The Tech Hubs vs. the Rest of the US-Earning Disparity Gap Widens

In a recent column, I wrote about how Silicon Valley Is becoming more vilified these days as the technology we create has increasingly been used to deliver both good and bad things to the market and that a pall has been cast on our tech region.

I pointed out that there have been dozens of media reports about Facebook’s role in allowing Russian ads on their site and its potential impact on our elections. And Silicon Valley is coming under attack over corporate tax issues, offshore holdings and how much of what they create doesn’t factor in their technology’s overall potential for evil as well as good. Even more troubling is that Russia and other nefarious actors have found ways to game our systems and tech sites like Facebook, Twitter and others have lost control of their sites and what is often posted, can’t even be trusted these days.

But there is another issue that I see that is going to be an even bigger problem for tech. That revolves around the disparity in the wage gap we see when it comes to earnings in tech hubs like Seattle, San Jose, Austin and other areas where tech helps drives the economy and jobs, vs. the rest of the country. This is especially pronounced the in midwest, rust belt and the south where many people feel left behind by the rapid rise and importance of tech and its impact on the job scene.

In so many of their cases people were trained to work in factories and industries tied more to vocational skills, and as the world moves to more tech-driven ways to do business and learn, it impacts their ability to get better-paying jobs, and they see their way of life taking a real hit. No wonder so many look at Silicon Valley in a more negative light these days instead of focusing on the incredible innovation that continues to come from our region, that ironically, they benefit from if they have a PC, smartphone or tablet air other tech-related products.

The chart below from the Economic Innovation Group Communities Index should be very troubling for our tech leaders and our government officials since it shows how widespread the distressed communities are in the US.

Data: Economic Innovation Group Distressed Communities Index; Map: Lazaro Gamio / Axios

Although I had lived in San Jose all of my life, except when I went to college in Switzerland and attended Southern Illinois and later in life, Oxford, my life has revolved around the work and benefits that came from being involved within the tech world. However, I have been aware of this issue of wage discrepancy for a long time, and as I have traveled to the midwest and the south, I started to hear inklings of a potential backlash to Silicon Valley about five years ago.

This issue started coming to the forefront after the last presidential election, and there is much more vocalization on this topic recently as a result of the role Facebook and Twitter are playing in impacting our national election and overall national mindset. As I stated in the article I mentioned above; we are even starting to hear calls for tech companies to be regulated or broken up to keep them from becoming monopolies and having, even more, control of our lives national psyche.

But let’s be clear that at the heart of this is an age-old question about sharing the wealth that is often at odds in a capitalist society. I grew up being pushed to excel and do my best and work hard and be rewarded for my efforts and that what I earn is mine. And for Most workers that is still their mantra. However, when they see bankers, tech leaders, and some politicians making billions or millions of dollars, sometimes at their expense, the question of spreading the wealth becomes a serious question.

I will let others debate the issue of capitalism vs. socialism vs. communism, but for us, in the tech world, we need to become more aware and sensitive to the fact that our earning potential has grown while most of those in the US see their wages stagnating. They see no hope, in most cases, of getting better jobs and being able to earn more given their current situations.

I have a real fear that if we are not careful, we will see an even greater level of disparity between have’s and have not’s. At some point, those who do not have a chance for a better life will either rebel at the election polls or even worse, get more vocal and perhaps even violent in their quest to see wealth distributed more fairly.

These various attacks on Silicon Valley are not going to go away. Our tech leaders must start taking this attack seriously and start to find ways to deal with this problem. While I don’t have specific answers as to how they respond, I do think that they need to start acknowledging that this issue exists and start internally looking at ways to minimize the fact that the outside world is starting to view tech more negatively and find way’s to be more responsive to this issue.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

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