In the past year, we’ve taken a few looks at “corporate inequality”: i.e., the theory that income inequality in the US is being driven in large part by the growing divide between the compensation of high-value employees at highly profitable firms and the rest of the workforce. Large, wealthy organizations, particularly in the tech sector, are able to attract top talent by paying much higher salaries than lower-margin industries, exacerbating inequality by cultivating an elite class of professionals with high pay and lavish perks whose experience is completely divorced from that of the typical employee anywhere outside Silicon Valley or Wall Street.
Not everyone who works for these highly profitable companies benefits equally from their success, however. As the Guardian’s Julia Carrie Wong writes in a snapshot of Facebook’s contingent workforce, these contractors and subcontractors don’t enjoy the all-inclusive benefits o the tech giant’s regular employees, and many are struggling to get by in the increasingly expensive San Francisco Bay Area:
The $500bn company has been conscientious about ensuring that its subcontracted workers are relatively well paid. In May 2015, amid a nationwide movement to raise the minimum wage, the company established a $15 an hour minimum for its contractors, as well as benefits like paid sick leave, vacation and a $4,000 new-child benefit.
But those wages only go so far in a region with out-of-control housing costs. San Francisco and San Jose ranked first and third in the nation a recent analysis of rents, with one-bedroom apartments in San Jose going for $2,378. The extreme cost of housing is why California has the highest poverty rate in the country, according to a US Census figure that takes into account a region’s cost of living.
“You work for a company that makes so much money, and the pay that they give you is not affordable to live out here,” said Jiovanny Martinez, a security guard at Facebook’s main campus. “You still have to have a second job. You’ll probably never be able to afford a home. It’s a struggle.”
For their employees, tech companies have helped address the cost of living by offering housing benefits or simply housing them on-site: Facebook’s new campus, for example, will include 1,500 housing units, including some that will be offered at below-market rates, though these will not be exclusively available to employees. Talent Economy editor Frank Kalman worries about the social impact of what he describes as a new generation of “company towns”:
Facebook, Google and Amazon aren’t just investing in real estate to build additional offices; they’re trying to build an environment where people’s employment is literally at the center of their lives. …
The implications wouldn’t end there. Think about the larger, social consequences of this new-age company town revival. Silicon Valley already has a diversity problem. What would that mean as, for instance, the Facebook village continues to expand and get bigger? Soon enough, little bubbles would slowly pop up in company-picked locations where essentially everyone in town fits the “culture profile” of the type of people Facebook, Google and Amazon want to hire. As of right now, that’s a fairly limited demographic.