the U.S. where taxes are always viewed as something bad.
> Those "rent seekers" are the investors that provide you with capital to build something in the first place. They don't produce anything physical directly with their own hands, but if they don't provide the funds, then nobody else would either.
Read my comment again, I'm not calling company investors rent-seekers - I'm saying those who live off other's labour through their real estate are rent seekers.
It's pretty funny that 99% of "investors" do not invest a dime in actual companies that produce goods and services. Instead most invest in rental properties to leech of their fellow man or invest in land with the excitement that it will increase in value and that they can price-gouge somebody who might need it for something productive.
When I talk to everyday people, what are their dreams? It's not striking out on a business with their own great idea, it's not even investing in interesting ventures by others. The dream is always the same: Buy some rental property and live care-free on the rent that others pay. It's pathetic.
Seems inappropriate; McDonalds beats minimum wage and has significant opportunities for career growth that many other "fancier" restaurants don't offer.
Part of it is explained as (paraphrasing) "builders won't build low cost homes because the profit isn't there" so all the builders are 20 miles away over in Bloomington Indiana building $500K houses for the same labor and materials cost and making a lot more money.
Yeah, builders won't build "small" homes so they're building "small" 1300-1500 square foot houses and selling them for $200k. I live in a "low" cost of living area in Canada and $200k USD might get you an 800 square foot condo.
Naively, I'm surprised it's not common(?) for large or well capitalized employers to offer favourable mortgages in their comp packages. Some banks certainly do it as a perk. It would also create a new asset for the company, where the loan itself could be sold on if needed.
If you have a whole pile of balance sheet cash, buying up some city condos and leasing them back to key staff seems like a pretty good investment. You can use them to secure cheap debt if you need liquidity, or sell the leases, and it's an inflation hedge. It seems so simple and progressive that it must be illegal for some reason.
I think the only businesses willing and able to do something like this would get roasted hard by the media and even politicians for this. Classic handwringing about any perceived nefarious plot because it’s done as part of a big tech/pharma/finance/whatever company
Honestly, if my bigtech employer had some company housing benefit, I’d really appreciate it and likely use it. “Company towns” from a century go are so, so different from what a big tech housing development would be: none of us would be getting paid in scrip, we’d easily have transport options outside the corporate housing (it’d probably just be somewhere in the middle of an urban area like South Bay or Queens), we’d be consciously choosing it because of municipal policy failure making housing too expensive and not because it’s literally the only option in the area.
I would have to understand better what you mean by a mortgage though because I doubt I’d want to live in a corporate housing development years after leaving the company. It would probably be better for capitalization (capture the depreciation$$$) for the company to own the building but offer it for rent at a low rate to employees.
This sounds like a recipe for a messy divorce. It makes sense for a bank to offer a discounted mortgage, because they're in the business of mortgages, and it's not unreasonable to still bank with a bank you used to work for.
OTOH, I wouldn't want to have to have a payment relationship with my employer after I left. Sometimes it's nice to keep a 401k with an old employer, but you end up caught up in their drama still --- when they change 401k providers, you need to pay attention, if they go through a merger, you need to pay attention, etc. It would be worse if they were administering your mortgage.
Now --- if they want to partner with a bank/credit union and subsidize a lower rate or something, that might make sense. It could be win-win-win; it might be less risky loans for the bank, a nice perk for the employee, and a way to attract employees. Of course, it depends on what happens the employer; it also concentrates the loan portfolio of the bank; if you had a lot of loans to employees of a company that has a big problem, you've now got a lot of borrowers risking default at the same time. I got a nice deal on a car and factory loan incentives because of who I worked for, and there's lots of other employee perks available.
I did a postdoc at a hospital in a HCOL city which offered still expensive but below-market hospital owned apartments for postdocs. It was a massive perk at the time and I'm not sure I would have even taken the job without it. Even setting aside the cost part, it was a massive relief just not having to visit the city in advance and trying to find an apartment in a brutal housing market and dealing with sketchy landlords.
Of course it came with the stressful side of knowing that if I ever left the job (or was fired), I'd also need to move out of the apartment as well within a month.
I want more businesses to try this. I think the kneejerk “company town bad” misses a lot of the contextual differences between how and why they were needed in the past, vs what employer-built/managed housing would look like today.
For starters, company towns in the past (and these actually still exist) were usually for raw resource extraction in isolated areas. The workforce was a lot poorer than today and whereas now you could probably go on SSI or take a different job to not starve, people were desperate enough to take these jobs just to put food on the table. Once there, technology and infrastructure were such that connections to the outside world were difficult to make, and done by the company (who imported all the goods and provided all the services). So yeah, putting a lot of desperate people in complete control of a for-profit business led to a lot of abuse, de facto indentured servitude or what we now call debt bondage/ modern slavery, and other bad stuff.
Employer housing in a place like the Bay Area would be entirely different. You’re completely connected to the rest of the world, you’d have plenty of money and options to switch jobs or engage in consumption outside the company development, you could just take your pay and use it for non-corporate housing (just like some people do with company food). There are for sure pitfalls we’d need to prevent, like lease or mortgage terms that make it too hard to switch jobs, or the employer being too nosy about what happens in its housing. But like, this model is a thing we’re all familiar with already in the form of university dorms, live-in resident managers, military housing, except it could be even more hands off.
I actually think it would incentivize a lot of win-win outcomes. Employees get reasonably priced housing, employers offer a perk with nice balance sheet effects, employees get to live in presumably a safer area nearby (but not with) friends and acquaintances (ie a community), employees get a short commute, employers don’t have to pay out the nose for expensive third party corporate housing, employers get to capture positive externalities of job creation, it incentivizes development and would actually be able to make it happen because it’s a priority for a well funded and more importantly well-organized pro-housing entity… and if you thought it were creepy or better for young people than families you could just not use it.
It’s a little dystopian at first glance, serfdom yadda yadda, but in the Bay Area we already have serfdom except our lords are random people who bought or inherited housing when it was cheap in the 70s-90s. And those people fight tooth and nail against development which keeps prices high and them in power. If we’re gonna have lords I’d rather have them be pro-development and giving me shares of their fiefdom.
Haven't companies been doing this for decades? Between 2000-2010 Halliburton subsidized housing for engineers in West Texas. In the 1970's, IBM subsidized housing for employees in Boulder.
I've read that unions used to build affordable housing with the union members retirement funds, but a law was passed (maybe Taft–Hartley?) that said they had to focus on returns only, rather than consider any other benefits. So, unions don't build affordable housing any more.
The issue is more with ERISA, which came about in the 70s. It requires all employment-connected retirement plans to act “solely in the interest of participants and beneficiaries” for the “exclusive purpose of providing benefits” to them. In that context, the fiduciaries do have an obligation to maximize risk-adjusted returns for the benefit of the plan participants as a whole. While the fiduciaries have latitude in selecting investments, intentionally investing in something they know won't maximize returns to the plan participants would not be allowed. The "benefit" of a below-market-rate affordable housing project doesn't count because those benefits would go to the housing occupants and not all plan participants.
My father used to work at a university, which provided apartments for its employees as a benefit. Largest place I ever lived in.
Anyway I can't imagine actually buying a place from my employer. What if I get laid off like so many already have during the last 12 months? These things tend to happen every 20 years or so.
At least with the company featured in the story, it's your house to keep regardless of your employment status. The company does say it's keeping an option/first right of refusal to buy it back from you for the first three years at the same price you paid (to prevent flipping). Once that period is over, you are free to sell it on the open market.
I recall thinking when Amazon was building out SLU that they should just go ahead and build the apartment buildings too. Why let Equity Residential take the vig? At that point they could include housing in the comp package and it would essentially be a barter arrangement of work for housing. While that's still taxable, it would help maximize the ever important future free cash flow.
If that pattern became widespread popular then I expect some kind of COBRA, but for housing, would be legislated.
Monopolistic and malign practices always creep in. Say you miss and are late on rent, and then walk in to find you've been terminated. They won't say its because you were late on rent, but its not outside the possibility that they'll have some other manufactured excuse.
Maybe the buildings have ongoing recording that isn't disclosed, Wayward Pines style.
The incentives for this only make sense when you factor in the additional malign control the company gets over the employee.
Reminds me of that one TV series "The Colony" (not a post-apocalypse type movie).
This reminds me of how NYU is one of the largest property owners in Manhattan and makes a metric shit ton of money renting accommodations of various types to students and faculty.
I come from a small factory town in Scandinavia (under 10k population).
Up until the late 80's the factory either provided ready-made housing or backed the loans of employees who wanted to build a home in the town.
That's how a bunch of my aunts and uncles got a cheap loan to build a home in their 20's. The bank had practically zero risk when a multimillion company was co-signing the loan.
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