Silicon Valley labor groups target tech 'segregation' in push to raise wages

Aug 27, 2014, 7:33am PDT Updated: Aug 27, 2014, 10:20am PDT

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Working Partnerships USA

A breakdown of Santa Clara County-wide wage data for high-paying technology jobs and much lower-paying service sector positions. While this data covers all workers, not just those employed by high tech firms, a new report by a Silicon Valley labor think tank Working Partnerships USA calls attention to what they say is the rampant use of low-paid subcontractors, including many black and Latino workers, at large area companies.

Economic Development Reporter- Silicon Valley Business Journal
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Amid heightened anxiety about racial and gender inequality within Silicon Valley's tech workforce, area labor groups are doing their best to drive home the point that those issues are even more extreme for low-income workers.

A new report by San Jose labor think tank Working Partnerships USA highlights an "invisible workforce" of janitors, landscapers and security guards keeping companies like Google Inc., Apple Inc. and Facebook Inc. up and running.

"The tech industry is making deliberate business policy decisions that result in economic and occupational segregation in Silicon Valley," Derecka Mehrens, executive director of Working Partnerships USA, said in a statement. "There are simply no standards for their subcontractors."

One major problem: We still don't know how many people work as contract employees at Silicon Valley tech firms, what their demographics are, let alone how much they are paid.

Though several highly visible tech firms have released diversity reports detailing their very low proportions of female, black and Latino full-time workers, there is little targeted information on tech services providers available aside from isolated anecdotes.

Apple, Google and Facebook — the three largest tech companies named in the Working Partnerships USA report — all declined to answer my questions about how much they pay janitors, landscapers or security guards, whether they employ contract laborers in those support services jobs or even how many workers they employ in those fields at all.

Working Partnerships' new four-page report relies on Santa Clara County-wide state wage data to work around tech companies' unwillingness to talk about blue collar employment. The report shows landscaping, janitorial work and security all pay a median $11.39-$14.39 per hour — not even close to enough to afford $2,500 average rents in the San Jose metro area. We don't know the specifics of how tech companies' workers figure into those calculations.

Still, the report does highlight several glaring differences between employment demographics reported by tech companies and the overall racial and ethnic makeup of Silicon Valley.

An average of just 3-4 percent of the full-time workforces of tech companies that have volunteered their diversity figures were black or Latino. A full 28 percent of the workforce in Santa Clara County consists of black or Latino individuals, and the numbers are even more jarring when broken down by occupation; Black and Latino workers account for 72% of all Silicon Valley janitorial and building cleaning workers and 76% of all grounds maintenance workers, according to U.S. Census data.

As I have reported, there is also a widening earnings gap between area residents of different racial or ethnic backgrounds. White residents saw per capita income rise 5 percent from 2010 to 2012 to $62,374; Asian residents got a 2 percent bump to $42,607; African American residents saw per capita earnings fall 5 percent to $30,758; and earnings for Latino residents dropped 2 percent to $19,049, according to data by Joint Venture Silicon Valley.

The concept of the "invisible workforce" posited by labor groups attempts to personify widely acknowledged regional issues like unaffordable housing and often-difficult public transportation, which threaten the long-term economic stability of Silicon Valley's workforce and social structures.

Lobbying for labor changes

Labor advocacy groups including the South Bay AFL-CIO Labor Council, which supports 90 area labor unions, are seizing on these tense dynamics to push for aggressive policy reforms at the local and county level.

Both the Labor Council and Working Partnerships USA are backing a comprehensive Santa Clara County policy overhaul currently winding through the political process. A preliminary county study will analyze proposals to raise wages paid to private government contract workers, mandate paid sick days and institute a new employee-friendliness ranking for businesses.

“The idea is to create an economy where everyone is self-sufficient,” Ben Field, executive officer of the South Bay AFL-CIO Labor Council, told me of the effort.

The release of the new report on income and racial inequality — which asks readers to divulge their contact information on an online form for a campaign called " Tech Can Do Better" — also coincides with a town hall forum held Monday by Santa Clara County at the urging of labor groups. The event sought community input on "the price we pay" to live in Silicon Valley.

In these efforts to improve the lot of low-wage Silicon Valley workers, labor groups do have recent political history on their side.

The Labor Council and allied nonprofits groups chalked up two major wins in 2012 — after investing several hundred thousand dollars in campaigns — with voters approving two ballot measures to raise the City of San Jose's minimum wage and increase the sales tax to fund community health care. The minimum wage effort in particular was strongly opposed by business groups like the Chamber of Commerce, the California Restaurant Association and East Coast industry lobbyists.

Still, the new political effort to take on tech companies while campaigning for stronger labor regulations is just one facet of the region's much bigger problems with income inequality.

The Working Partnerships report closes by imploring readers to "imagine giving a raise of $5 per hour to 10,000 contracted workers – enough to lift a security guard from the median wage to self-sufficiency." Such an investment, the document adds, would cost less than 0.1% of the record $103.7 billion in profits reported by Silicon Valley's 150 biggest companies last year.

"With a stroke of a pen, tech companies could improve economic opportunities for thousands of low-wage workers and their families," the report concludes.

Click here to read much more about Silicon Valley's struggle to hang onto a population increasingly polarized by income.

Lauren Hepler is the economic development reporter at the Silicon Valley Business Journal.


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