It’s an unmistakable feature of the new Silicon Valley economy: Venture capital-backed tech companies fill the cities with well-paid employees, making life less and less affordable for the service workers whose wages seem immune to the forces that have sent engineer salaries soaring.
For several years now, labor unions and community groups have recognized that bifurcation is at the root of the inequities that have embittered the Bay Area. Earlier this year, they launched a campaign called Silicon Valley Rising, which aims to fix that problem by pushing tech giants to turn those minimum wage jobs they’ve contracted out into family-sustaining careers, using the sometimes massive cash piles that their business models have generated.
And lately, some of those companies have started to respond -- not just in their philanthropy, but in how they compensate those who guard their buildings and clean their floors. Just the latest example: Last night, Facebook announced that it would be requiring contractors with more than 25 employees to pay a minimum wage of $15 an hour, offer a minimum of 15 paid days off, and pay a $4,000 childcare benefit if they don’t provide parental leave.
The move is the first by a large tech company to raise wages through contracting, but it comes on the heels of a similar action by Microsoft, which required its contractors to offer 15 days of paid leave in March. Google and Apple took a more direct approach with security guards by making them into full-fledged employees, entitled to the same benefits as someone who writes code.
“We’ve seen incredible movement in a short amount of time,” says Derecka Mehrens, executive director of Working Partnerships USA, which has organized the Silicon Valley Rising campaign. “We know that the companies are embarrassed about conditions in the contracted workforce. Facebook is a leader in saying that all of their subcontracts will have a higher floor.”
In a blog post outlining the new policy, chief operating officer Sheryl Sandberg -- who has come into some criticism recently for favoring an individualistic, self-motivated approach to female advancement -- expressed her rationale in terms of social good. “Taking these steps is the right thing to do for our business and our community,” she wrote. “Women, because they comprise about two-thirds of minimum wage workers nationally, are particularly affected by wage adjustments.”
It’s not clear that Facebook’s action -- even if every other company were to follow its lead -- would eliminate the area’s inequality problem.
Under the new policy, benefits packages for Facebook’s janitors and cooks are still a far cry from what Facebook employees get: 21 days of vacation, unlimited sick days, and four months off for new parents. With regard to wages, across the Valley, the median worker in a management, business, science and arts occupation made $99,591 in 2014, while the median service worker made $27,642. Working Partnerships USA estimates that the true “living wage” needed to raise a family in Santa Clara County is $19.02.
“A $15 wage is still pretty low in Silicon Valley,” Mehrens says.
Meanwhile, contracted workers who’ve recently unionized -- like shuttle bus drivers at Apple, Yahoo, eBay, and Facebook itself -- have already made greater gains than Facebook is now promising other employees. Under their new contract, the drivers at Loop Transportation will make upwards of $21 an hour, with 11 paid holidays, nine days of paid sick leave, and fully employer-paid healthcare.
“This is going to increase the pressure on other firms to follow suit,” says Ken Jacobs, chair of UC Berkeley’s Labor Center, in praise of Facebook’s policy. “That said, it’s a step short of saying that all firms they’re contracting with should respect the right of workers to bargain collectively, which would do more to help them raise standards.”
Finally, in the absence of government inspectors or union shop stewards, there’s the problem of making sure contracted employees actually get what they’re supposed to get. Facebook says it doesn’t know how many employees the policy will cover, which could make it difficult to follow up.
“Are the new rules that are set up actually enforced? How does Facebook plan to do that?” Jacobs asks. “That’ll be the question with any voluntary program.”
Ultimately, that’s why even those who cheered Facebook’s new policy want government rules to push everyone else the same way. Not all businesses are as easy as tech companies to shame into sharing their profits with their non-technical workforce.
“We would love to see the U.S. Congress catch up with where the nation’s top businesses have ended up,” said Debra Ness, president of the National Partnership for Women and Families. “We can’t afford for this to happen employer by employer. If we leave it for corporations to do it voluntarily, you’ll have the smart progressive ones taking action, but it won’t be everybody.”