THE SECURITY INDUSTRY AND RISING INCOME INEQUALITY IN SILICON VALLEY

Poverty In the Midst of Plenty

The Security Industry and Rising Income Inequality in Silicon Valley

his study focuses on the lives of Silicon Valley security officers who play a vital role in protecting the Valleys greatest assets prospering tech giants, glittering office buildings and cutting edge biotechnology campuses. Yet, these officers struggle every day to make ends meet at home.

The story of these officers struggles is not that different from the story of other low-wage workers and even middleclass families throughout the region. Ultimately, we are all being held back from prospering by a lack of cooperation and collaboration between wealthy companies and the communities where they are located. A just model for growth must be developed in Silicon Valley to reduce income inequality and spur wider economic prosperity. Silicon Valleys 3,000 security officers are coming together to join SEIU, United Service Workers West to raise industry standards and to transform part-time, sub-contracted work into good jobs that support a family. Creating good jobs in the regions security service industry could help stimulate the local economy by bringing needed dollars into low-income neighborhoods and struggling local businesses.

I used to think I was the only one who couldnt get enough hours to survive on flex-time, but then I learned others share the same problem and realized its a structural problem. The recession may be over for people at the top, but for people like me its still hard. I am a flex worker which means I work whatever hours they give me. I cant count on making enough to live on, so I had to move in with my mom. And because I am not full-time, I dont have paid sick days or health insurance. As a result I had to sign my four-year old daughter up for Medi-Cal. Manny Cardenas, Security Officer Security Industry Specialists
United Service Workers West

SEIU USWW, 1010 Ruff Drive, San Jose, CA 95110 April 17, 2013

Prepared by SEIU United Service Workers West

THE SECURITY INDUSTRY AND RISING INCOME INEQUALITY IN SILICON VALLEY

Silicon Valleys Remarkable Prosperity and Extreme Inequality

ilicon Valley is a powerful economic engine, home to dozens of world famous companies such as: Apple, which last year became the most valuable firm in corporate history; and Google, a brand that has reshaped our everyday lives and understanding of technology. Standing beside these well-known companies are hundreds of other financial, legal, technology, and other specialist firms, driving the Valleys seemingly endless waves of innovation and prosperity.

Real GDP, Silicon Valley, 2001-2010

(Billions of 2005 Dollars) $180 $160 $138 $140 $120 $100 $80
$117

$168 $149 $130 $121 $110 $112 $152 $148

Despite the Great Recession, Silicon Valley prospers. Gross Domestic Product, the standard measure of the value of goods and services, has steadily increased to a remarkable $168 billion. And publicly traded companies headquartered in Silicon Valley sit on a stunning $244 billion in cash. Silicon Valley recently ranked second highest in concentration of wealthy people with 16 percent of Santa Clara County households make at least $191,000 each year, putting them in the top 5 percent of income earners. All of the greater Bay Area ranked high on the wealth concentration list, but whos left out of the wealth equation? As stocks soar and fortunes rise for the elite few, record numbers of hard-working Silicon Valley residents slip into poverty. According to the 2012 and 2013 Silicon Valley Indices, reports issued by local business and philanthropic interests, the gains experienced by the region are not reaching all residents. Small businesses are clearly not out of the rough; the public sector is still in the throes of a fiscal crisis; and median household income continues to fall as the gap between those suceeding and those struggling grows wider and wider. Its as if were living in two valleys. The 2013 Silicon Valley Index reported problems from the previous year had deepened, including a large and growing education deficit, rising high school drop-out rate and a steady fall in average income for Hispanics ($19,000 a year) and African Americans ($25,700 a year). It doesnt end there, food stamp participation hit a 10-year high, median incomes fell throughout the region and homelessness rose 20 percent over two years. How can a region recently ranked as THE best economically performing metro area in the United States by the Milken Institute also suffer such growing disparity? And perhaps more seminalwhat can we do to join the two valleys back into one?

2001 02 03 04 05 06 07 08 09 2010
Source: Working Partnerships USA, Saving the Middle Class: Lessons from Silicon Valley.

Change in Percent Below Poverty in Silicon Valley 1980-2010

46.2% 39.3%

4.3%

0.6%

1980s

1990s

2000s

1980 2000

Source: PERE analysis of 1990 and 2000 Census data, and 2010 ACS data, Dr. Chris Benner, U.C. Davis

Change in Silicon Valley Income Gap

Measured by the 80-20 household income ratio
34.8% 25.9%

13.7%

5.7%

1980s

1990s

2000s

1980 2000

Source: PERE analysis of 1990 and 2000 Census data, and 2010 ACS data, Dr. Chris Benner, U.C. Davis

April 17, 2013

Prepared by SEIU United Service Workers West

THE SECURITY INDUSTRY AND RISING INCOME INEQUALITY IN SILICON VALLEY

Security Officers in Silicon Valley

rivate security is a growing industry globally. Private sector businesses, governments, universities, cultural and other institutions of all kinds contract with private security firms to provide armed and unarmed officers for protection. Some of these security contractors are reputable, and others are not, relying on cutting corners and breaking the law to turn a profit.

Security officers and other lower-wage workers contribute to Silicon Valleys growing wealth and provide the essential service of keeping people and property safe. But officers do not share in the ability to achieve better lives for themselves and their families. The median hourly wage for a security officer in Silicon Valley is $14.89 an hour, with many making $912 an hour. If full-time work is available, the mean annual wage officers earn is $32, 850. However, full time work often isnt to be found and contracted officers interviewed at Apple and Google report their employers keep them at reduced hours (ironically called flex-time) on purpose and avoid providing any benefits such as paid sick leave or health insurance. Even those who are offered full-time work, earn too little to make ends meet in Silicon Valley. According to the Insight Center for Community Economic Development for a family of four, covering basic needs such as food, rent, childcare and transportation comes to almost $90,000 a year. Median home prices alone rank at $550,000 a year in Santa Clara County and $635,000 in San Mateothe two main counties encompassed in Silicon Valley. Rents for the region average just under $2,000 for a two bedroom apartment. Silicon Valley officers are coming together to win better pay and meaningful benefits. Raising industry standards would greatly improve the lives of security officers and their families along with the well-being of communities where Silicon Valleys working-class families live.

The Stand for Security Model Works

In cities across the country 40,000 officers have joined SEIU Stand for Security, winning guaranteed wage increases, paid sick days, paid holidays and vacation days, employer paid health care and job security. Stand for Security members work through a model of employer/employee partnership to raise wages in the industry market-wide so no single employer is placed at an economic disadvantage. The contrast between the working conditions of security officers in San Francisco and Silicon Valley is striking. Union officers in San Francisco protect the prospering financial district as well as many technology companies. They earn decent but modest salaries: an experienced office earns about $18.00 per hour. And most importantly they and their families enjoy affordable healthcare benefits. Turnover is low and many officers have 10 or more years experience in the industry. Our union is growing in California and throughout the United States through partnership with workers from all walks of life, religious and community leaders, elected officials and others to protect ourselves and our cities.

Drivers of Prosperity or Income Inequality?

Silicon Valleys economy is driven by globally oriented high technology companies which prosperbut do they give back to the local population and businesses where they are located? Many of these companies gained fame for the generous treatment given to their technology workers: stories abound of young programmers and developers bused to work in luxury shuttles, lunching on catered meals in employee cafeterias, and lavished with six-figure salaries, onsite childcare and handsome benefits packages. Beyond the glitz of that world, however, one finds tens of thousands of low-wage service sector workerssecurity officers, janitors, building maintenance staffwho also contribute to the regions vitality, yet go unrecognized.
April 17, 2013

Prepared by SEIU United Service Workers West

THE SECURITY INDUSTRY AND RISING INCOME INEQUALITY IN SILICON VALLEY

Despite the importance of their daily work for company operations, these workers do not experience the same generous treatment. According to the recent Milken Institute report, for each job added in the tech sector, five jobs are created in other industries. As an exampleApple has an estimated 34,000 employees in the metro area but it is responsible for another 170,000 in the region. Dont Apple and other tech companies bear some responsibility to ensure that all these jobs are good jobs?

CONCLUSION

ilicon Valley needs a transformation of low-wage service work into good jobs that provide decent wages, affordable healthcare, strong quality standards and training that provides career development opportunities. Blue collar service jobs could serve as the good jobs backbone of the regional economy. While a simple idea, this shift could directly address the Valleys extreme inequality, while properly rewarding service workers for their contributions to the Valleys economic success.

In the worlds best known hub of innovation the top CEOs of tech companies like Apple, Google, ebay and others know innovation is rarely an individual actit requires a critical mass of talented workers ready to take on complex problems, bringing their multiple perspectives to bear in creating a solution. Everyone who makes our prosperity possible, needs to be at the table to shape policies and initiatives that will shape our region. Creating social equity is not simply a beneficial social goal, it is also an important component of economic development policy and practice. We believe that unions are a critical part of a strategy to assure low-wage service jobs are transformed into good jobs. This much is undeniable: In Silicon Valley, union janitors have moved themselves and their families forward while the security officers continue to struggle; and across the Bay Area, San Franciscos union security officers are sharing more fully in the regions prosperity than their colleagues in Silicon Valley. All it requires is the collective will and good faith to work together to raise standards.

Poverty In the Midst of Plenty

SEIU USWW calls on the Silicon Valley security industry to:
I Generate the good jobs our communities need; I Foster safe and humane workplaces, where all are treated equally; I Honor security officers as heads of households and families; I Create comprehensive standards for training; and I Reduce costly turnover.

April 17, 2013

Prepared by SEIU United Service Workers West