Silicon Valley subcontracting makes income inequality worse, report finds

Subcontracted jobs have grown at three times the rate of all private sector jobs in Silicon Valley over the past 24 years, exacerbating the region’s gaping income inequality, according to a new report from the University of California, Santa Cruz.

The tech firms whose campuses dominate Silicon Valley are known to employ armies of subcontracted employees as janitors, cafeteria workers, gardeners, security guards and shuttle drivers. Researchers found that growth in subcontracted industries has outpaced overall job growth since 1990 – 54% compared with 18%. That rise is “contributing” to income inequality, the report says, because subcontractors earn less money, have less access to healthcare, and are more likely to be black or Latino than their directly employed counterparts. “This report shows that the rise in subcontracting has made the hi-tech sector a weak engine for middle-class job creation,” said Ben Field of the South Bay Labor Council, a coalition of unions. “Additionally, it shows that the few good jobs tech does create go disproportionately to white men."