The Poverty Problem in Silicon Valley (Los Angeles, San Francisco: fit in, real estate, 2013)

[jade408]

SFGate is talking about the wealth gap in the Silicon Valley. A topic that is really under-reported.....
Many left behind as Silicon Valley rebounds - SFGate

But a bleaker record is also being set this year: Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year— capping a steady 14 percent drop over the past five years, according to the annual Silicon Valley Index released by Joint Venture Silicon Valley, representing businesses, and the philanthropic Silicon Valley Community Foundation.

Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty.

And another quote about the cost of living:

The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation's wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development.

Basic needs for a family of 4 requires $90k.

[mayorhaggar]

Last year the share of households in Silicon Valley earning less than $35,000 rose two percentage points to 20 percent, according to the 2013 Silicon Valley Index.

The most important part imo. Most people in the Bay Area are annoyingly oblivious about the fact that there's tons of people all around them not making all that much money, they just assume everyone else is a workaholic tech zombie making over 80k just like them. I was making 36k and living in a studio in Oakland until about a year ago, and while I was fairly comfortable I definitely felt the squeeze of rents going up year by year. Now I'm far away and living rent free in a cow town in Korea, lol.

[cardinal2007]

One major reason for that is that as companies expand, and hire more workers, you don't see a corresponding increase in the housing stock, cities in the Bay Area for the most part have decided that rising rents and the issues that come with them are things they want, it makes homeowners richer afterall since rents going up means more renters will be looking to buy.

Tech booms: Too hot for jobs | The Economist

As rents go up we will see more people with lower incomes leave for other more affordable places, along with people with families that are paying more in rent looking to buy a place finding it hard to do so here. Smaller, younger families and single people willing to put up with smaller housing accommodations will replace them, as long as there are jobs people will move here. At least we are not as bad as Williston, North Dakota, Williston, N.D., Oil Boom Means Rents as High as New York City's | AOL Real Estate, but we could end up more like that if we don't start thinking about these issues.

High rents do tend to lead to an increase in homelessness. We could see significantly higher costs on anything requiring services, like eating out, car maintenance, and healthcare.

[Nineties Flava]

Originally Posted by mayorhaggar

The most important part imo. Most people in the Bay Area are annoyingly oblivious about the fact that there's tons of people all around them not making all that much money, they just assume everyone else is a workaholic tech zombie making over 80k just like them. I was making 36k and living in a studio in Oakland until about a year ago, and while I was fairly comfortable I definitely felt the squeeze of rents going up year by year. Now I'm far away and living rent free in a cow town in Korea, lol.

The reality is that the majority of wealthy people in the Peninsula/South Bay literally don't see any of the poverty a couple miles (or in the case of Atherton a couple blocks) away from them. This is mainly due to the suburban nature of the area... suburban people with money already don't take public transit because that would be too ghetto (lol) for them and they generally choose school districts or private schools where their kids are surrounded by people whose neighborhood looks just like theirs. For the most part they don't even frequent the same grocery/hardware stores or hang out in the same places... the most socioeconomically diverse place in any given city in the South Bay or the Peninsula is probably the local movie theater. And even then, they'll often skip certain movie theaters once they get a reputation for being "ghetto" (see Century 20 in RWC).

This is in many ways an entirely different group of people than the equivalently wealthy group of people in San Francisco... It's very difficult to adequately explain just how easy it is to be extremely sheltered if you're from a wealthy part of the South Bay/Peninsula. Someone from Pacific Heights might feel out of place or out of their element walking through the Tenderloin but the average person from Los Gatos would probably **** their pants... you'll simply have more exposure to people who don't look like you growing up somewhere like San Francisco.

The hugely ironic part of course is that it's this same population of sheltered ultra-wealthy suburbanites that has created the domestic population and economy in the Peninsula/South Bay (i.e. by far the most impoverished group in the area). The closest most of them get to a barrio or any working class neighborhood for that matter (all of which being "too ghetto" to be caught dead in of course) is their legions of houseworkers and maids.

Another factor that compounds this is that a lot of the wealthy tech immigrants who've increasingly flooded into Silicon Valley come from countries where it's perfectly normal to have a wide chasm - figuratively and literally - between the haves and have-nots. The increasing lack of upward mobility for poor people in the South Bay (and really the whole US) isn't much of a concern to people who come from countries where upward mobility largely doesn't exist for poor people at all.

All that to say it's not very shocking that the issue of poverty in the Silicon Valley area isn't discussed too much... many of the wealthy people in SV are all but entirely unaware of it and sadly for the most part could care less.

[andyadhi01]

That's in line with the general trend in the whole country.. Who cares about a few hundred thousand poor people when you have hundreds of tech billionaire and thousands of tech millionaires to brag about. Bay area, despite its liberal pretenses, is for all practical purposes just about the most money worshiping part of the country and makes absolutely zero attempt to improve housing situation in the area.

BTW, since when is the median house price in silicon valley only 550k? I thought its almost twice that number.

[sliverbox]

I do fairly well financially, but when I first moved here I was making $8 an hour. Then later I was up to $12 an hour. If you've experienced that and you live in the Bay Area, that's not the easiest thing to do. Truth be known the Bay Area is a really difficult place to live on a lower income. I did it for over 3 years and I am very thankful every day that I have a job that pays me well now. I agree that poverty here seems to be a bit swept under the carpet. There's an assumption that its happy days for all.
All I know is that if I go to a restaurant, a retail store, or the janitor comes by I always try to say thank you, let them know I appreciate the service, or leave a good tip. I've been there.

[silverkris]

Originally Posted by cardinal2007

One major reason for that is that as companies expand, and hire more workers, you don't see a corresponding increase in the housing stock, cities in the Bay Area for the most part have decided that rising rents and the issues that come with them are things they want, it makes homeowners richer afterall since rents going up means more renters will be looking to buy.

It's hard to increase the housing stock given that there is a finite amount of land available and it is also fairly difficult to build new housing relatively speaking from a regulatory point of view.

[BayAreaHillbilly]

Originally Posted by jade408

SFGate is talking about the wealth gap in the Silicon Valley. A topic that is really under-reported.....
Many left behind as Silicon Valley rebounds - SFGate



And another quote about the cost of living:



Basic needs for a family of 4 requires $90k.

For example, when I was a kid (1970s) there were many solid middle class jobs in Silicon Valley and the Bay Area in general. Some of this was driven by high tech, some driven by more traditional durable goods industries and some by "office jobs."

So what happened? As I see it, there was a triple whammy. Firstly the corporate community got bit by the outsourcing bug and once you open that door, why even outsource to a nearby firm? Secondly, the general cost environment got more hostile resulting in only those activities with low burden elements above and beyond salary could be justified remaining. Thirdly the regulatory environment increasingly favored so called "knowledge workers" over manufacturing and clerical workers. There you have it. A disaster for the middle class, and, an apocalypse for native born people of color as well as lesser educated and skilled whites.

[BayAreaHillbilly]

Originally Posted by Nineties Flava

Another factor that compounds this is that a lot of the wealthy tech immigrants who've increasingly flooded into Silicon Valley come from countries where it's perfectly normal to have a wide chasm - figuratively and literally - between the haves and have-nots. The increasing lack of upward mobility for poor people in the South Bay (and really the whole US) isn't much of a concern to people who come from countries where upward mobility largely doesn't exist for poor people at all.

We are importing feudalism. Eventually, the imported grandees will gain political power then bye bye Constitution.

[loloroj]

What most people don't know is that the "tech revelt" was powered primarily by code writers making relatively little money, with much of it invested in wrist protectors, that did little to prevent carpal tunnel. It has always been that way, despite what media spin and PR mavens claimed. Much of the massive population increase in the BA has been fueled by WAY over sized expectations of money, wealth and opportunity. Simply not true, but they keep coming, much as those that think they'll make it in media keep flocking to Los Angeles.