Big Tech: Billion Dollar Idea or Billion Dollar Boondoggle?
In a world where real incomes are either flattening or falling, we have seen a steep rise of big tech being hailed as the saviour. At the local, national, and even international levels, increasing the demand and supply of tech jobs and workers has had policy implications for every sector imaginable.
Image source: Christina Morillo, Pexels
In the last five years, cities like New York and Chicago have pledge to teach computer science to every high schooler in their respective cities. In addition to working towards increasing the tech workforce, local governments have also provided big tax breaks to big tech companies. A major example of this was the 3 billion-dollar incentives that New York City and the state gave Amazon, to entice it into opening its second headquarters there.
But is big tech really the saviour its being hailed to be? Is it really creating the new middle class?
A closer look at who makes up the tech workforce tells a different story.
When researchers talk about the reduction of a middle class, they typically refer to predominantly semi or medium-skilled manufacturing jobs held by the old middle class. While the nature of what constitutes new middle-class jobs is different, it is difficult to ascertain that tech jobs are a large portion of these because of the lack of diversity and often, opportunity for equitable access.
Let’s look at the demographics. At Google, Facebook and Twitter, no more than 2 percent of employees are black. Apple fairs marginally better at 7 percent. The numbers are similarly low for other minorities, except for people of Asian descent.
While the companies are quick to blame the recruitment pipeline as the main problem, studies have shown that the pipeline is stronger now, than ever before. Moreover, the recruitment teams of these companies are not looking in places that would traditionally house large numbers of potential minority tech workers. A good first fix would be to increase their recruitment efforts at historically black colleges and universities or even community colleges in cities with diverse populations.
Is adding more diversity into the tech workforce a real solution?
In the short term, maybe.
However, computer science (CS) education and the jobs these degrees create may not be a viable long-term solution. The first reason for this involves the economic principles of demand and supply. Currently, tech workers are in high demand and low supply, allowing them to command high wages. However, if the supply increases drastically, it would allow big tech (who is always looking for ways to increase their bottom line) to lower wages substantially making tech jobs much less lucrative than they are today.
The second reason is the rise in automation. We have already seen that automation (along with outsourcing) has led to the loss of millions of well-paying manufacturing jobs over the last few decades. With the creation of software that can write code itself (yes, it’s already a thing), it is likely that there won’t be as large a need for programmers in ten years as there is today. New reports have already shown that there are more CS graduates– minority or otherwise, than there are high-paying jobs available. If current trends prevail, it will only get worse.
Why should policymakers care?
Policymakers need to realise that counting on big tech to save the day is not the answer. In fact, instead of actively eliminating inequity, policymakers have instead caused what is known as the Matthew effect — “the rich get richer and the poor get poorer”.
By offering large financial incentives to companies that are not creating jobs for those who need them, most policymakers, at all levels of government, have enabled a feedback system that only supports people with higher socioeconomic status to begin with.
Governments need to act and create policies that regulate these companies. When identifying which policies would yield short- and long-term results, policymakers need to experiment with different solutions. In recent years, Silicon Valley giants have spent more than Wall Street on lobbying efforts and that has unsurprisingly given them more leeway than is needed. And while it is necessary to support existing and potential tech workers, it is even more important to look beyond the tech bubble for poverty alleviation solutions.
Big tech’s newest billion-dollar idea is to take over the education system and manufacture new workers whom they can pay less and demand more from. Governments need to see this tactic for what it really is and consequently, take on the role of an upset investor to demand they change course before it is too late.
Juhi Kore is a published author, researcher and TEDx speaker currently pursuing her Master’s in Comparative Social Policy. Juhi graduated with her Bachelor’s degree in Political Science where she focused on International Relations, Leadership Studies, and Urban Studies, at the University of Tampa. Upon graduation, Juhi worked with different startup accelerators in London and Silicon Valley, in U.S. politics, and as a policy analyst specialising in low income housing policy.
Juhi’s graduate research looks at the intersection of policy and technology adoption in the context of policies that result from technology adoption as well as the political processes leading to technology adoption. She hopes to expand on this work in her doctoral studies.
The views expressed in this article are the author's own and do not necessarily reflect any editorial policy.