Linked In’s Reid Hoffman to Millennials – Welcome to the New Feudalism | Peter Mehit

On a recent Tuesday, it was not a good day to be a millennial. They learned that, unlike any previous generation, they are entering their work life with an average of $22,000 of student loan debt. They were told by the HR chief of Intel that their liberal arts degrees (far and away the majority for them) are not valuable enough to stop the outsourcing of jobs offshore. One of their own, a 23 year old running a South Bay non-profit, described her struggles with debt and the bewildering number of jobs she’s held in the brief interval since graduation. All of this coming before Reid Hoffman, one of the founders of Linked In, declared that ‘…careers are dead’ and that they should expect to be employed as freelancers their entire working lives.

At a conference hosted by the Atlantic monthly, the National Journal and Allstate Insurance entitled “Millennials in the Next Economy” at UCLA, we learned some interesting facts about this generation who are 92 million strong. They are the most diverse generation ever: 40% are minorities. 28% are college graduates, making them the best educated (in terms of degrees, at least) of any previous generation, with 42% currently in school. 26% are seeking employment. Politicians should note that 72% are registered to vote and 39% believe the country is headed in the wrong direction.

But the one statistic that I found most interesting is, despite the economic collapse and the situation they find themselves in, 60% believe that they are in control of their own destinies, that their decisions will primarily decide the outcome of their lives.

The conference, hosted by the UCLA Anderson School of Business, centered on a discussion of these statistics, which were gathered by Allstate and the National Journal in a project called the Heartland Monitor Poll.

Dr. Philip Gardner

There was a panel discussion after the survey presentation. Two of the panelists stuck out in my mind. One was Dr. Philip Gardner of Michigan State University, where he is Director of Research for the Collegiate Employment Research Institute. Being from Michigan, he’s seen the worst of the economic collapse. He pointed out that this generation had seen their parents ripped out of jobs they had held for a lifetime, cheated out of pensions and health care. “This generation doesn’t trust the company,” he said, and went on to say that they won’t be driven by the expectations or needs of those who hire them. He believes they will walk their own path.

The other panelist that stuck out was the only millennial who spoke that day. Nicole Brown runs a VISTA outreach office in San Pedro. Young and enthusiastic, she spoke of her experiences while seeking employment. She spent time working in a corporation and as a construction project manager before falling in love with the non-profit world.

Her advice to her peers: “Don’t go into debt for an education.” She recounted her struggles trying to have a life while dealing with crushing student loan payments concluding that she wasn’t sure it had been worth it.

Dr. Gardner agreed. “Kids just want to have fun,” he said, “There are cheaper ways to do it than paying for a four year degree.”

I was stunned. There we were, sitting in a room on the campus of UCLA (the career center’s director was on the panel), the majority of the people with me had degrees and the panel was advising millennials that if they do get a degree they should do as much of as they can at two year schools to reduce the cost.

The next speaker was Vice President of Human Resources for Intel, Patricia Murray, who ham handedly delivered her talking points.  She blamed the employment situation on Boomers not retiring to make room. “They’re clogging us up,” she quipped.  She also broadsided  grads for not majoring in what Intel needs, mainly engineering degrees.  She also said that many younger people didn’t, “learn what we learned when we where young, ” about personal finances and job hunting which she illustrated with a battery of unflattering anecdotes.

It was interesting that globalization was not part of the problem. It couldn’t be that Intel isn’t actually investing in its home country. While simultaneously touting Intel’s support of university research and development, Ms. Murray lamented the curbs on H1-B visas and waxed nostalgic for the time when it was fun to “work at a place like, say, IBM… now you can’t pronounce the names on any of the cubicles.”

Reid Hoffman

Then Reid Hoffman spoke. Beginning as a clearly outlined speech, it quickly disintegrated into jargon filled business school talk, punctuated with moments of extreme clarity. One of these points came when he said. “Careers are dead.” Companies can’t afford to train anymore, he explained, so there are no starter jobs. He went on to say that people must see themselves as their own brand, developing appropriate strategy, differentiation, branding and value propositions. He said that, “…people must create an assembly of talents…translating into much higher liquidity in the job market.” Adaptation is the new reality, according to Mr. Hoffman.

He went on to describe a nearly dystopic world of boom and bust, where workers spend all their time working like hell or training like hell to be able to catch the next updraft. It was as if he were telling the millennials, ‘if you liked 2009, you’re going to love the rest of your life.’ Then he spoke about the relative values of feudalism and capitalism, the basic difference being the workers (serfs) of today can collect and concentrate their value through collaboration. He used this as a jumping off point, not surprisingly, to discuss personal networks and the creation of ad hoc teams that has solved problems, done deals and created jobs on Linked In.

The feudalism remark stuck with me. From the great depression up until nineties, America embarked on a bold experiment. We decided that least among us shouldn’t be hungry, shouldn’t retire in squallor. We decided that we wanted our country to be college educated. We put laws in place to guard against the greedy impulses of a few.  Then came globaliztion with all of the rule bending and responsibility avoidance we’ve all come to know.

A primary feature of globaliztion is equalization, meaning, if I use replace expensive labor with cheap labor, then the wages paid to everyone will eventually decline. And we’ve seen exactly that. Since outsourcing hit its stride in the nineties, personal spending power has continually decreased. This outsourcing movement has had another unintended effect. Since we have moved manufacturing and information technology offshore, keeping only the mid level jobs here, there is no path to get to those same mid level jobs for those who live here. The natural consequence is that eventually those jobs will eventually be filled off shore as well since there is no way to build experience here.

Understanding that, it’s a little disingenuous for the Intel VP to excoriate millennials for not majoring in math and science when, her 80,000 jobs not withstanding, there aren’t a whole lot of math and science jobs around. And why is that? Because a lot of American firms, Intel included, have offshored those jobs to less expensive workers. It’s a spiral.

Our situation will only continue to deteriorate until wages are equalized worldwide. At that point an Indian serf will be worth what an American serf is worth. Once that happens, corporations will pick and chose from the best of the serfs regardless of national origin. The only thing that has historically worked against economic feudalism are unions, alliances and apprenticeship guilds so that workers can collectively withhold their labor to achieve some control over their lives.

Ironically, these same concepts were voiced from the stage. Millennials will have to apprentice to get the skills they need, since corporations won’t train. They will need to assemble themselves into alliances to compete for business, the alliances changing and growing as needed by the current context. They will need to rely on themselves and not expect a lot of assistance from the government or anyone else for that matter. This was the biggest message by far. You are on your own.

I asked Mr. Hoffman if thought that this creation of an entire generation of people who are seen as resources instead of people could actually lead to a post corporate world.  He almost laughed. Oh no, that will never happen. Capital will remain in the hands of corporations. That system won’t change.

Mr. Hoffman should be careful what he wishes for. We have the most educated, collaborative generation in history being told in stark terms that they have already been marginalized. Remember that a majority don’t trust the company and believe they are in control of their lives, despite the grim days we are enduring. They have been given the road map on which to base their future: Apprenticeship, guilds and alliances. They have seen and experienced the destruction that the greed of a few has brought to our nation.

After the conference I spoke to several of the millennials in attendance. One lamented that he should have never wasted time on a degree that put him $130,000 in debt only to be making copies and getting coffee for the partners in his firm. “I should have stayed at the beach surfing. I could have waited for this mess.”

They are angry, too. The future is in good hands.

2 responses to “Linked In’s Reid Hoffman to Millennials – Welcome to the New Feudalism | Peter Mehit

  1. This conference seems to have held a lot of mixed consciousness within it. While one speaker said that an education was not worth the extreme debt, another offered that we must build our human capital. When we appear to be worth payment for our labor, we will be granted the privilege of wage labor. Where in this discussion was any talk of collectivity? Of working together to change the modern function of markets and their major players?

    It seems as though this was more about how to mold yourself into a system which never liked you to begin with. I smell a bad breakup coming.

    ‘It is no measure of health to be well adjusted to a profoundly sick society’ – Jiddu Krishnamurti

  2. A bad break up, indeed. Millennials have the power to transcend this mess if the believe they can. It’s your stage.

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