Economic Disparity in America’s Second Wealthiest City
I remember growing up in the Bay Area with extreme fondness; living in the heart of Silicon Valley, I felt like I was at the center of technology and progress, constantly inspired and awestruck by the ambition I saw and felt around me. Home is still my favorite place, but now, I see the Bay Area without rose-colored glasses—aware that the place that motivated me to pursue greatness, is the same that’s responsible for suppressing the goals and dreams of kids like me, but born to different financial circumstances. Despite being characterized by innovation and technology and being seen as the pinnacle of capitalistic success, Silicon Valley has a severely unaddressed wealth inequality problem.
The pinnacle of capitalistic success, characterized by innovation and technology, Silicon Valley is so often seen as proof of the American Dream being realized. But the bountiful wealth that makes Atherton the richest city in the United States does not extend to all of the Bay Area’s residents. In a region made relevant by shiny technologies holding promise for the future, it’s easy to overlook the persisting (and increasing) wealth inequality that affects nearly half a million households.
In fact, according to a study by the Silicon Valley Index, just eight households hold more wealth than the bottom 50% in the Santa Clara and San Mateo regions. In 2022, an estimated 8,300 households held over $10 million in investable assets while about 220,000 households in the area held fewer than 5,000 total assets. About 23% of Silicon Valley residents lived below the poverty line in 2021. Clearly, saying Silicon Valley is just a wealthy area may not be entirely correct. There is an estimated $1.1 trillion dollars of estimated wealth in the Santa Clara and San Mateo counties…and the top 0.001% of the region possesses a whopping 4% of it. The bottom 50% of the population holds less than 1% of it.
Income data from the region often skews analysis, since the average annual income in SV is double the national income at $170,000. However, what’s not as obvious is the fact that service workers in the region make an average of $31,000–a hugely disparate amount.
Of course no discussion on income inequality is complete without an analysis on racial discrepancies. The average rate of households that require government assistance in the area is 33%. For Black households, that number is about 50%. For Latino residents, that number rises to 61%. And for Latino families in which neither parent speaks English, that number skyrockets to 90%. 46% of children in Silicon Valley live in households on government assistance. While it’s largely agreed that the national minimum wage of $7.25 is far too low, in order to survive in Silicon Valley, more than double that is necessary–$18.50 per hour.
Unsurprisingly, the wage gaps that plague the working class of America persist in Silicon Valley as well. Black workers in the area make, on average, 50% less than those with a similar education level as their white counterparts; and Hispanic workers earn 65% less. Moreover, Hispanic people only represent 8% of the workforce at tech companies in SV–even though they constitute almost a quarter of the region’s overall workforce.
The Bay Area may be leading the “richest regions” list, but that’s not the only list it exceeds expectations in. Santa Clara County ranks at the top of the list for total number of unsheltered homeless. The national and statewide levels of income inequality decreased by up to 3% in 2021 but in Silicon Valley, income inequality increased by 5%.
The Bay Area lifts up the well-educated, financially privileged engineers while simultaneously limiting the growth of underprivileged communities, trapping students in a cycle of poverty. Understanding the more dismal side of Silicon Valley is crucial in seeing the value that the Reach Foundation provides. Giving students support and resources to work around the restrictive iron grip of capitalism is necessary in ending the income inequality I’ve described above. By promoting the Reach Foundation and the indispensable aid it provides, we can create a more equitable Silicon Valley; so that every child growing up here looks at their home with nothing but enthusiasm and warmth.