Saturday 17 June 2023

Economic disparity: 8 Richest households in Silicon Valley have 6X more wealth than poorest 500,000

 A new report has revealed that the eight richest households in the Silicon Valley region hold six times more wealth than the region’s poorest 500,000 residents.

The fourth annual Silicon Valley Pain Index (SVPI) published June 13 by San Jose State University‘s (SJSU) Human Rights Institute revealed this stark inequality in the region. SJSU sociology professor Scott Myers-Lipton, the report’s lead author, noted: “After producing the SVPI for the fourth time, we have a clear understanding of the astronomical wealth gap.

He continued: “It is time for the community and elected officials to create social solutions to address the ‘social pain’ that is highlighted in this annual report.” According to ArcaMax, Myers-Lipton launched the SVPI in 2020 following Black Lives Matter riots over the death of George Floyd. A similar effort in the wake of Hurricane Katrina that exposed “racial inequalities” to the disaster’s official response inspired the sociology professor.

The SVPI serves as a meta-analysis of more than 60 recent studies and reports on the technology hub, defined as the counties of Santa Clara and San Mateo, published in the year since the third report in June 2022. It presents 110 statistics laid in numbers from zero to 1.5 trillion in a bid to show how “racial minorities received less of Silicon Valley’s economic, political, educational and social rewards.”

Data breaking down the wealth of the region’s billionaire class was a new addition to SVPI’s fourth edition. Previously, data only was available for the top one percent. Based on this, the top thousandth of a percent of households in Silicon Valley own $50 billion in liquid assets or cash – six times more than the total wealth of the bottom half of the region which is made up of about 500,000 households.

The figure came from the 2023 iteration of the February Silicon Valley Index produced by the Joint Venture Silicon Valley (JVSV) think tank, one of the papers examined by the SVPI. It also prompted JVSV President and CEO Russell Hancock to remark: “If Silicon Valley were a country, that kind of wealth disparity would be considered politically unstable.”

SVPI numbers show economic disparities in America’s tech hub

The SVPI’s numbers also revealed several economic disparities among the residents of America’s technology hub.

San Jose County ranked No. 1 in the entire country when it came to homelessness among young adults between the ages of 18 and 24, with 85 per 100,000 people. The index stated that 28 percent of Silicon Valley households do not earn enough to meet their basic needs without public or private assistance. Moreover, it found that 460,000 residents received monthly grocery bags from charity – an 80 percent increase since 2019.

The SVPI’s numbers also focused on several Big Tech firms that call Silicon Valley their home. Google, Adobe, Intel and Zoom reportedly donated a total of $72 million to local nonprofits in 2021. This is but loose change to these companies, as the amount constituted about 0.02 percent of their total revenue.

All in all, the total wealth of Silicon Valley households – including real estate – racked up to $1.5 trillion.

Aside from economic disparity, the SVPI also found several things that have worsened in the region, among them fentanyl deaths, food insecurity, eviction filings, homelessness among families with children, monthly mortgage costs and median household income.  

“There is a power in reading it this way, as the inequality is dramatized as the numbers increase,” Myers-Lipton remarked.

Responding to the SVPI, the Silicon Valley Leadership Group (SVLG) – which represents the region’s leading technology companies – said its members support efforts to ease the societal challenges spawned by their success.

“This year’s [SVPI] report underscores the myriad social and economic challenges facing our region, which have only deepened in the wake of the post-pandemic economic volatility,” said SVLG CEO Ahmed Thomas.

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