Tech and Wealth Inequality: The New Wall Street That Bernie and Hillary Are Ignoring

Years ago, when people talked about the "digital divide," they meant that the less wealthy lacked access to broadband and other digital technologies. Now, that digital divide -- which still exists -- has broadened into a chasm that threatens to engulf our whole society.

Tech threatens to become the new Wall Street: a massive engine of wealth accumulation for the few at the expense of the many. And while presidential candidates Hillary Clinton and Bernie Sanders energetically debate how to regulate the old Wall Street, they've mostly ignored the new one. That's a mistake

The piece of this that's gotten the most attention is Silicon Valley's ongoing diversity problem. In 2014, major tech companies like Google, Yahoo, Facebook and Apple reported startlingly weak diversity figures. Facebook, for example, reported that 15 percent of its tech workforce was female, three percent was Latino and just one percent was African American. The higher you go into company management and executive levels, the worse these gaps tend to get. And the news hasn't gotten any better, either for people of color or for women, who continue to suffer from a serious gender gap. Astonishingly, Apple management recently opposed a fairly mild shareholder resolution calling on the company to boost its diversity.

But the problem goes well beyond diversity in employment. Technology has the power to transform lives and communities, but -- as a high-powered group of academic, business and technology leaders recently declared in an Open Letter on the Digital Economy -- "the benefits of this technological surge have been very uneven." They explain, "The majority of U.S. households have seen little if any income growth for over 20 years, the percentage of national income that's paid out in wages has declined sharply in the U.S. since 2000, and the American middle class, which is one of our country's great creations, is being hollowed out. Outsourcing and offshoring have contributed to these phenomena, but ... the recent wave of globalization is itself reliant on advances in information and communication technologies."

The tech boom has increased this growing divide. Silicon Valley Rising notes, "A third of the population in the most prosperous region in the America struggles to make ends meet. For every tech job created in the Silicon Valley, four service jobs are needed to support it." Too often, those jobs pay minimum wage or just slightly more -- not nearly enough to cover a family's food, rent and utilities in a region where the price of everything, especially housing, keeps skyrocketing.

Affordable housing has become a crucial problem. Many more jobs are created in Silicon Valley than there are homes built, sending housing prices far out of reach of most workers. As a result, cities with a growing tech workforce are also some of the fastest gentrifying cities in the U.S. -- and not just in the San Francisco Bay Area. Cities like Denver with growing tech work forces feel the same pressures. And again, with a few exceptions (Cisco has invested in a housing trust fund in the Silicon Valley, while some tech leaders backed a San Francisco housing bond), tech companies have mostly been missing in action when it comes to developing affordable and workforce housing.

And what about jobs? Some experts believe that the old adage that technology creates more jobs is over. For example, observers predict that the rise of driverless cars will bring massive job loss, especially in the blue collar sector. One expert notes that "hundreds of thousands, if not millions, of people -- truckers, cabbies, and delivery people -- drive for a living in the USA," arguing that corporations will jump at the chance to replace these workers. That would cut labor costs, benefits, workers compensation claims, etc., while vaporizing a huge number of middle class jobs.

Finally, it appears that tech companies spend more dollars lobbying to expand their H-1B visa pool than they do in addressing the development of their future U.S. workforce. As Debra Watkins pointed out in a piece entitled, "Diversifying the STEM pipeline? Don't Believe the Hype," "When pundits claim that the black community makes no efforts to help itself, they fail to acknowledge programs that were short-lived because funding either trickled in or never came at all." She argues that strong STEM programs targeting people of color are severely underfunded, especially when compared to the enormous wealth in tech.

Imagine if Bill Gates called a few of his wealthy friends and said, "Hey guys, we have a huge workforce problem and I need to you to pitch in to create a multi-billion-dollar fund to address the problem." It's possible, as we saw this week with the launch of a new fund to fight climate change. To its credit, Intel put up a $300 million fund for diversity across the tech sector and tech entrepreneurs Mitch Kapor and Freada Kapor Klein pledged at least $40 million to bring more diversity to tech. We need more leaders in the field to step up.

These are just a few of the economic equity issues the tech boom raises. Business and political leaders in California and nationwide, including the presidential candidates, need to address this 21st century economic crisis. We must go beyond just "diversity in tech" and have a robust discussion about how the technology boom can be harnessed to produce real economic equity, in Silicon Valley and across the U.S.