Silicon Valley boom eludes many, drives income gap
March 7, 2014 9:05 PM
Marcio Jose Sanchez
A family receives aid at a food pantry at Sacred Heart Community Service in San Jose, Calif.
Marcio Jose Sanchez
People line up at a food pantry at Sacred Heart Community Service last month in San Jose, Calif. Silicon Valley is entering it's fifth year of unfettered growth, with among the highest incomes in the U.S. and the largest share of high-growth, high-wage jobs. Those gains have doubled housing costs in the past five years while wages for low and middle skilled workers are stagnant. Homelessness and racial disparities are on the rise.
By Martha Mendoza / The Associated Press
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. Mr. Buditom rooms with his sister an hour's drive from work. Mr. Farfan gets his groceries at a food pantry.
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 sporadic protests.
Mr. 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 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 Mr. Buditom, who emigrated from Indonesia 30 years ago.
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 has dropped.
A 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.
The 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," Mr. Hancock said.
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.
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."
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.
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