Silicon Valley workers face hardships

The following article is from the Palo Alto Daily News:

The economic stability of Silicon Valley’s working and middle class is worse now than during the post-dot-com recession, and the future looks grim unless action is taken, according to a report released Thursday.

The study, by the San Jose-based nonprofit Working Partnerships USA, painted a dire picture of the hardships of living in Santa Clara County even as the economy is said to be recovering.

“Without question, working families in the region went through tough times in that recession,” Louise Auerhahn, the nonprofit’s associate policy director, said in a conference call with reporters.

But, she said, “the economic problems facing Silicon Valley residents didn’t end with end of the recession.”

The report, titled “Life in the Valley Economy 2007,” analyzed data from a variety of sources, comparing the year 2000 to 2005. It points to rising health care costs, stagnant wages, high cost of living and job insecurity, among other difficulties of living in the area.

Taken separately, any of those factors would present a challenge to families, Auerhahn said. But combined, they form a “perfect storm of economic woes” that has brought the county’s families to a near-crisis point, she said.

U.S. Rep. Mike Honda, D-San Jose, said in the report’s foreword that it “shines a spotlight on Silicon Valley’s fundamentals, bringing to light deficiencies that should concern us all.”

Among its findings:

_ Median household income fell from $83,370 in 2000 to $74,293 in 2005. When analyzed in income increments of $50,000 per year, the only two groups to see increases over the past five years are households making less than $50,000 annually and households making more than $250,000. The bottom line is that the middle class is shrinking, the study’s authors said.

_ Those declines also come as the median home price has jumped 65 percent since 2000 to $790,000, and as 18.4 percent of homeowners and 23 percent of renters are spending more than 50 percent of their income on housing.

_ Even for those with jobs, healthcare costs have increased: Annual spending on job-based family health coverage has doubled from $1,477 in 2000 to $2,883 in 2006.

_ The public “safety nets” for people who have fallen on hard times have also been hit hard, according to the report. It found that unemployment insurance programs are insufficient, serving only about 40 percent of the people out of work.

“We have to be able to figure out, when there is an information-based economy and a new economy, how do working families survive?” said Phaedra Ellis-Lampkin, executive director for the organization.

To begin tackling the problems, the group recommends bringing people that have “grass-roots energy and professional expertise” together, said Bob Brownstein, policy and research director.

The full report is available on the Web at www.wpusa.org/live.

Tags: Silicon-Valley, Working-Partnerships-USA

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