A rising Silicon Valley doesn’t lift all boats

Collective bargaining and good public policy is needed for California’s tech corridor to foster widely shared prosperity

March 9, 2015 1:45AM ET
Silicon Valley is the center of innovation in our economy. But are the profits it generates bolstering a strong middle class?
This question is as relevant today as it was in the 1990s, when the dotcom boom began. In fact, tech billionaires have since increased their lobbying in Washington and Sacramento, and now play an increasingly influential role in political debates. Last month, the Capital and Main website released a series of articles on inequality in California. The state “is the home to more superrich than anywhere else in the country,” the authors noted. “And it also exhibits the highest poverty rate in the nation, when cost of living is taken into account.”
The report added that Silicon Valley’s digital innovation has led to “unprecedented” rise in productivity levels. “But virtually all of the economic benefits went to those at the top,” it said.
This is not a new problem. From 1994 to 2003, I served as chief executive officer of the South Bay Labor Council (SBLC), a 100,000-member regional coalition of labor unions based in San Jose. When I first took the position, Santa Clara County, where the Council worked, was ushering in a new era for the tech industry. The first web browser had just been invented; the next year, Netscape went public and Yahoo was founded. As The New York Times put it recently, Stanford University circa 1994 was “precisely when and where the web was stirring to life.”
Yet, despite the buzz around these new industries, there were striking similarities with past economic transformations. Amid prosperity and growth, many people felt left out of the gains. From defense research to semiconductor manufacturing, all past booms provided new opportunities for engineers and investors. But there’s a common pattern: Without outside pressure, prosperity doesn’t trickle down.
Silicon Valley’s inequality problem can be overcome, but only with concerted effort from outside the industry. An innovative combination of collective organizing and smart public policy will be required. This may include interventions that address the needs of working people who do not fit the image of high-wage techies, but who nevertheless play a critical role in the region’s economy . . .
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