Will the Bay Area's tech royalty back a big boost to the minimum wage in San Francisco? They should. And they will -- once they see the numbers.
Let me explain. Until recently, the region's tech stars have been able to portray themselves as the antithesis of the Wall Street folks, New Yorkers who tricked widows and orphans into taking out mortgages they couldn't afford. Those were the greedy guys. And the bitter dysfunction in Washington, D.C.? That's a town run by partisan ideologues.
San Francisco, meanwhile, is packed with entrepreneurs and engineers -- problem-solving do-gooders who definitely pay attention to the numbers. The biggest company on the block practices the philosophy "make money without doing evil." All around, there's a more benevolent attitude: Do good while doing good.
But that cheerful image is beginning to pixelate due to rising income inequality in the Bay Area. According to a recent report from The City's Human Services Agency, San Francisco is about on par with Rwanda when it comes to sharing the wealth. In 2012, 15 percent of San Franciscans were living in poverty, up from 10.5 percent in 2007. Meanwhile, among people here over the age of 25, 1 in every 137 is worth more than $30 million. Even New York City has a lower frequency of super wealthy individuals.
The imbalance has fueled resentments. Consider the notorious Google bus. Alexandra Goldman, a San Francisco city planner, has done research that shows rents go up an average 20 percent near a Google bus stop, pushing out residents who were already struggling to pay The City's astronomical rents. It's no wonder people are taking out their frustrations on these buses.
True to its corporate philosophy and can-do engineering spirit, Google has tried to quell some of the outrage. It donated $6.8 million to the San Francisco Municipal Transportation Agency program offering free public transportation to The City's low-income children.
But the tech industry needs to do more. Enter the ballot measure to hike the minimum wage, proposed by Mayor Ed Lee. This November, San Franciscans will have a chance to approve an increase to more than $12 in May and to $15 an hour by 2018. I'm convinced the tech industry will -- and should -- champion the hike.
To understand why, you have to convert the debate over the proposal into terms that people in Silicon Valley understand: numbers.
Right now the minimum wage in San Francisco is $10.74 an hour. That translates to roughly $21,000 per year. If you're earning the minimum wage, plan on finding not just roommates, but bunkmates. The average annual rent for a one-bedroom apartment in the city is $35,000.
In San Francisco, earning the minimum wage often means living in poverty.
"Anyone who has ever struggled with poverty," the novelist James A. Baldwin once astutely observed, "knows how extremely expensive it is to be poor."
Some of the costs are borne by taxpayers. A 2013 study from UC Berkeley found that from 2007 to 2011, the low minimum-wage costs the American economy $243 billion each year because so many of those workers were forced to go on food stamps. In essence, taxpayers are subsidizing some corporations' low wages by almost a quarter of a trillion dollars per year. In March, the Center for American Progress estimated boosting the federal minimum wage to $10.10 an hour, as President Barack Obama has proposed, would cut food stamp expenses by $4.6 billion a year.
Those numbers will resonate with Silicon Valley. Take it from somebody who spends a lot of time with tech-industry engineers and business people: Most are idealistic, but few are ideological. And the vast majority can see that there's a more meaningful way to ease tension over income inequality here than to buy more free bus rides for underprivileged youth.
The practical opposition to the higher minimum wage ought to be nonexistent. The fact is, the tech industry doesn't really employ a high number of minimum-wage workers. So approving the hike is, as Louisiana Sen. Russell Long might have ruefully put it, like voting to "tax the guy behind the tree."
Tech companies do count minimum-wage workers among their customers, though. Siding with them in this fight would be akin to Henry Ford realizing that if he boosted his employees' wages to $5 per day, he could sell them more of the Model T cars they were laboring to produce at his factories. Roughly 10 percent of workers in San Francisco earn the minimum wage, according to Ted Egan, The City's chief economist. Some additional income will give many more of them access to the devices and software created in the region.
Finally, there is that do-good mentality I mentioned earlier -- plus a measure of us-too competitiveness. San Francisco tech voters know that Seattle, its tech-heavy rival to the north, has already passed a similar measure. Voters here are also aware that their actions could prompt changes elsewhere. Other cities are considering similar hikes to the minimum wage. Cities have been incubators for other smart labor policies. The movement to provide paid sick days, for example, started in cities and spread to the rest of the country. Many cities passed gay-rights ordinances long before their states did.
A $15 an hour minimum wage won't solve all of San Francisco's poverty problems. It equates to an annual salary of $31,200 -- still not enough to cover rent on an average one-bedroom apartment in The City. But it should begin to ease some of the income-inequality tensions that have cropped up in The City. And that's a numerical problem that the tech industry should be eager to solve.
Mike Montgomery is the executive director of CALinnovates, a San Francisco-based nonprofit advocacy group whose members include high-tech companies, political and thought leaders, and entrepreneurs.