Income inequality debate shifts to the tech darlingsComment on this story
The epicentre of the income inequality debate has shifted 4 200km west, from Wall Street to Market Street. Whether it’s protesters targeting Twitter’s new San Francisco headquarters and Google’s buses or the criticism against these agitators by former venture capitalist Tom Perkins, the Bay Area’s technology industry is attracting the kind of attention often reserved for New York’s moneyed elite.
Concern about the growing gap between the wealthiest and poorest Americans is erupting across San Francisco, where an influx of newly minted dotcom millionaires is boosting rents and property prices, putting affordable housing that much further out of reach.
Rage over inequality has spilled into the streets, where demonstrators have blocked buses transporting Google employees, breaking the window of one in Oakland.
“All booms have their winners and losers,” said John Elberling, the executive vice-president of Todco, a San Francisco-based builder of affordable housing. “Even if you have a good job, it’s very likely you can’t afford to buy a place in the city.”
Having previously called income inequality “the defining challenge of our time”, President Barack Obama was expected to make it the main theme of last night’s State of the Union Address.
From a jobs perspective, San Francisco is excelling. While New York’s unemployment rate is stuck near 8 percent, adding to scrutiny about Wall Street’s lavish bonuses two years after the Occupy movement, the San Francisco area’s jobless rate fell to a record low 4.6 percent last month from 6.1 percent a year earlier, according to preliminary data from California’s Employment Development Department.
All jobs aren’t created equal, and some residents see the city’s progressive history threatened as those not in the technology industry get priced out. Trulia, a real estate listings site, said only 14 percent of homes up for sale in San Francisco were affordable for the middle class.
Prices rose 13 percent last month to a median $813 000 (R9 million), DataQuick said on January 15.
About 6 400 residents were homeless, the city’s Human Services Agency said in a biennial report released in June.
“San Francisco is a liberal, community-caring city and we’ve gotten a little bit away from ourselves,” said Steve Humphreys, the chief executive of Flywheel Software, an app for hailing taxis.
With too many of his peers living in a bubble and not paying attention to the city’s economic issues, “things went a little willy-nilly”, he said.
That had left an opening for technology companies to become the targets of criticism.
Even as they hire aggressively and create innovative products, the initial public offerings of Facebook and Twitter resulted in new Silicon Valley millionaires, and in some cases billionaires. Among the newest is Facebook chief operating officer Sheryl Sandberg, who last week became one of the youngest female billionaires in the world, according to the Bloomberg billionaires index. Twitter co-founder Evan Williams is worth about $3.3 billion, according to the index.
On November 7, the day of Twitter’s stock market debut, protesters gathered at its San Francisco headquarters with signs like “We are the public, what are you offering?”
In 2011, Twitter considered leaving San Francisco, telling mayor Edwin Lee that a city tax based on the size of the company’s payroll would erode its growth. Lee exempted Twitter and other companies from the payroll tax if they would move to Central Market, an area plagued by crime and drugs near the city hall. The microblogging site is now worth $32.8bn.
Google, Apple and Facebook are among companies that have come under fire for busing employees from San Francisco to their Silicon Valley campuses, with residents claiming they congest city streets and use public transport stops.
A group of technology companies agreed in December to pay the city a daily fee to use existing stops.
Some buses have been blocked by protests, and in Oakland demonstrators shattered the window of a Google bus last month. News site Berkeleyside.com wrote last week about a protest outside the home of a Google engineer in Berkeley.
The backlash has drawn the ire of members of the technology community, including Bryan Goldberg, the founder of sports news service Bleacher Report, who wrote a satirical blog post this month defending tech workers.
Former venture capitalist Perkins wrote a letter in the Saturday Wall Street Journal comparing the treatment of the richest Americans to the persecution of Jews in Nazi Germany.
His comments led his former venture firm, Kleiner Perkins Caufield & Byers, to disavow its co-founder, and venture capitalists including Marc Andreessen to openly criticise him. In a Bloomberg Television interview, the venture capital pioneer on Monday apologised for referring in his letter to Kristallnacht, a night in 1938 when Nazis co-ordinated attacks against Jews.
“It was a terrible misjudgement,” he said. Even so, “I do not regret the message at all. Any time the majority starts to demonise any minority, no matter what it is, it is wrong and dangerous.”
Hans Johnson, a research fellow at the non-profit Public Policy Institute of California in San Francisco, said the city’s success in reducing unemployment had the unintended consequence of deepening its housing issues.
“Demand has increased dramatically, because the economy has come back strongly and that’s led by increases in tech,” he said. “When people get frustrated and they look around for a scapegoat, they see tech workers and the tech industry.” – Bloomberg