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Rising Wealth Masks Widening Income Gap in Santa Clara County

Rising Wealth Masks Widening Income Gap in Santa Clara County

We are witnessing an economic crisis in Silicon Valley.

Wealth Gap PostAccording to a 2014 IHS Global Insight Study commissioned by the U.S. Conference of Mayors, rising wages and increasing employment in Santa Clara County mask a widening wealth gap that has increased dramatically in the last year. More than 13% of the population earn only $50,000-$74,999 in comparison to top tier earners who have household incomes well over $75,000 per year. Earning wages below the middle income bracket are 15.4% of Bay Area households that earn between $25,000-$49,000 and a startling 13.9% who make less than $25,000 per year. The disparity is clear – while Silicon Valley experiences a positive surge in job growth accompanied by higher wages and salaries, the income remains unevenly distributed with a hollowed out middle class.

The 2015 Silicon Valley Index supports this trend. While Tier 1 (high-skill, high-wage) and Tier 3 (low-skill, low wage) jobs have grown in their percentages of total employment over the last decade, the share of Tier 2 (mid-skill, mid-wage) jobs has dropped by nearly 3 percentage points, indicating a shrinking middle class. Income inequality in the Bay Area has increased over the last 30 years at a faster rate than in the United States as whole. This is partly a result of a nearly 20% decline in shares of middle-income households.

Our community members face remarkable economic inequality that has only worsened overtime. One of the most alarming patterns affects both housing and transportation costs. As the wealth of the region increases, housing costs are skyrocketing. People can no longer afford to live where they work. Middle- and low-wage earners must move to more affordable communities that are often outside of their work locations, forcing them to commute farther distances to reach their jobs. The strained family time for these Bay Area workers can entail vast and often overlooked consequences ranging from high costs of child care to unstable family relationships to unheeded effects upon child & adolescent development.

“People are spending hours and hours in automobiles,” states Russell Hancock, president of Joint Venture Silicon Valley. “That is not how you build families. That isn’t a life.”

How can we build Silicon Valley’s economic infrastructure in a way that strengthens our community ties and builds families?

Citations:
Avalos, George. (2014, Aug. 11). “Santa Clara County has highest median household income in nation, but wealth gap widens.” San Jose Mercury News. Retrieved from http://www.mercurynews.com/business/ci_26312024/santa-clara-county-has-highest-median-household-income.

Massaro, Rachel. (2014, Nov. 14). 2015 Silicon Valley Index. Retrieved from http://siliconvalleyindicators.org/pdf/index2015.pdf.

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