How Tech Companies Get Richer Than Ever – And Make Everyone Else Struggle

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Originally published on Daily Dot and republished here with their permission. 

This year, the San Francisco Chronicle ran a disturbing article about the dire conditions of bus drivers who shuttle tech workers to and from their expensive apartments to their suburban offices.

Many of those workers lack stable housing or even a place to live, while others sleep in their cars to avoid the city’s high rent prices.

This is what it means to make ends meet while working for some of the richest companies in the world.

Of course, anyone who has paid even the slightest bit of attention to the increasing unaffordability in tech-driven towns like San Francisco and Seattle should not be surprised.

When cities no longer offer housing at a rate that people making under six figures can afford, people making under six figures either move to another city or end up homeless.

Those are really the only options, and as I wrote in an op-ed for the Daily Dot in July, relocating isn’t an option for far too many workers.

And in these cities, lawmakers are wringing their hands and passing resolutions.

This week, the Seattle City Council began a long, slow fight against state laws which prohibit any form of rent stabilization – as activists, advocates, and even developers gather around to try to come up with solutions to this crisis.

But in every one of these meetings, someone is missing from the table: the companies who have created this climate of high rents, displacement, and gentrification.

Where is Apple? Where is Amazon? Why are municipalities expected to solve this problem and not the companies who, by and large, have caused it?

In Silicon Valley and Seattle and cities like them, it’s easy to point to the moment when rents began spiraling out of control. It was the moment that highly paid employees of startups and tech giants began moving into town.

The city’s spate “luxury” apartments were completely out of reach for average workers, while regular apartments started to become priced at luxury rates. The market rose to reflect not the median income of all workers, but rather, the median income for top earners.

In Seattle, rents in some areas have gone up as much as 40% since Amazon first began aggressively hiring employees from out of town. And in California, it’s the same story. The San Jose Mercury News wrote this in July:

About 60% of Mountain View’s residents are renters, and Forest Glen is a microcosm of the city, where hiring by Google and other tech companies is ratcheting up competition for a severely limited inventory of rental units. The result is that new two-bedroom luxury apartments can fetch between $5,000 and $6,000 monthly, while comfortable but older two-bedroom units – including the 1970s-era townhouses on Forest Glen and 14 more on nearby Granada Drive – often cost $2,600-$2,900 and up.”

The suburbs, too, are becoming out of reach for many workers.

Even neighborhoods that were once the place for middle-class earners have become too expensive; Menlo Park, Mountain View, and Palo Alto have all seen rents that go up just as quickly as those in the cities that surround them.

In the Pacific Northwest, the biggest rent increases (up to 12% in some areas) are happening in Woodinville and Bothell – traditionally family neighborhoods for blue-collar employees of Boeing.

This means the issue is beginning to affect everyone within a 100-mile radius of these tech companies – and a lot of the people who don’t benefit from their presence one bit are feeling it.

Teachers, service workers, and even public servants are being priced out, and Silicon Valley, often indicated as the cause, has yet to step up and offer a solution. Apple recently announced a plan to expand shuttle transportation for its workers, theoretically creating more jobs. But without housing reform, this will only create more employees who can barely afford rent in the city.

Instead of offering to help, tech companies seem to be actively working to stop others from fixing the problems they’ve created in the cities where they land.

Amazon has fought against the unionization of their lower-paid employees and contractors, and most of the major companies (including Apple and Google) have remained mum on issues like raising the minimum wage – even as service-oriented companies like Target, Wal-Mart, and Starbucks have stepped up to pay their employees almost enough to live on.

Companies like Apple and Google and Amazon create jobs, we’re told. They hire talented, educated people at a breakneck pace, offering huge hiring bonuses (reportedly as high as $400,000 over two years) and assistance with relocation.

This is a good thing – but only if you’re one of those people.

For the people in the regions where these highly-paid workers move, there is little to celebrate. It means more restaurants you can work in, but can’t afford to patronize and more traffic as you try to get to your second or third job.

The high cost of housing doesn’t seem to be trickling down into more money for services like education, either.

The state of Washington, which has added tech jobs like crazy in the last five years, is currently getting fined $100,000 per day because the state was found to be criminally underfunding their public schools.

It’s not as if they lack the resources to affect change. Apple called their fourth quarter of 2014 “one for the record books,” posting $8.5 billion in profits in just that one quarter. Google, meanwhile, saw an increase of almost 20% in profits in 2014. Amazon, who has famously suffered to post actual profits, did so for the first time this year.

Tech companies do create jobs, and they do bolster the economies of the cities where they open their doors. But they also leave a tornado path of poverty and displacement in their wake.

To say that they are not responsible – and to not hold them responsible – is thus unacceptable.

The truth is that tech companies are taking care of their own (though even that is debatable), and no one else. This is not a rising tide that is raising all boats; it’s a flood that is drowning everyone who was already living in the flatlands.


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Hanna Brooks Olsen is a writer, small human, and a millennial. Her interests are politics, podcasts, Pac-12 football, feminism, and Oxford commas. She is curious to a fault.

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