How tech’s business models concentrate wealth while shortchanging workersRead the report
20 years of data show that Silicon Valley’s business models exacerbate income inequality while enriching corporate shareholders, executives, and Wall Street:
This report was produced in partnership with UC Santa Cruz Professor Chris Benner and the UCSC Everett Program for Technology and Social Change. Read the longer companion report published by the Everett Program here.
Despite nation-leading economic growth and productivity, Silicon Valley's tech economy is only benefiting the top 10%. Over the past 20 years, per capita economic output in Silicon Valley increased 74%, yet wages fell for nearly 90% of the workforce.
In fact, if labor’s share of GDP had been the same in 2016 as in 2001, the average Silicon Valley worker would have received an additional $8,480 in pay and benefits that year alone.
And while the share of middle and high-wage jobs declined, the percentage of workers in low-wage jobs increased by 9 points.
So why is such strong economic growth failing to lift wages even in the heart of the innovation economy?
The persistence of these trends helps underscore that they have structural roots, meaning that the problems underlying current tech markets and business models are not self-correcting; they will not be solved by private markets alone.
Just as public sector investments and collaborative processes have been critical for the economic dynamism of the region, so too must public sector policies and collaborative processes be developed to solve the problems created by this economic system.
The consequences of not acting are clear — growing inequality and insecurity, along with a dangerous politics characterized by xenophobia, racism, and intolerance that has spread across our country. This economic system undermines our democracy and our ability to live full and healthy lives.
The seeds of solutions are already beginning to sprout in the form of community- and worker-led policy and organizing innovations.
The report identifies a set of concrete steps to begin rewriting the rules and rewards of Silicon Valley’s business models so that tech companies: