Falling Behind

The Bay Area is home to one of the planet's greatest concentrations of private wealth, which is expanding as the market races to new highs. Yet there are significant numbers of people who not only have not participated in the boom but are also falling behind.

The Silicon Valley is adding jobs faster than it has in more than a decade as the tech industry roars back. Stocks are soaring and fortunes are once again on the rise.

But a bleaker record is also being set this year: Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year— capping a steady 14 percent drop over the past five years [snip]

Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty.

Other reports echo the bifurcation [bold added]:

New census data shows that 15.9 percent of Silicon Valley residents rank in the richest 5 percent of the country - bringing home at least $191,469. That makes the region No. 2 nationwide for wealth concentration.

Median income in Silicon Valley hit an 11-year low during 2011, falling to $84,724, according to a report released last week by local economic think tank Joint Venture Silicon Valley.

An income of $84,724 may seem like a lot of money to many Americans, but it barely allows a family to purchase a home at the Bay Area's median price of $550,000. Of course, the median measure means that some families receive less--in some cases considerably less--income than the median. With shelter so expensive it's no surprise that homelessness is the most visible manifestation of poverty.

Your humble observer, for what it's worth, has opinions on why the local wealthy do not donate (no, it's not because they're greedy). Their possible thoughts, based on anecdotal observation:

The government is handling the problem. Many who are in a position to donate assume, mistakenly, that because their taxes are so high that government is taking care of basic human needs. Because they do not personally deal with government at the social-services ground level, they do not see how inefficient and wasteful government can be. That experience can truly be shocking to those who are used to functioning at Internet speed.

I want to save the world. Solar energy, Third World communicable disease, climate change, etc. are causes more important than collecting clothes or referring a family of four to a free clinic.

I can't find a smaller local charity that I trust. Most are too busy for due diligence, e.g., to make sure that dollars aren't being wasted on directors' salaries, marketing, political lobbying, or non-essential activities. It's far safer to write a check to big-name charities with a national or even international mission; the downside is that few of the funds are recycled back to the Bay Area. © 2013 Stephen Yuen