Whitewashing Silicon Valley

Lack of benefits to subcontractors leads to lack of diversity in tech

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Illustration by Kaileen Smith
Illustration by Kaileen Smith

You can’t predict the future, but white men in Silicon Valley are stealing it. Income inequality in Silicon Valley is wider than ever, especially for people of color. The wage gap between workers is also reinforced by an increasing gap in occupational opportunities.

Only 7 percent of tech workers in Silicon Valley are people of color, according to a Contract Workforce Assessment published in March by the Everett Program in partnership with UC Santa Cruz. Yet there are an estimated 19,000-39,000 people in low and medium wage subcontractor occupations in the region — and 58 percent of these blue-collar workers are Latinx or African American.

Despite large tech companies trying to downplay the practice, they outsource subcontractors at a much cheaper expense at an increasing rate.

A majority of these workers are subcontracted through a third party. They only receive 30 percent of an in-house tech employee salary ­— less than $40,000 a year — and don’t receive benefits. The average annual pay for direct tech employees in Silicon Valley is $113,000, while annual average pay for blue-collar contract industry workers is $19,900.

Meanwhile, median annual rent in Santa Clara County is $21,444. Considering that Silicon Valley is home to seven of the 10 most expensive cities to find a home — including Saratoga, Cupertino, Los Gatos and San Mateo — it isn’t feasible for these workers to live close to or anywhere near their places of employment while making such low wages.

This means employees in Silicon Valley who cook meals, wash floors or landscape grounds are subject to irresponsible contracting practices, and as a result, are being pushed out of the area.

Last year, Apple announced after a year-long reviewing process that it will expand employee benefits including full health insurance, retirement benefits and parental leave to their in-house security team. Apple, based out of Cupertino, previously subcontracted its security officers. This is a start, but it isn’t enough.

Silicon Valley is home to tech giants like Hewlett-Packard, Facebook, Cisco, Intel and Netflix. It’s within their power to leverage structural inequality, and it’s imperative that they adequately support underrepresented people within their organizations.

Service workers deserve higher pay rates in order to afford living a reasonable distance from their workplace, and they should be hired directly and with the same in-house employee benefits as tech workers.

Hiring these workers directly and providing a salary proportional to their workload not only demonstrates their value to the corporation but establishes a stronger presence of people of color in the tech workforce.

Though diversity within Silicon Valley tech companies is predominantly rooted in subcontracting, it’s vital that representation is also expanded beyond blue-collar jobs and into engineering and computer tech careers. This lack of diversity originates from a larger issue of education of underrepresented communities in the STEM field attributed to a systematic lack of resources for underrepresented communities beginning in preliminary education.

As of fall 2015 at UCSC, less than 2 percent of declared computer engineering or computer science majors are African American students. Latinx students comprise less than 25 percent of computer engineering majors and 17 percent of computer science majors.

Silicon Valley is a leader of the future of tech, innovation and commerce. Last May, Facebook implemented the $15 hourly minimum wage for workers, while the state-mandated minimum wage is $10 an hour. Fellow Silicon Valley supergiant Netflix offers its employees unlimited vacation time, provided that employees finish their work and act within Netflix’s best interest.

At the same time, the people creating these technologies and companies are distancing themselves from service workers by not financially supporting them. It’s ridiculous that despite advancements, many of these supergiants still lack representation and full benefits for their subcontracted employees.

How can some of the most seemingly progressive companies in the country be a leading force in gentrifying the locale in which they reside?

“The key point is that there is strong occupational segregation by race,” said Everett Program executive director and UCSC environmental studies professor Chris Benner, “with Latinos and African Americans in poorer employment opportunities.”

If the companies who claim to be role model employers can’t address these issues, there’s little hope for other industries to follow in their footsteps.

Silicon Valley may be paving the way for the future of labor, but so far the fruits of these ideas have yet to trickle to the bottom of the wage spectrum and lift up underrepresented communities.

Because a huge portion of subcontracted workers in Silicon Valley cannot afford to live in the area, they are being forced out by wealthier — and often white — residents who can.

If this trend continues, Silicon Valley and its neighboring areas will be further whitewashed, and only occupied by highly educated and nearly all white male employees. This is not and cannot be the standard by which Silicon Valley and any corporation operates.