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The Mayor of Palo Alto Wants Tech Companies (And Their Jobs) To Go Away. Here's Why I Do, Too.

9/5/2016

3 Comments

 
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In many ways, Palo Alto, CA, is a paradise. This wealthy Silicon Valley town is built on the backs of tech companies like Google, Facebook, Palantir, and countless others. But with the explosive growth of these companies have come some serious problems.

Housing is unaffordable to all but a few. Traffic is horrific. And many people get terrible cell coverage, because Palo Alto lacks the infrastructure to sustain its population. 
Which is why Palo Alto mayor recently said, “Big tech companies are choking off the downtown. It’s not healthy.”

Many residents were quick to call him an idiot -- but, honestly, I kind of agree with him. In addition to solving many of the city's affordability problems, encouraging tech companies to open offices in more affordable locations could be a very important social justice issue.


Why?

As it is now, the only people who can take an entry-level, non-technical jobs here are the ones who can afford to live here on an entry-level salary -- which often means having a trust fund or help from your family. Which isn't a problem for more privileged graduates. But look at what happened to former Yelp employee Talia Jane when she took a customer service job in San Francisco:

"I can’t afford to buy groceries... Because 80 percent of my income goes to paying my rent." Read more >

Now, to be fair, it was a totally stupid decision to move to the Bay Area and live in a one-bedroom that cost 80% of her salary, instead of taking a job somewhere else or living with housemates. But it's not like she would have been able to find a place here that was that much cheaper. And it sucks that she should have to walk away from a great opportunity because she couldn't afford to live here. 

Because here's the thing about working in tech:

No one ever got rich off a salary.

One of the perks of working at a startup -- other than the chance to create real value in the world -- is that you get stock options and other benefits that could make you wealthy. A system that keeps graduates with student loans/from low-income families out of the startup world... is a system that exacerbates the wealth gap.

You could argue that all the money that was going to be made at Facebook or Cisco has already been made. But what about all the other startups that are vying for office space in the Silicon Valley?

As long as they're here, they’re contributing to a system in which the only graduates who can afford the opportunity to be early startup employees... are the privileged ones. 
Now, to be fair, some tech companies have recognized this problem. Even before Talia Jane wrote her open letter, Eat24/Yelp had opened a new customer service office in Phoenix -- which is actually a pretty cool place to live.
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Meanwhile, Tesla was working on its new Gigafactory in Nevada, and other tech companies were looking for office space in Watsonville and other non-Bay Area locations.

This is a good thing.


Especially because, as I mentioned above, startups have the potential to create real value in the world -- from lifesaving technologies to new jobs. The future of America isn't in manufacturing or farming. It's in innovation.

But look at this chart, from Andrew Yang's Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create Jobs in America:
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Over half of our top graduates do the same six things after graduation (and the reason why is depressing). And yes, medicine is important. Yes, lots of cool research comes out of grad school. (Science for the sake of science is one of the best things ever.)

But! Teach for America is a terrible program. There’s no evidence it helps low-income kids at all, and it fails to address the actual problem most disadvantaged schools face: low teacher retention.

And! Finance, consulting and law do nothing to create value. They just move shit around. According to Yang, many young people in these professions hate it, and are only doing it for the security and prestige that come with the job.

So the Tl;Dr here is that startup and tech jobs are awesome -- but as long as they all want to be here, they're going to create problems. Not just for people who live and work in Palo Alto -- but for people who want to close the wealth gap. For people who care about social justice. For people who truly want to hire the most qualified candidates, and not just the ones who can afford to live in the Bay Area. 

The good news is, there are plenty of cool startups in emerging cities, like Miami, Providence, New Orleans, and Charlotte -- but these cities are growing fast, so if you're thinking of making the leap, sooner might be better than later.  
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According to Movoto, Charlotte ("the California of the East Coast") is basically a brand new city. 
3 Comments
Andrew
9/7/2016 11:42:37 am

I don't agree with your assertion that finance does nothing to create value. Perhaps if you were talking about the incremental person or dollar moved to finance you'd be correct, but finance is essential for a successful economy. You're criticizing finance for "merely moving money around," but that's actually an extremely important activity. Time and resources are scarce, so by moving money around, you can better organize activity by allocating capital towards its most effective use. Again, because time and resources are scarce, you need to do this - this allows you to be more productive and have more surplus, some of which can be allocated towards people who do not have enough.

Again, you can perhaps criticize the incremental graduate going to finance or consulting, and you can cherry-pick examples of where finance has hurt society, but in aggregate, you need a smart financial system so you can organize activity most efficiently and make the economy as productive.

To reiterate: finance and consulting do a lot to create value, and certainly more than another "entrepreneur" creating another minor consumer app that only serves to distract people.

While I generally think you reach articulate and well thought out conclusions, I think you're wrong here and that's largely because you don't understand why finance and consulting exist. If you disagree, please explain to me your view, in particular why the organization of corporations and allocation of capital are more or less irrelevant to general productivity.

Reply
Eva Glasrud link
9/7/2016 01:10:44 pm

Obviously I'm speaking very generally here, just as I would be if I said, "Teachers are underpaid," or, "Doctors are overscheduled." There are some lawyers who add value. There are also a lot of ambulance chasers and unemployed JD graduates.

Some finance professionals and consultants create real value. But a lot of them mainly do things like helping companies figure out who they can fire and how to pay as few taxes as possible. They also do things like, say, creating financial crises, but that's another issue.

My main problem with these professions is that they are disproportionately full of people who want to "change careers," "make the jump," "do something meaningful," or "start their own thing." A lot of people who enter these fields do so for the perceived security or prestige that comes with them, and joke with halfhearted smiles that they've "sold their soul."

Meanwhile startups -- even stupid mobile game companies that don't actually "change the world" -- create thousands of jobs. No one has successfully been able to calculate how many, because of all the multipliers that are hard to estimate. Who knew, in 2007, that Facebook Platform could create so much value -- Zynga alone has over 1,669 employees, and they used to have a lot more.

What's more, according to VFA founder Andrew Yang's research, people who work at startups tend to have greater life and job satisfaction, and a greater sense of connection to their work. That's a really good reason to work at a startup, rather than finance/law/consulting.

This issue isn't one that I have super strong feelings about (as evidenced by the phrase, "I kind of agree with him"). But the mayor makes a good point: it's incredibly expensive to live here, and we're having a water crisis, and we lack the infrastructure to support everyone who's coming in. It would be great if there were more startup/tech opportunities elsewhere, in terms of quality of life, opportunity and equality. There ARE other places to live that are just as cool as Palo Alto.

Reply
Mariss
9/13/2016 02:39:56 pm

Yes! Go Venture for America!!

Reply



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    Eva is a content specialist with a passion for play, travel... and a little bit of girl power.  Read more >


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