300,000 new millionaires: How many new homeless?
The booming stock market just created 300,000 new millionaires, but at the other end of the economy, food stamp participation just hit a 10 year high.
SAN JOSE, Calif.
America's two economies couldn't be more stark. On the one hand, the stock market closed today with a 10-day bull streak and a wealth research group called Spectrem Group is announcing that 300,000 people have joined the status of millionaires. On the other, food stamp participation is at an all-time high, and one in four people lining up at Silicon Valley food pantries has a college degree.Skip to next paragraph
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On a morning the stock market was sailing to a record high and a chilly storm was blowing into Silicon Valley, Wendy Carle stuck her head out of the tent she calls home to find city workers duct taping an eviction notice to her flimsy, flapping shelter walls.
"I have no idea where I'm going to go," she said, tugging on her black sweatshirt over her brown curls and scooping up Hero, an albino dog.
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She glanced at the glimmering windows on a cluster of high-tech office buildings just blocks away and shook her head.
"Did you know Google shares hit $840 each this morning?" she asked. "I just heard that on the radio."
Carle, who did not want to give her age, used to manage apartments. Today she lives on a Supplemental Security Income disability payment of $826 a month due to back and joint problems.
The Silicon Valley is adding jobs faster than it has in more than a decade as the tech industry roars back. Stocks are soaring and fortunes are once again on the rise.
But a bleaker record is also being set this year: Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year— capping a steady 14 percent drop over the past five years, according to the annual Silicon Valley Index released by Joint Venture Silicon Valley, representing businesses, and the philanthropic Silicon Valley Community Foundation.
Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty.
"In the midst of a national economic recovery led by Silicon Valley's resurgence, as measured by corporate profits and record stock prices, something strange is going on in the Valley itself. Most people are getting poorer," said Cindy Chavez, executive director of San Jose-based Working Partnerships USA, a nonprofit advocating for affordable housing, higher minimum wages and access to health care.
Nowhere is this growing disparity more obvious than this sprawling and trash-strewn 28-acre tent city that authorities are trying to clean out. Beneath the sweeping shadow and roar of jets soaring in and out of nearby San Jose's international airport, residents here say times are so tight they have nowhere else to turn.
"This is the most ridiculous place ever," said Kristina Erbenich, 38, clambering onto her bike, a heavy pack on her back. The former chef said she spent $14,000 on hotel rooms before her savings ran out. "If everyone around here is so rich, why can't they do something to help?"
United Way Silicon Valley CEO Carole Leigh Hutton wonders the same thing.
"How is it that in an area so very rich, we have so many people so very poor? Why can't we break that cycle? With all the brain power in the Silicon Valley, we should be able to solve these problems. But what we need is the collective will."
The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation's wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development.
"The fact is that we have an economy now that's working well only for those at the very top," said Lawrence Mishel at the Economic Policy Institute in Washington D.C. "Unless we adopt a new approach to economic policy, we're going to continue going down this path, which means growth that does not really benefit the great majority of people in this country."
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