"Is This Legal?" Feb 2
meet the company that powers silicon valley's race- and gender-based hiring goalsRiver Page
In 2009 Obama’s Secretary of Commerce, Gary Locke, announced that the Economic Development Agency (EDA) had awarded Pensacola, Florida a grant of $2 million dollars to attract tech businesses to the Panhandle city. The grant was estimated to create 670 jobs and attract $27 million in private investment. The project, a “tech campus” set in the middle of the city's rapidly gentrifying downtown, was finished in 2012. When I moved to Pensacola in 2016, it was a green field that homeless people hung out at. When I moved in 2022, it was being used as a practice field for youth soccer. The “tech campus” has yet to attract a single tenant, a single job, or a single dollar of private investment.
Despite past failures, the federal government is once again attempting to build new tech hubs outside of the big coastal cities where they have previously been concentrated. This time, they’re going even bigger. The EDA recently finished accepting applications for its new Regional Technology and Innovation Hub Program (known colloquially as “Tech Hubs”), a large grant program created by the CHIPS Act which will see 20 regions designated as Tech Hubs. Of these 20, three to eight will be given grants averaging $65 million dollars for programs meant to develop the local tech sector. The convoluted details of this program demonstrate a clear commitment to DEI principles, naked political patronage, and are littered with self-erected barriers to the programs own success.
Let's start with DEI:
In a section of the Tech Hub Program’s Notice of Funding Opportunity (NOFO) titled: How should applicants consider equity? the agency writes:
[The] EDA expects projects to advance equity to underserved and underrepresented populations to the extent practicable. Specifically, applicants are expected to articulate which populations or communities will benefit from the project and how the project will provide for inclusive community engagement, ensuring that the economic benefits of the project will be shared by all communities in the project area, including any underserved communities.
In a footnote, the EDA defines underserved and underrepresented communities as: people who rent their homes, racial and ethnic minorities, limited English proficiency populations, persons with disabilities, and racially and ethnically concentrated areas of poverty — the last being a neat little reverse-racism dog whistle that good lawyer could argue refers to blacks in the Mississippi Delta and Scotch-Irish in Appalachia equally, although we can all infer otherwise.
Utilizing a variety of patronizing euphemisms, the diversity and equity requirements in this program make it clear that the EDA believes minorities require special and preferential treatment. For example, the EDA says it “seeks evidence-driven equity and inclusion initiatives, including ones that support more historically underrepresented innovators.” Moreover, the section titled How Should applicants consider climate and environmental responsibility? states:
Applicants are expected to design their projects to minimize the potential for adverse impacts on the environment and the local community, including communities with environmental justice concerns.
Emphasis mine, but spiritually, the EDA’s too. Their grant writer audience knows very well that the difference between a community with environmental concerns and a community with environmental justice concerns is typically one of color. The text says “including” rather than “especially,” but the dog whistle is clear: If the impact on local communities cannot be “minimized” equally, err on the side of the community whose environmental concerns are most likely to be discussed in terms of justice. Hint, hint.
Minority institutions are given an even more explicit leg-up. According to the official Notice of Funding Opportunity, applicants will be judged specifically on:
The extent to which the Designated Tech Hub leverages institutions of higher education serving historically underrepresented in STEM, including historically Black Colleges and Universities, Tribal Colleges and Universities, and Minority Serving Institutions.
Of course, such institutions — like most of academia — are bastions of institutional support for the Democratic Party. This requirement is just one of many examples of thinly-veiled political patronage found in the Tech Hubs program. Authorized by the somewhat bipartisan CHIPS Act — which passed with support from a minority of Republicans in the Senate — the program requires that at least one-third of the designated “Tech Hubs” be located in the following (mostly Red to Purple) “low population” states: Alaska, Maine, Montana, New Hampshire, North Dakota, South Dakota, Vermont, West Virginia, and Wyoming.
Beyond the requirement concerning those specific states, at least one-third of the designated Tech Hubs must also represent a small and rural area. Call that political patronage or a genuine desire to geographically diversify the tech sector, but either way, the same issue arises: even with multimillion dollar grant funding, how will small rural areas be able to attract the quality tech talent that's required for a region to transform these "designated tech hubs" into actual ones? Far from answering this question, the Tech Hubs program explicitly forbids recipients from using any funds to attract talent at all — a massive self-erected barrier to the program’s primary goal of geographically diversifying the tech sector. By accepting grant money, the EDA requires recipients to sign a “non-relocation policy” which states:
In signing this award of financial assistance, Recipient(s) attests that EDA funding is not intended by the Recipient to assist its efforts to induce the relocation of existing jobs within the U.S. that are located outside of its jurisdiction to within its jurisdiction in competition with other U.S. jurisdictions for those same jobs.
Essentially, these new “Tech Hubs” are required to work with the labor force they currently have, however sparse and unqualified it might be. In its own way, the EDA seems to acknowledge this problem, by offering a cartoonish non-solution to it. Here’s a hypothetical project the EDA says could be funded with a multimillion dollar Tech Hubs grant:
Partnerships with organizations that support employer adoption of hiring and employment practices that tap into the talents of existing workers and remove barriers to good jobs, such as skills-based recruitment recruitment and hiring practices.
The notion that “skills based recruitment and hiring practices” in the tech sector of all places, are barriers to good jobs in need of removal is absurd to a level that’s beyond parody. It demonstrates either a baffling ignorance of the basic functionings of business, or else a deep disregard for them. The idea that tax dollars — millions of them — could be used to facilitate willful and self-destructive management practices that could harm not only the business, but depending on the sector, the unskilled worker himself, his colleagues, or, for example in the case of the biomedical industry, patients (through incorrectly dosing or accidentally tainting medications) or the entire human race (by accidentally releasing a dangerous pathogen from a lab) would be laughable if it weren’t so dangerous. If deputizing NGOs to convince tech companies that “hiring unqualified workers is good, actually,” is the sort of project the EDA imagines might be a good use of tax dollars, imagine the sort of hair-brained schemes they might approve from applicants.
If you take all the ridiculous requirements at face value, the ideal candidate for a Tech Hub grant is one which promises that local, non-English speaking, wheelchair bound Native Americans without any particular skills or education relevant to the tech industry will successfully transform a small town in North Dakota into the city of Wakanda under the auspices of a nearby HBCU. If we are lucky, only the vast majority of our tax dollars are wasted in pursuing such fantasies, and one or two mid-sized cities will get grants and somehow find a way to turn their tiny tech sector into a medium-sized one by recruiting kids from the engineering department at a nearby “minority serving” university. I don’t think this ends in a single, actual new tech hub, and certainly not 20 of them. More likely, this ends in money being wasted in unique ways we’d never considered before.
I guess innovation isn’t dead after all.