Warning To Millennials: Silicon Valley and Washington Are Deleting Your Prospects

David Wheeler has an axe to grind with Silicon Valley, and he’s not afraid to brandish that axe right in his CNN op-ed headline – “Silicon Valley To Millennials: Drop Dead.”

He makes some very sharp points about the disparity between pop-culture dreams of strolling from college into an exciting high-tech career, or going rogue and taking the world by storm with your own computer business, and a reality of dwindling job opportunities chiseled from ice-cold statistics. There are a couple of factors he fails to mention, although they reinforce his central point.

Wheeler’s unhappy thesis, and the facts backing him up:

Silicon Valley is tossing millennials aside like yesterday’s laptop.

The commonly held belief is that with hard work and a good education, a young person in America can get a good job. But despite falling unemployment, college grads age 22 to 27 are stuck in low-paying jobs that don’t even require a college degree. The percentage of young people languishing in low-skill, low-paying jobs is 44%, a 20-year high.

Only 36% of college grads have jobs that pay at least $45,000, a sharp decline from the 1990s, after adjusting for inflation. Perhaps most depressingly, the percentage of young people making below $25,000 has topped 20%, worse than in 1990. In other words, those with a bachelor’s diploma were better off before the digital revolution.

Wheeler could have thrown in some numbers about the gigantic, ObamaCare-inflated student loan debt these young people are carrying (it was the Affordable Care Act’s nationalization of student loans that opened the floodgates of easy money and caused those university cash sponges to swell like never before.) Maybe he thought the picture he painted was depressing enough already without mentioning how much debt millennials are incurring to qualify for jobs that aren’t there.

Much of the remaining concerns the unreal expectations young people have developed about the tech sector, based on both real-life rags-to-digital-riches stories such as Mark Zuckerberg, and fictional Internet moguls. In reality, the percentage of young people who start up their own business ventures has dropped to a 24-year-low, while Wheeler argues that automation and online efficiency are wiping out more jobs than they create. He’s also strongly critical of the “sharing economy” and its informal employment relationships:

But wait – won’t the digital economy eventually lead to better jobs? After a period of adjustment, won’t things get better? Unfortunately that’s not the path we’re on. One of the biggest misconceptions about the digital economy is that for every middle-class job rendered obsolete by technology, there’s a new, equally good (or better) job created by Silicon Valley.

But exactly the opposite is happening. The digital economy is vaporizing the good jobs and replacing them with two kinds of jobs: minimum wage jobs (think Amazon warehouse employees) and so-called “sharing-economy jobs” (think Uber drivers).

The sharing-economy jobs are even worse than minimum wage jobs because they offer no stability or protections for workers. Sharing economy jobs aren’t really jobs at all; they’re freelance gigs.

Sure, Silicon Valley doesn’t owe America jobs. But something is wrong with the picture of a handful of tech billionaires overseeing a kingdom of falling wages, decreased worker protection and zero job security.

The relationship between technology and job creation is complex; one must always take care to avoid the path of “ATMs kill jobs” foolishness President Obama led us down, when he was fumbling for excuses to cover the failure of his “job creation” policies. One of the reasons that was such a painfully silly discussion is that, as banks and ATM manufacturers surprised to find themselves on Obama’s ever-expanding enemies list pointed out, automatic teller machines did not cause a net loss of jobs. The banks found other, better users for labor than manning a vast row of teller windows.

In order for a healthy destruction-and-creation life cycle to function properly, it must be relatively easy to launch or expand business enterprises, and affordable to hire new employees.  When that’s not true – and entrepreneurship never stops getting harder under Democrat economic policies, especially the current President’s – the result is the kind of economic paralysis that leads to the automation and sharing-economy contract work Wheeler describes. Traditional employment has been burdened so heavily by regulations, mandates, and taxes that entrepreneurs are seeking alternative arrangements. Reducing the high cost of traditional labor, and evading anti-competitive regulations designed to protect established players in protected markets, help companies like Uber offer remarkably low prices to customers suffering from years of flat wage growth.

Technology always plays a role in labor disruption – that has been true since the cutting edge of technology involved tools beaten out of iron. Whether that disruption leads to growth or stagnation depends largely on how heavily capitalism has been shackled. Make it easy to launch a business and hire people to work there, and automation can lead to productive opportunities and new services. Put capitalism under the boot of activist government and its rapacious masters, and you get big restaurants looking at ways to operate without human wait staff, while small restaurants go out of business.

One other major factor in Silicon Valley Wheeler doesn’t mention is the H-1B visa program. Those high-tech jobs are being outsourced, kids, and people like Mark Zuckerburg and Bill Gates are 100 percent behind it. There’s no way that process could go forward without a great deal of cooperation between Big Business and Big Government. It’s no accident that the nominal requirements for companies to “prove” they tried to “hire Americans first” were hollowed out into an easily-avoided joke.

Good luck complaining about that situation, millennials, because our entire immigration system is a sham, but anyone who complains about any segment of it will be denounced as a bigot. That’s especially true of the high-tech job sector, where it’s conventional wisdom that we need as many skilled immigrants as we can get, no matter how many displaced or never-employed American workers there might be. In truth, this is one of the few areas in which a serious call for reduced legal immigration has been made, but that call is resolutely ignored, because it comes from a relatively small number of people who are blithely assumed to have good prospects after they finished training their replacements and pick up their final paychecks.

Wheeler’s concluding suggestions for immediate action are: “First, we can stop glorifying tech titans and start talking openly about Silicon Valley’s questionable tactics and its real job creation record (i.e., just follow the numbers). Second, we can encourage more lawsuits against the abusive practices of ‘sharing-economy’ powerhouses. Third, we can elect leaders who are vocal about holding Silicon Valley accountable for their power over the entire American workforce, including white-collar employees.”

Two of those suggestions amount to talking tough about Silicon Valley CEOs, and encouraging more legal entanglements is not a formula for robust economic growth. We’ve got more than enough rich lawyers in America, thanks. I’m all in favor of calling out anyone for bad practices and deception, but I don’t need more “elected leaders” to do it for me; on the contrary, they’re the group most in need of a good calling-out. And if we’re going to fix a big problem that stands to ruin the hopes of an entire generation, we need to think about big solutions, not just finger-pointing.


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