It was the second day of the semester at San Jose State University, and Elisha St. Laurent was stressing. She had unwittingly enrolled in a seniors-only class — she was just a junior — and needed another class on her schedule, stat. Most professors prohibited an add if a student missed the first class, but St. Laurent was in luck: Professor Scott Myers-Lipton had room in his Social Action class, an elective wherein students are required to craft (and then implement) their own public policies beyond the bubble of the classroom.
St. Laurent was presented with two options: Join an initiative at a local elementary school or help raise San Jose’s minimum wage. The latter instantly resonated with her. She was making $9 an hour as a cashier at a Santa Clara Micro Center, the latest in a string of retail jobs St. Laurent had held since she was 14. She wasn’t working for beer money, either. She had her son Zayne, then four years old and whom she was raising along with her mother, to support. She’d never been a class warrior. She’d never gotten involved with politics before. But soon, she found herself at the forefront of the push for Measure D — the San Jose ballot initiative that would mandate the city’s 70,000 minimum wage workers to get a 25 percent raise from $8 to $10 an hour, the single largest minimum-wage jump in the nation’s history.
The students weren’t piggybacking on the idea of a progressive mayor or union leader (although virtually every left-leaning organization in Silicon Valley would eventually support it). Measure D originated in October 2010, when Marisela Castro, the daughter of onetime farm workers and a then-sophomore, approached Myers-Lipton about wanting to raise the minimum wage. At the time, Castro was working at an afterschool program with middle schoolers. Each day she noticed that they were stealing graham crackers and chips and hoarding them in their pockets.
“Their parents were gone, they weren’t too involved at all,” Castro said. They’re “working one or two jobs and getting paid really little.” She figured if San Jose’s minimum wage went up, these parents would be able to spend more time with their kids. If they were more available, then a whole host of issues she saw play out daily — anything from low academic performance to behavioral problems to hunger pangs — would be easier to tackle.
After doing a little research and finding out that San Francisco had implemented a wage hike in 2003, Castro decided to recruit her fellow students. She put up fliers and made the rounds to classrooms, giving out her email and phone number. But after a semester, she could only get one person to join her cause. That’s when Myers-Lipton suggested she take his Social Action class. Castro signed up in the spring semester, and was at first only joined by Leila McCabe, Saul Gonzalez and one other. Gradually, over the course of a year and a half, the project hit a nerve with a revolving door of student organizers.
Elisha St. Laurent was supporting a son as a retail cashier earning $9 an hour when she got involved with the campaign to raise the minimum wage.
This legislative fight was hatched in a perfect storm. It was happening post-recession, in the wake of open global panic about the economy. It was happening during mind-boggling tuition hikes — SJSU has raised its tuition by 141 percent since California’s last minimum wage increase in 2008. It was happening when gas prices often surpassed $4 a gallon. The campaign kicked off just as thousands of angry Americans, many of them young, descended on Wall Street and hundreds of satellite cities, including San Jose. This wasn’t President Obama’s generic call to raise the federal wage in the State of the Union address. This was a fight that belonged to the students. And the fight wasn’t just altruistic, as the students’ own paychecks hung in the balance.
The San Jose campaign came at the heels of minimum wage battles being fought across the country, from New York to New Mexico to the congressional floor. Democrats in the Senate had, by this time, introduced and repeatedly called for the passage of the Fair Minimum Wage Act, which would raise the federal minimum to $10.10. But at its heart, the minimum wage is an idea that’s most resonant in cities like San Jose, where poverty and homelessness are all the more obvious next to Silicon Valley’s extreme prosperity. The funneling of creative, educated young people and venture capital dollars to a city, which in turn gives birth to a service industry to support this class, is both the modern emblem of urban success and a recipe for a cavernous wealth gap.
San Jose has long been a tech mainstay that other start-up-friendly cities across the country, like Omaha and Atlanta, hope to emulate. But could it also be a model for young, urban activists fueled by the very inequality their city’s wealth has created?
Measure D may have started in the classroom, but it quickly spilled out into the San Jose streets. Encouraged by Cindy Chavez of the South Bay Labor Council, the students (who at this point had formed a group called CAFÉ-J) decided it was worth conducting a poll to gauge public opinion. Armed with a 2007 study from the University of Berkeley that found San Francisco’s minimum wage hike had no negative effects on job growth, they set up a fundraiser to pay an outside group $6,000 to conduct the poll, and were emboldened by the results: 70 percent of those polled were in favor of the measure. That’s when unions, churches and other progressive groups perked up. They formed a large coalition and in early 2012, set about petitioning to get the measure on the ballot that year.
St. Laurent remembers her first day getting signatures. “I literally got maybe five,” she tells me later. “I was like, ‘I don’t want to do this, this is so annoying.’ I was only doing it for a class project [at first].” She and the others petitioned on campus and at Safeway, flagging down busy shoppers or students rushing to class. Whereas before she usually got home in time to greet her son from kindergarten, she was now staying on campus from 7:30am to 9pm, glimpsing Zayne for half an hour a day. When she wasn’t collecting signatures, she was phone banking, promoting the campaign on Facebook or instructing fellow petitioners provided by the Labor Council.
The group eventually amassed more than 35,000 signatures from the community, and hand-delivered them on March 29, 2012, after a barefooted march to City Hall. Myers-Lipton asked St. Laurent to speak and tell her story. She was terrified at first, overcome by nerves, but when she realized the news media was hanging on her every word, she “was just inspired,” she says. “I’d never told my story like this, and for it to be broadcasted was really empowering.”
Even she was ready to quit when her nephew died two months before the election. She remembers thinking: “I’m depressed, I don’t want to get out of bed, I can’t feed myself, I can’t feed my kid, I can’t do anything, and you want me to do what?”
St. Laurent was right. People were starting to notice — including the Chamber of Commerce and the mayor, both of whom were against the measure. The Chamber formed a group that raised almost a million dollars to defeat the measure, claiming it would cause businesses to raise prices and bleed jobs. Many small businesses were sympathetic to the workers, but admitted they may have to cut hours or staff. Matt Mahood, the Chamber’s CEO, and Scott Knies, executive director of the San Jose Downtown Association, wrote an impassioned op-ed in May 2012 in the San Jose Mercury News, whose editorial board opposed Measure D. “[The increase] will have a domino effect that employers have had no time to plan for,” Mahood and Knies wrote. They warned of layoffs and stiff competition from neighboring communities.
In the end, the “Raise the Wage” coalition was outspent by hundreds of thousands of dollars. But they had the last laugh at the voting booth: That November, Measure D passed with 60 percent of the vote, making San Jose the fifth and largest city to raise its wage above its state’s minimum.
San Jose bills itself as “the capital of Silicon Valley,” a place where businesses thrive and entrepreneurs are rewarded for taking big risks. Its metro area has the second highest wealth concentration in the country, according to the Census. San Jose State claims to supply Silicon Valley with the most education, engineering, computer science and business graduates.
But that doesn’t mean the students are all Mark Zuckerbergs. They have little in common with the graduates of, say, Stanford University, 1,174 alumni of which have a net worth of more than $30 million. Most of San Jose State kids are from neighboring cities in California, and usually not rich ones. Myers-Lipton estimates that 80 percent of SJSU students have jobs on the side. Most of them have loans. The student body is incredibly diverse — white, black, Hispanic, Asian, foreign-born. Some of them took two, three, eight years off between high school and SJSU. Some, like St. Laurent, transferred from community college. Some have children.
And many of them have low-wage jobs, including the sociology majors who spent the last two years fighting to pass Measure D. Castro, along with a few other students, made less than $10 an hour working at different afterschool programs. Tahsina Haq, 24, made the minimum as a cashier. Leila McCabe made drinks that cost nearly her hourly wage at Starbucks and Jamba Juice. Castro and many other students were from immigrant communities, where some of their undocumented neighbors make way less than that.
From a bird’s eye view, the minimum wage campaign had the perfect narrative; McCabe admits that it helped a lot to have a heartwarming story. The concept was simple and easy to explain. It seemed to have a clear, moral resonance. “We thought, ‘This is winnable,’” McCabe says, especially in a city where the low-wage population was growing as fast as start-ups’ profit margins. As of May 2013, almost 88,000 residents in the San Jose-Sunnyvale-Santa Clara area worked in leisure and hospitality, and that number is inching up by the thousands every month.
But the fight wasn’t without its obstacles. Economic pressure motivated the students to fight, but those same pressures pushed an already-overworked group to the edge. Saul Gonzalez, 30, worked a fulltime job at an advocacy organization while holding down two other side gigs; he survived on about four hours of sleep a night. Almost every student involved in Measure D was juggling classes, one or two jobs and endless organizing meetings.
It became hard to maintain a consistent group of students. Castro is usually the one credited in newspaper articles as the driving force behind the campaign, but after the first stages, she was overwhelmed with work obligations and health problems, and stopped coming to meetings. Pinning down volunteers felt like an insurmountable problem. Many students would show enthusiasm, maybe even make it to a meeting, only to never show up or pick up their phone again. And before a group of students would graduate, fresh volunteers had to be found.
“We kept passing the baton,” says Diana Jones, a single mom who joined the campaign late in the game. “A lot of people were going through things… and it wasn’t anything to take personally, but they couldn’t always be engaged.” That’s the downside of fighting against your own roadblock, when that roadblock is poverty.
“Everyone was going through something,” St. Laurent recalls. “We were all just losing each other, and we weren’t connecting.” Even she was ready to quit when her nephew died two months before the election. She remembers thinking: “I’m depressed, I don’t want to get out of bed, I can’t feed myself, I can’t feed my kid, I can’t do anything, and you want me to do what?”
St. Laurent called an emergency meeting, where she planned to resign from the campaign. But when 15 people showed up — which, at that point, was a lot — she was so touched that she couldn’t go through with it.
“That was the moment we were all inspired by each other,” she says.
Diana Jones brought her young son to rallies and to table with her on campus.
A sense of legacy seemed to propel the campaign even in its bleakest moments. Jones felt a deep connection not only to the issue at hand, but how it fit with the city’s history. Jones’ mother was a student at San Jose State in 1968 when two fellow students, John Carlos and Tommie Smith, both African Americans, went to the Mexico City Olympics to compete as runners. A sociologist friend, Harry Edwards, had urged the two athletes to boycott the Olympic games in the wake of Martin Luther King, Jr.’s assassination. Instead, Carlos and Smth become global icons of the Black Power movement when they chose to, during the medal ceremony, “raise their fist against racism and poverty” while the U.S. national anthem played. At that time, San Jose State’s campus and fraternities were segregated. Blacks weren’t allowed to take the same classes as whites.
To Jones’ dismay, her mother wasn’t involved at all.
“She was like, ‘I was too busy. I had classes, had to take care of my family. Didn’t have time for that,’” Jones says. “I was like, ‘Alright, this is kind of like my opportunity to right the wrong and be involved.’ I don’t want to let history pass me by.”
Jones started bringing her son to rallies and registration tables. She brought him to campus when John Carlos visited (and endorsed Measure D), and he took a picture with him. She told her son, “You get to actually stand with the man that stood for change… all hugged up against him. Someone’s mom is taking their kid to see Lil’ Wayne right now, you know what I’m saying?”
San Jose’s legacy of social justice is the exception, not the rule. The streets are clean and uniform. The city’s Santana Row is polished and upscale, dotted with chains like Gucci and local concept restaurants like Left Bank Brasserie and Blowfish. Not exactly the picture of a city with a rebellious streak.
“What’s most striking about San Jose is that it’s a docile place,” says Russell Hancock, president and CEO of the Joint Venture Silicon Valley Network. “It’s not characterized by class tension… We’re not a heavy, blue collar, unionized town.” For the most part, San Jose is “swept up in this mentality that… this is a place of opportunity, that it’s a place where we can be creative, entrepreneurial, innovative.”
“We” refers to the 40 percent of the workforce that’s in tech jobs. In Silicon Valley terms, San Jose is old-school; one journalist that covers the tech world there told me it’s not “hip enough” for scrappy start-ups, famously hosting bigger global Fortune 500 companies like Adobe, eBay and Cisco in pristine, gated campuses. And the wealth gap the tech community creates has become just as well known. A report put together by Hancock’s company found that food stamp participation is the highest it’s been in 10 years. The homeless population, residing in San Jose’s perennially raided tent encampments, rose 20 percent in two years. The average income for Hispanics, who make up a quarter of Silicon Valley residents, fell to a new low of about $19,000 a year in 2011. Meanwhile, the rich have never been richer, and prices are rising along with their salaries. San Jose’s median home price is almost $600,000, and rents average just under $2,000 a month.
This wealth divide plays out in cartoonish ways on San Jose State’s campus. Engineering and business majors are sequestered in spotless, state-of-the-art classrooms while humanities and social science departments crumble.
“We have old wooden seats,” Jones tells me as we sit on the second floor of Martin Luther King, Jr. library. “Like desks with a little groove for the pencil. And mismatched tiled floors. We have an old, out-of-date heater-slash-furnace, AC that kind of works, doesn’t work.” And then there’s the engineering department, “where the AC just blows your hair back… They have like three-ply toilet paper where we have something equivalent to paper towels. Every little difference that you can think of is made. Down to toilet paper.”
It’s by now a well-worn fact that tech dominates in deeply divided Silicon Valley, but Hancock points out that it wasn’t always this way. Just 10 or 12 years ago, he says, the Valley was made up of mostly mid-wage earners in cubicles and factories. Then came globalization, along with the dot-com boom and Bush-era tax codes. Nowadays, the wealth gap is the stuff of every other think piece, and the cost of food, housing, gas and health care in San Jose has risen exponentially in the last decade. During the Measure D campaign, the non-profit Working Partnerships estimated that if the minimum wage were correlated to the cost of living, it’d be at least $16 an hour.
Engineering and business majors are sequestered in spotless, state-of-the-art classrooms while humanities and social science departments crumble.
Nearly every student I spoke with cited San Jose’s inflated cost of living as a motivating factor for raising the minimum wage. Brooke Wayne, a recent SJSU graduate who joined the Measure D campaign January 2012, is blunt about why it resonated with her. “I felt like California is very expensive. It’s very, very expensive,” she says. “I didn’t see how $8 could possibly make it in California.” She balks at the fact that the minimum wage in Arkansas and Oklahoma, where her mother’s family is from, was only 75 cents less than in California. “There’s a world of difference in the standard of living,” she says.
Ultimately, when put in the larger context of San Jose, the fight over Measure D wasn’t between David and Goliath. It was a fight between poor minimum wage workers and precarious, middle-class small business owners who are subject to the same inflated cost of living as individuals. But the tech sector, which holds the vast majority of wealth in the region, barely registered this fight on its radar. Several Silicon Valley tech networks I reach out to have no comment on the matter, and a few engineers and coders I speak with barely know about the measure. The general consensus seems to be that when it comes to the civic life of the city, the tech industry remains completely separate.
“Almost any minimum wage job at a major tech company has surely been outsourced to some other company,” San Jose Mercury News business columnist Mike Cassidy writes in an email. In terms of politics, “the valley does exude a certain progressive social consciousness, but ironically it’s often at a 35,000-foot level, rather than at a down-the-street level.”
Members of the tech community may be somewhat messily dipping a toe in national politics, as the New Yorker reported in May in meticulous detail, but in terms of local fights, they stay out of them — mostly because these fights don’t affect them. In February, Rebecca Solnit vividly described tech industry workers in the London Review of Books as being shuttled around in luxurious little “pods,” immune to the concerns of public transportation, subsidized housing and other civic matters, even as they inflate the cost of living for everyone else.
This disconnect reared its head during the recent BART strike in San Francisco. Marketplace quoted Sarah Lacy, Pando Daily’s founder, as saying the tech world is a “meritocracy,” a concept that’s “directly opposite to unions.” Techies and blue-collar workers in San Francisco just “live in different worlds.” And for the San Jose tech sector, Measure D was as relevant as Uber and $20 BLTs were to minimum wage workers.
San Jose’s widening wealth gap is simply an extreme example of what’s happening everywhere in the U.S. The ascendant cities courting entrepreneurs and businesses — Houston, New Orleans, Miami — as well as infamously expensive cities like New York, Los Angeles and San Francisco are all becoming more unequal. The minimum wage may not make the rich less rich, but it tangibly closes the gap between them and the bottom in places where that gap is hopelessly large.
San Jose is markedly less politically progressive than other cities that have recently implemented minimum wage hikes: Santa Fe, Washington, D.C. and San Francisco. But it found influence in the latter city, which currently has the highest minimum wage in the country. (In fact, much of the language of Measure D was lifted from its neighbor.) A couple years after San Francisco’s wage hike, the Center for Economic and Policy Research did a study finding that businesses were thriving, not least because there was less turnover. Another study done in Pennsylvania came to the same conclusions. A month before the 2012 election, the University of California-Berkeley put together a study of the projected effects of a minimum wage hike on San Jose’s economy, and predicted it would have positive results.
Many economists and most conservatives say that a minimum wage increase hurts job creation by preventing businesses from hiring new workers. Other economists say that raising the minimum wage and indexing it to inflation is the antidote to the widening wealth gap in U.S. cities. It will also, they argue, stimulate the economy — business owners often nudge up prices, but higher wages mean people have more money to spend.
In San Jose, it’s played out both ways. Nick Taptelis, owner of Philz Coffee, has stores in both San Jose and San Francisco, so he wasn’t freaked out by the prospect of raising employees’ wages. After the increase a decade ago, he says, “we saw how our team was a lot happier, and everyone was working harder.” Taptelis implemented a wage increase at his San Jose location several months before the requirement as a gesture of good faith, and witnessed the same thing.
“When the employees are happier and working harder, for us the line flows a lot faster,” he says. “Business automatically increases because the line’s not sitting out the door.” Plus, he points out, “customers like to see happy people.” If anything, he thinks Measure D has given his business a boost.
There’s no denying that big box stores can absorb the cost of a couple more dollars an hour. Still, the same pressures that hit the students — the cost of food, real estate, health insurance — hit small businesses, many of which are franchises or privately owned establishments with slim profit margins. So far, three months in, the increase hasn’t decimated any businesses. But they certainly feel a pinch.
Marisela Castro, the daughter of onetime farm workers, began the battle to raise San Jose’s minimum wage as a student project while attending San Jose State University.
In the first two weeks of the minimum wage increase, many businesses responded in kind. Round Table Pizza and Mezcal Restaurant reduced hours. Nothing Bundt Cakes, a national chain, raised prices by $1. A local car wash fired some of its supervisors. Yonhee Shon, owner of The Pita Pit, raised her prices 3 percent and trimmed her employees’ shifts. “I work longer hours instead,” she says. “A 25 percent increase is just too much all at once.” Shon says she also has noticed fewer customers coming in than before, although she can’t be sure.
Charlie Major, owner of Charlie’s Cheesecake Works, doesn’t object to a minimum wage increase on principle, but he too has felt the squeeze. He’s raised prices 7 percent and noticed that his retail sales are off by 8 percent.
“I had a [high school] kid that wanted to come and work for me after school and during the weekends to wash dishes and do odd jobs,” Major says. “The plan was he’d eventually move up the ladder and learn how to bake, how to run the register.” Major was going to pay him $8.50, a perfectly decent wage for a high schooler. “But for $10 an hour I’ll just wash my own dishes.” And that’s exactly what happened.
In this hapless high school kid, Major constructs the platonic ideal of a minimum wage worker — a teenager who still has a roof over his head and no college loans, who can afford to move up the old-fashioned way. The problem is, many minimum wage workers are paying rent or feeding families with their paychecks.
Austin Nichols of the Urban Institute believes the minimum wage has a significant impact on inequality, especially in the short-term and during an economic recession, when employers may respond by hiring more part-time workers. “It’s not going to close the gap between the middle and the rich,” he says, “but it could certainly have a big impact on the low versus the middle.”
Nichols adds that some of the negative effects economists worry about manifest later, a sentiment echoed by San Jose’s Chamber of Commerce president, Matt Mahood. And the success of a citywide initiative depends on the scope of the measure — whether it’s on a federal, state or municipal level. If it’s a small city, it may create disincentives for businesses and customers. But if it’s in a larger city or implemented statewide, it may have a larger effect. Nichols says it may make sense to raise it in San Jose and not surrounding areas, since prices for goods and real state are higher.
But Gary Burtless of the Brookings Institute sees citywide initiatives as a stopgap measure, no matter the city’s size. Even if the cost of living is higher in San Jose, he says that one should standardize the minimum wage for the surrounding areas to minimize competition. Otherwise, “it’s not difficult for [customers] to drive an extra mile to get a burger across the city boundary.”
Many of the minimum wage workers who got a raise on March 11 don’t live in San Jose at all. Instead, they retreat south to places like Gilroy or Morgan Hill, or east to suburbs like Sunnyvale, where the rents are cheaper. On a beautiful, breezy day in late April, I drove the 20 miles down to Gilroy, a city that’s almost 60 percent Hispanic. As I approached, I rolled down the window and sniffed to see if I could catch the fabled smell of garlic (Gilroy processes more garlic than any other place in the world). My nose detected a spiciness in the air, although I smelled a stronger scent of cow manure and, once the fields turned into newly minted strip malls, the faint burn of exhaust.
Saul Gonzalez meets me on a Starbucks patio right near the highway. He’s well dressed, tall, gentle and slightly distracted; he’s on his lunch hour and can only talk for a few minutes. Gonzalez was involved in the Measure D campaign from its inception and then on and off until Election Day. He grew up in Gilroy, the southernmost city in Santa Clara County, in a low-income housing complex called Aspen Grove, with 11 other siblings and his parents. His mother worked at Motel 6 as a maid, and then later at a tomato-canning company. His father, an undocumented Mexican immigrant, worked in the fields making less than minimum wage, picking garlic and chili and getting paid by the crate ($3.50 each). It’s what lots of people did just a couple decades ago, back when Gilroy was nothing but farmland.
“Here, where we’re sitting, this used to be fields,” he says. “I remember taking [my father] to Target one time, and he said, ‘I remember when this was empty. There was no streets, there was no buildings, just fields. And trees.’”
In terms of politics, “the Valley does exude a certain progressive social consciousness, but ironically it’s often at a 35,000-foot level, rather than at a down-the-street level.”
Two of the largest employers in Gilroy are still Christopher Ranch and Olam Spices and Vegetables. But low-wage retail and service jobs began to multiply in the early 1990s, when the box stores starting coming. Gonzalez’s first job out of high school was a cashier at KFC. Now, Gilroy is sprawling and full of chains. Unlike in San Jose, they still pay $8 an hour.
Some South Bay residents are already starting to commute to San Jose for the wage premium. Like Veronica, Gonzalez’s 18-year-old cousin, who has worked at Taco Bell for the past year. After Gonzalez told her about Measure D, she asked her supervisor if she could be transferred to a restaurant in San Jose. He obliged.
Veronica now gets $150 more every two weeks, which she’s using to save up for a car. Until then, though, she’s spending $80 to ride an hour and a half on the bus. A back condition makes the commute tough; Veronica says she may have to quit soon at the urging of her doctor, who tells her she has “bones like an old person.”
“I love Taco Bell,” says Veronica, who’s baby-faced and friendly, defying every stereotype of a disaffected service worker. “I would love to stay… but after this back problem, my work is limited.”
The migration goes the other way. Mahood, the San Jose Chamber president, tells me that franchise-operated businesses that previously looked at expanding in San Jose have deflected to bordering cities. The San Jose Downtown Association has launched a campaign encouraging residents to buy local rather than seek out business that may not have raised their prices.
It’s too early to tell whether customers are actually crossing city borders to avoid price hikes. But it’s become clear that declaring victory in San Jose and ending the fight over wages in the region isn’t a sustainable endgame. Dave Cortese, supervisor for District Three of Santa Clara County, has called for a similar wage increase to level the playing field for the whole area, so that neighboring towns aren’t competing with each other. Already, there are signs others agree — a Sunnyvale city council member recently approached Cortese about matching the wage. “It almost becomes politically contagious,” he says. Students in Oakland, retired seniors in Eureka and city council members in Berkeley are all launching copycat campaigns. Neighboring colleges like De Anza are hooking up with Working Partnerships to launch their own initiatives.
Meanwhile, Elisha St. Laurent is involved with a new project: a push for affordable housing in San Jose, an initiative whose participants overlap with Measure D’s. “People have been surprisingly proactive in this,” she says. “We really had a dull moment in the beginning… but [after the election], people really feel like they can do something.”
This story was produced with assistance from the independent Economic Hardship Reporting Project.
Our features are made possible with generous support from The Ford Foundation.
Nona Willis Aronowitz is a journalist, Pipeline Fellow at the Roosevelt Institute and cofounder of Tomorrow Magazine. She’s working on a book called The Crash Generation, about how the recession has affected Millennials’ class consciousness. She tweets at @nona.