December 13, 2005

Income gap widens in San Francisco area: report

SAN FRANCISCO (Reuters) - The 1990s technology boom in the
San Francisco Bay area lifted earnings of high-wage workers by
20 percent while low-wage workers' earnings remained flat,
widening the income gap between wealthy and poor in the region,
according to a report released on Tuesday.

The region's high-tech economy, centered on Silicon Valley,
rewarded high-wage employees and middle-income workers, but
low-wage workers missed the rising economic tide from 1995 to
2000, according to the California Budget Project report.

"In 1979, high-wage workers in the Bay area earned 2.2
times as much as low-wage workers. However, by 2004, high-wage
workers earned 3.0 times as much as low-wage workers,"
according to the public policy research group's report.

"Even the boom years of the late 1990s did not bring wage
growth for low-earning workers," the report added. "Since 1979,
the hourly earnings of the Bay area's low-wage workers actually
declined 4.6 percent after adjusting for inflation, signaling
that the enormous wealth created in the Bay area did not
trickle down to the lowest earning workers."

Wealth generated by the tech-boom and despite the following
high-tech downturn has helped the San Francisco Bay area's top
and middle income earners finance homeownership in one of the
priciest housing markets in the nation.

By contrast, low-income workers are struggling in the local
housing market.

A single worker earning minimum wage in the San Francisco
Bay area would need to work 106.3 hours a week to afford a
studio apartment renting at the region's average fair market
value of $932 a month, according to the California Budget