Billionaires get richer: Data shows more than a THIRD of the U.S. is on welfare handouts

 

 

 

 

 

 

Billionaires get richer as record number of Silicon Valley residents fall into poverty Huge disparities on show in the Silicon Valley Homelessness rose 20 percent in two years and the average annual income for Hispanics fell to a new low of $19,000 Meanwhile, the region's top tech earners inched up the Forbes annual list of the richest people on the planet released this week On a morning the stock market was sailing to a record high and a chilly storm was blowing into Silicon Valley, Wendy Carle stuck her head out of the tent she calls home to find city workers duct taping an eviction notice to her flimsy, flapping shelter walls. 'I have no idea where I'm going to go,' she said, tugging on her black sweatshirt over her brown curls and scooping up Hero, an albino dog. She glanced at the glimmering windows on a cluster of high-tech office buildings just blocks away and shook her head. Kicked out: Wendy Clarke, left, holds her neighbor's dog Hero as she is handed an eviction notice by San Jose city worker Rita Tabaldo as city worker Mark Ruffing, center, attaches a notice to a Clarke's tent at a tent city in San Jose, California 'Did you know Google shares hit $840 each this morning?' she asked. 'I just heard that on the radio.' Carle, who did not want to give her age, used to manage apartments. Today she lives on a Supplemental Security Income disability payment of $826 a month due to back and joint problems. The Silicon Valley is adding jobs faster than it has in more than a decade as the tech industry roars back. Stocks are soaring and fortunes are once again on the rise. But a bleaker record is also being set this year: Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year. This capped a steady 14 percent drop over the past five years, according to the annual Silicon Valley Index released by Joint Venture Silicon Valley, representing businesses, and the philanthropic Silicon Valley Community Foundation. Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty. 'Cleanup': An eviction notice posted by San Jose city workers is shown on a tree at a tent city in San Jose, last Tuesday 'In the midst of a national economic recovery led by Silicon Valley's resurgence, as measured by corporate profits and record stock prices, something strange is going on in the Valley itself. Most people are getting poorer,' said Cindy Chavez, executive director of San Jose-based Working Partnerships USA, a nonprofit advocating for affordable housing, higher minimum wages and access to health care. Nowhere is this growing disparity more obvious than this sprawling and trash-strewn 28-acre tent city that authorities are trying to clean out. Beneath the sweeping shadow and roar of jets soaring in and out of nearby San Jose's international airport, residents here say times are so tight they have nowhere else to turn. 'This is the most ridiculous place ever,' said Kristina Erbenich, 38, clambering onto her bike, a heavy pack on her back. The former chef said she spent $14,000 on hotel rooms before her savings ran out. 'If everyone around here is so rich, why can't they do something to help?' Aid: Kathy Jackson, CEO of Second Harvest Food Bank, gives a tour of the supply area at Second Harvest Food Bank. Record numbers of Silicon Valley residents are slipping into poverty United Way Silicon Valley CEO Carole Leigh Hutton wonders the same thing. 'How is it that in an area so very rich, we have so many people so very poor? Why can't we break that cycle? 'With all the brain power in the Silicon Valley, we should be able to solve these problems. But what we need is the collective will.' The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation's wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development. 'The fact is that we have an economy now that's working well only for those at the very top,' said Lawrence Mishel at the Economic Policy Institute in Washington D.C. 'Unless we adopt a new approach to economic policy, we're going to continue going down this path, which means growth that does not really benefit the great majority of people in this country.' Nationally, Mishel says the declining value of the federal minimum wage is a major factor driving inequality. On Monday, in an effort to address this, minimum hourly wages will rise from $8 per hour to a new minimum of $10 per hour, the nation's largest minimum wage increase approved by voters last fall. While it's a dramatic shift for tens of thousands of workers, it's a minuscule fraction of the increases top earners in the region enjoyed last year. Going: San Jose city workers Mark Ruffing, left, and Rita Tabaldo attach eviction notices to a tent at a tent city in San Jose Silicon Valley's top tech magnates inched up the Forbes annual list of the richest people on the planet released this week. Oracle Corp. CEO Larry Ellison had a reported net worth of $43 billion, Google co-founders Larry Page and Sergey Brin had about $23 billion each, Facebook CEO Mark Zuckerberg, was worth an estimated $13.3 billion, and Laurene Powell Jobs, widow of Apple Inc. co-founder Steve Jobs, had an estimated worth of $10.7 billion. 'The wealth numbers are staggering, they are absolutely staggering,' said Alf Nucifora, who chairs the Luxury Marketing Council of San Francisco One in five ultra-wealthy Americans, defined by having a net worth above $30 million, lives in California, stoked by the 'wealth-generating cluster' of the Silicon Valley, according to WealthX, a company that tracks the super-rich. Stanford University, in Palo Alto, boasts 1,173 alumni with a net worth of more than $30 million - only Harvard University and the University of Pennsylvania have more. 'The Silicon Valley is an ecosystem of human capital, venture capital, risk, an educational infrastructure,' says WealthX president David Friedman. 'All of those things combine into this glorious cocktail of prosperity.' But many residents, even those with college educations, are finding it tougher than ever to make it in the Silicon Valley. Disparity: Kristina Erbenich, right, is handed an eviction notice at a tent city in San Jose. Meanwhile Silicon Valley's top tech magnates inched up the Forbes annual list of the richest people on the planet released this week Before the Great Recession, about 10 percent of people seeking food had at least some college education. Today, one in four who line up at food pantries for bags of free food have been to college. Last year the share of households in Silicon Valley earning less than $35,000 rose two percentage points to 20 percent, according to the 2013 Silicon Valley Index. 'There are millionaires, even billionaires, who sit in their sunrooms watching me work in their gardens and they have no clue what's going on,' said Sherri Bohan, a credentialed horticulturist who ran a landscape gardening firm for 30 years and raised two sons as a single mom. Today, retired and disabled, she picks up a free bag of groceries every week at her local food bank. Without the food she says she would go hungry. Silicon Valley's rich do give, and often significantly, but the money mostly leaves the area. Facebook's Zuckerberg gave $100 million to Newark N.J., public schools in 2010; his $500 million gift to the Silicon Valley Community Foundation last year has yet to be designated. The Google Foundation donated about $11 million in 2011, according to its tax forms, largely to global environmental and health projects. Poverty: Median incomes fell throughout the Silicon Valley. The tent city in San Jose is being removed 'Many people come here to work, but they have no idea what's really going on,' said Lisa Sobrato Sonsini, whose Sobrato Family Foundation - funded by profits gained as a leading real estate and development firm in the region - is the single largest contributor to local charities in the region. 'The companies are generous, but they don't see the need directly in front of them, they want to send their money away.' Phyllis Kizer, a long time high-tech business analyst, is disturbed by the challenges people in her community face. 'Looking at myself, I'm very well paid for what I do, I have no complaints,' she said. Once a week, Kizer heads to a low income school where she sits with children, including recent immigrants, helping them learn to read. 'I love books, and I love teaching,' she said. 'I wanted to pass that on. Some of these children, they can really go far, but we need to help.'

'In many cases Americans can do better on benefits than in an entry level job': Data shows more than a THIRD of the U.S. is on welfare handouts Around 110 million Americans are now on government welfare benefits This equates to more than one third of the country relying on handouts At least 51 million are using food stamps and 83 million are on Medicaid Analysts are calling for the minimum wage to be increased to $10.10 an hour +2 Around 110 million Americans are now receiving government assistance, one third of the country A third of Americans are now on welfare benefits, prompting calls to raise the minimum wage and encourage more people to stay in work. New census data has revealed that around 110 million Americans are receiving government assistance of some kind. The number includes people receiving 'means-tested' federal benefits and subsidies based on income. Those receiving food stamps, subsidised housing and Temporary Assistance for Needy Families are also included in the total. At the end of 2012 around 83 million were collecting Medicaid and 51.5 million were on food stamps, with some benefitting from multiple programs. Analysts have raised concerns that the programs are encouraging people to stay at home rather than work. They pointed out that when recipients combine several government assistance programs, in many cases they pay better than going to work. Michael Tanner, from Cato Institute think tank said that in the eight most generous states, the benefits are comparable to a $20 minimum wage. This would exceed the $7.25 minimum wage in most states. 'So in many cases people could actually do better on welfare than they could in an entry level job,' said Mr Tanner. Supporters say the safety net is necessary to keep Americans from living in dire conditions. And many argue that a solution would be to raise the minimum wage to $10.10 an hour. 'I think a lot of people would do the jobs when they pay a living wage,' said Melissa Boteach, from the Center for American Progress. 'In addition, there's growing jobs in health care and information technology and energy. There's a lot of places where, if able to make investments, we can really grow our economy in those sectors.' Tanner said there must be a serious effort to put people back to work because the continued growth of government assistance programs is unsustainable. +2 President Obama urged Congress to reinstate jobless benefits for more than a million Americans this year 'You can't in the long run have a society in which you have to rely on a smaller and smaller group of wealth producers who have to support more and more people who are not contributing to that wealth,' he said. The number of people on such benefits is up slightly from 2011. The government still runs a half-trillion dollar deficit, according to the most recent estimates, and the national debt is nearing $18 trillion. Heritage Foundation analyst Rachel Sheffield has criticised President Obama's plan to vastly increase spending on welfare. She also accused the Obama administration of giving Americans less incentive to find work and eventually free themselves from public assistance. 'Unfortunately, the federal government tends to measure welfare success by the number of people receiving benefits,' she said.