Working Class Struggles in Silicon Valley

When we think of Silicon Valley, a lot of us think of hard-working people living high on the corporate hog: high-end restaurants on campus, on-site gyms, concierge services, et cetera.

But this fabulous work world full of people dreaming up new ways of doing business sits on a base of people doing business the Old-Fashioned Way. Many of those service workers, the ones chopping carrots and mowing lawns, are working for subcontractors, and those workers are struggling to survive.

The nonprofit Joint Venture Silicon Valley has tracked local economic trends for the last 20 years. This year's Silicon Valley Index reported the income gap is wider than ever, and wider in Silicon Valley than elsewhere in the San Francisco Bay Area or California.

Joint Venture divides the workforce into three different “tiers.” For high-skilled, high-wage jobs, Tier 1 in Silicon Valley, the median wage is $119,000 a year. For low-skilled, low-wage jobs, or Tier 3, the median is $27,000.

"Thirty percent of our population is living below the self-sufficiency standard," says Joint Venture Vice President Rachel Massaro. "That means they can’t survive without public or informal private assistance."

Housing Costs a Major Strain

Joshua Hugg, with the Housing Leadership Council of San Mateo County, says what many economic analysts do, that the housing boom that has come along with the latest tech boom has made it much harder for anybody making a modest salary to survive.

"Because of our chronic underproduction [of housing] for decades now, we are in such a huge hole that even that addition of affordable housing, that addition of market rate housing, is not enough to move the needle here," Hugg says. "When you have two to three, some say four to five, service-level jobs being created for every tech job, that’s a burden and a responsibility that the community has to bear."

But aside from some government mandates requiring developers to set aside a small percentage of new units for affordable housing, individuals are largely left to their own devices.

Massaro at Joint Venture says, "One of the definitions of informal private assistance is living with a relative or a friend. That’s what a lot of people are doing here to get by."

Getting By in One Room

That would describe how Michael Johnson is getting by. He rents a room in the San Jose apartment of a friend he used to be in a band with years ago. In between boxes stuffed to the gills with his belongings, there’s just enough room for Johnson’s bed, desk, chair and three bass guitars.

As a security guard making less than $20 an hour, this is all he can afford. "There’s no place to go except to move out of the valley, and a lot of us have families here."

Johnson is 52 years old, divorced, with three kids, two of them in local colleges, the other just graduated. He’s working full time, but unless he finds a more lucrative line of work, it’s hard to see how his life is going to improve soon. Or for that matter, the lives of people like him working in service jobs across the region.

Once We Were Young, And Engineers

Turn up Tuesday mornings at 7:30 outside a certain tech office in Santa Clara, and you’ll spot Johnson waiting for a weekly delivery from his buddy, Norman Meeks.

Silicon Valley tech companies are famous for lavish food at catered events and campus restaurants. There are a lot of leftovers. No use in that food going to waste, Meeks thinks. So, with permission, he distributes it to other security guards and janitors. Today, Meeks has chicken wings and bok choy, a kind of Chinese cabbage.

"If someone’s in a situation, you know, hey, pitch in and try to help," Meeks says. Both men work at Universal Protection Service, a major security subcontractor. That’s where they met. But that’s not where either of them started. Johnson says both men know what it is to be on the sunny side of Silicon Valley’s economy.

"You’re looking at two black engineers," Johnson says. "I’m a communications engineer. I just finished my master's in information security. I have 15 years experience. We both have project management experience. All of that."

Remember the dot.com bust about 15 years ago? Both men got laid off, and neither man recovered, not fully. Meeks was a field engineer. "It took me almost a year to find something, and then I got laid off again. I had a friend that said 'Why don’t you try security?' "

The security guard gigs were supposed to be temporary, but that's not how it's worked out. "Once you get out of the workforce, it’s hard to get back in," Meeks says.

Johnson says human resources people who do call him about his job applications ask why he’s looking for something in tech when he’s been in security for 10 years. He suspects it doesn’t help that he’s 52 and black, even though Silicon Valley companies are under pressure to diversify their employee base.

Talk of a Union

Johnson is doing better than many in security. He works full time, and his company provides benefits, although the package is a lot thinner than it used to be. "You know, when I started in security in 2004, we used to have better medical benefits. We had paid time off. Yeah, my benefit package was really comparable. The big difference was stock. When I was an IT person, I had stock options and all that."

That was before security firms started cutting costs to compete during the Great Recession, about seven years back. Universal Protection Service does offer health coverage, but Johnson can’t afford it. It would cost him 40 percent of his take-home pay.

Johnson doesn’t blame his employer or security contractors in general. He blames their customers, the tech companies. "The truth of the matter is, they determine how much we earn. They determine our benefits. They determine the whole thing. Our contract agencies will do whatever they say do."

"I think Elizabeth Warren said it best," he adds, referring to the liberal Democratic senator from Massachusetts. "She said, 'If you don't have a seat at the table, it's because you're on the menu.' ”

But security guards will never make what engineers do.  I press him to make an elevator pitch to a CEO worried about defending himself before shareholders who want to know why he would pay security guards a penny more than he has to.

"All these companies are now setting record profits!" Johnson says. "When is that going to trickle down to the rest of us? That were in the boat with you. That tightened up our belts along with you. That have participated in your success. Why can’t we participate in your prosperity? When are you going to open the door for the rest of us?"

He’s still shopping his IT resume on LinkedIn, but whether he breaks out of security or not, he’s now involved in an effort to unionize security officers in Silicon Valley. Security officers are unionized in San Francisco and the East Bay, but not in San Mateo or Santa Clara counties.

Ben Field is executive officer of the South Bay Labor Council, which represents 93 local unions. Field says Johnson’s comment about losing ground in the recession applies more broadly. “I think that’s been the case not just in security, but in service work generally. The wages and benefits haven’t recovered.”

There is a union contract for janitorial services in Silicon Valley, but Field and his cohorts are still working on trying to organize security officers, bus drivers and cafeteria workers. Once there are contracts, the next challenge is getting one tech firm after another to agree to play  ball.

Field muses, "You know, it seems like such a revolutionary idea that workers should be paid enough to live on."

Curious about the boom/bust cycle that is reshaping the Bay Area? Check out our Boomtown series.