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Silicon Valley wages have dropped for non-tech jobs

188 points| Futurebot | 7 years ago |mercurynews.com

226 comments

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[+] yjhoney|7 years ago|reply
I started a nonprofit 2 years ago (garagescript.org) that hires low income people in San Jose and their full time job is to learn how to code and teach new students.

Our nonprofit started off with 20 students, most were making about 25k/year and had no coding experience. I paid each of them 2k / month to quit their jobs and focus on coding full time.

From the original 20 students, 6 are left. The other 14 are all full-stack software engineers.

If anyone wants to help out, send me an email to song at garagescript.org. I believe the real long term solution is to train under-served communities better and help them acquire technical skills.

edit remove donation link.

[+] space_fountain|7 years ago|reply
First thanks for what you're doing. I think it's definitely part of the solution. My worry though is that I don't think everyone is equipped to be a programer. The thing I keep coming back to is my younger brother. He's got mental disabilities which mean he can't read or do math at more than a very basic level (first grade maybe) and for what ever it's worth he also scored pretty low on IQ tests. Despite a bit of a falling out he's working in construction and doing fine, but he could never go into a highly skilled occupation. There's plenty of people like him some not nearly on such an extreme who would have been perfectly capable of working in management or similar, but as we require more and more training for simple jobs I worry that we loose places for people who can't keep up
[+] 0xffff2|7 years ago|reply
That's great, but isn't it orthogonal to the topic at hand? We need non-tech jobs in Silicon Valley as much as anywhere else. Even if we could get every single person in the bay area a job as a software developer of some kind, we would be left in a barren wasteland of office buildings with no services. The solution clearly has to be to somehow make living here viable regardless of how you're employed.
[+] mynameishere|7 years ago|reply
Everything about this post is highly dubious, especially all the numbers involved. And then this:

We do not teach for loops and while loops. (Recursion is the only loop we use)


...okay. Maybe that's a joke, but look at that Github account! Your typical 18 year old CS freshman could throw together a more impressive set of code than this "charity" that has the wherewithal to pay out 25,000 (or 24,000) times 20 dollars and landed 14 of said students "full stack" positions. My shit company would drop all 14 of their resumes right in the garbage. Where are they getting hired?

And who in hell would spend their 401k on something like that? No one. Not the greatest fool in the world. Especially not a fool who managed to gain all of 41 Twitter follows in the process.

...just a plea for a minimum of skepticism. Hate to see a rather obvious swindle fool people.

[+] tropdrop|7 years ago|reply
From article -

> low and middle income jobs, such as teachers and firefighters or nannies and cooks, are key to the local economy.

Someone else commented in this thread how all these jobs (meaning every non-tech, middle-class job) will begin to pay more once they're more in demand. The assumption is that programming/tech is highly paid because it's so in demand, and every other job isn't because vice versa.

Let's just take one job that is critical for a local economy - teachers. Some might mention that because of online learning places like Udemy, teachers for middle or high school education could be gotten rid of without too much harm. Even if you think that's true, consider children ages 0-12. Those children, undoubtedly, still need teachers/daycare of some kind. They're simply too young and at this point most adults prefer not to deal with kids, pursuing their careers instead (this is good! More brains in the knowledge economy helps spur innovation).

However, San Francisco is currently experiencing a teacher shortage of several years [1], so that vice versa I mentioned above is simply not true. The city is offering cash bonuses for teachers now, and it introduced some legislature to attempt to incrementally increase their wage, but it's not enough. Fewer people are entering the profession, knowing they need more than a cash bonus but a continually valued job that gets them consistent revenue to be able to afford to buy a house here. Even those that might have been attracted to teaching, they figure - well, I need more money to live than what being a teacher pays. That's simply an unacceptable standard of living for me and my future children.

So yes, those potential teachers can instead come to your non-profit and those individuals will be able to afford to live, fairly comfortably, as full-stack engineers.

But the community as a whole will have an even more drastic lack of teachers. While non-profits like yours help a few individuals, it is certainly not the panacea HN purports it to be.

[1] https://www.sfchronicle.com/education/article/SF-offers-rare...

[+] smudgymcscmudge|7 years ago|reply
Nobody has dropped out or decided coding isn't for them? It sounds like you found students who really know what they want. How hard was it to find students and what was your selection process like?
[+] czechdeveloper|7 years ago|reply
It's interesting. Where I live, I was thinking about vice versa situation. We have good developers who are paid quite bad salaries. I'd love to make company that can bring good projects and pay good salaries. But I'm not good entrepreneur, so it will likely remain a dream.
[+] isostatic|7 years ago|reply
Given the (relatively) massive income your ex students are now receiving, do they donate?

Have you looked for sponsorship from the big companies who are ultimately benefiting (the more potential staff they have, the lower the salaries they can pay)

[+] tru3_power|7 years ago|reply
This is awesome. I grew up in a low income household/poor and always try to push getting into tech to people looking to make a change in their life.
[+] voxl|7 years ago|reply
Are you operating at a loss? It's hard for me to see how this is financially stable. Obviously its a non-profit, but you still need to pull in money to maintain the non-profit.

I've heard of other ventures similar to this that would take a percentage of the students wages after getting them successfully hired, but even that seems to have fallen out of the news.

[+] snazz|7 years ago|reply
You should post this as a Show HN. That’s a wonderful idea. I’m sure many people would gladly donate.
[+] StudentStuff|7 years ago|reply
This seems like a great model, and your a kind person to burn through all your savings and 401k to build a nonprofit that helps some of the most disadvantaged among us. Hopefully more than a few of us will support your efforts!
[+] refurb|7 years ago|reply
Congrats on an original model and impressive results. I love how donors know exactly where the money goes - to support themselves while training.

Do you think it's scaleable?

[+] IloveHN84|7 years ago|reply
And how did you get back the original investment of 2k$/month?
[+] ma2rten|7 years ago|reply
Do you screen the students who want to get into the program?
[+] CydeWeys|7 years ago|reply
I have when the news writes an entire article around a single report, but then fails to link to that report. You had one job ...

Anyway, here's the report in question: http://www.everettprogram.org/main/wp-content/uploads/TIGHTR...

Reading the fine details of the report, you see that the top-line metric is real income, adjusted for inflation and local cost of living. And the #1 factor that's proved ruinous to local cost of living in the Bay Area these past two decades is of course housing prices. If zoning restrictions were relaxed and more housing was allowed to be built, costs would be reduced and a lot of these problems would be solved. The Bay Area has a critical lack of housing, which is driving all these prices up and causing most of the decline in CoL-adjusted non-tech wages.

[+] zaroth|7 years ago|reply
Reading the article the whole time waiting to see the words “real” or “adjusted” — thank you for doing the leg work.

It is no surprise that all but the fastest growing wages cannot outpace all but the fastest growing real estate prices in the world.

If those wages were nationally adjusted for inflation instead of locally adjusted for housing costs, the story would be entirely different. The middle-wage jobs aren’t fully pricing in real estate I suppose because the people who hold those jobs don’t live in the “Real Bay Area” and must commute long distances to work.

It’s terrible for just about everyone for housing prices to raise faster than 2-3% annually, certainly any faster than national inflation rates will impact mobility.

[+] bcatanzaro|7 years ago|reply
Thank you! I had no idea what they were talking about in that article. Not only did they not link the report, they didn't even explain how they were measuring real income. Which matters a lot.

My #1 issue is housing. We have got to build more in the Bay Area. It's a social justice issue.

[+] dublidu|7 years ago|reply
If only we could aloe property assessments to increase with a local cost of living index, we would at least have enough property tax revenue to pay teachers.
[+] lupire|7 years ago|reply
The author almost noticed Simpson's paradox:

> Surprisingly, the UC Santa Cruz study suggests that employment in low wage industries is growing. The share of worker in jobs considered low-wage in 1997 grew 25 percent over the next 20 years, while the percent working in middle- and high-wage jobs declined.

The problem isn't that wages are dropping for certain work; the problem is that middle-wage jobs are being automated away, leaving only low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes.

[+] Barrin92|7 years ago|reply
the jobs that are mentioned in the article that are being hit the hardest are teachers, firefighters, caretakers and so forth. How many of those have been automated away?

It seems that tech workers in the valley have found their own analog to blaming immigrants for downward wage pressure, their particular boogeyman seems to be the robots.

No, the answer is much more trivial. As the article points out, the huge influx of capital in the area is being returned only to the tech sector, who merrily spend it and drive up the cost of living. The machines are not to blame for this one.

[+] dunpeal|7 years ago|reply
> low-skill but non-automatable jobs that require organically-optimized things that all people have but machines don't, like fingers and eyes.

Machines already have those. They're just more costly and clunky than humans, often by a relatively small margin.

Anyone thinking low-skilled / low-paid jobs are not automatable is deluding themselves.

[+] deanmoriarty|7 years ago|reply
How about:

1) Introducing a much higher tax rate for rental property income.

2) Making property taxes be reassessed every single year unless your AGI is lower than average and you are a resident.

3) Introducing a much (much!) higher tax for non-residents/foreign investors who buy a house purely for investment, and sometimes they don't even rent it out (I know a few rich folks from FAANG who bought a handful of houses in MV, and they keep them empty because they don't want the trouble of dealing with tenants, they say the appreciation is more than enough, to me it's borderline criminal).

I've seen numerous instances of those three events playing out against normal people trying to afford some housing while working a normal job. If it's not obvious, I'm heavily biased against real estate investors, because housing is a need for everybody, so the market should be much more regulated.

[+] kuyaab|7 years ago|reply
It’s incredible how hard it’s been for retail and service companies to recruit lower-wage workers her in the South Bay. Mike Rowe and tech execs love to talk about skills gaps, but the fact is most jobs aren’t filled because the compensation these positions offer is garbage.
[+] imagetic|7 years ago|reply
As someone who lives in the outer bay area, pay for jobs hasn't really gone up at all in the last 8 years, but the tech industry has really pushed the cost of living up a lot. I can't say I've noticed a drop in pay outside of the media industry since that's what I work in. And a lot of that has to do with the cost of gear now and the supply is so high buy the demand hasn't grown that much.

Most of my neighbors are contractors / construction workers. Nobody I know can fathom buying a home. But until last year things were fairly stagnant for them. There is a lot more construction going on now, but it's mostly to turn homes we can't afford into vacation rentals.

[+] mlindner|7 years ago|reply
This is because zoning laws largely prevent additional housing construction. Converting existing housing isn't blocked however so converting them to vacation rentals makes sense economically.
[+] ummonk|7 years ago|reply
One thing I've noticed is that aside from rent, random expenses in NYC are so much more expensive. E.g. classpass classes, restaurants, etc. Do service workers get better paid there?
[+] helen___keller|7 years ago|reply
Zoning law and housing code were enacted across the nation in response to the crowded, unsanitary, and unsafe tenements of the industrial revolution. But, we’ve gone too far and allowed too much local control of housing. Now in 21st century American boomtowns, you can’t convert your single family into a duplex or small apartment building, you can’t convert the first floor of your building into a small business, you can’t have organic growth in your city the way cities had grown up until the early 20th century. Far from just outlawing tenements, we’ve outlawed our cities from adapting to change, which is why we see such absurdities as in the bay areas cost of living.

For decades now we’ve been surviving off technical debt. Cars and roads allow us to survive even when our cities are absurdly inefficiently organized. But as the nation changes more and more, our top cities’ roads and street layouts don’t adapt to the change, so we have unbearable traffic in every major city. On top of that, we continue to ignore the needs of a more efficient method of organizing ourselves - relaxing zoning to allow organic growth in the city, and construction of mass transit between the dense regions that develop under this system.

That’s how we developed cities before we started relying on cars, and what we need to do to continue scaling American cities. Or we can just accept as every house in the Bay Area reaches multimillion dollar price tag.

[+] Aeolun|7 years ago|reply
Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world?
[+] clubm8|7 years ago|reply
> Isn’t it ironic that the rates of poverty are increasing in possibly the wealthiest region in the world?

Not really - a natural side effect of corporations not paying their fair share in taxes, alongside employees who are compensated in ways (stock options) where large chunks of their salary are untaxable by local governments.

(It's my understanding it's much harder for local governments to tax stock options as capital gains go to feds, please correct me if I'm mistaken)

[+] mlindner|7 years ago|reply
That's because creation of new housing is highly restricted in Silicon Valley because of high regulation and very restrictive zoning laws. And additionally all the money that would be going to the low income is getting sucked out by the continuous raising of the minimum wage, greatly restricting the size of the labor market at the low end resulting in higher unemployment.
[+] mlindner|7 years ago|reply
Silicon Valley has a multi-fold problem.

1. Housing is expensive because of the influx of people immigrating to the state from out of state and also out of country. (I'm one of them.) This causes a housing shortage which will naturally drive up price of housing.

2. The housing prices don't come down because California in general has very restrictive zoning laws, especially in the most expensive areas, that prevent building of sufficient housing density to cover demand. This in turn drives housing development further outside of the bay area forcing long commute times and highway usage.

3. Because of the high cost of living (primarily from housing, food/etc is not significantly more expensive) from the above problems the solution proposed is to greatly raise the minimum wage, now hitting $15 in many areas. This causes a drive to automate away simpler jobs (also providing an entry for further tech startups to automate these things) or more commonly, move the jobs out of the state via company acquisition followed by moving the administrative jobs to company headquarters located out of state or sometimes out of country. A high minimum wage reduces the available job market by putting an artificial job supply limit in place thus causing unemployment for these simpler jobs.

4. On top of this there's a loophole for illegal immigrants where companies abuse them by paying them below minimum wage because they are here illegally. (Another reason that giving a path to legal immigration for illegal immigrants would help things.)

The first thing and most important thing that needs to happen is for the state to overrule local zoning laws (as opposed by the NIMBYs) and force generic zoning, allowing unrestricted housing development. Just look at the south bay area. The zoning is obvious even looking at satellite maps. Industrial areas are kept separate from housing which are kept separate from retail. This prevents natural intermixing of these causing a lot of need for road development to allow people to travel between these blocks rather than walking down the street.

[+] cutler|7 years ago|reply
This is the real truth about the tech boom - how it impacts society as a whole and who benefits. A nation's progress is measured by the standard of living of the average citizen, not the elite. By that yardstick the so-called advanced nations such as the UK and USA, with their spiralling housing costs, are moving backwards not forwards.
[+] ReptileMan|7 years ago|reply
This looks like the run of the mill hollowing of the middle that has been going on since the late 70s.
[+] Scipio_Afri|7 years ago|reply
Boost the wage floor. High skilled workers have more force to push against the wage supply price that employers set; they have a lot of power to set wages, including an entire department called HR dedicated to ensuring they get the best deal as they can. Low wage employees do not have that power.
[+] mlindner|7 years ago|reply
The wage floor has been continuously getting raised. Many areas of California have the highest minimum wage laws in the country. That isn't going to solve the problem.
[+] malandrew|7 years ago|reply
Raising the wage floor just puts more upward pressure on housing.
[+] crankylinuxuser|7 years ago|reply
Surprised? I'm not. Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes.

https://www.nytimes.com/2015/01/15/technology/silicon-valley...

Google, Apple, Intel and Adobe in this one....

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay here.

https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixin...

[+] lupire|7 years ago|reply
The article is about non-tech employees' wages dropping.
[+] rayvy|7 years ago|reply
I'm sure you'll get downvoted to kingdom come, but I actually checked out the included links - interesting stuff
[+] hazz99|7 years ago|reply
Edit: I'm not a mod, nor trying to masquerade as one.

> Please don't use Hacker News primarily for political or ideological battle. This destroys intellectual curiosity [0]

Please keep your ideological battles away from HN.

[0] https://news.ycombinator.com/newsguidelines.html

[+] thepp1983|7 years ago|reply
Capitalism != Corporatism.

We have a problem with corporatism not capitalism.

Please learn the difference.

[+] tomcam|7 years ago|reply
Upvoted not because I agree (I'm a happy capitalist who happens to hate corporate welfare) but because many, many people on HN have views like this. Don't know why parent should be downvoted for them. Why single this person out?
[+] kumarm|7 years ago|reply
Call any service business from top list on Yelp (Handyman, Dryer Vent Cleaning, Plumber etc), they would charge minimum 80$ (Irrespective of whether they do work or not).

Where is this money going?