Income chasm widens in San Diego

The income gap between San Diego’s very richest and everybody else is widening, but still, inequality here remains less scary than it is in the nation as a whole. That may partially explain why Occupy San Diego has been less rancorous than similar protest demonstrations in other cities.

In an attempt to measure income inequality, the United States Census Bureau’s American Community Survey publishes a “Gini coefficient” for various metro areas. In a coefficient of 0, income is perfectly distributed — every breadwinner brings home an identical slice of bacon. A coefficient of 1 means that one household collects all the loot. Most cities rank between 0.4 and 0.5. Only a few metro areas, such as New York City and towns in Connecticut’s Gold Coast, have coefficients above 0.5 — reflecting, respectively, the presence of obscenely paid Wall Streeters and billion-dollar-a-year hedge fund operators.

In 1990, San Diego’s Gini coefficient was 0.428, well below the nation’s 0.445. Equality (well, sort of) reigned. It didn’t last. In 2000, the local Gini had risen to 0.455 but was below the nation’s 0.463. Last year, San Diego’s had inched up to 0.458 but remained below the nation’s 0.469.

Liberals and conservatives have different explanations for the gap between the rich and the rest. Liberals tend to blame three decades of tax policies favoring the rich; the influence of big money on politicians; companies’ shipping of jobs to low-wage nations to bolster short-term profits; the rapid decline of private sector labor unions; the escalation of top management pay; companies’ reluctance to hire even though they sit on cash; and high corporate profits in a weak economy.

Conservatives may agree with some of those arguments, but they tend to stress the rapid growth of high-tech jobs that require intensive education and hence higher pay.

San Diego’s experience can buttress both points of view.

San Diego companies have moved many jobs overseas. Private sector manufacturing is only 5.3 percent of the local workforce, compared with 6.9 percent nationally. Chief executives of local tech companies often rake in high pay. Last year, Qualcomm’s boss, Paul Jacobs, took in $17.6 million, which is 520 times the median workers’ pay, according to the AFL-CIO. Gregory Lucier of Life Technologies grabbed $11.5 million, or 339 times what the working stiff makes, while Illumina’s Jay Flatley got $6.6 million and NuVasive’s Alexis Lukianov $6.2 million.

The ordinary tech employee makes more than those in other professions. According to the occupational employment statistics of the California Employment Development Department, San Diego computer and information systems managers average $128,628 a year, biochemists make $95,772, space scientists $118,919, and computer programmers $78,775.

Contrast those figures with bartenders $20,850, waiters and waitresses $20,235, short-order cooks $23,279, and maids $21,366.

According to the 2010 census, the county’s poverty rate rose to 14.8 percent last year from 11.1 percent in 2007, which was recession-free until late in the year. Median household income dropped to $59,923 from $60,231 in 2009.

Sums up Corinne Wilson, research and policy lead of the labor-oriented Center on Policy Initiatives, “San Diego is creating more jobs with low wages and also low wage growth — in tourism, for example. If you look at the major development projects the City is talking about, the Chargers stadium and convention center expansion, these [would not be creating] high-paying jobs and do not come with benefits — unless there can be some mechanism to make them good jobs. The top 20 percent of San Diegans capture 49 percent of the income generated in San Diego County. This problem is not going to end until we get people back to work in middle-class jobs with benefits.”

Kelly Cunningham, chief economist for the National University System Institute for Policy Research, says that tech is San Diego’s savior. He figures that the average tech/biotech salary in San Diego last year was $93,800, more than double the $45,000 average salary of nontech workers. Without a doubt, the higher tech salaries contribute to the big wage disparities. He laments, “We have lost some tech jobs to overseas, such as in communications and recreation equipment,” but all told, “We have been able to retain tech jobs; otherwise, the economy would have been much worse.”

What’s more, there is a big ripple effect from technology — that is, jobs that are created indirectly from the county’s concentration in technology. In 1990, tech jobs were 11.1 percent of San Diego employment. Now they are 11.2 percent. However, if you count the indirect contribution (suppliers and service providers, for example), technology is responsible for 29.3 percent of San Diego jobs. “We need more high-tech workers,” says Cunningham.

W. Erik Bruvold, president of the National University System Institute for Policy Research, concedes that “Over the last 20 years, the upper 10 to 20 percent has seen almost all the income gains.” (Nobel laureate Joseph Stiglitz points out that the richest 1 percent owns 40 percent of the nation’s wealth.)

But Bruvold says there are flaws in the Gini coefficient. For example, the nation is growing older, and as people go into retirement, income decreases. “That may be another reason for the inequality,” he says. “I would say the growth in tech and the aging of the population contribute to the increase in inequality in the Western democracies,” including San Diego.

In any case, it is clear that while the San Diego establishment pushes for low-wage, no-benefit jobs provided by a convention center expansion and a new football stadium, more money and effort should be put into providing higher-paying tech jobs. The Gini coefficient might continue rising, but overall, the county would be better off.