A fast food worker takes an order in San Francisco.

For all the talk about the prosperity of the tech boom, more than a third of Bay Area jobs pay less than $36,000 per year. We look at what the current economic boom means for low- and middle-income workers as part of KQED’s Boomtown series, examining the effects of the Bay Area’s economic surge.

Show Highlights

 

Economic Prosperity Strategy

Guests:
Egon Terplan, regional planning director for SPUR
Enrico Moretti, professor of economics at UC Berkeley and author of "The New Geography of Jobs"
Derecka Mehrens, executive director of Working Partnerships USA

  • jurgispilis

    We import so many foreign workers to do these jobs – that don’t pay enough to live here in the Bay Area. We import about 125,000 foreign workers into the U.S. each month. Has anyone on your panel consider reductions in immigration as a strategy to narrow the income inequality gap in the U.S.?
    Before the Feinstein-Kennedy sponsored “American Competativeness in the 21st Century Act” of October 2000, American applicants were giving preference for American jobs. Not so today. Thus the income gap has widened. I’m not saying immigration is the only factor contributing to the inequality gap, I’m only saying that it is a significant factor, among many. Why is it not recognized as such?

    • Gary

      THEY TOOK OUR JOBS!!!!!!!!

      • jurgispilis

        The simple eloquence of South Park. I couldn’t have said it better myself.

        • Gary

          Ha ha, you know that’s satire, right?

          • jurgispilis

            I know, I know. But you’re beating a dead horse, dude!

    • Another Mike

      125K foreign workers every month? Where does that factoid come from?

      • jurgispilis

        Divide 1.5 million by 12.

  • Skip Conrad

    Another dyamiic is the entry into the American labor force of all these millions of DACA and other recent amnestied aliens via Obama’s executive actions, which are not backed by any executive orders. Not that these millions were not already working in the underground economy, but now they will be moving into the legitimate economy, with a freshly minted California drivers’ license, and further expanding the American work force, and according to the law of supply and demand (you do believe in supply & demand, don’tyou?) futher depress American middle class wages.

    And those recently vacated jobs in the underground economy? We’ll import more unauthorized foreigners. This is not the way to run a nation, nor an economy. You”re merely speeding up the conveyor belt for the already thinly stretched American population. Something is going to snap.

    • Kurt thialfad

      I’m looking forward to the drop in Uber and Lyft prices.

    • Lance

      Our trade deals have caused a lot of these problems. Since we’re talking about California , give thanks to NAFTA + subsidies. Thus it’s worth the time, risk and effort for foreign workers to come to the U.S. illegally.

      I also agree the amnesty program isn’t the solution.

      It’s going to be a wild ride with the trans pacific trade agreement.

      • Gary

        DER TERK ER JERBS!!!!!!!!!!!!!!!!!!!!!

      • jurgispilis

        NAFTA Is unconstitutional. They (Clinton) couldn’t get NAFTA passed, as a treaty requiring the constitutionally-mandated 2/3rd of the Senate, so they changed the rules (i.e. FastTrack) to make it so only a simple majority of both Houses is required. I don’t recall any constitutional amendment to facilitate this, do you?

    • Another Mike

      The supply of illegal workers has already kept wages down. Now that they’re out of the shadows, they can fight for fair wages and safe working conditions. Will this keep more illegals from migrating here? I don’t know.

  • Neal Strummer

    I’m sorry, I’m already paying higher taxes than my counterparts in Canada (and don’t get nearly the benefits they do) and other western nations. Why not look at cutting expenses (defense) than continuing to go after those that work hard to save and invest. I’m sorry but I don’t agree with the “Let’s Tax” call.

    • Another Mike

      Buy a house — there’s no mortgage deduction in Canada.

  • Neal Strummer

    Why not assess all the expenditures in this country and really look at what’s worth investment and what’s not. I’m so tired of the tax argument when the money that’s collected never really makes it to those that really, really need it.

    • Lance

      No worries, our lobbyists have that covered.

      /s

  • Lance

    Do the guests have any input on the problem of the old thinking of economic stability with population growth, vs what we have now is an efficiency economy?

  • Robert Thomas

    I’ve worked in the technology industry (computing and networking machinery) in Santa Clara Valley for roughly thirty-eight years.

    I note a recent expansion in business, after a period of rather more slack business.

    As a kid, remember well how the oil price increases and post-war contraction affected our community after 1974. No fun.

    I myself worked through two tight periods, one commencing about 1981 and another, lesser one in 1990.

    Neither of these were booms or busts. Our industry has been expanding more or less steadily since the mid 1950s.

    This “boom” spoken of since the recent sharp recession, at least as it applies to our technology industry (as was the phony “boom and bust” of 1999) a figment of the journalistic imagination.

    If you want to see what a boom is like, visit my relatives in Williston, North Dakota. Now, that’s a boom.

  • Curious

    “Economic boom”?????
    LOL!!!!

  • ES Trader

    Have you considered the intermediate term effects of $18 per hour ?

    What will your plumber. the baker, the candlestick maker begin charging immediately after ?

    In 5 years you will be advocating $25 per hour.

    You are addressing the symptoms and not the causes of low paying jobs.

    When I was in college I a lower box seat at the Stick to see the Giants for $10, I wonder what “competitive pricing” will be for Dodger games this year., even for a nose-bleed or bleacher seat.

    Inflation was a major economic problem in the 1970’s that led to stagflation(cost-push), were you around in those years ?

    Price is only one variable of the 4 P’s in marketing. Employers and employees must see themselves likewise.

    • Kenji Yamada

      If it were true that inflation necessarily consumes the gains of wage increases, then we should never see wages rise in real terms. But we do.

      • ES Trader

        If productivity matches or exceeds wage increases then yes but it’s a delicate balance; the Classic definition of inflation is “too much money chasing too few goods “.

        Think of the average person receiving a new credit card or a credit increase

        What happens to the card balance a few months after?

        Americans, unlike Nihonjin are consumers not savers

        Also when minimum wage rises it eventually pushes up the wages above it unless there is a wage ceiling something non existent in the private sector.

  • Sanfordia113

    Yet amother report by yuppie white fuzzheads who probably have never worked hard labor or survived on a minimym wage job for years on end. After the 2000 dot implosion, I bevame unemployed and had been underemployed in minimum wage jobs for over a decade. Worked as housekeeping at SF hotels, bellman, restsurant, file clerk, inventory counter… The past 10 years, I have never gad more than $20,000 in income. Nonetheless, I lived in Santa Clara and before SOMA on $700/month by sharing a bedroom with another worker. Just like I did in community college and in the army. I was married last year to a woman I met on the job. We now live in Visitscion Vslley. My Roth IRA is now $30,000 (I save at least 10% of income every year). I hsven’t been to the movies in almost a decade, but I go yo free concerts in SF and elsewhere several times a year. I ride a bike to work. SF is still affordable for people who work hard.

  • Kurt thialfad

    Why are we importing so many low wage workers, when we don’t have the low wage jobs? Are we importing poverty?

    • Another Mike

      America needs an easily exploitable labor force. “Don’t like the wages or working conditions? Go back where you came from.”

      • geraldfnord

        The answer is enforcement of the the labour laws; my own crack-pot notion is that any illegal who reports violation of such gets a green card, and their co-workers some years’ grace. This is the only way (of which I’ve thought) to have a solution that scales with the problem: hire a lot of illegals, increase the chances of getting reported.

  • Ben Rawner

    All of these new “disruptive” technologies really just makes the writers and investors of theses apps rich. Uber is worth so much because they take 20% of all transactions. Realistically they could perform this function for less than 5% of these transactions. So really Uber and similar companies are just milking the system for 15% for doing pretty much nothing. All these tech companies are just making a select few richer and at the same time making everything more expensive for the rest of us. The death throes are upon the middle class and few seem to care. The real issue is that Americans as a whole are much less about their communities and much more about getting rich, even if their actual chances of getting rich are probably close to zero.

    • Bill_Woods

      So start a new company that only takes 10%. Underprice Uber and drive them out of business.

      • geraldfnord

        I’m guessing you haven’t done this yet, so I must ask why you’re leaving all that money on the table.

        • Bill_Woods

          I’m guessing the challenges are much harder than the “pretty much nothing” that Mr. Rawner imagines, and the rewards much smaller than 15%.

  • Paul Blankenship

    Germany still has a strong economy. Why? Because they still manufacture many of their own goods.

    We need to bring back manufacturing to the US to provide jobs and stop the theft of intellectual property by China and Chinese companies.

    We, as the American public, are somewhat to blame. We want cheap products over quality and to make that happen manufacturing had to go where labor is cheap. I would rather pay a little more for a product that will last 2-3 times longer and/or perform better.

    • Selostaja

      NAFTA looked good, but added to this crazy race to the bottom. Look out for the Trans-Pacific Partnership (TPP) coming up soon. Consider carefully.

      • jurgispilis

        NAFTA Is unconstitutional. They (Clinton) couldn’t get NAFTA passed, as a treaty requiring the constitutionally-mandated 2/3rd of theSenate, so they changed the rules (i.e. FastTrack) to make it so only a simple majority of both Houses is required. I don’t recall any constitutional amendment to facilitate this, do you?

    • Another Mike

      My highly skilled cousin in Germany watched his precision metalworking job go first to East Germany, and then to the Czech Republic, where the wages for skilled craftsmen are much less. He finally took a job in the mailroom of a bank, where he hopes to hang on until retirement.

      • Paul Blankenship

        I’m not saying that Germany doesn’t outsource, but the fact they still have a strong economy is that they outsource FAR less.

        • Whamadoodle

          Good point, and they also fund vocational schools teaching many skills that feed into that manufacturing sector too. We should do that, and have businesses that would benefit from that education contribute to it as well.

          • Paul Blankenship

            We do that with Pell grants and other types of student aid. I personally used a Pell to work towards getting a degree in automotive services and the community college I went to had other options like welding, machining and automotive body. Of course that isn’t what I do for a living now, but you get the idea.

            The problem seems to be that most people either don’t know about them, think they wouldn’t qualify fo aid or simply don’t want to actually have to work for it. The latter is what I suspect is what holds most people up. Working full time and going to school is seriously tough but it’s absolutely worth it.

    • geraldfnord

      They have strong unions, especially as their unions have representation on the boards of their larger firms—our pointy-headed pinko New Deal types who set up their government and economy had the weird idea that throwing labour some especially meaty bones would help keep the Bolschewiks out. Just because they were right doesn’t mean that any American has to admit it, as these were un-American types, many of them rootless cosmopolitans!

  • 1PeterDuMont2STARALLIANCE8

    Michael: Please ask your guests to discuss the pros and cons of an idea I consider brilliant: the concept of a FLOATING MINIMUM WAGE. In other words: tie the minimum wage to the cost of living so if the cost of a normal existence goes up, so will the ability to earn it.

    The only downside I can see to this anchoring, stabilizing idea is the difficulty inherent in applying it across different geographical areas. Please ask your experts to comment.

    (Btw: I heard this idea from Obama himself a few years ago, but nothing since. Sure hope he comes back to it tonight!)

    • Kenji Yamada

      I agree with you. Pegging minimum wage to some kind of inflation metric seems obvious. Apart from political reasons, I can’t see any conceivable reason we would want a minimum wage that fluctuates downwards in real terms, which is what you get when it isn’t made to track inflation.

  • Selostaja

    Being in and out of unemployment and programs that place the unemployed into minimum paid internships or 6 month contracts, I’ve been led to believe these will lead to full time work only to find out that the employers are taking advantage of matched pay. I’ve worked jobs in the program with responsibilities of a $60K position only to be paid $11.50/hr of which the employer only pays $5.75/hr. You are ‘laid off’ after 6 months and they re-apply to the City to find another desperate worker.

  • Vic Monae

    My family and extended family has done well since they immigrated in the 70’s. Now, in spite of our solid moral and educational upbringing, I witness with horror my own younger cousins, and others, selling drugs or participating in the porn industry and getting in trouble with the law, in general when that was unthinkable. Can the panel address the lure and the realistic size of the Black Market with regards to the lack of good, decent work for the present generation?

    • jurgispilis

      It’s the moral decay of our capitalistic society. Better to stay home. rather than be tempted by false stories about the greener grass in America.

    • Bob Fry

      I know my sense of economic morality finally disappeared with the 2008 crash and subsequent non-prosecution of anybody involved. Now, we’re running backwards, removing the wimpy regulations imposed. Why should the “little” guy follow moral codes when the top dogs don’t?

  • Bob Fry

    I would like to understand why low-wage workers continue living in the expensive Bay Area…why not a cheaper area, say the Central Valley?

    • Another Mike

      Why stop there? McAllen,Texas is even cheaper.

      1. The jobs are in the Bay Area
      2. There is a practical limit to the time one can spend commuting and still meet one’s other commitments.
      3. The cost of commuting makes the cheaper housing not that cheap.

      I worked with four engineers whose houses were as far away as the Sierra foothills. They would drive to work Monday morning, and drive home Friday night. They would rent a room in the Valley during the week, and talk to their families online every evening.

  • Vic Monae

    Low wage workers: Your wage doesn’t help pay your rent. It helps your employer pay HIS rent!!

  • Nadine

    What is considered middle class in the Bay Area? My household income is in the top tax bracket, but after taxes, mortgage, childcare, etc., we are far from “rich.”

    • jurgispilis

      Middle class included those who earn their income primarily through wages. Wage-earners are generally middle class. If your bonus income exceeds your wage income, then you have entered upper class.

  • Hilary Donahue

    I heard only a small part of the show this morning unfortunately. Did anyone mention that there will always be people, the poor and the higher income people, who simply do not live within their means. Some people overspend, on everything, and seem to feel entitled to have whatever they desire, instead of going without. They buy everything on credit. It’s nearly impossible to dig yourself out when that happens. Then, they are counted as the poor in America , when really they brought it on themselves by making bad choices. This did not happen back in the 50’s and 60’s because we didn’t have a credit card and budgeted our household expenses VERY carefully.

    • Paul Blankenship

      I was just talking about that very thing someone yesterday. On a weekly basis I get at least 3 offers for high interest (read north of 30%) personal loans, take out a loan against my paid off car, or to refinance my motorcycle with a lower payment. The bike will be paid off in 11 months… why on EARTH would I want to save $75/mth but extend that loan out to 36 months?!?! Yet there are always those people that look at only the payment.

      There’s a reason why there’s a saying “A fool and his money are soon separated”. It’s sad, but true and I don’t really have too much sympathy if people are not bothering to read the fine print or think about how something will affect them long term on more than 1 occasion.

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