Living on the Bottom of Silicon Valley

Proletarians in California's High Tech Zone

Revolutionary Worker #1054, May 14, 2000

"...Overcompetitive subcontracting, poverty-level wages, piece-rate compensation, chemical and ergonomic hazards, routine health and safety violations, no medical benefits, retaliation, and an immigrant, largely female, non-union work force. These factors describe what the public commonly refers to as sweatshop conditions."

Lani Hironaka, Executive Director of
the Santa Clara County Center for Occupational Safety
and Health (SCCOSH)

Nike plants in Indonesia? Gap factories in Haiti? No, this quote comes from testimony at a recent California State Senate hearing looking into working conditions at electronic assembly plants in Silicon Valley. There is growing awareness of sweatshop conditions in the oppressed nations of the Third World, but what has been far more hidden is the widespread existence of similar conditions right in the U.S. high-tech heartland.

The Silicon Valley began as a center for high-tech development and production in Santa Clara County--the area surrounding San Jose, California. Over the past decade, production associated with the Silicon Valley has expanded north to the southern edges of San Francisco and the southern part of the East Bay.

In the media, Silicon Valley is portrayed as the home of "gold rush fever" where 64 new millionaires are created every day. This is where the head of one company made $117 million last year, and top executives routinely take home paychecks 220 times larger than their average worker. And those that have it flaunt it--with monster houses, muscle cars, designer clothes and every conceivable electronic gadget. But what they don't talk about is how all this wealth is based upon the low wages and sweatshop conditions that exist in Silicon Valley, as well as around the world.

Poverty-Level Wages

According to the California Employment Development Department there are about 65,000 electronic assembly workers in Silicon Valley, half of whom make less than $13 a hour--and most of them well below that. Plus there are another 40,000 non-assembly manufacturing workers who are generally even lower paid--with half making less than $11 an hour. That's 100,000 production workers at the bottom of Silicon Valley's industrial pyramid. And this is only what the state authorities have recorded. In addition, government figures estimate that there are another 200,000 service workers in the area, including janitors, maids, gardeners, and restaurant workers who make the same low wages.

The vast majority of assembly workers make a lot less than $13 a hour. But even $13 an hour won't get you out of poverty in Silicon Valley. The cost of living in this area is the highest in the country, and it is rising rapidly. The national federal poverty level for a family of four is approximately $17,000 a year--and 9% of Silicon Valley residents fall even below that. But by the government's own admission, that $17,000 figure is ridiculously low for this area.

The biggest reason for the high cost of living is housing. Rents have gone up 60% in the last five years and now the average two bedroom apartment in the Silicon Valley rents for $1,650 a month. JUST to pay this kind of rent takes two people working full time at the minimum wage of $5.15 an hour. And buying a house is outrageously expensive. In 1999 only the richest 20% of local households could qualify to buy the median priced home in the Silicon Valley--which cost a half million dollars. And housing prices are rising rapidly. Just one year earlier, 33% of the Valley's families could qualify to buy that same home.

While the cost of living has been going through the roof, real wages have dropped for the majority of people. Among hourly paid workers, 75% find their wages actually buy less now than in 1989. Workers without a high school diploma--whose average wage in the Silicon Valley is $8.25 per hour--have seen their buying power cut by 36% since 1979. The vast bulk of electronic assembly jobs pay at or near minimum wage with little or no chance for raises or advancement.

So how do these workers survive? First, they work more hours and more jobs. This practice has increased dramatically since 1995. While immigrant men have generally worked second jobs in the informal economy when they could find them, it has only been recently that women too have begun doing this. And for women, this really means working three jobs--or "Three Shifts" as some immigrants call it--one at a sweatshop in the formal economy, a second taking care of the family, and then a third working in the informal economy, taking in laundry or cleaning houses on the weekends.

A New York Times article (4/18/00) describes a Latina janitor who spends eight hours a night dumping trash and cleaning toilets at a giant Silicon Valley corporation. At 3 a.m. she gets home to a windowless garage where she lives with her three children. After four and half hours of sleep she has to wake up and get her children ready for school. And then--because the $954 a month she makes on her night shift will barely cover the $750 a month rent on the garage--she goes off to her day job cleaning the local Convention Center.

Families are also cramming more and more people into tighter living quarters. The New York Times described a family of five living in one bedroom of a single family home--that was shared by four families. A total of 22 people were living in the house. Another investigator found that the typical immigrant living situation has four working adults and three children living in a two bedroom apartment.

Of 32 Malaysian immigrant working mothers interviewed--all making $8 an hour, doing overtime and working a second job--not one could afford to rent their own apartment. All had to double up with another family. Before 1995 it was not uncommon for there to be an older aunt or grandmother living at home to help with child care. But now, just to make ends meet, that other person must work too. This makes child care an enormous problem.

Finally, when all else fails, some immigrants are forced to forgo a home altogether and just rent space to sleep on someone else's floor. The San Jose Mercury News (6/16/99) described how this has become a major feature in the Latino community. In laundromats and on bulletin boards everywhere, signs are posted--"se renta piso" (floor for rent). Over a recent two-week period 35 similar ads ran in local Spanish-language newspapers. The going rate is $150 to $200 a month which buys you eight hours a night in the corner of somebody's living room. And the same extreme financial pressure that is forcing some people to pay to sleep on another person's floor is also driving other immigrants to rent out that floor space to keep from losing their apartment altogether.

A New York Times article titled "Homeless on $50,000 a Year in Luxuriant Silicon Valley" described people who work but can't afford a place to live, and so they sleep on a city bus at night. The article reported that "More teachers, police officers, firefighters, commissioned salespeople--all people who make more than $50,000 a year and would be comfortably middle-class in many other places--are seeking the services of area homeless shelters." And the article described people working three jobs, or making $15/hour, who slept on busses because they couldn't afford an apartment in the Silicon Valley.


What are 300 high-tech sweatshops doing in the heart of Silicon Valley? The common notion is that in the 1980s when electronics giants like Intel, Hewlett-Packard and Cisco Systems closed their U.S. plants and laid off tens of thousands of workers, all those jobs went to the Third World. And a lot of them did. But what has been kept largely secret is that a lot of these jobs stayed right in the U.S., but in different forms.

The new "leaner, meaner" global imperialism demands maximum speed and flexibility in producing and delivering of products. Competition is fierce to "get to market first." Therefore, the cost savings from shipping production to the Third World is often offset by the time it takes to do it.

A whole network of local sweatshops called contract manufacturers (or contract assembly houses) has sprung up. These are independent companies that bid on contracts from the electronics biggies. By contracting out production, the big corporations avoid all accountability for workers' wages, benefits or working conditions. And by fostering intense competition between the contract houses, they are able to drive down wages and other costs to rock bottom.

According to the San Jose Mercury News (6/27/99), using contract houses can save major Silicon Valley corporations up to 50% on the cost of production. So it is no surprise that the nation's largest concentration of electronics contract manufacturers (assembly houses) is located right in Silicon Valley. The largest of these--Solectron--is among the area's 10 largest companies, and four others are in the top 150. Today, contract assembly houses represent about 20% of the $500 billion electronics equipment market and are one of the area's fastest growing sectors.

Calculated Exploitation

"I have a very simple formula for hiring... small, foreign and female... These little foreign gals are grateful to be hired--very, very grateful--no matter what."

These words from a hiring supervisor at a local circuit board assembly shop are a frank admission of the reactionary logic driving the electronics assembly industry. This quote, along with a lot of other insightful information, comes from the work of Professor Karen Hossfeld of San Francisco State University who has spent 20 years studying the lives and working conditions of 200 families who work in the Silicon Valley electronics industry. In her interviews, she found between 80 and 100% of the workers in contract assembly houses she studied were immigrant women from Third World countries. And the percentage went up, the lower the skill level. One researcher estimated that two decades ago Latinas made up about half of all sweatshop workers. But today there is an ever widening range of ethnic diversity--especially from Asia--with 30 different nationalities now represented in high-tech assembly in the Silicon Valley.

Hossfeld's interviews with hiring managers around the Valley reveal how consciously employers seek sections of the proletariat they feel they can exploit most brutally. Employers admitted to Hossfeld that they won't hire Black people under any conditions. Which means that in addition to racist police brutality and harassment, Black people in Silicon Valley also face blatant discrimination in employment.

Right now, Southeast Asian women, especially Vietnamese, are often the workers of choice for the lowest paid assembly jobs. Employers play on immigrants' fears and desperate situation. Immigrants are told they deserve to work for less because they "haven't paid their dues yet." Women are told their wages should be lower than men's because their income is only "supplemental" and their real purpose is to be wives and mothers--in spite of the fact that 80% of the women Hossfeld interviewed were the main breadwinners in their families.

The first wave of Vietnamese immigrants came right after the U.S. defeat in South Vietnam and were mainly members of the defeated elite and officer corps who had done the U.S.'s dirty work in the war. Many of these people had some education and connections. But the later and larger waves of Vietnamese immigrants were from very poor backgrounds and had great difficulty climbing out of the bottom of U.S. society where many were dependent on welfare. The main reason for the recent influx of Vietnamese into electronics contract manufacturing is that the U.S. government cut off welfare benefits to immigrants in the mid-1990s. Then the government set up welfare-to-work programs that pushed poor Vietnamese women into high-tech sweatshops. Today some of the Silicon Valley sweatshop hiring networks are controlled by the same reactionary Vietnamese ex-generals who once oversaw the imperialist plunder of South Vietnam.

Piece-Rate and Home Work

One way the contract assembly houses cut costs and meet deadlines is to pressure workers to take work home and accept payment by the piece (as opposed to time and a half for overtime). In some cases, the big corporations like Hewlett-Packard or Cisco contract out to shops like Solectron. Solectron then subcontracts to a growing number of second tier contractors like TopLine. TopLine then sends work out to be done at home. The San Jose Mercury News article documented workers from 14 local contract houses who were doing piecework at home, oftentimes calling on grandparents and children to help out at pay rates well below minimum wage.

Employers skirt the state labor laws by designating these home workers as "independent contractors," thereby making them exempt from requirements for a minimum wage, overtime pay or any kinds of benefits--to say nothing of safety standards.

Meanwhile the use of temporary workers is increasingly being used as an important tactic to intimidate workers and boost profits. According to the U.S. Census Department, "Help Supply Services" (temps) is the Silicon Valley business category with the largest number of employees--over 41,000 in 1997, which was a 340% increase since 1994. And over the same period the number of these temp agencies jumped from 67 to 253. Corporate employers have no responsibility to temporary workers for benefits, pensions or severance pay. Plus these workers are completely without rights--they can be hired when needed, dumped when demand slackens, and fired and blacklisted for any hint of opposition.

Chemical and Ergonomic Hazards

Not only is work in contract assembly houses extremely low paying with long hours, it is also very dangerous to the workers' health. Safety rules are uniformly ignored. According to U.S. Bureau of Labor statistics, electronic assembly workers suffer the highest rate of "systematic poisoning from chemical exposure" of any manufacturing workers. This is true both in California and nationwide. This February a local semiconductor plant of 250 workers (90% of whom were monolingual Chinese) was forced to shut down for four days because management knowingly exposed workers to illegal levels of arsenic.

Just this past April, MMC Technology's CD-ROM plant in San Jose had to shut down its swing shift of 200 workers when a lid exploded off a 55-gallon drum sending up a cloud of toxic chemicals and a splash of nitric acid into the air. According to the SF Bay Guardian, "If nitric acid gets in your eyes, they sizzle and shrink. Where it touches your flesh, the skin dies and eventually becomes black and shrunken. If it splashes down our throat, you might literally vomit your guts out."

The head-to-toe suits the workers wear look like safety suits, but they are designed to protect the product from the workers--not the workers from the chemicals. Testifying before a California Senate investigation, JoLani Hironaka of SCCOSH described how it was commonplace for workers to be pulled over on DUI on the way home from work because they were driving erratically after being exposed to high levels of industrial alcohols. They were legally drunk from the chemicals they were working with! Chemicals used in making computers and other high-tech products have been linked to cancer, spontaneous abortions, and many chronic respiratory diseases.

And employers' lack of safety concerns has ramifications far beyond workplaces--especially for those doing piecework at home. JoLani Hironaka held up a photo at the California Senate hearing showing the kitchen table of a Filipino family who was soldering circuit boards at home. Right next to a variety of highly toxic materials sat the family's rice pot with dinner cooking. These workers have never been informed of the dangers posed by the materials they handle every day at work--much less given equipment for protection. Many workers have no idea of the dangers they are bringing into their homes. If workers complain about the unsafe working conditions, they risk firing and blacklisting.

Cracks in the Valley Floor

All the major corporations in the Silicon Valley contract out services like cafeteria workers, garbage removal and janitorial services. Even many white-collar jobs, like secretaries and clerical workers, are subcontracted to temp agencies, and are without benefits or job security. The cooks, garbage collectors and janitors who work for these contract shops make similar sub-survival wages as contracted assembly workers. Over the last few years, a wave of struggle has broken out among the janitors.

At the California Senate hearings held in the Silicon Valley, 40 janitors wearing red and black "Justice for Janitors" T-shirts lined the walls as their members spoke and broke out into chants of "íSi se puede!" ("Yes, we can!") They testified about how they have been forced to work unpaid overtime, to meet unreachable quotas or be fired, and trying to survive on salaries that don't allow them to have apartments, cars, or pay for daycare. 7,000 unionized janitors in Silicon Valley are part of the same union local as the L.A. janitors who went on strike in April. In the weeks following the hearing the Silicon Valley J4J have held numerous picket lines and demonstrations in support of the striking L.A. janitors. And now they themselves have voted to go on strike on May 31 if they don't get higher wages.

During the last weekend in April, SCCOSH and the San Khau Viet (Viet Stage) organizations produced a play called "Like Heaven"--a bilingual play in Vietnamese and English--to expose the dangerous underbelly of life in the Silicon Valley and to educate Silicon Valley workers about the health hazards of piecework done at home. The play tells the story of an extended Vietnamese family struggling to survive in the Valley, working hard at home, but never quite able to make ends meet. The Vietnamese immigrants involved in the play, most of whom have worked on the line in the electronics plants themselves, also know friends or relatives who are involved in piecework assembly at home. One of the actresses said, "You need to fight for more. You need to fight for your rights."

The emerging struggle of workers in the Silicon Valley, as well as exposes by health activists, have attracted support from an increasing section of people in the San Jose/Silicon Valley area. You could see the beginnings of this at the State Senate hearing. A broad range of forces stepped forward to expose the inhuman working and living conditions forced upon the high-tech proletariat.

One activist told the RW that when she testified at a similar hearing 10 years ago, every speaker but her was an industry apologist. But this time the participants included immigrant sweatshop workers, militant rank-and-file janitors, union organizers, environmentalists, immigrant and women's rights advocates, progressive academics and anti-sweatshop student activists. And the theme that ran through many of the presentations was the same one that has rocked the streets with the recent anti-globalization demonstrations in Seattle and Washington, DC--that there is something profoundly wrong with this imperialist dominated world where a handful of rich live in opulence while the masses get only hardship and misery.

This article is posted in English and Spanish on Revolutionary Worker Online
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