Silicon Valley boom eludes many, drives income gap

  • Follow News

SAN JOSE, Calif. — Arwin Buditom guards some of the most successful high-tech firms in America. Joseph Far­fan keeps their heat, air and electric systems humming. But these workers and tens of thousands like them who help fuel the Silicon Valley’s tech boom can’t even make ends meet anymore. Bu­ditom rooms with his sister an hour’s drive from work. Farfan gets his groceries at a food pantry.

People sift for used clothes at Sacred Heart Community Service in San Jose, Calif. The gains Silicon Valley has seen through the tech boom have doubled housing costs over the past five years, while wages for low and middle skilled workers are stagnant.  MARCIO JOSE SANCHEZ/ASSOCIATED PRESS
MARCIO JOSE SANCHEZ/ASSOCIATED PRESS
People sift for used clothes at Sacred Heart Community Service in San Jose, Calif. The gains Silicon Valley has seen through the tech boom have doubled housing costs over the past five years, while wages for low and middle skilled workers are stagnant.

“It’s unbelievable until you’re in the middle of it,” Farfan said, standing in line at the Sacred Heart Commu­nity Center in San Jose for free pasta, rice and vegetables.

Silicon Valley is entering a fifth year of unfettered growth. The median household income is $90,000, according to the Census Bu­reau. The average single-family home sells for about $1 million.

But the river of money flowing through this 1,800-square-mile peninsula, stretching from south of San Francisco to San Jose, also has driven housing costs to double in the past five years while wages for low- and middle-skilled workers are stagnant. Nurses, preschool teachers, security guards and landscapers commute, sometimes for hours, from less-expensive inland suburbs.

Now the widening income gap between the wealthy and those left behind is sparking debate, anger and protests.

Rants against “the 1 percent” were spray-painted last month on walls, garages and a car in the Silicon Valley town of Atherton, home to many top tech CEOs. In Cupertino, security guards rallied outside Apple’s shareholder meeting Feb. 28 demanding better wages.

Farfan, 44, a native of the valley, said he figured he must be mismanaging his $23-an-hour salary to be struggling. But when he met with financial counselors, they told him there was nothing left to cut except groceries because rent, child support and transportation expenses were eating away the rest of his money.

Buditom, 44, said the reality of working for some of the nation’s richest companies has sapped his belief in the American dream. For the past four years, he has been living in his sister’s apartment, commuting an hour for a $13-an-hour security job.

“It’s impossible to get ahead. I’m just trying to survive,” said Buditom, who emigrated from Indonesia 30 years ago.

Buditom stays to be near his family who help support him. Farfan stays to be near his 9-year-old daughter; he shares custody with his wife.

Three decades ago, Amer­i­cans’ income tended to grow at roughly similar rates, no matter how much they made. But since about 1980, income has grown most for the top earners. For the poorest 20 percent of families, it has dropped.

Housing costs are largely to blame for the high cost of living in Silicon Valley. An $800-a-month, two-bedroom apartment near AT&T’s Dallas headquarters would cost about $1,700 near Goog­le’s Mountain View headquarters. Dental visits, hamburgers, washing machine repairs, movie tickets – all are above national averages.

Five years ago, Sacred Heart was providing food and clothing for about 35,000 people a year. This year it expects to serve more than twice that.

Those firms, meantime, are increasingly opting to build their own infrastructure rather than depend on public systems and have become social bubbles, with their own child-care centers, cafes, dry cleaning services, gyms, onsite health providers and hair salons. EBay changes its employees’ oil; Facebook repairs their bikes. Some of those workers are in-house, with good salaries and benefits. Others are contracted out.

The companies also have put money back into the communities. In the past three years, Google has given nearly $60 million to area nonprofits, including Second Harvest Food Bank. The firm also gives grants to advance math and science education, and every June workers are encouraged to volunteer during a weeklong event called GoogleServe. Apple donated $50 million for new buildings at Stanford University.

“Google strives to be a good neighbor in the communities where we work and live,” Google spokeswoman Meghan Casserly said.

Still, said Poncho Guevara, who runs Sacred Heart: “The juxtaposition of the innovation and growth happening here, compared to the social needs, portends what’s going to be playing out in the rest of the country in years to come.”

While some are struggling to survive, others are fighting back.

Twice in December and again in January, activists in San Francisco, where recent tax incentives have lured Twitter, Yelp, Spotify and other firms, swarmed privately run shuttle buses that ferry workers for Google, Facebook and other tech companies from the city to work. Tires were slashed, rocks hurled. Signs taped to the buses read: “Gentrification & Eviction Technologies: Integrated Displacement and Cultural Erasure” and “F--- Off Google.”

Last month, as protesters beat drums outside, former Daily Show member and comedian John Oliver mocked the tech elite during an annual awards ceremony in San Francisco that honors startups and Internet innovations. “You are no longer the underdogs,” he told the audience. “You’re pissing off an entire city, not just with what you do at work, but how you get to work. It’s not easy to do that.”

The crowd roared with laughter, and he went on.

“I heard the latest design for your buses is to use tinted windows but reverse, with the tint on the inside, the reason being, ‘Look, I don’t mind if the peasants see me, but I would rather not see them, hmm?’”

Fewer laughs followed that one.

The protests and critiques have left some who work in the industry nonplussed.

“I’m not a billionaire. Like many people, I’m still paying off my student loans,” Google maps program manager Crystal Sholts said during a meeting in which San Francisco officials approved a plan to charge a fee for the corporate shuttles to use municipal bus stops.

Activist Sara Shortt of the Housing Rights Committee of San Francisco said the protests weren’t intended to target the workers themselves.

“We’re going after the bus as a symbol, a very palpable symbol, of the dramatically growing income divide in our city,” she said. “Frankly those gleaming white buses with their tinted windows are a slap in the face to the rest of us who are waiting for the public bus or riding our bicycles down the bike lanes competing with these mammoth vehicles.”

Last month during a conference aimed at helping tech workers find more wisdom and peace in their lives, protesters with a banner reading “EVICTION FREE SAN FRANCISCO” drew nervous applause when they jumped on stage. But when a woman with a megaphone began jumping up and down and yelling “San Francisco, not for sale!” and guards scuffled with the group to move them offstage, the audience grew silent and a live stream video was cut.

When calm was restored, Google’s Bill Duane, a senior manager for well-being, led the crowd in meditation.

Economist Steven Levy has tracked the region’s economy through boom and bust. He said talking about the wealth gap “gets you nowhere.”

“It’s an indicator that the top are getting richer, but the folks at the bottom are stuck, with stagnant wages and not enough housing, not enough transportation, not enough infrastructure,” he said.

Solutions abound: Build more affordable housing, raise the minimum wage, train locals for high-tech jobs. But they all cost money, and advocates such as Guevara said not enough has emerged.

“There is this sense of disconnection,” he said. “The techies may live and work in the same city, but their kids are not going to the same schools. They don’t live in the same neighborhoods. There simply isn’t much engagement across the divide.”

A few prominent figures in the tech elite have fanned flames on the issue of income disparity. Greg Gropman, CEO of the tech startup AngelHack, ridiculed San Francisco in a now-deleted Facebook post in December: “Why the heart of our city has to be overrun by crazy, homeless, drug dealers, dropouts, and trash I have no clue.”

A month later, in an open letter to The Wall Street Journal, venture capitalist Tom Perkins likened what he called “the war on the one percent, namely the ‘rich’” with fascist Nazi Germany: “Kristallnacht was unthinkable in 1930; is its descendent ‘progressive’ radicalism unthinkable now?”

He apologized a few days later, calling his choice of words “terrible.”

Comments (0) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
jimmymac
39881
Points
jimmymac 03/10/14 - 09:58 am
0
0
INCOME
Unpublished

So the "man" s to blame for these people's lack of a good enough income Maybe if they'd gone to school and worked for a better life is would have turned out better for them. Thirteen dollars an hour for a security isn't bad pay. It's what the job is worth. Because the other guy's has to pay child support that's the fault of someone else? Do something about your situation instead of wallowing in wealth envy. No one is forcing them to live there so move and live where the cost of living is cheaper and find a better job.

Back to Top

Top headlines

Many black colleges struggling

Although Paine has struggled with its own failures over the past several years, HBCUs across the nation are dealing with some of the same troubles that are threatening their missions and existence.
Search Augusta jobs