A new article in Forbes describes San Jose, Santa Clara and Sunnyvale as the richest region in America. And yet, our poverty rate is too high and our education successes are too low. We have the capacity to change it.
The San Jose-Sunnyvale-Santa Clara metro area’s median household income of $96,481 is the highest in the United States. The typical area household earns $42,000 more than the typical American household.
As in many of the nation’s wealthiest areas, the poverty rate in San Jose is well below average. Just 8.7 percent of the city’s population lives below the poverty line, much lower than the national poverty rate of 15.5 percent.
In San Jose, 47.5 percent of adults have at least a bachelor's degree, well above the comparable national rate of 30.1 percent. Nationwide, 5.3 percent of households earn $200,000 or more each year. In San Jose, 18.2 percent of households earn that much, the second highest share of any metro area in the country.
But things could not only be better here; we have the power to set a path for other regions to follow.
Liberals such as Bernie Sanders and Robert Reich have the correct analysis: The gap between rich and poor is too great. Technology has changed the economy and manufacturing jobs are leaving. The middle class has diminished—57 percent of Americans don’t have a net worth—and the economy cannot be sustained with all of the gains in growth going to the top 2 percent.
Reich and Sanders argue that we should return manufacturing jobs to the US, tax the wealthy, provide educational opportunity for free and reenergize the middle class. However, the solution is not to go back to the old economy.
There must be some and incentive for businesses to help achieve the above-mentioned goals. Technology competes with labor, making many jobs obsolete and allowing global competition from those who are willing to do more for less. The labor “market” has always been problematic. Someone will usually do a job for less pay than the currently employed. That’s just a fact. Labor wages are artificially set by business. A corporate executive makes millions—sometimes billions—by laying off workers and reducing costs to receive a higher profit.
Could the Board of Directors at HP find someone to ruin the company for half the salary Carly Fiorina charged? Of course they could, but the club demands a higher salary.
Could Walmart pay their employees more and still make obscene profits? Of course they could, but Walmart would argue it pays its employees “market” wages. Whose market? Their market.
Tim Cook recently defended the $185 billion Apple parked offshore because of a 35 percent tax rate to repatriate the money and the complicated tax structure of the United States. He is correct. There should be a lower rate to repatriate the money and the U.S. tax code should be simplified.
But repatriating Apple’s money would still allow them to keep more than $116 billion while also bringing our deficit down. It would be a patriotic act. If all companies did the same, it would erase our national deficit and we could give everyone a tax break in the future.
The real point here is our region, Silicon Valley, can make monumental changes. We can end homelessness. We can change the way the economy runs. We can innovate and provide a new economic model for the rest of the world.
Sweden recently cut their work hours back to six hours a day. That would be heresy here, but it makes sense as we move forward in the new economy. Technology has replaced jobs, making our lives easier. People should benefit from those advances. Moreover, this would create more jobs and allow more people to benefit from the economy. The key is not to cut revenue from those who labor less.
We live in a consumer economy. Companies benefit when people take home disposable income, but clearly the market is shrinking. Not from demand, but from lack of liquidity in the market. Fewer and fewer people are able to afford products. The use of credit has allowed companies to grow and consumers to purchase, but eventually it is a losing model—as there becomes a tipping point when the consumer, shackled with debt, can no longer pay. Student debt, mortgage debt and credit card debt are what sustain our economy. This needs to change.
Further, we have the ability and models to end homelessness. The old liberal way of giving people money does not work. The conservative horse manure that you make everyone work also does not work. But there is an answer. Phillip Mangano, a George W. Bush Administration appointee, has the answer.
It is a combination of getting people into housing and providing services. Not offering a shelter, but giving them a key to a real home and providing the real services they need. Housing and homeless advocates understand the model and are implementing it. They need resources.
Mangano shows that using resources in this manner saves taxpayers money. Most of the emergency services that are used in this country go to the small minority of people who are truly homeless and helpless. Redirecting resources to provide them housing and services would come at a fraction of the cost we currently provide this population for emergency responses. That’s a fact.
Silicon Valley is rich enough to end homelessness. We simply need the will to implement what we already know.
Education must also change. Robert Caveney has a program that addresses education for the 21st century. We still use a 19tht century model to teach our children. Technology changes too fast for the system to keep up, but we must teach our children how to think, not simply recite or learn in the same fashion prior generations were educated. We can’t continue to put our kids through a system that is antiquated for our times.
The Caveney system, which I’ve previously written about, is a simple change from treating our kids like cogs in a wheel to understanding each has an individual capacity and all learn at a different rate. It is a system that empowers children to learn creatively and teach themselves. They advance only when they have mastered the skills, each at their own rate.
Finally, Silicon Valley is home to world leaders in innovation. From technology and education to government and human development. The late John Vasconcellos used to say that Silicon Valley leads the world in every human endeavor, including gender equity, diversity and human achievement.
The rest of the world looks to us for inspiration. For whom much is given, much is expected. We can rise to the challenge, as we are the richest area in the richest nation in the history of the earth.
We can do this.