Silicon Valley inequality persists four years in a row

A vast amount of wealth in Silicon Valley is concentrated in just a few households, while residents throughout the region struggle to afford basic needs.

That’s according to the 2023 Silicon Valley Pain Index, an annual report put forward by researchers at San Jose State University. This year’s findings highlight how eight households in Silicon Valley own $260 billion in total wealth, which further translates into $50 billion in liquid wealth—six times more than the total wealth of the bottom 50% of those in Santa Clara and San Mateo counties combined.

“We’re doing this not because we want to critique Silicon Valley, but rather say how… do we create a social structure so that everyone can share in the wealth—not just the elite, not just the eight families,” Scott Myers-Lipton, retired SJSU sociology professor and lead author of the report, told San José Spotlight.

The latest study puts a spotlight on structured wealth inequality and the concentration of wealth by a few households in the region. The study shows that .01% of households in the region own $323 billion of total wealth, while .1% own $122 billion in liquid wealth. The study also mentions that the .1% of those owning the total wealth in the U.S. grew their net worth by 71% from 2020 to 2022.

This is while San Jose ranks first in youth homelessness in the U.S. and 28% of households across Silicon Valley do not earn enough money to meet basic needs without public or private assistance.

“That’s not a distribution of wealth through which you can ensure the basic fundamental dignity is to everybody in that society,” Will Armaline, SJSU sociology professor and the second lead author on the report, told San José Spotlight. “This is a big problem for us.”

Russell Hancock, CEO of Joint Venture Silicon Valley and president of the Silicon Valley Institute for Regional Studies, said the region is a punishing place when it comes to the widening wealth gap.

“There’s a lot of pain in Silicon Valley,” Hancock told San José Spotlight. “It’s far more than people realize. And people, especially people outside the region, don’t think of Silicon Valley as a place with lots of pain.”

The Silicon Valley Pain Index highlights racial discrimination, environmental issues and income inequality in the region. It is produced each year by the San Jose State University Human Rights Institute. The report was first published in 2020 following the murder of George Floyd by Minneapolis police, and was inspired by a similar index focusing on New Orleans in the aftermath of Hurricane Katrina.

The annual report’s goal is to use data and reporting to show structured inequalities and push elected officials to act. The 2020 report focused on the prevalence of white supremacy and the growing wealth gap in the South Bay. In 2021, the report showed how the disparities worsened, focusing on hunger, homelessness and income inequality all rising. Last year’s report showed declining life expectancy for Black and Latino residents as the wealth gap grew further.

Racial disparities persist

The report also highlights that many racial wealth disparities have persisted from the first report in 2020. About 26% of Black residents own a home compared to 63% of white residents; white residents have double the amount of per capita income—with Black residents having $44,606 compared to white residents with $91,852; Black residents experience a poverty rate of 16% compared to 5% of white residents; and Black residents file for unemployment at 2.4 times the rate of white residents.

The report also says trends have worsened when it comes to indicators such as evictions, fentanyl overdoses, food insecurity, homelessness and rent and mortgage payments.

Rev. Jeff Moore, president of the San Jose/Silicon Valley NAACP, said the pain index proves inequalities are getting worse.

“The pain index continues to show that the Black community by far is suffering,” Moore told San José Spotlight.

Report highlights environmental concerns 

Another key finding from this year’s report is around environmental concerns. Researchers found the Silicon Valley region has a 99% risk of a three-foot flood between now and 2050—with the potential to leave 29,748 homes, 27 schools and other waste and contaminated sites under water. The county also has a 99.8 FEMA risk index score, which is double the national average because of its risk for natural disasters.

Eleana Paneda, a student at SJSU who assisted with climate change research for the report, hopes the findings energize engagement from residents and community leaders.

“It’s definitely very worrying and very troubling,” Paneda told San José Spotlight.

Read the full report here.

Contact Julia Forrest at [email protected] or follow @juliaforrest35 on Twitter.