Poverty in the City by the Bay

July 3, 2014

Carl Finamore, a resident of San Francisco's Hunters Point and retired former president of Air Transport Employees, IAM Local Lodge 1781, looks at how the other San Francisco of poor and working-class residents has been affected by growing inequality.

"I WAS born and raised in San Francisco but had to move to Oakland to provide for my young twins," 24-year-old working single mother Jaquayla Burton told me. "I wanted to stay near my family in the city I love, and I could have if wages were higher, if job opportunities were available and if housing was more affordable."

Jaquayla is not alone. This is a tale of growing inequality in one of the wealthiest cities in America, and it just doesn't have to be this way.

San Francisco is one of the most beautiful cities in the world, resting on the Pacific Ocean with incredibly picturesque landscapes surrounded by plush water inlets and bays.

Some 150 years ago, desperate Chinese laborers described their dream destination as "Gold Mountain." European adventurers coined the phrase "Paris of the West." In modern times, it became known simply as "City by the Bay." Laid-back locals just say the City and leave it at that.

But no matter what it's called, everyone agrees it is one of the world's most gorgeous cities. It is a leading tourist destination and also consistently ranks as one of the best places to live, with Bloomberg's BusinessWeek placing it at the very top as recently as 2012.

A salvage truck on the streets in San Francisco
A salvage truck on the streets in San Francisco (Carl Finamore)

But San Francisco has another distinction placing it atop all others. It is number one in terms of fastest-growing inequality between rich and poor anywhere in America.

This is not to disparage those enjoying dramatic increases in their standard of living through the explosion of jobs with Google, Twitter and tech startups lured to the city with big corporate tax incentives.

Rather, the concern is that the economic boom, just like the Pacific's powerful receding tide, leaves many San Franciscans high and dry. And the statistics are alarming.

Widening Inequality and Growing Poverty

According to the Public Policy Institute of California and the Stanford Center on Poverty report on inequality, 23 percent of San Francisco's roughly 800,000 residents live in poverty--almost a quarter of the population.

Another authoritative study by the Brookings Institution released in 2014 confirms the cavernous income gap.

For example, it's calculated that a San Francisco household in the top 5 percent in terms of income earned almost 17 times as much as a household in the lowest 20 percent.

Referring to the Brookings' data, San Francisco writer Barbara Koh noted that the same trend is occurring in cities across America--"San Francisco's income gap is distinctive, however, because our rich are uber-rich and getting richer," Koh wrote. "The $353,500 income of San Francisco's wealthiest 5 percent of households is higher than their counterparts in any other big city."

As Koh indicates, the income gap trend is indeed rising all across America, but largely because the incomes of the lower 20 percent are plunging more dramatically downward than in San Francisco where even the meager $10.74 minimum wage, actually the highest in the country, helps ever so slightly to bail out struggling families.

It's worth noting that the national minimum wage would actually be $21.72 per hour if it were accurately adjusted for productivity gains made by workers since 1968.

"Obviously, income from those productivity gains are going to fatten the pockets of employers and stockholders who already have plenty, and this is one of the things that contributes to the increasing poverty and wealth disparity in this city, in this state and in this country," said Jessica Bartholow, a policy expert and legislative advocate for the prestigious California-based Western Center on Law and Poverty.

On a positive note, a progressive San Francisco coalition of community and labor groups just announced a November 2014 ballot proposition, supported by the mayor and 10 members of the Board of Supervisors, that will steadily raise the minimum wage to $15 an hour by 2018.

This ballot measure does not include any exceptions for workers making tips or for those with company-provided health care, already a mandatory city requirement for employers. As a result, it is considered the most advanced minimum wage proposal in the country and, if passed, will considerably raise the standard of living of those on the bottom.

This has worked before. When the Great Recession of 2008 first hit, San Francisco did better than the rest of California, according to Karl Kramer, campaign co-director of the San Francisco Living Wage Coalition. The city had lower unemployment, which, he strongly believes, was due to "the flotilla of protective laws like the current minimum wage legislation."

Indeed, large numbers of low-wage workers with money in their pockets did, in fact, boost the whole economy by spending widely in local businesses, big and small.

When Mayor Ed Lee came into office, however, his economic policies were to prioritize high-tech businesses by dangling large tax subsidies (the mayor did not respond to a request for comment). This lured into the city a highly skilled and highly paid workforce that almost immediately set off a housing crisis of rising rents.

The San Francisco Sentinel reports that during the most recent quarter in 2014, "a one bedroom will cost you $2,795, a two bedroom $3,875 and a three bedroom $4,750."

But this is only one of a host of related problems. What gets lost in the mayor's unbalanced economic approach, Kramer tells me, "is reduced emphasis on developing jobs for low-wage workers." And that takes a toll on working-class families who are then forced to leave the city.

It is so wrong that Jaquayla's family was "forced to leave because of economic hardship," Bartholow told me. Asked what her suggestions would be, the legislative advocate immediately responded that city policy should first stop the exodus of working families by making affordable housing more available and by making wages match basic needs.

She has a point. There are 184,000 San Franciscans living in poverty, according to 2011 data. But the hardships of soaring rents, for example, also fall on those fortunate enough to have a job, thus firmly establishing the term "working poor" in the lexicon necessary to make sense of the conditions facing low-wage workers.

In California, 64 percent living below the poverty line reside in a household with earnings.

Bad Policies Haunt Us Today

There is nothing inevitable about these conditions. They are a result of national and local policies enacted over the last several decades that cut social spending on a vast range of public services like education, food programs for children and subsidies for the elderly.

For example, Bartholow stated, poor families with children eligible for basic needs (CalWORKs) assistance "receive a monthly grant amount that has half of the poverty alleviating power it did 20 years ago."

Unless an aware and mobilized community and labor coalition representing the majority begins to mobilize (as they recently did during the struggle for a $15 minimum wage in San Francisco), things will only worsen.

"It's going to take a fight," Kramer tells me, "but it's a winnable fight" by creating a more livable, a more fair and a more just vision for our city--far different from where San Francisco is now headed.

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