In the port city of San Francisco, a loosely associated class of programmers and computer engineers are enjoying a golden age. The bohemian city has become the epicenter of tech culture, with startups reshaping transportation, consumption, and sociability to cater to wealthy tech workers. Due to the geographic constraints of a narrow peninsula and their ability to dominate a relatively fixed housing stock, tech workers have garnered tremendous public attention—principally around intensified trends of gentrification, displacement, and other expressions of urban inequality.^[1] Housing and labor activists in the San Francisco bay area are not alone in responding with a focus on inequality. From Occupy Wall Street organizers, to superstar economist Thomas Piketty, to the audacious Pope Francis, the collapse of housing wealth in 2007 and ensuing global crisis has concentrated attention on inequality as a widespread diagnosis for global disorder.

But to focus only on expressions of tech inequality in the San Francisco bay area obscures the robust traffic of financial venture investment that fuels the wealth of the tech sector. After briefly contextualizing the link between tech inequality and the financial economy, this essay will elaborate the contours of privilege and vulnerability of San Francisco tech workers’ “golden age.”

As inequality gains acute visibility in public discourse, it is crucial to embed discussions of inequality in an inquiry into the historically unique dynamics of capital accumulation that undergird unequal geographies and wealth divisions—in our context, that means grappling with our financialized economy and its corresponding expressions of uneven development. A term popularized by geographers, “uneven development” refers to the cyclical bursts of sector and place-specific rapid economic growth and their corresponding forms and places of development and underdevelopment.^[2] With its historical origins in Leon Trotsky’s analysis of imperial Russia in terms of “uneven” and “combined” development, the concept has been embraced by geographer David Harvey, who described the struggle to maintain competitive profits in capitalist societies as “continuous leap-frogging in the adoption of new technologies and new organizational forms”—a “leap-frogging” across space and sectors that benefits some and burdens others.^[3] Building on Harvey, sociologist Beverly Silver contextualized dynamics of uneven development in profitability “fixes,” which refer to the couplings of financial, spatial, technological, organizational, and product “innovations” that reinstate profitability following periods of intense competitive pressures on capital accumulation (the generation and investment of profits).^[4] The post-recession tech economy, for which the San Francisco bay area serves as epicenter, rests on a coupling of innovations in finance and in internet and communication technology (ICT) to generate competitive profits and massive wealth, relatively unencumbered by the constraints of labor and time.^[5]

The current “golden age” of San Francisco’s tech workers has no shortage of historical analogies.

The current “golden age” of San Francisco’s tech workers has no shortage of historical analogies. While these reoccurring pockets of privilege are always shaped by the specificity of their historical and geographic context, one intriguing example reminds us that uneven development occurs cyclically, is ripe with profound tensions, and is not specific to finance-led capital accumulation.

A century and a half ago in France’s busiest port city, Marseille, a society of dockworkers avoided the fate of tailors, shoemakers, and weavers by sustaining abnormally high wages, generous pensions, hereditary benefits, and local political power amid rapid French industrialization. The development of maritime industrial trade during the “hundred-year peace”, coupled with organizational, technical, geographical, and local political conditions provided Marseille’s dockworkers between 1840 and 1850 with “a position unique not only in Marseille but possibly in all of France.”

Yet as historian and social theorist William Sewell Jr. notes, by the 1870s this society of dockworkers experienced a dramatic decline in benefits and wages as the geographic expansion and modernization of the port, the influx of non-guild dockworkers, the organizational demands of steamships, and national regime changes eroded the peculiar conjuncture that enabled their decade-long golden age. While generated by different forms of capital accumulation (the French case rested on expansions in the maritime trade of industrial goods; the San Francisco case on accumulation enabled by venture finance and the stock market), both privileged niches illustrate how the dynamic of uneven development, and the inequality it generates, is deeply tied to specific strategies of economic growth.

Back in San Francisco, the privilege of tech workers is commonly explained by their limited supply. While Marseille’s dockworkers maintained a restrictive and hereditary “mutual benefit society,” tech workers have no such organization. Instead, the scarcity of tech workers is derived from trends in domestic socioeconomic reproduction. Decades of state disinvestment in education and recruitment by the tech and finance industries from restrictive elite universities have allowed for the emergence of a small group of skilled workers from middle and upper class families who could translate class privilege into economic privilege amid the turbulent restructuring of the information economy.^[6] Related are the caps on labor migration that regulate and restrict the ability of tech firms to recruit skilled workers from around the world.

But as suggested earlier, the relative scarcity of tech labor is only significant due to coupling of technological innovation and financial investment. The transformation in capital accumulation that buttresses this golden age is foremost characterized by the increased dependence on financial-service and speculative profits on the part of financial and non-financial firms alike.^[7] This rise in the profitability of FIRE (finance, insurance, and real estate) sectors has been paralleled by a decline in the profitability of manufacturing, falling real wages for all but the wealthiest, and a dramatic decline in the labor needed to produce high volumes of profits.^[8]

San Francisco’s tech workers derive their privilege in great part by their ability to attract shipments of venture capital and high company valuations.

A recent illustration of this in the tech sector is the $16 billion purchase by Facebook of WhatsApp, a startup with a mere 55 employees. As mainstream economists (as well as The Economist) concede, regardless of high profits and company valuations grow, “Facebook will never need more than a few thousand employees.”^[9] If the temporary privileged niche of Marseilles’ dockworkers was formed, in part, by their position as enablers of trade (necessary to the maritime expansion of industrial growth), San Francisco’s tech workers derive their privilege in great part by their ability to attract shipments of venture capital and high company valuations. Both leveraged a crucial dependency on the part of a burgeoning configuration of capital accumulation.

So, it’s not only the small supply of computer programmers but particularly the coupling of venture investment and innovations in ICT that gives this tiny pool of workers the ability to generate massive profits and high company valuations and accounts for their privileged status. The tensions built into this configuration are numerous, ranging from housing displacement, increases in unemployment and inequality, and the precarious flow of pension investments into speculative start-up ventures.^[10] But more profoundly, unlike pre-recession mortgage speculation, which helped to generate impressions of rising private assets and obscured the dramatic rise of inequality that paralleled the rise of finance, venture investments offer neither expanded job opportunities nor do they extend finance-enabled wealth effects. The current configuration appears unsustainable in economic and social terms.

Thus, following the analogy of Marseille’s dockworkers should compel us to focus on how the process of uneven development that created this privileged niche also threatens to destroy it.

This past April, tech giants Google, Adobe, Apple, Intel, and Pixar, spent $324.5 million to settle a lawsuit with 64 thousand programmers who alleged collusion between the firms aimed at decreasing competition for their labor and effectively capping their wages. This was perhaps the most dramatic illustration of the tech sector’s unwillingness to allow their workers’ wages to inflate as freely as the value of their stocks, but it was not the only one. In 2013, Bill Gates and Mark Zuckerberg partnered with Code.org, an online computer programming tutorial website, to launch a campaign aimed at incorporating computer programming into public school curricula. The idea has now been taken up by President Obama, whose computer literacy campaign urges students to not simply “play on your phone, program it.” Small for-profit “coding camps” have also sprung up nationwide—often unaccredited—that may charge anywhere from $5000 to $35,000 for a certificate. All these initiatives threaten the golden age of tech workers by potentially increasing tech labor competition.

Lobbying efforts to ease visa restrictions for high-skilled workers and innovations in the outsourcing of information labor—known as “microwork”—further undermine the bases of tech labor’s current privilege. The trendy FWD.US initiative—which is backed by a who’s-who of tech CEOs, including Mark Zuckerberg—has gathered significant celebrity and policy support for a very specific sort of immigration reform.

FWD.US builds on the lobbying efforts of other industry-supported organizations like Compete America, which have perpetuated the popular assumption that the act of immigration is itself a signifier of entrepreneurial spirit, and have been pressuring Congress to raise the annual cap of 65,000 H-1B visas (“specialty occupation” work visas). Last April, the cap on H-1B visas for 2015 was reached five days after applications opened. Expanding labor migration in STEM fields is popular because it enables tech firms to expand the pools of applicants and allows governments to “outsource” the training and education of workers who then contribute to domestic profits for the six-year duration of the visa.

“Microwork,” sometimes called “impact sourcing,” involves the use of global under-and-unemployed labor, overwhelmingly from the Global South, to perform simple data-based tasks online. It’s akin to a global information assembly line.

Arguably the most striking threat to the privilege of San Francisco’s digital dockworkers is the emergence of the “microwork” labor model, which firms like Google, LinkedIn, and Microsoft have begun implementing. “Microwork,” sometimes called “impact sourcing,” involves the use of global under-and-unemployed labor, overwhelmingly from the Global South, to perform simple data-based tasks online. It’s akin to a global information assembly line. Early initiatives that connected the world’s poor with Silicon Valley allowed firms to pay per data task. At this early stage, tasks range from data entry and data mining to transcriptions of multimedia content. Lacking a formal worker’s contract, this pay-as-you-go labor model lowers labor costs by simplifying complicated tasks and avoiding worker’s benefits. Explicitly promoted by industry pioneers as a Fordist division of information production, “microwork” could result in the deconstruction and global dispersion of high-skill domestic labor and inflict a formidable blow to the basis of tech labor’s golden age. Like the calls for the opening of immigration flows, microwork claims a social conscience. Pre-branded as a poverty solution, this model of “socially-targeted sourcing” has been hailed by the Rockefeller Foundation as a generator of “financial and social value.”^[11] Immigration reform lobbying and “microwork” illustrate the global scale at which uneven development occurs.

But as I suggested before, tech workers are privileged by the massive amount of wealth they can generate per worker. But this bastion appears to be built on shaky soil as well. When Facebook bought WhatsApp for $16 billion, it paid $12 billion in stocks and $4 billion in cash. This is speculation enabling speculation. While a few large firms have the optimistic investors and cash reserves to engage in these practices, not many firms in this “new economy” can. Yet similar purchases are not only indications of the paranoid fear of competition on the part of internet giants, but also of the desperate search for high-returns on the investment of their massive wealth. A 2013 Financial Times estimate found that seven of the top tech companies held a combined $340 billion in cash and liquid reserves—the ironic problem of “vanishing investment opportunities” for leading companies.^[12] Moreover, financial speculation in the ICT sector is perhaps more precarious than that of the housing bubble, principally because of the tech sector’s inability to provide a sustained mediation between production and consumption, in the way that robust speculation around mortgages did.^[13] There is no “wealth effect” to obscure the structurally unequal labor pools produced under this type of financially enabled accumulation, or to momentarily buttress the construction sector, or enable asset-leveraged consumer spending. As a profitability “fix” of the type Beverly Silver has elaborated, this configuration of tech and finance is profoundly limited. The social reaction to the inequality this “fix” necessitates is visible in the streets of San Francisco.

San Francisco’s tech workers owe their privilege to the macroeconomic and geographic peculiarities of uneven development. In that sense, they are like Marseille’s dockworkers in the 1840s, but also like Detroit’s white autoworkers of the 1940s, who owed their privilege to the postwar competitive advantage of the “Big Three” automakers, federal military expenditures and housing subsidies, union organizing, and to racial discrimination against Black workers. Yet the autoworkers privilege eroded with increased industrial competition and the strategic implementation of automation in the early 1950s.^[14]

The golden age of San Francisco’s digital dockworkers and the vulnerability of Bay Area working-class communities of color are the result of the particular way in which injections of venture capital are reshaping local legacies of discrimination and shaping trends of profitability at a global scale, centered around the coupling of ICT innovations and finance. San Francisco’s “tech problem” is inescapably also a finance problem.