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Google Chairman on WhatsApp: $19 Bn For 50 People? Good For Them!
theodp writes "Speaking at an SXSW panel, Google executive chairman Eric Schmidt emphasized that Google is 'very, very worried' about the class tensions that underlie recent Bay Area protests, where high-salaried techies have driven up rents. 'Ninety-nine percent of people have seen no economic improvement over the last decade,' he said, adding that 'the data suggest that the problem gets worse' and will become the 'number one issue in democracies around the world.' Schmidt's solution to this displacement? Foster conditions — e.g., better education, looser immigration laws, and deregulation in strictly-controlled areas like energy and telecommunications — that encourage the creation of fast-growing startups ('gazelles') that generate lots of jobs. When interviewer Steven Levy noted 'gazelles' like the 50-employee WhatsApp which was acquired by Facebook for a reported $19 billion seem to lead to more inequality, Schmidt brushed aside the apparent contradiction. 'Let us celebrate capitalism,' the tax-us-if-you-can Schmidt said, opening his arms. '$19 billion for 50 people? Good for them.' Eric, meet Tom."
Tech startups don't create the kinds of jobs that the 99% actually need. Oh, sure, many of them will eventually hire one secretary, and will pay into their building's contract for one part-time janitor.
As pointed out in the WhatsApp example, most tech startups employ a dozen or so high-skill kids at low wages. In most cases they then work for 5 years and lose their jobs, not having really made much of anything. The ones that make the papers are the ones where the kids become millionaires. They then grow into 20-50 person firms that never really hire anybody who isn't technically skilled. As modern companies they don't have the kinds of legacy processes that involve heavy manpower. If they sell widgets then they do the design with a few local employees, send the manufacture to Asia, and then warehouse the goods in some 3PL company that puts part-timers lacking benefits through a meat grinder to get packages shipped (those companies create jobs for sure, but as few as they can possibly manage at low pay and they're anything but desirable jobs).
I think startups are important for the economy, but not because they create jobs.
I think we need to get past the model where the typical person is employed by a private company. Private companies just don't need the sorts of skills that the typical person has. Nobody wants to hire an average programmer (at least, not at US wages), or an average marketer, etc. Today we have hyper-specialization and if you're in the top 1% of whatever you do you'll have a job for life, and if not you'll be lucky to ever have a job. We're still in transition, but all the trends are there.
We life in a country which has a huge economy, and yet tons of people who are unemployed. And yet, our roads and bridges are falling apart. Just tax a small bit of the wealth flowing through the country and give people part-time jobs fixing potholes or whatever. When we run out of those they can fix bridges, dig trenches for municipal broadband, and so on.
You'll never hear businesses lobbying for that, however, because then they might actually have to pay their janitors a living wage to keep them. I'm not suggesting private enterprise is evil/bad/etc, but ultimately these companies are not stewards of the public interest. Let's run the economy in a way that actually allows people who are unemployable to survive, and which helps the private economy as well. After all, wouldn't better transportation in the Bay Area help companies like Google?
He's not looking for generalized education. He's looking for "high school/college graduates with job skills". More and more coding jobs are essentially clerical: here's a spec, generate code that executes this spec using the algorithms you've been given. This is recognized by the non-exempt nature of entry level programming jobs. I'm not talking here about "architect" or enterprise data store design, I'm talking about "here's a screen layout for each of the 50 states, we need them all coded up by a month from now, so we can roll out the new application" or "here's a document describing the workflow and business rules, implement SQL stored procedures for this"
Right now, a lot of that kind of work gets offshored, but that's getting expensive. They'd MUCH rather have $15/hr high school grads cranking out the code, particularly if they can collect various subsidies for hiring young people or prisoners or whoever.
"Turn your schools into training camps for us"
"I know I will be modded down for this": where's the option '-1, Asking for it'?