Growing Together, or Drifting Apart? provides a detailed statistical portrait of the daily life of residents of Silicon Valley. By evaluating data on wages, employment and poverty, and analyzing key indicators of social and community life, we are presenting a comprehensive overview of our regionÕs well-being.
This report comes at a critical time. Many leaders in both government and the private sector believe the Silicon Valley experience can provide important clues for an America anxious to succeed in a new, global economy. There is significant evidence to suggest they are wise to do so. As this report points out, over the course of the last two decades our regionÕs economy has prospered far more than most. Our success, fueled in large part by the growth of new, information technology industries, has recently given rise to a host of efforts by others in the U.S. and worldwide to create high-tech ÒcorridorsÓ in their own communities.
However, while there is no question that much of the Silicon Valley experience merits this enthusiasm, our report finds that the rewards of our regionÕs economic competitiveness are still not being shared by many residents of our community. Further, we find that despite our regionÕs successes, Silicon Valley is experiencing a dramatic growth in income inequality and economic insecurity.
The decoupling of economic competitiveness from the quality of life has disturbing implications. Economic development policies have long been guided by the assumption that the success of private employers accrues to the benefit of the community as a whole. To this end, local governments have routinely embraced an array of incentives to encourage the location, growth and retention of various industries. However, by examining a range of indicators our report suggests that, absent the presence of mediating institutions, the competitiveness of Silicon Valley industry has not resulted in a higher quality of life for local residents.
There is some validity to comparing the impact of the growth of the information technology industry on our community to that of the steel industry on Pittsburgh or the meat packing industry on Chicago. Though, in their time, both industries were dynamic and highly competitive, it was only after the wide scale organization of labor unions that this resulted in the creation of large numbers of middle-class wage earners. Similarly, the Silicon Valley experience suggests that, barring the development of similar wage-setting institutions, income inequality will continue to expand, even as local industry continues to prosper.
Responding to income inequality and building an economy where businesses and workersÕ wages do grow together, in fact, requires bold and innovative leadership from Silicon ValleyÕs policy makers, business leaders and community activists. Reaching a consensus will require each to challenge many traditional assumptions about the roles of both industry and public institutions in community life. While this will be difficult, failing will have enormous implications for the businesses and families who have made their home in Silicon Valley.
Major findings of this report include:Growing Economic Inequality:
Strained Public Sector Services:
Though both population growth and expanding wage inequality have placed new demands on public education and an array of public services, local government has continued to face severe financial constraints in providing them. Since the 1978 passage of Proposition 13, local tax burdens have shifted from property taxes and federal transfers, to an increasing reliance on sales taxes and service chargesÑregressive taxes which place an unfair burden on middle-income and lower-income residents. The result is that even though our community as a whole benefits from public education and the provisions of other public services, the cost of providing those services is increasingly being borne by those who can least afford to pay. This new reliance on the sales tax impacts local economic development strategies as local governments give preference to retailers and other sales tax generators over industries which may have greater value to the community.
Threats to Environmental Quality and Public Health:
While environmental threats posed by the electronics industry are not as readily apparent as those posed by heavy industries such as oil and steel, significant environmental problems such as groundwater contamination, high-volume water use, and serious toxic exposure in the workplace are hallmarks of high tech production. Our regionÕs heavy reliance on automobiles is also straining our transportation infrastructure while posing a growing hazard to public health and environmental quality.