That’s Not ESG

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Felix Salmon: Hello. Welcome to the VAX, not ESG episode of Slate Money. Your Guide to the Business and Finance News of the Week. I’m Felix Salmon of Axios. I’m here with Emily Peck of Axios.

Host 2: Hello. Hello.

Felix Salmon: And with Elizabeth Spiers.

Speaker 3: Hello.

Felix Salmon: And we are just going down the list of things that are not ESG. This week we are going to start with Tesla, which was literally kicked out of the S&P ESG Index. We’re going to move on to Grubhub, which obviously isn’t ESG, but had a particularly cursed week with a promotion that went horribly wrong. We are going to talk about Tok, which is a Chinese company, and other any ESG, Chinese companies, I don’t know. But certainly Bytedance doesn’t seem to be one of them.

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Felix Salmon: And then finally in Slate plus, we are going to talk about the most ESG industry of all, which is to think tech, all the E and F and G boxes. So tooth fairy, if you’re out there listening to Slate Money, well done. You managed to stay in the index. It’s all coming up on slate many. Okay. So in preparation for. All manner of high minded think flew in seeing next week a topping out.

Felix Salmon: I’ve been thinking about ESG which is always a very popular topic of conversation and it is in the news because every year the S&P rebalances its S&P 500 ESG fund, which is basically the S&P 500, but with an environmental, social and governance overlay, which is meant to more or less follow the S&P 500, but just be a bit nicer for everyone concerned.

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Felix Salmon: And most people have never even heard of this index. And it doesn’t normally make headlines unless and until Tesla is involved. And Tesla was in the S&P ESG fund and now isn’t because it’s in the bottom quartile of all automakers for ESG. And of course, Elon Musk and the Tesla fanboys are up in arms about this because they reckon that Tesla should automatically be part of the ESG fund because, hey, it’s solving the planet by making electric cars and anything else is irrelevant. I’m going to take a wild guess here, Emily, that you don’t agree with them.

Host 2: Oh, well, Felix, I’m about to surprise you. Don’t. Don’t I feel like Elon Musk might have a slight point. Whoa, a slight point. From what I have read about how the S&P ranks companies, by ESG standards, they don’t take into account emissions avoided presumably by producing electric cars. Tesla is avoiding some amount of carbon emissions, but that’s not taken into account at all. So therefore, Tesla doesn’t make this list. But ExxonMobil does make the list because they look in the ESG rankings, they look at like business plans around climate and promises these companies are making.

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Felix Salmon: So one of the things they do, if they do try to mirror the S&P 500 as best they can so they rank you against your peers rather than against all other companies. So the reason ExxonMobil is in there is because ExxonMobil does well compared to other oil companies. Tesla is compared to other auto manufacturers. They’re not comparing Tesla to Exxon. They’re not saying Exxon is better than Tesla. They’re saying Exxon is better than Chevron. So I do take your point that if you make electric cars, then those cars are going to produce much lower emissions than gas burning cars. And that should count for you.

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Felix Salmon: Yeah, but ESG is only one third E. There’s also the S and the G. The G on Tesla is not super bad. They have a separate chairman. They have a single class share structure. The governance of Tesla is a bit you know, we all know it’s basically Elon’s way and he can do what he wants. So the governance is not great, but it’s not terrible. The S is terrible. The S is super terrible, is full of accusations of sexism and racism and union busting and you name it. And on the se alone if. Exxon is the kind of company that you might want to exclude just because if you see, then Tesla is exactly the kind of company that you might want to exclude just because of S Elizabeth.

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Speaker 3: I mean, I agree with Felix. I think you could take Iran out of the equation just as a standalone variable and they might be back in the index. But I also take Emily’s point, which is that if the index was a standalone e index, it wouldn’t necessarily make sense to kick Tesla out of it. But the predictable reaction from Eli on is his perpetual sense of persecution. He is alleging that this is the powers that be persecuting Tesla for inexplicable reasons, and they’ve been pretty clear about why Tesla is being kicked out. It didn’t really give Ilan or any of the rest of the company clear signals about what they need to do to repair it. So I just I think it’s perfectly reasonable decision.

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Speaker 3: But I also am surprised that Ellen and the fanboys are reacting the way that they are.

Felix Salmon: I think one of the things is that when people see ESG, they think E and the two have just conflated. But. Facebook, a.k.a Metta, has not been in this index for a while and it’s still not in this index. And Facebook’s carbon emissions that relatively small, like the reason Facebook is not in the index is because of S&P and specifically actually because of G. I think it’s just completely controlled by one man, which is just crazy. So I take heart from this because it does show that this is properly an ESG index and not just an E index. And so that makes me happy because I think you do need to balance these things that although. It. On one level, you can just say, well, climate change is the big existential risk for the planet and it’s the only thing we should care about. I feel like it’s worth being a little bit more holistic.

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Host 2: Absolutely. I mean, and we’ll talk about tick tock later in the show. But the S is really important. The least you can do as a company is treat your employees and your stakeholders well. Right. The social piece is really important.

Felix Salmon: And it’s pretty clear that Tesla employees are badly treated. And yeah.

Host 2: Judging. Yeah. By the complaints from the state of California and various lawsuits over the years, I would say it’s not looking good, it’s.

Felix Salmon: Looking very bad. And Elon Musk is famously a terrible person to work for. He fires people on a whim. He’s very mercurial. We just saw this week there was a big Business Insider piece about how he apparently signed a big settlement with one of his flight attendants on a space x private jet for sexual harassment. So that should be disqualifying.

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Host 2: Yeah, but on another level, ESG just seems like so much artifice, like it’s a performance. It doesn’t. One of the things they rank, Ian, according to one of the things I read was having a stated net zero goal and disclosing climate risks. That gets you like a high ranking. I mean, so that’s not actually good for the environment. It’s nice to have goals, but so what? Isn’t that just greenwashing?

Speaker 3: But the index really is tied somewhat to what people expect these variables to do for the stock price. So for instance, and with the ETS component of it, if Iran is behaving erratically, which he does as a matter of course, but maybe more so recently, shouldn’t that be a factor?

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Felix Salmon: Yeah. And as all of these things being hard to measure, hard to compare, like this is the deep, fundamental issue with all ESG investing. How do you compare one company to another on these metrics? You can’t just conflate it all down to a single number, right? There’s no good way of doing it. There’s no good way of comparing these apples and oranges and a lot of accountancy companies and a lot of big buy side investors putting a huge amount of effort into really trying to create comparable metrics that you can judge companies against each other on.

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Felix Salmon: We are a long way down from the kind of hand-waving, Oh, I think this company is better than that company. But we are still a long way from something really rigorous and quantifiable, although we’re getting there. And I think honestly, we’re getting there faster than they had expected us to. And while it is always possible to look at certain individual factors that go into these rankings and these decisions and say, well, that individual factor is problematic because it can be gained or it’s not great, ultimately, I think there is a certain amount of good faith in honest attempts to try and do the best they can, and it is improving. So I’m a little bit optimistic about that.

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Host 2: Whoo hoo! This is who cares about ESG investing? Like, who is this all for?

Felix Salmon: Really good question. And the answer is mostly large European pension funds. There are literally trillions and trillions of dollars of state controlled and privately controlled European pension funds and insurance companies who really care about this a lot. And they are mostly driving it. It’s mostly not American investors at all. It’s mostly European investors, and specifically it’s mostly institutional investors rather than retail. This is not one of those things where you’re like, your vegetarian brother is like, I want to be cool with my investment. So I’m putting my 401k into ESG. You know, this is trillion dollar investment funds who are saying we want to actually do our bit to help save the planet.

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Host 2: And does it work? You know, I mean.

Felix Salmon: I think the jury’s out on that. But if you look at the number of companies who are putting a lot of money into trying to create net zero plans and all the rest of it, you have created that at least we don’t know yet whether those plans are successful. It’s very hard to know what the counterfactuals are in terms of what would those companies be doing if it wasn’t for the ESG push from large investors? But it stands to reason that they are doing more than I mean, you can see already that they’re doing more than they were and they’re doing more than they would be doing if it wasn’t for this pressure. So how big of a difference it makes is almost impossible to quantify, but that is making a difference is almost undeniable.

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Host 2: Because if ESG, how can ExxonMobil be ESG? It just doesn’t make sense.

Felix Salmon: So. Right. So there are lots and lots of different ways. It’s not there’s not just one.

Host 2: I know so.

Felix Salmon: Many things, but not. No, but it’s not even a binary thing. It’s not like you are ESG or you’re not. Right. Yeah. And then if it’s ESG and you invest in the ESG companies, and if it’s not in the company, you don’t invest it. It’s much different than that. And the BlackRock is, for instance, a passive investor, but it. It’ll push us to this kind of thing. The idea is that simply divesting from Exxon is not going to help you. Exxon is still going to be. Exxon is still going to be very profitable, is still going to be pumping out carbon into the air. And if a bunch of European investors just don’t have any exposure to Exxon, stock like that doesn’t help the planet at all in terms of excellent emissions. What you want is for Exxon to reduce its emissions and to move towards net zero. And so what you want to do is you want your own investors to push the board to go in that direction. And you want to compare Exxon to other oil producers and say, are you doing better than your peers? That’s the argument. I’m a big believer that the divestment is completely useless and doesn’t help anyone.

Speaker 3: I think it depends on who is doing the divestment, but I think the ESG funds are really designed to give a structural and sort of to companies like Exxon to not just do nothing. And I think the importance of institutional investors and actually having influence on that is enormous. So I understand why it’s enough of an incentive that they have to take it into consideration in a way that they wouldn’t otherwise.

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Host 2: Just so uncomfortable like it is with the company. You get a high ESG rating now.

Felix Salmon: So I think there are a couple of sectors who are just completely off limits in most, but not all ESG investing. Tobacco is one and arms manufacturer is another. But there was a really interesting moment there towards the beginning of the Ukraine war, where the arms manufacturers were like, look, you need us, you should have us in your ESG rankings because we are helping the world be a better place because you need the arms manufacturers to help the Ukrainian resistance. That was kind of awesome.

Felix Salmon: Let’s stay on this as part of ESG for a minute and talk about Grubhub, who had a great idea this week, which was, I know, why don’t we spend millions of dollars on buying everyone in New York City lunch for the day? That’s going to cause a huge amount of goodwill. We’re going to have this massive city and everyone in New York City is going to love us because we gave them a free lunch. Elizabeth, did you take them up on that offer?

Speaker 3: I did not. But I remember whenever I saw it thinking, how are they going to do that? And this is even in the absence of the obvious mistake they made, which is a, you know, a reseller of widgets, not telling the widget vendors that they were going to have enormous explosive demand a time. So I am surprised at the chaos. I am surprised that this problem seemingly did not occur to them, which, if they were an energy company, would be, I guess, a failure, the g aspect of it.

Felix Salmon: But it was clearly mostly a failure of the S, which was just the social chaos that resulted from this. You had overwhelmed restaurants, you had people placing orders and then just getting canceled. You had people placing orders and waiting hours and hours for their lunch to turn up. You had long lines. You had I think someone had tried to phone up Grubhub and was told they were 3,922nd in line or something like that. According to Grubhub themselves, they were getting 6000 orders a minute was if you work it out over that three hour window, works out to about a million orders, which is just crazy.

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Felix Salmon: Right. And so and the fact that they didn’t think this through and all of this chaos was entirely predictable and that what they were doing was they were taking a bunch of restaurants, mostly who are understaffed and stretched already for pandemic reasons and saying, we’re just going to sort of tax your demand without warning you. Someone somewhere was just not thinking.

Speaker 3: Also, is this a situation where they were I mean, they didn’t frontload any of the costs either. So I guess the restaurants just had to front everything and then wait to get paid. Is that our understanding of.

Felix Salmon: Yeah, I mean, exactly. The idea is if you put in your $15 GrubHub order to a restaurant and GrubHub will pay the restaurant $15, but the restaurant had no ability to sort of stock up in advance of the demand to be able to fulfill the huge number of orders coming in. And GrubHub had no ability to say, Oh, they have nothing in the system where the restaurant can say, like, we’re overwhelmed, no mass. And GrubHub would just keep on sending orders into these restaurants, even when the restaurants were completely overwhelmed and had no ability to fulfill the orders.

Host 2: It seems like the peak moment for what is a badly structured business, which these delivery businesses, I think, and we’ve talked about them a couple of times, they’re just they’re not ESG at all. They’re not good businesses. The way they interact with the restaurants seems they don’t try and work with them or coordinate with them. They did this promotion, obviously, was going to be very taxing on the restaurants, could have benefited them if they had like really planned it out and coordinated. But they did not.

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Felix Salmon: It was clearly not for the benefit of the restaurants, right? It was it was a marketing campaign to try and get people to sign up for GrubHub. And the idea is that if getting a million New Yorkers to sign up for GrubHub, that customer acquisition cost of $15 per customer, which I’m sure they’ve managed to do a spreadsheet saying our lifetime value of GrubHub customers is much more than $15. Therefore, it’s cost effective for us to do this. But the humans involved are just not even thought about. And a lot of these companies are based on this idea of we can just use all of that human labor as next analogy that we don’t need to worry about.

Host 2: Right? And you can’t do that in 2022, especially because the cost of labor has gone up a lot. There’s fewer laborers to find to abuse in this way. I don’t think these business models make sense anymore. If they ever did.

Felix Salmon: I’d remember that GrubHub in particular is first and foremost delivery platform, right? The idea is that you put in your order and then you get your food delivered to you. So it’s not just the restaurant needing to make the food and fulfill all of those orders. They then need to find delivery humans to pick up that food and deliver it to certain residential addresses. And there’s absolutely no way you can find enough delivery humans to deliver a million lunches in the space of 3 hours. It’s just not going to work.

Speaker 3: Is it? He wrote a created an anti ESG index.

Felix Salmon: Oh, they exist. Yeah, they totally exist. The sin indexes or the sin indices, the ones which are like, well, all you do good is you go ahead and invest in vegetarians or something. And we are going to invest in gun manufacturers and tobacco and everything. Evil. Yeah, totally. Grubhub those indexes. I mean, in general, over. The past few years, ESG indexes have outperformed and said indexes have underperformed. That’s largely because the big oil majors have underperformed. But in general, the ESG thesis seems to be working out as an investment thesis if you’re purely mercenary about it and you don’t care about the planet at all. There seems to be more and more evidence that ESG is worth putting your money behind just because it makes you more money.

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Felix Salmon: Pay attention Grubhub hub. If you Grubhub what you do right? I mean, you can definitely be less evil. You can stop. Like there was that thing where they started making fake websites for restaurants because if a restaurant puts, it’s all that through to GrubHub from its own ordering system, it pays less than if the order comes in via the Grubhub platform. Yes. And so GrubHub created fake websites for restaurants that the people thought they were ordering from the restaurant directly, but in fact, they were ordering by a Grubhub. That’s just plain evil. And don’t do that, GrubHub. And come on.

Host 2: Yeah. And they’re still they’re facing lawsuits in D.C. and Chicago for that and for saying they don’t charge delivery fees and hiding them in sales tax number and stuff like that.

Felix Salmon: But in general, the idea behind GrubHub is they sell it to restaurants as a kind of this is free extra money. You might not make as much money as you would on people coming in to eat because they charge huge fees to the restaurants. But it’s just additional it’s free additional cash. So you don’t need to. So you should all sign up for it anyway.

Felix Salmon: And in fact, if you normalize delivery to this degree and if you make delivery this easy and if you make people think to themselves, Oh, I should just eat in rather than go out to eat. That’s terrible for restaurants and the whole delivery industry, but it’s Ubereats or GrubHub or anyone else is just hurting restaurants, hurting their margins, hurting, especially the amount of money they make on selling booze with meals because people don’t order booze when they order food. And yeah, it’s just making it harder to operate restaurants which come on, come on, people. That’s not ESG. Elizabeth is a New Yorker with a kid. You use GrubHub?

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Speaker 3: Yeah, we use it more than I would. I would like to admit there, especially given my child’s range of what he will eat. I can count all foods on one hand. So he is. And several of them come most frequently via delivery. So I would say we are high volume consumers of delivery food.

Host 2: When I first moved to New York City, I don’t know why, but I had a moral stance against delivery and people would come over and be like, Where’s yours? Because every New Yorker used to have before GrubHub, you would have a drawer and in the drawer would be like a thousand takeout menus. Yeah, but I refuse to take out. I would only pick up an order in person because I had a moral. I don’t remember what the reason was. I’m being honest. That just seems a lazy and, like, weird not to just go around the block.

Felix Salmon: That’s what I always order for. Like, sometimes we eat in, but when we do, we order from our local restaurants. And I go there physically and I pick it up. Yeah, because like, it’s quicker that way and the food is harder that way. And also I don’t feel like I’m messing up the streets with a whole bunch of delivery people who are underpaid and overstressed. And it’s just a bad job. And I don’t want to encourage people to, you know.

Host 2: Do that job and they’re in physical danger.

Speaker 3: So you think I’m the personal anti person here?

Felix Salmon: If you are if you are a major European institutional investor, I would highly recommend divesting from Elizabeth Spiers just like out of that asset class.

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Host 2: I mean, they make it so convenient it’s hard not to do it, especially now that you don’t have to call and go through that whole awkward ordering over the phone. You just push buttons. They make it really easy. And I don’t fault anyone for using these services. Right?

Felix Salmon: Except for Elizabeth.

Host 2: Well, yeah, listen.

Felix Salmon: But when it comes to mistreatment of employees, here’s my next Segway. Elizabeth, tell me what it’s like to work for Tick tock.

Speaker 3: Tick Tock is definitely in the anti ESG index, I think. So long hours, low pay, all the sort of abuses that, you know, I remember from the first dot com boom that people would venerate. And you find people sleeping under the desk for low pay and high upside and treating interns like 60 hour a week employees, things that happen at the beginning of a cycle. And, you know, startup booms still horrible. You would think that at this point there would be enough standards around laborers. These things wouldn’t still be happening, or at least would be based on the fact that there’s so much more media scrutiny that you wouldn’t get away with stuff like this as easily, but apparently not.

Felix Salmon: I’m not sure about the low pay thing. It’s definitely long hours, but the main thing reading these stories specifically, this one story about Tick Tock is that there’s just this fundamental disconnect on two different levels between the Americans and the Chinese. Right? So Tick Tock is a is owned by Bytedance, which is a Chinese company which is based in China. And the idea in China work life balance and bring a whole self to work and make sure that you are about, you know, all of that kind of stuff like that has not reached China yet.

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Felix Salmon: Right. So the Chinese don’t seem to care at all about that. But also they not only expect the Americans to be more like the Chinese in terms of their work ethic, they also expect the Americans to be more or less on Chinese hours. So there’s a whole bunch of like middle of the night shit going down because that’s daytime working hours in China and everything just revolves around the Chinese headquarters. And it just makes life incredibly miserable for the Americans who are not only working the American, the House, but also working the Chinese hours.

Host 2: Yeah, I really like this piece. It was in the Wall Street Journal, I think, earlier this month. And I’ve been wanting to talk about it. And it is this weird thing where there are echoes of the famous Jodi Kantor, New York Times Amazon story, where Amazon white collar workers were like crying at their desks and whatnot because they’re so overworked. And every day is day one at Amazon, which.

Host 2: Oh, my God, no. But that is apparently Tick Tock has borrowed that slogan or that whatever mission for their office to every day is day one. And they have all these be candid and clear is up on the wall, but no one knows what the standards are for performance reviews. And there’s all these like weird slogans and mottos to foster some kind of company culture. But the company culture is confused because it’s somewhere between Amazon inspired and Chinese inspired. And I learned from this article that in China, Chinese tech workers were working a996 schedule. Do you know what this is? So it’s 9 a.m. to 9 p.m. six days a week. That’s crazy. That is a lot of work. And that was just like even.

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Felix Salmon: Amazon workers don’t like that.

Host 2: I don’t think so. And then they said, okay, well, we’ll relax. The Chinese government, I guess, even said like, that’s too much. And so Bytedance said it would do 1075, which is 10 to 7, five days a week, which that does sound kind of like normal for the U.S. anyway. Yeah, I just thought the culture of of what Elizabeth was saying, the startup intense culture meets like the Chinese startup tech intense culture, which is even more intense. One woman said she was sat at her desk and she couldn’t get up from a meeting, so just had her period through her underpants. There was just is crazy stories in this article and it just seemed like from another time or something you can’t believe people are putting up with this now.

Speaker 3: You also see where there’s an opportunity for American tech execs to kind of co-opt some of these behaviors when it’s convenient.

Speaker 3: I hate to bring up Elon again, but he was tweeting a couple weeks ago about Chinese workers and he said something to the effect of, you know, in China, workers are asleep on the floor and so all 3 a.m. get up and works or something like that. And he was framing it as a work ethic issue and suggesting that, you know, people who want to work reasonable, healthy work hours are just being lazy. So there’s not enough pushback, I think, from American executives in these companies that you do have to prioritize worker health.

Host 2: Yeah. And there was a line in the journal piece that was just like, it’s not a work ethic thing. It’s a fear thing that Chinese tech workers are worried if they don’t work really super hard, according to this article, that they’ll lose their job and they’ll fall behind in the industry. It’s not like there’s a different work ethic, there’s a different fear level.

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Felix Salmon: There is also a different work ethic. I think one of the things we are seeing now with the resignation and the way that the pendulum is swinging more towards labor and away from capitalism, we’ve been seeing this for the past year or so and I think we’re seeing it very much with Gen Z. Entering the workforce is genuinely less of a work ethic in a good way.

Felix Salmon: Right. In the sort of I’m not. Living to work. I am working to live. What is the point of killing myself at work if I don’t get any kind of benefit out of it? Except for some. I have no pension plan. I may or may not be able to retire on in 40 years time. You know, it’s like, no, I want to have a decent, fun, fulfilling life now and I can’t do that if I’m working all the time. We’re seeing that with those PowerPoint presentations that the Goldman Sachs interns put together and stuff. And basically people are saying a lot of the work ethic is about delayed gratification, right? It’s about our work today in order to have a better life tomorrow, in order to build a better life for my children. And I think, yeah, if we are swinging towards a slightly healthier attitude to where we are working today because you want a better life today, then there is a limit to how much you should be working. Yeah.

Speaker 3: I don’t like the work ethic framing because if you’re working insane hours because you feel like you don’t have a choice, you’re going to get fired, never get a job again. That’s a very different motivation than doing it because you do everything through the delayed gratification lens and really don’t want to do anything right now that might jeopardize that. And also, it’s a matter of the extent to which the culture will tolerate exploitation of workers, which has little to do with whether the labor market or how workers feel about work ethic.

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Host 2: I agree. I don’t think it’s about work ethic and kids today don’t want to work as hard as like we did. I think we are in a genuinely great moment for workers like you just said, where they actually have some leverage and they don’t have to. No one ever wants to work that hard, but like sometimes you have to, like there’s no.

Felix Salmon: Well, the bosses do. Yeah. If you founded and run the company and this is not just a villain, this is true of most founders, then certainly most successful founders is that they really do come in and want to work, that they do have that competitive drive. They do want to beat the competition. They want to outwork competition. They want to outsmart the competition, you know, and they have that drive and they have a lot of money to make if they’re successful, unlike their workers. And they do absolutely expect their employees to have the same kind of incentives that they do. And of course, they don’t have the same yeah.

Speaker 3: They have wildly different incentives. Know, I say this having started businesses myself, it’s ridiculous to expect a floor worker at Tesla has exactly the same motivation to be there as you. And as I think that gets overlooked a lot in the discussion, especially when you see C-level executives complaining that people don’t want to work that hard. It’s like, well, I’m sure if you were somebody working a factory job and you were compensated the way that Ellen is, then yeah, I think that would probably change perceived work ethic.

Felix Salmon: What what one of the interesting things about the Amazon story and the tech talk story is that these are stories of white collar workers on six figure salaries who, you know, we read these things a lot when the subject is meatpackers or people working in Amazon warehouses or something like that. But when you read the stories about burnout and complete massive overwork and bad working conditions for these people whose job is to sit in front of computers and be like knowledge workers all day, then, you know, it does feel qualitatively different somewhere, but really it’s exactly the same.

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Host 2: And it’s so stupid too. I mean, that’s my high level analysis is.

Felix Salmon: So.

Host 2: Yeah. I mean, it’s tick tock. It’s like a fun app that you go to to like watch little clips of videos and be goofy. And it seems sad that it should be a creative job that you don’t spend 14 hours a day doing like there’s a drop off in your productivity. I think with it, you can’t just squeeze more juice from the lemon. I don’t know what the saying is. It’s been a long week, but you know what I mean. Like, these should be creative white collar jobs. Like, you’re not, like, screwing a widget into a just. I don’t know what you screw a widget into. Honestly.

Speaker 3: I know that.

Felix Salmon: Emily is all out of for these people. If you have any if you have any good, like white collar work goes to Emily, send them in to slate money at Slate.com. Maybe we need to replenish. We’ve used them all up at the Axios retreat.

Host 2: Yeah, like, you know, if I sat at my desk for 16 hours a day, I would not have great ideas. By our 13, I’d be like, I don’t know, just write something about widgets. And I wouldn’t have a metaphor anymore. Like these workers, there’s a limit to how much you can push white collar workers.

Felix Salmon: I think there’s a limit to how far you can push blue collar workers.

Host 2: Yeah, they’ll die.

Speaker 4: Yeah.

Felix Salmon: It is interesting that, you know, the hot sectors are often the ones with the places where people are reported to be working the most. Amazon’s this trillion dollar company by people working really hard. You saw the same kind of reports about Netflix a lot back in the day. We’d hear it about McKinsey or before that. You’d hear it about Salomon Brothers. You know, it’s whatever seems to be like, hot and sexy also seems to be the place where. People just work insane hours. And wouldn’t it be nice if there was a world beating industry that didn’t burnout its employees?

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Speaker 3: And it’s just when those jobs are in high demand, what people will tolerate on the job, I think is much more expansive.

Host 2: And it also is performative. Also, I wrote about a study must’ve been like six or seven years ago. They looked at a consulting company and everyone was allegedly working 12 hour days, so much work. But the researcher dug deeper. I think it was Aaron Read and found like a lot of the men were saying, they were at work, but they were like out skiing or like at home with their families. It was just like they performed working long hours, but actually they were not and they could get away with it because people just assumed, like if this guy with the suit was leaving at five, he was going out for a client dinner. Whereas like the women, if they left at five, would be assumed to be like going home to be with their children.

Speaker 3: In a survey research people are really terrible at reporting their own behavior. They tend to have a sort of fictional version of themselves that they always give the benefit of the doubt knows behaves slightly better than they do. So it’s possible that some of the men responding to that survey really do think they work that hard and they haven’t quantified it.

Felix Salmon: It golf is work to Elizabeth.

Host 2: I definitely overestimate how much I work. I think the other day was like and I work like 12 hours yesterday and my husband was like, you did not. Do you kidding? Like looking you looked at your phone like, all right, that’s true.

Felix Salmon: You’re a writer. You’re creative, like always every time you take a shower. That’s working.

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Host 2: True. Fair enough.

Felix Salmon: Let’s have a numbers round. Elizabeth, you have a number?

Speaker 3: Yeah. So have two numbers.

Felix Salmon: Oh, my God.

Speaker 3: Well, they’re related.

Felix Salmon: Okay.

Speaker 3: So one is $132,000, and the other is $10,618. So $132,000 was how much the inspector general’s office, the Social Security Administration, fined a woman who accidentally received payouts from her dead partner’s Social Security accounts for $10,618.

Speaker 3: Apparently, the inspector general is a Trump appointee who decided that the office is going to be more aggressive about pursuing Social Security fraud, which is not inherently a bad thing. But normally there is a cap on what you can charge people if they have mistakenly received funds, which, you know, a lot of people don’t actually realize that’s happening, especially if it’s a smaller amount or they’re receiving other automatic payments, which is what happened to this woman. But some of the fines are more like $176,000 for offenses that prior to that, there would have been a 20 $800 cap.

Host 2: So she got $10,000 extra in Social Security payments, but was fined over $100,000 for that.

Speaker 3: Yes, there was another woman who was fined $176,000 after she had already written a check to repay $26,000 that she had received in error. And some of these people had identified the fact that they had received the money in error, contacted the agency, and still got these insane fines.

Host 2: But what about that Revlon case? They got the extra money, and they didn’t have to pay it back, remember? Well, the Citibank figure.

Felix Salmon: Yeah, God damn it. They said it just isn’t fair. Maybe these guys should hire, you know, Revlon’s lawyers.

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Host 2: Yes, they absolutely should.

Felix Salmon: Which would cost more than $176,000. And that’s.

Host 2: Also true.

Felix Salmon: My number is €135 million, which is about $142 million euro. And the dollar very much has to be.

Host 2: Really strong right now.

Felix Salmon: Very strong. So anyway, $142 million, that is the amount that a car just sold for.

Host 2: What car, Felix?

Felix Salmon: Which I still can’t quite get my brain around $142 million car and it’s not a Ferrari. All of the most expensive cars are always Ferraris. But this was not a Ferrari. This is a 1955 300 SLR ueland coupe. Hey, which is a mercedes. And there were only two of them made and they were both owned by Mercedes. And Mercedes decided to sell one of them. And it was this once in a lifetime opportunity. And they opened it up to bidding among a very select group of buildings that they handpicked. And no one even knew this auction was happening. But the auction happened and the winning bid was €135 million. And that is so much bigger than the maximum amount of money ever paid for a car in the history of the world. It’s just completely obliterated the record.

Felix Salmon: We’re never going to see it again, but it just goes to show, you know, these kind of collectable alternative assets don’t seem to have been hurt too much by the big market swoon in crypto, in stocks and bonds and all the rest of it, that if you’re one of those billionaires who can afford to spend $242 million in a car, you are still going to take that opportunity if it comes out because you’re never going to have that. What do.

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Host 2: You do.

Felix Salmon: Again? You drive it.

Host 2: Know, you don’t you don’t drive $142 million car.

Felix Salmon: If I spent $100 million on the car, like can you imagine not driving it? Of course you’re going to drive it. How do you.

Speaker 3: Ensure $140 million car?

Felix Salmon: I think I’m probably Lloyd’s. I’m going to say Lloyd’s or maybe Chubb. I think it would have to be one or the other. Right.

Host 2: You can’t drive $142 million car. That’s just terrified. My God.

Felix Salmon: You can steal $142 million yacht. And what happens if that winds up in the storm?

Host 2: Right. You don’t want to get me started on yachts again.

Speaker 3: I feel like you’re less likely to crash a yacht there.

Felix Salmon: And who knows how even how to drive a 1955 Mercedes coupe like it probably drives very it’s not like driving a modern Ford.

Host 2: One cool thing about the collectible cars is that when you buy like a new car, of course, everyone says you drive it off the line, it immediately loses value, but.

Felix Salmon: Now it doesn’t.

Host 2: Wreck the used cars. But that’s changing a little bit, but with the collectible car gains in value. So, I mean, maybe it’s worth 143 million after you drive it. And I’m just making that up.

Felix Salmon: I don’t know. I mean, yeah, it depends how much you pay. Right. But we did have an episode of Slate Money Swag with Hannah Elliott talking about collectible cars. And yeah, they do exist and some of them go up and some of them go down and it’s the luck of the draw. Apparently. It’s the the sort of the slightly more modern cars, the sort of eighties and nineties cars. Trendy right now and going up in value. Mm hmm. Emily, do you have a number?

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Host 2: Mm. Yes, I do. This one comes from another Wall Street Journal story, and it is $18.05. That is the average hourly pay for a babysitter on care.com in April, and that’s up from $14 in 2020. And apparently there is great demand for babysitters, the teenage kind.

Felix Salmon: So what does that work out in sort of percentage annual gain?

Host 2: My thought feeling.

Felix Salmon: All right, give me the numbers again. Left what I found out.

Host 2: In 2020, it was $14.72. Okay. And now in April 2022, it’s $18.05.

Felix Salmon: Okay. I’m doing the math right now. That’s 30, 23%.

Host 2: 23%.

Felix Salmon: 23% inflation, although baby sitters, I.

Host 2: Mean, maybe I should have thought about this more like in 2020. No one needed a babysitter per se, because everyone was at home with their children. So but anyway, it’s still a lot of money. And some of the people quoted in the story, teenagers were getting paid as much as $35 an hour to babysit, which is like a lot of money. Yes, it’s crazy. Yeah. So anyway, I don’t know what that says about anything but child care workers still making way less than that.

Speaker 3: Daycare workers make less than that. A lot of.

Host 2: Then that’s why there’s also a shortage of daycare workers right now. Yes. There’s something should be done for markets together.

Felix Salmon: If your kids outgrown the.

Host 2: Buildings.

Felix Salmon: How about yours, Elizabeth? You do you pay your babysitters more or less than $18 now?

Speaker 3: I pay more than that.

Host 2: Near.

Felix Salmon: New York City. Exactly. But this is a good segue to our Slate Plus segment, which is how do you pay when your kid loses a tooth? That’s coming up for all of you fabulous sleep listeners. Otherwise, thanks so much for sticking with us on this glorious summer weekend. Thanks to the whole Slate crew, which is a huge group, there’s Madeleine who do show I’m here in Washington because Emily and I are in Washington. There’s Jessamine Molli, a seaplane armada in Brooklyn. There’s Shannon Roth, who does amazing things with the ads. It’s all coming together. Thanks to them. Thanks to all of them. Thanks to you for listening. And keep the emails coming on sleep money at Slate.com. And we’ll be back next week with more slate money.

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Felix Salmon: Okay. I am not a dentist, so I’m going to leave this one up to Elizabeth. How many teeth is your kid going to wind up losing over the next few months or however long it takes to lose teeth?

Speaker 3: Probably in the next few months. Six or seven years. Six is about to be seven years old. So yeah, I think that’s the range.

Felix Salmon: But there is more than that in total, right?

Speaker 3: Oh, yeah. Wow. How many to three? I don’t know.

Felix Salmon: I mean, I think we have 32 teeth or something. I don’t know if you have that many grown ups. Yeah.

Host 2: I think it’s 12. We should Google because I don’t know. It happens a lot. The my kids lost a lot of teeth over the years. I feel like, well.

Felix Salmon: You have multiple kids.

Host 2: Multiple kids. They’re all done with that.

Felix Salmon: So so when you’re calculating Elizabeth, how much money per tooth do you work out? Like a grand total you. I’m assuming you’re not starting with a grand total and then dividing by the number of teeth and working it out that way?

Speaker 3: No. Well, in this case, my kid lost his tooth very late in the day, and I came home from a work thing at 830. And my my child is just an epic negotiator. So he told me about the tooth and then said, we get to talk about how much the tooth fairy is going to give me for this. And at that hour, my husband and I looked at each other and kind of eyeballed our wallets and neither of us had a lot of cash. So after we went to bed, my analysis consisted entirely of how much we could scrape together from our existing cash pot, because the only alternative was the tooth fairy was going to be doling out leftover Easter candy, which actually seemed like a possibility because I had nothing in my wallet. So the punchline is that the kid got $10. And then when I looked up the national average for tooth fairy payouts, it’s $5.88 or no. It’s 457. In New York, it’s $5 and it’s.

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Host 2: $10 if you don’t want to set that kind of precedence.

Felix Salmon: Yeah, because like once the first tooth has gone for $10, then it’s hard to pay less than that for the second.

Host 2: Exactly. And there’s update I’ve Googled there’s 20, so there were 20.

Felix Salmon: Okay. So the result of the Googling instead of 20 teeth, if you pay $10 per tooth, then that’s 200 bucks. That’s a lot for a six year old or even a seven year old.

Host 2: Well, it happens over years and there’s inflation.

Felix Salmon: So how many years was it take to lose your teeth?

Host 2: It goes from like the time you’re like four or five until maybe like ten.

Felix Salmon: So wait. Elizabeth, is this not the first tooth that he’s lost?

Speaker 3: No, this is the first tooth.

Felix Salmon: And do you now reckon that, like, it’s going to be greater than or equal to $10 from here and then you’ve now inadvertently set a high floor for this?

Speaker 3: Oh, I totally set the baseline. And especially with my kid, if I told him that his lifetime expected payout was 200 bucks, he would immediately start negotiating for 500. So there’s no way it goes lower than ten.

Host 2: Wait, does he he then obviously doesn’t believe in the tooth fairy.

Speaker 3: Elizabeth he waffles. He was very before he lost the tears. He was like, there’s no way the tooth fairy exists. And he gave me an argument for why. And then I said, Well, but your teeth under your pillow will see. And he was convinced that he would wake up and catch one of us in the act, which he didn’t do, because he’s a heavy sleeper. And so the next morning he said, you know, I was really surprised. I guess the tooth fairy does exist. He’s very skeptical, kid, but he can be convinced that magic exists somewhere in the world.

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Host 2: Yeah, I think you’ve really set a too high. I don’t think you needed to go as high as ten.

Felix Salmon: Was that was this just a function of not having enough singles lying around?

Speaker 3: Yes.

Felix Salmon: I find myself in this situation of having literally zero cash almost every day now. It’s just I am almost everything just happens by waving pieces of plastic, whether they’re phones or cards or something in the general direction of something. And the problem with the cashless society is it’s very hard to give you a kid to money with Venmo.

Host 2: I have so many thoughts about this, Felix about the cash situation because it started in the pandemic. When the pandemic started, it had a certain amount of cash in my wallet and like I never, ever used it. So for like a year and a half I had the same cash in my wallet. And then in our home, which is like its own little economy, that the four of us in our home were always giving each other money.

Felix Salmon: So that circulates within the.

Host 2: House and just circulates. So my daughter would buy something on Amazon and she’ll give me $20 for it, but then then she’ll need to go do something. So I’ll give her the $20 back and then my husband will give her the $20. And then another thing on Amazon or maybe some candy, whatever, $20 comes back to me and we’re just circulating the money. I was thinking about it so much in the pandemic, which I guess is sad, but like it helped me understand so many things.

Felix Salmon: Like I feel a big thing coming on to access markets.

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Host 2: It just makes you understand, like reading like the Stephanie Kelton book and how she’s like, if you if there’s too much money, you just raise taxes and take the money out of the system. So like, if there’s too much money in the household, we somehow get the kids to give us the money back or I don’t know, it just there’s a lot.

Felix Salmon: It’s like it’s like the famous Paul Krugman column about the babysitting cooperatives.

Host 2: I don’t know that column.

Felix Salmon: Yeah.

Host 2: I’ve got a Google that.

Felix Salmon: The Paul Krugman babysitting co-operative monetary policy explainer is very good.

Host 2: Oh, okay. Yeah, that’s exciting. Yeah. And I don’t have any change either, but neither does anyone. There’s still a coin shortage, I believe. Sorry. This is not about babysitting anymore. Or I’m sorry. A tooth fairy.

Felix Salmon: But yeah. Is the one person here without any kids. I’m going to just come out and say that $10 per tooth is a little bit extra.