Silicon Valley’s equity grade is below flunking
The state of the Silicon Valley is grim in terms of fairness and equality.
The 2022 Silicon Valley Index report discovered that whereas jobs are again to pre-pandemic ranges within the area, earnings inequality widened, inflation skyrocketed and housing costs soared.
Officers from Joint Enterprise Silicon Valley, a bunch that analyzes regional points affecting the financial system and high quality of life, highlighted these bleak findings on Friday, the place it launched its report on the annual State of the Valley convention.
The group makes use of information from quite a lot of sources to look at final 12 months’s financial developments in Silicon Valley which they outline as all of Santa Clara, San Mateo and Santa Cruz counties, and a part of Alameda County, together with Fremont.
Stratification of wealth
Essentially the most surprising statistic to come back out of the report is the staggering earnings inequality – the very best within the nation.
Through the convention, Caroline Simard from the VMWare Girls’s Management Lab at Stanford mentioned if she might give the Silicon Valley a grade on fairness, it could be an F-.
All through the 39 cities within the valley, there was $1.2 trillion in family wealth, however 92% of that wealth is owned by the highest quarter of the inhabitants. The bottom quarter solely owns 1.4% of the wealth.
“There is no such thing as a denying and no dancing across the profound inequality that exists right here,” Santa Clara County Supervisor Susan Ellenberg, who attended the convention held at Stanford College, instructed San José Highlight. “Everybody has to acknowledge how race pushed the disparities are.”
For instance, Hispanic or Latino residents make a median wage that’s 64% lower than similarly-educated white residents; for Black and African American residents that determine is 50% much less.
About 33% of Silicon Valley households will not be self-sufficient – requiring help from the federal government or neighborhood to make ends meet for probably the most fundamental of wants. For Latino residents, that determine is 61%; for non-citizen Latino residents, it’s 82%; and for Latino households the place neither father or mother speaks English, the determine is 90%.
A two-person family would want to earn near $100,000 a 12 months to be self-sufficient, “and that doesn’t imply you’ll be able to afford a Netflix account,” mentioned Russell Hancock, CEO of Joint Enterprise and president of the Silicon Valley Institute for Regional Research. That is the third 12 months the group’s annual report has highlighted deep inequities and the rising wealth hole.
Inflation will increase by 5%
Prices within the area have additionally elevated on a median of 5.4% however some fundamental wants have gone up much more. For instance, meals and produce went up 15%, family vitality costs by 18% and gasoline costs rose by 36%, in line with the report.
One other important and disproportionate enhance was price of childcare.
“(Childcare) is likely one of the greatest obstacles for ladies getting into or staying in or returning to the workforce,” Ellenberg mentioned. “If we don’t take childcare critically as part of the financial infrastructure and be sure that it’s reasonably priced and accessible, we’ve no hope of closing the hole.”
Hancock mentioned consultants predicted that housing prices would trickle down throughout the pandemic, however Silicon Valley noticed the opposite. Within the area, the median price for a house was $1.3 million which implies that solely 25% of the neighborhood might develop into first time home-buyers.
Final 12 months, the area accepted 58,000 permits for housing – a determine Hancock mentioned was “probably not a drop within the bucket,” regarding the housing want and was largely for houses that many individuals couldn’t afford.
Final 12 months, unemployment dropped to 2.9%, near pre-pandemic document lows. Hancock mentioned the area regained the 150,000 jobs misplaced throughout the pandemic, and added 15,000 jobs.
Nonetheless, most of these jobs have been within the tech sector. Jobs in retail, transportation, nonprofits and different companies decreased by 20-30%.
Jim Wunderman, CEO of the Bay Space Council, mentioned it’s not honest to put the blame on tech corporations. The actual wrongdoer is the institutional and structural racism within the county’s cloth and the answer is to redistribute wealth, he mentioned.
“I feel it’s pure to leap and say that is the fault of the people who find themselves doing so nicely,” Wunderman mentioned. “However we even have all this institutional racism in our historical past (that we have to dismantle).”
Ellenberg mentioned it’s laborious to not really feel cynical whereas trying on the information, however stays hopeful due to the area’s stage of obtainable sources.
“After we’re offered with info that feels grim, it actually implies that we’re seeing clearly and particularly the place our challenges are, and what alternatives we’ve to do higher,” Ellenberg mentioned.
Contact Jana Kadah at [email protected] or @Jana_Kadah on Twitter.