Silicon Valley boom eludes many, drives income gap


SAN JOSE, Calif. (AP) — 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.
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. "Then the reality hits you."
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. The airport is adding an
$82 million private jet center.
But the river of money flowing
through this 1,800-square-mile peninsula, stretching from south of San
Francisco to San Jose, has also 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 for hours from less-expensive inland suburbs.
Now the widening income gap between the wealthy and those left behind is sparking debate, anger and
sporadic protests.
the 1%" and other rants were spray-painted last month on walls, garages
and a car in the Silicon Valley town of Atherton, home to many top tech
CEOs that Forbes magazine last year called the nation’s most expensive
community. In Cupertino, security guards rallied outside Apple’s
shareholder meeting on Feb. 28 demanding better wages. "What’s the
matter with Silicon Valley? Prosperity for some, poverty for many.
That’s what," read their banner.
Farfan, 44, a native of the
valley, said he figured he must be mismanaging his $23-an-hour salary to
be struggling with what seemed like a decent paycheck. 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, also 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 in stop-and-go
traffic for a $13-an-hour security job.
"I’m so passed over by
the American dream, I don’t even want to dream it anymore," said
Buditom, who immigrated from Indonesia 30 years ago. "It’s impossible to
get ahead. I’m just trying to survive."
From the White House to
the Vatican to the world’s business elite, the growing gap between the
very wealthy and everyone else is seizing agendas. 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’s dropped.
study last month by the Brookings Institution found that among the
nation’s 50 largest cities, San Francisco experienced the largest
increase in income inequality between 2007 and 2012. The richest 5
percent of households earned $28,000 more, while the poorest 20 percent
of households saw income drop $4,000. To the south, Silicon Valley’s
success has made it a less hospitable place for many, said Russell
Hancock, president of Joint Venture Silicon Valley, an organization
focused on the local economy and quality of life.
"We’ve become a
bifurcated valley, a valley of haves and have-nots," Hancock said. "The
economy is sizzling any way you slice it, and it’s about to get hotter.
But having said that, we are quick to point out there are perils to our
Once a peaceful paradise of apricot, peach and prune
orchards, the region is among the most expensive places to live in the
U.S. Those earning $50,000 a year in Dallas would need to make $77,000 a
year in the Silicon Valley to maintain the same quality of life,
according to the Council for Community and Economic Research; $63,000 if
they moved from Chicago or Seattle.
Housing costs are largely to
blame. An $800-a-month, two-bedroom apartment near AT&T’s Dallas
headquarters would cost about $1,700 near Google’s Mountain View,
Calif., headquarters. Dental visits, hamburgers, washing machine
repairs, movie tickets — all are above national averages.
years ago Sacred Heart was providing food and clothing for about 35,000
individuals a year. This year it expects to serve more than twice that.
On one brisk morning recently, families, working couples, disabled
people and elderly lined up out the door for free bags of food, just
miles from the bustling tech campuses.
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
have also put some 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.
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.
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.
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.
not a billionaire. Like many people, I’m still paying off my student
loans," said Google maps program manager Crystal Sholts 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.
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."
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
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.
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."
month later, venture capitalist Tom Perkins likened what he called "the
war on the one percent, namely the ‘rich’" with fascist Nazi Germany in
an open letter to The Wall Street Journal: "Kristallnacht was
unthinkable in 1930; is its descendent ‘progressive’ radicalism
unthinkable now?" He apologized a few days later, calling his choice of
words "terrible."
Follow Martha Mendoza at
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