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Workers ‘can still win really big.’ How labor can demand more

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Workers ‘can still win really big.’ How labor can demand more

Longtime labor organizer Jane McAlevey has some advice for what workers should demand of employers and union leaders: Don’t sign gag orders and commit to transparency.

That’s what McAlevey, the author of several books on union organizing and negotiating contracts, recently told a room of union staff and members at the United Food and Commercial Workers union Local 770’s home base in downtown Los Angeles. She was discussing her new book, “Rules to Win By: Power and Participation in Union Negotiations,” published in March, just in time for L.A.’s summer of strikes.

A strike in March by bus drivers, custodians, special education assistants and other low-paid workers at Los Angeles Unified School District set the tone for the rest of 2023, and since then, it’s been a busy and “hella exciting” time for labor in Southern California, said McAlevey, a senior policy fellow at the UC Berkeley Labor Center.

Labor organizer Jane McAlevey speaks with Los Angeles community organizer Anthony Thigpenn, right, about her new book titled “Rules to Win By: Power and Participation in Union Negotiations” in July.

(Allen J. Schaben / Los Angeles Times)

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But broadly there are still obstacles to workers securing major wins, McAlevey said. Namely, unions’ practice of using small committees of worker representatives to negotiate labor contracts behind closed doors.

In the book, McAlevey and her coauthor, Seattle labor lawyer Abby Lawlor, try to demonstrate a more transparent model by dissecting case studies — Boston hotel workers, educators in New Jersey, nurses in rural Massachusetts and Philadelphia, journalists from the Los Angeles Times and Law360, and hospital workers in Germany.

As Labor Day rolls by during a momentous surge in worker organizing, here are some lessons on building a strong contract campaign, according to McAlevey. The interview was edited for length and clarity.

Was there a specific moment that served as inspiration for this book?

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This book is a direct credit to the German labor movement. A group of organizers at German trade unions asked me to keynote as a conference about building a strike. Most people think of Germany as like, the Shangri La of worker rights. It’s not. In 2019, union busting in the style we see in the U.S. was hitting Germany. I got very busy doing training work over there because employers’ tactical warfare was adapting.

The organizers kept asking questions about how I negotiate — which is so foreign for them because in Germany, one big guy goes in and negotiates for a whole sector. They said, “We need to learn how to do this. We need a manual from you.” They did not give up. Every few weeks I got a long email saying “are you going to write the book on negotiations?”

The 20 elements of open negotiations I list at the beginning were a response to some wicked good peer reviewers. The feedback was super consistent, like “McAlevey shows us these great case studies but she never actually tells us like what are the things.”

Hotel workers hold a banner reading "boycott Los Angeles"

Hotel workers represented by Unite Here Local 11 picketed outside the JW Marriott Hotel in downtown Los Angeles on Aug. 24. The union has called for a boycott of some 60 Southern California hotels that haven’t agreed to new labor contracts.

(Suhauna Hussain / Los Angeles Times)

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What do you see as the three main takeaways from your book?

The first is that workers actually can still win really big. I don’t want to settle for less-than-good contracts. Workers have, for 50 years, been taking it in the neck in this country; we see it in the inequality divide. It’s just a function of greed. There is plenty of money. So the first lesson is, workers actually can win much more, but it’s a question of power and strategy.

Secondly, it is about showing — not talking about showing — what new democracy looks like. That’s really important to me. There are plenty of unions that are not exactly good at being ‘small d’ democratic — at involving all the members in negotiations.

You have to build guardrails to protect democracy. Forcing all unions to have to allow the members into negotiations is an example of one. That way, no deals can get cut behind workers’ backs; nothing’s going to happen that the workers themselves aren’t directly involved in.

The third one is about the question of political education and governing power and teaching workers what it means. When do you have enough power to set the rules? What are the rules that you want set? How do you build unity and solidarity around them?

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Strikers in front of Fox Studios in Los Angeles

Strikers in front of Fox Studios in Los Angeles on Aug. 28.

(Christina House / Los Angeles Times)

What is the main obstacle to the labor movement in Los Angeles, California and beyond?

The governing paradigm.

There’s a certain dynamic and logic happening during an organizing campaign where the energy is all one way: It’s about saying united, overcoming union busting, warding off division, building solidarity. But at the end of a hard-fought National Labor Relations Board election, there usually is real division. Even if there isn’t — which is rare — but even if there isn’t, the transition to “how do we negotiate our contract” is a really big transition for people.

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What the tradition I come from argues is, since negotiation is all about power, the person that you have leading the table is an organizer who actually understands how to build worker power.

Think about how much power is required to force lawmakers to take action, whether it’s on fast-food issues or taxing the wealthy in California. You look at the control of Democrats in California, and you realize how many problems should be solved that we’re not solving: that’s because of the architecture of power.

It’s super rare in the labor movement for organizers to be the negotiators. Negotiators are usually lawyers. This book is basically an organizer’s approach to negotiations.

During your July book event in L.A. you said the most basic value union leaders need to commit to is transparency. What are a few simple steps to take relating to transparency?

There are a lot of unions for whom a simple demand for transparency seems impossible. That is not a democratic practice, in my opinion.

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There are a lot of unions that are crushing expectations — putting downward pressure on the idea of what you should expect to win. It’s kind of common, and that’s frightening.

Not signing gag orders would actually be a very big leap for a lot of unions and would be a great first step.

Striking workers hold signs on a picket line

Yadira Martinez, 53, left, a special education assistant for the Los Angeles Unified School District, joined the picket line at Florence Avenue Elementary School on March 22. The three-day strike ended with a tentative agreement including raises of 30% or more, and it set the stage for Southern California’s summer of strikes.

(Irfan Khan / Los Angeles Times)

How can transparent negotiations help to resolve conflict within a bargaining unit? How can it help to enforce a contract once it’s in place?

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In hospitals, where I’ve done a lot of my negotiations, there’s persistent tension. Emergency department nurses might think they belong in the highest tier of the wage scale alongside the intensive care unit nurses because sometimes they’ve got critical patients coming in. Then people in the ICU might disagree.

Where do you belong on the wage scale? Do you take into account seniority? There’s so many fundamental questions that we can divide ourselves over. Learning to govern is part of the beauty of negotiations.

For me, it’s what workers are doing away from the employer — not away from the table, but away from the employer — learning how to write the best rules possible to govern their workplace, and then learning that it takes real power to enforce it.

My approach to everything is, put it out to people. Don’t hide it; surface the tension. Work through them as a group or break people out into small discussion groups.

I do weekly meetings for months leading up to the start of contract negotiations. In theory, tensions have had months to work themselves out before bargaining begins. So it’s not exploding right at the last minute, and people go to the table united and together on compromises that they learned to make.

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When they’re fighting the fight, I always say, “Look, do you want the boss to make the decision for you? Or do you want to make the decision? Do you want to let him keep dictating the terms and conditions or do you actually want to figure out a way for us to resolve this conflict ourselves?” And that’s foundational.

Then you do that unusual thing I write about in the book, which is a ratification vote on the contract proposals. That’s the final way to just say, “All right, everyone agrees, these are proposals that are going in.” That avoids so much disappointment and conflict that I see with people who don’t use that approach, or who don’t tell the workers what they’re negotiating, don’t tell them what’s going on in the room. That’s when you get a lot of really upset people.

Enforcing your contract is best done when every single worker has been involved in the negotiations because workers then understand what the contract language means. They understand it takes power to enforce it, not lawyers. Having a good lawyer in the background is good, but if you only file grievances and you become a grievance mill union, you’re gonna go down, you’re going to weaken, you’re going to atrophy.

Striking academic workers and faculty gather on the UCLA campus in December

Striking University of California academic workers and faculty gather on the campus of UCLA in December. The strikers demanded better pay and benefits. They reached a tentative agreement two days later after striking for five weeks.

(Luis Sinco / Los Angeles Times)

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You have called out issues with the way United Auto Workers leaders ran their contract campaign for University of California academic workers. Can you explain your thoughts on what went wrong?

(Note: In a piece McAlevey wrote last year she said the union failed to effectively bring together various moving parts: There were four separate units in negotiations, including academic student employees, graduate student instructors, postdoctoral scholars and academic researchers — overseen by three separate union locals.)

I objected to much of how the contract campaign was run. Yeah, I don’t think they did a good job on this at all. It was a pretty badly run affair. I wrote about it a little bit in the Nation. Not a lot. It was during our strike, so I was trying to be gentle. But I was indirectly, quite seriously calling out some of what had been happening.

The union did all this work to line up the contracts so that they expired at the same time. But then the UAW position holders, as I call them — not leaders — did a lot wrong: they kept all the workers divided, and it set up huge tensions.

The mistake that they made from the beginning was allowing the boss to keep the different units at separate negotiating tables.

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Just watching it was amazing. They were like breaking almost every rule. They settled academic researchers contract before the others expecting us to then cross the picket line of our graduate students.

UAW will say that they were practicing open negotiations because anyone could join the Zoom meetings. But it’s not really open negotiations if you’re having a secret off the record with the employer every week, which in fact, they were doing. So you can put on a show and look like you’re doing your democracy, or you can actually really do a democracy.

But I don’t want to talk about things that went badly. I actually want to constantly show workers what’s possible, how to win, what works and what you can do to actually win. That is my life mission.

I’m not interested in writing about failure. It’s all around us. I think what workers need is direction, clarity and some alternate ideas.

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How Poshmark Is Trying to Make Resale Work Again

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How Poshmark Is Trying to Make Resale Work Again

Lauren Eager got into thrifting in high school. It was a way to find cheap, interesting clothes while not contributing to the wastefulness of fast fashion.

In 2015, in her first year of college, she downloaded the app for Poshmark, a kind of Instagram-meets-eBay resale platform. Soon, she was selling as well as buying clothes.

This was the golden age of online reselling. In addition to Poshmark, companies like ThredUp and Depop had sprung up, giving a second life to old clothes. In 2016, Facebook debuted Marketplace. Even Goodwill got into the action, starting a snazzy website.

The platforms tapped into two consumer trends: buying stuff online and the never-gets-old delight of snagging a gently used item for a fraction of the original cost. During the Covid-19 pandemic, as people cleaned out their closets, enthusiasm for reselling intensified. It was so strong that Poshmark decided to go public. On the day of its initial public offering in January 2021, the company’s market value peaked at $7.4 billion, roughly the same as PVH’s, the company that owns Calvin Klein and Tommy Hilfiger, at the time.

Then, the business of old clothes started to fray.

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Using the Poshmark app, Ms. Eager and others said, started to feel like trying to find something in a messy closet. The app was cluttered with features that did not work or that she did not use, and it felt “spammy,” she said, sending too many push notifications.

Many platforms found selling used items hard to scale. Now, online resellers are trying to recalibrate. Last year, ThredUp decided to exit Europe and focus on selling in the United States. Trove, a company that helps brands like Canada Goose and Steve Madden resell their goods, purchased a competitor, Recurate. The RealReal, a luxury consignor, appointed a new chief executive as the company tried to improve profitability.

Poshmark is undergoing perhaps the biggest reinvention. In 2023, Naver, South Korea’s biggest search engine as well as an online marketplace, bought the company in a deal valued at $1.6 billion, less than half its IPO price.

Something of a mash-up of Google and Amazon, Naver is betting it can rebuild Poshmark, which has 130 million active users, with the same technology that made Naver dominant in its own country.

It may also help breathe new life into the resale market. Analysts think the resale fashion market still has room to grow in the United States, with revenue expected to increase 26 percent to $36.3 billion by 2028, according to the retail consultancy firm Coresight Research.

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New legislation in California could help. The law, passed last year, requires brands and retailers that operate in the state and generate at least $1 million to set up a “producer responsibility organization” to collect and then reuse, repair or recycle its products. Resale platforms like ThredUp and Poshmark could be in a position to help brands carry out that mandate.

At the moment, though, Naver’s focus for Poshmark is more basic: Make it a better place to sell and shop. The company has the “operating know-how” to do that, said Philip Lee, a founder of the media outlet The Pickool, which covers both South Korean and U.S. tech companies.

“They’re trying to renovate Poshmark and then expand the market share,” he said.

Poshmark, which is based in Redwood City, Calif., was founded in 2011 by Manish Chandra, an entrepreneur and former tech executive, and three others. In trying to expand, Poshmark faced a problem common to resellers: Capturing the excitement of the secondhand-shopping treasure hunt while not frustrating buyers with an endless scroll. The company knew it needed better search, as well as interactive elements that gave people more reasons to come beyond paying $19 for a J. Crew sweater.

For its part, Naver was looking for ways to push beyond South Korea, where its commerce and search businesses were already mature. The growing online resale market in the United States presented an opportunity, and also gave the company access to the largest consumer market in the world.

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Commerce is a big growth engine for us,” Namsun Kim, Naver’s chief financial officer, said. And the peer-to-peer sector, where users sell to one another, was still in its infancy, with room to expand. But, Mr. Kim added, “it’s a more challenging segment, and that’s why it’s harder for a lot of the larger players to enter.”

There are two common business models for resale: peer-to-peer and consignment. With consignment, a platform collects and redistributes physical goods. Poshmark uses the peer-to-peer model, which relies on scores of people — many of them novices — haggling over prices and then mailing items to one another. This decentralization can be a headache for brands, which like to maintain a certain level of control of their products. And platforms like Poshmark must make buyers comfortable with trusting the sellers on their site.

Before the Naver purchase, it was difficult to push through needed technological changes, said Vanessa Wong, the vice president of product at Poshmark.

“I would always talk to my engineers and ask, ‘What if we do this or do that?’ They’re like, ‘That’s hard. The effort’s really high,’” Ms. Wong said.

Naver’s purchase offered both the investment and the expertise to pull off the changes. Founded in 1999, the company is everywhere in South Korea.

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“We are not just a simple search technology or A.I. service,” said Soo-yeon Choi, the chief executive of Naver, whose headquarters are near Seoul. The company, she said, “alleviates the frustrations of people, which is what is needed to help growth.”

Search built Naver “into the massive power that they are in Korea,” said Mr. Chandra, who stayed on as chief executive after Naver’s purchase. It was the top priority when the company bought Poshmark.

Several new elements for users and sellers have been introduced. With a tool called Posh Lens, users can take a photo of an item and, using Naver’s machine-learning technology, the site populates listings that are the same or similar to the shoe or tank top that they’re searching for. A paid ad feature for sellers called “Promoted Closet,” pushes listings higher on customer feeds.

Poshmark also introduced live shows, some of which are themed, to draw in the TikTok generation and increase engagement. One party auctioned off clothing previously worn by South Korean celebrities, a connection that was made with the help of Naver.

Still, the resale market is going through growing pains and has not quite found its footing since the height of the pandemic. It’s not clear whether the changes taking place at Poshmark will be enough. In May, Mr. Kim, Naver’s finance chief, said in an earnings call that Poshmark’s profitability was improving, but by November, the company was cautioning that growth had slowed because of weakness in the peer-to-peer resale market in North America.

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The company has already done some backpedaling on unpopular decisions.

In October, Poshmark introduced a new fee structure, which increased costs for buyers. Sellers, fearing that higher costs would make consumers bolt, revolted. Within weeks, the company scrapped the new fee structure.

And there are still user headaches: tags and keywords that help users find what they’re looking for can be miscategorized. Sellers sometimes tag their products incorrectly to get more eyeballs on their less popular products. (Hard-to-offload Amazon leggings, for example, may be listed as Free People apparel.)

The company is beta testing changes with its frequent sellers — people like Alex Mahl, who sells thousands of dollars in apparel on the site each year. And within dedicated Facebook groups related to Poshmark, there’s a lot of chatter about the changes that sellers and buyers would still like to see.

“The only way for it to do well is there’s going to be constant changes,” Ms. Mahl said about the tweaks on Poshmark. “If you were just on an app that never changed — one, it would be boring, and two, the opportunity to just do better wouldn’t be there.”

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One recent morning, Ms. Eager, the seller who joined Poshmark back in college, was pleasantly surprised to find that the app had some new features she actually liked. She snapped a photo of her Aerie gray tank top with Posh Lens. Within seconds, the app populated listings of similar products. It was so much better than conjuring up the adjectives needed to describe it.

“Love it,” Ms. Eager exclaimed.

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When receipts of home renovations are lost, is the tax break gone too?

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When receipts of home renovations are lost, is the tax break gone too?

Dear Liz: I have sold my family home recently after almost 50 years. I had done lots of improvements throughout those years. Due to a fire 15 years ago, all the documentation for these improvements has been destroyed. How do I document the improvements for the capital gains tax calculation?

Answer: As you probably know, you can exclude $250,000 of capital gains from the sale of a principal residence as long as you own and live in the home at least two of the previous five years. The exclusion is $500,000 for a couple.

Once upon a time, that meant few homeowners had to worry about capital gains taxes on the sale of their home. But the exclusion amounts haven’t changed since they were created in 1997, even as home values have soared. Qualifying home improvements can be used to increase your tax basis in the home and thus decrease your tax bill, but the IRS probably will demand proof of those changes should you be audited.

You could ask any contractors you used who are still in business if they will provide written verification of the work they performed, suggests Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. You also could check your home’s history with your property tax assessor to see if its assessment was adjusted to reflect any of the improvements.

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At a minimum, prepare a list from memory of the improvements you made, including the year and the approximate cost. If you don’t have pictures of the house reflecting the changes, perhaps friends and relatives might. This won’t be the best evidence, Luscombe concedes, but it might get the IRS to accept at least some increase in your tax basis.

If you’re a widow or widower, there’s another tax break you should know about. At least part of your home would have gotten a step-up in tax basis if you were married and your co-owner spouse died. In most states, the half owned by the deceased spouse would get a new tax basis reflecting the home’s current market value. In community property states such as California, both halves of the house get this step-up. A tax pro can provide more details.

Other homeowners should take note of the importance of keeping good digital records. While documents may not be lost in a fire, they may be misplaced, accidentally discarded or (in the case of receipts) so faded they’re illegible. To make sure documents are available when you need them, consider scanning or taking photographs of your records and keeping multiple copies, such as one set in your computer and another in a secure cloud account.

When an employee is misclassified as contractor

Dear Liz: A parent recently wrote to you about a son who was being paid as a contractor. I know someone else who got a job that did not “take out taxes from his paycheck.” Such workers believe they are pocketing more money, but unfortunately, too many do not know about the nature of withholding. They only learn if they choose to file for their expected refund, but instead discover an exorbitant tax liability that a paycheck-to-paycheck worker cannot pay.

The sad fact is that many of these employers improperly classify their workers, who are truly employees, as independent contractors! And they do this to avoid paying their own portion of Social Security and unemployment taxes and also workers compensation insurance.

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If workers believe that they have been misclassified (the IRS website provides all criteria), they can file IRS Form SS-8 and Form 8919, which will allow them to pay only their allocated half of their Social Security taxes. Hopefully the IRS will then contact these employers to correct their wrong classifications. And finally, it should be a law that, when hired, all true independent contractors should be given a clear form (not fine print on their employment agreements) that informs them of their status and the need to make estimated tax payments.

Answer: A big factor in determining whether a worker is an employee or contractor is control. Who controls what the worker does and how the worker does the job? The more control that’s in the employer’s hands, the more likely the worker is an employee.

However, the IRS notes that there are no hard and fast rules and that “factors which are relevant in one situation may not be relevant in another.”

The form you mentioned, IRS Form SS-8, also can be filed by any employer unsure if a worker is properly classified.

Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.

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Inside Elon Musk’s Plan for DOGE to Slash Government Costs

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Inside Elon Musk’s Plan for DOGE to Slash Government Costs

An unpaid group of billionaires, tech executives and some disciples of Peter Thiel, a powerful Republican donor, are preparing to take up unofficial positions in the U.S. government in the name of cost-cutting.

As President-elect Donald J. Trump’s so-called Department of Government Efficiency girds for battle against “wasteful” spending, it is preparing to dispatch individuals with ties to its co-leaders, Elon Musk and Vivek Ramaswamy, to agencies across the federal government.

After Inauguration Day, the group of Silicon Valley-inflected, wide-eyed recruits will be deployed to Washington’s alphabet soup of agencies. The goal is for most major agencies to eventually have two DOGE representatives as they seek to cut costs like Mr. Musk did at X, his social media platform.

This story is based on interviews with roughly a dozen people who have insight into DOGE’s operations. They spoke to The Times on the condition of anonymity because they were not authorized to speak publicly.

On the eve of Mr. Trump’s presidency, the structure of DOGE is still amorphous and closely held. People involved in the operation say that secrecy and avoiding leaks is paramount, and much of its communication is conducted on Signal, the encrypted messaging app.

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Mr. Trump has said the effort would drive “drastic change,” and that the entity would provide outside advice on how to cut wasteful spending. DOGE itself will have no power to cut spending — that authority rests with Congress. Instead, it is expected to provide recommendations for programs and other areas to cut.

But parts of the operation are becoming clear: Many of the executives involved are expecting to do six-month voluntary stints inside the federal government before returning to their high-paying jobs. Mr. Musk has said they will not be paid — a nonstarter for some originally interested tech executives — and have been asked by him to work 80-hour weeks. Some, including possibly Mr. Musk, will be so-called special government employees, a specific category of temporary workers who can only work for the federal government for 130 days or less in a 365-day period.

The representatives will largely be stationed inside federal agencies. After some consideration by top officials, DOGE itself is now unlikely to incorporate as an organized outside entity or nonprofit. Instead, it is likely to exist as more of a brand for an interlinked group of aspirational leaders who are on joint group chats and share a loyalty to Mr. Musk or Mr. Ramaswamy.

“The cynics among us will say, ‘Oh, it’s naïve billionaires stepping into the fray.’ But the other side will say this is a service to the nation that we saw more typically around the founding of the nation,” said Trevor Traina, an entrepreneur who worked in the first Trump administration with associates who have considered joining DOGE.

“The friends I know have huge lives,” Mr. Traina said, “and they’re agreeing to work for free for six months, and leave their families and roll up their sleeves in an attempt to really turn things around. You can view it either way.”

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DOGE leaders have told others that the minority of people not detailed to agencies would be housed within the Executive Office of the President at the U.S. Digital Service, which was created in 2014 by former President Barack Obama to “change our government’s approach to technology.”

DOGE is also expected to have an office in the Office of Management and Budget, and officials have also considered forming a think tank outside the government in the future.

Mr. Musk’s friends have been intimately involved in choosing people who are set to be deployed to various agencies. Those who have conducted interviews for DOGE include the Silicon Valley investors Marc Andreessen, Shaun Maguire, Baris Akis and others who have a personal connection to Mr. Musk. Some who have received the Thiel Fellowship, a prestigious grant funded by Mr. Thiel given to those who promise to skip or drop out of college to become entrepreneurs, are involved with programming and operations for DOGE. Brokering an introduction to Mr. Musk or Mr. Ramaswamy, or their inner circles, has been a key way for leaders to be picked for deployment.

That is how the co-founder of Loom, Vinay Hiremath, said he became involved in DOGE in a rare public statement from someone who worked with the entity. In a post this month on his personal blog, Mr. Hiremath described the work that DOGE employees have been doing before he decided against moving to Washington to join the entity.

“After 8 calls with people who all talked fast and sounded very smart, I was added to a number of Signal groups and immediately put to work,” he wrote. “The next 4 weeks of my life consisted of 100s of calls recruiting the smartest people I’ve ever talked to, working on various projects I’m definitely not able to talk about, and learning how completely dysfunctional the government was. It was a blast.”

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These recruits are assigned to specific agencies where they are thought to have expertise. Some other DOGE enrollees have come to the attention of Mr. Musk and Mr. Ramaswamy through X. In recent weeks, DOGE’s account on X has posted requests to recruit a “very small number” of full-time salaried positions for engineers and back-office functions like human resources.

The DOGE team, including those paid engineers, is largely working out of a glass building in SpaceX’s downtown office located a few blocks from the White House. Some people close to Mr. Ramaswamy and Mr. Musk hope that these DOGE engineers can use artificial intelligence to find cost-cutting opportunities.

The broader effort is being run by two people with starkly different backgrounds: One is Brad Smith, a health care entrepreneur and former top health official in Mr. Trump’s first White House who is close with Jared Kushner, Mr. Trump’s son-in-law. Mr. Smith has effectively been running DOGE during the transition period, with a particular focus on recruiting, especially for the workers who will be embedded at the agencies.

Mr. Smith has been working closely with Steve Davis, a collaborator of Mr. Musk’s for two decades who is widely seen as working as Mr. Musk’s proxy on all things. Mr. Davis has joined Mr. Musk as he calls experts with questions about the federal budget, for instance.

Other people involved include Matt Luby, Mr. Ramaswamy’s chief of staff and childhood friend; Joanna Wischer, a Trump campaign official; and Rachel Riley, a McKinsey partner who works closely with Mr. Smith.

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Mr. Musk’s personal counsel — Chris Gober — and Mr. Ramaswamy’s personal lawyer — Steve Roberts — have been exploring various legal issues regarding the structure of DOGE. James Burnham, a former Justice Department official, is also helping DOGE with legal matters. Bill McGinley, Mr. Trump’s initial pick for White House counsel who was instead named as legal counsel for DOGE, has played a more minimal role.

“DOGE will be a cornerstone of the new administration, helping President Trump deliver his vision of a new golden era,” said James Fishback, the founder of Azoria, an investment firm, and confidant of Mr. Ramaswamy who will be providing outside advice for DOGE.

Despite all this firepower, many budget experts have been deeply skeptical about the effort and its cost-cutting ambitions. Mr. Musk initially said the effort could result in “at least $2 trillion” in cuts from the $6.75 trillion federal budget. But budget experts say that goal would be difficult to achieve without slashing popular programs like Social Security and Medicare, which Mr. Trump has promised not to cut.

Both Mr. Musk and Mr. Ramaswamy have also recast what success might mean. Mr. Ramaswamy emphasized DOGE-led deregulation on X last month, saying that removing regulations could stimulate the economy and that “the success of DOGE can’t be measured through deficit reduction alone.”

And in an interview last week with Mark Penn, the chairman and chief executive of Stagwell, a marketing company, Mr. Musk downplayed the total potential savings.

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“We’ll try for $2 trillion — I think that’s like the best-case outcome,” Mr. Musk said. “You kind of have to have some overage. I think if we try for two trillion, we’ve got a good shot at getting one.”

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