by Young Han
The national discussion on wealth disparity and social mobility has taken center-stage in recent months. In line with the 50th anniversary of Lyndon Johnson’s “War on Poverty” address (http://www.npr.org/2014/01/04/259646707/fifty-years-later-did-the-u-s-win-the-war-on-poverty), as well as the success of avowedly progressive-to-radical political candidates in recent years (http://www.governing.com/topics/politics/gov-video-mayor-inauguration-speeches.html), mainstream publications such as the New York Times have begun to report on the problem of escalating inequality with increasing gusto. Some of the more thought-provoking (if not fear-engendering) findings of this reporting, at least to a Seattleite such as myself, have come out of the city of San Francisco. Even with its storied progressive history and reputation for inclusiveness, the city has undergone the same economic changes affecting the rest of the country, if it has not led them. And, from the steady stream of recent reports, it appears that even the identity of the city may be on the line.
San Francisco, perhaps more than any other city in the US, represents what the new information economy may look like. The city, much like Seattle, has a highly educated population and a substantial proportion of its workers in the technical or managerial professions. Companies like Adobe, Twitter, and Wells Fargo call it home, while others such as Apple and Google are headquartered nearby. When business or political elites talk about the economic future of America, particularly in discussions about “free” trade or international competition, this is what they envision to be the ideal outcome. As the logic of globalization leads industrial production (and traditional working-class jobs) out of the country, workers will move into engineering, biotech and finance jobs—well paying, intellectually-satisfying and hierarchical flat. This is, fundamentally, the idea of comparative advantage.
San Francisco shows that it doesn’t exactly work that way. The narrative found in both official statistics and media reports is less one of a New Economy lifting all boats than that of growing conflict and displacement (http://america.aljazeera.com/articles/2014/1/7/classes-clash-assanfranciscansblametechforrisingrents.html). Sound familiar? While the latest boom for technology companies, to use one stark example, has given the city an enviably low unemployment rate, filled its public coffers, and created tens of thousands of jobs paying over $100,000 per year, it has also led to median monthly rents of over $3,400, a triple-digit increase in the rate of evictions, and pages of anecdotes regarding unprecedented levels of status consumption (http://www.npr.org/2013/12/03/247531636/as-rent-soars-longtime-san-francisco-tenants-fight-to-stay). It is now possible, for instance, to pay $8 for two slices of toast and $2,400 a year to hobnob in a private nightclub. Together, these facts have led many to ask how people employed in traditional middle-class occupations, entrepreneurs without venture financing, activists, and artists can still manage to relate to the new San Francisco, much less call it home.
More recently, anxieties related to the dramatic changes have led to no small degree of ugliness. Protests against private buses provided by Silicon Valley employers to ferry high-tech workers from their homes in San Francisco have served as a lighting rod for frustration, however misdirected. For many, these buses represent a further enclosure of public services into private hands. The buses represent both a failure to invest in transportation accessible to all, but also, given their use of congested public bus stops without remuneration, a kind of noblesse oblige. A few activists have taken to blockading the buses and sometimes even vandalizing them. The class war, however, has certainly not been one-sided. Rants by notable members of the tech community, in particular, have recently lit up the blogosphere. One equated people in the “lower part of society” with animals and suggested they ought to know their place when they strayed outside their own poor or working-class neighborhoods (http://valleywag.gawker.com/happy-holidays-startup-ceo-complains-sf-is-full-of-hum-1481067192).
As a Seattleite, these developments concern me as the dynamics in play in San Francisco exist here, as well as across the country. Within the city of Seattle, increased demand for housing by those with the means to pay premium rents have raised the median price of a studio, over the past two years, by between $306 and $434 in its core neighborhoods (http://seattletimes.com/html/localnews/2021673014_rentincreasesxml.html). At the same time, workers who provide essential services, such as healthcare support and custodial services, typically earn less $15 an hour (http://livingwage.mit.edu/places/5303363000). This is 20% less than the minimum wage in 1968 (http://www.epi.org/publication/lagging-minimum-wage-reason-americans-wages/) had it been indexed for productivity and inflation. It is certainly not a rate of pay conducive to either saving money, paying for more education, or getting new skills. As a city that prides itself on its progressive politics and a commitment to inclusion, we must ask whether we too may become a place that primarily edifies the well-to-do, one whose service-sector attendants live physically outside its boundaries or marginally inside it.
Ultimately, this question is about values, but more importantly, it is a question about policy. It is less productive to blame specific companies, sectors, or individuals for responding to incentives than criticizing the perverse political and economic context that created them. The success of companies that hire employees with technical skills has brought great benefits and it is absolutely essential for well-diversified economy. After all, after deindustrialization and massive structural changes in the economy, Seattle doesn’t look like St. Louis or Detroit. We are in a position of relative strength. At the same time, the economic dynamics that have transformed San Francisco, and threaten to do the same here in Seattle, are not natural or inevitable outcomes. Policies regarding taxation, money, and who controls knowledge and culture have redistributed political and economic power upward. We need to understand this and ask if this is what we want.