The Two Silicon Valleys

David Sawyer, via Flickr Fewer than half of first-time home buyers in Silicon Valley, including in places like Palo Alto, Calif., can afford to purchase a median-priced home, according to recent research.

Silicon Valley is booming. Job growth is so strong that the recession is a distant memory. Average incomes are up, and the levitation of technology stocks and a pipeline of initial public offerings promise more wealth to come.

“The economy is sizzling, any way you slice it, and about to get hotter,” said Russell Hancock, the chief executive officer of Joint Venture Silicon Valley, a policy organization focused on regional issues.

And yet divisions within the region are growing.

Fewer than half of first-time home buyers can afford to purchase a median-priced home, and rents are increasing faster than incomes, especially for the middle class. While whites and Asians are making more money, blacks and Latinos are falling further behind. Men with a college degree or higher make 40 to 73 percent more than women with the same levels of education. One-third of children in third grade can’t read at their proficiency level. Native-born Americans find the region increasingly inhospitable and steadily leave, even as immigrants find it irresistible and keep arriving.

“We’ve become two valleys: a valley of haves and a valley of have-nots,” Mr. Hancock said at a news conference in San Jose on Tuesday.

That was the clear message of the Silicon Valley Index, an annual report card of the region’s health that was delivered on Tuesday by Joint Venture and the Silicon Valley Community Foundation.

The report’s analysis focused on the valley itself, which encompasses the area from San Jose to San Francisco but excludes the city of San Francisco itself. But San Francisco faces similar tensions â€" just look at the city’s ongoing battles over the tech industry’s private bus fleets.

Sadly, the report’s findings are largely consistent over time. Every year, the index shows vast gaps between the rich and poor, the educated and noneducated, the native-born and immigrants. Every year, Silicon Valley’s leaders bemoan the lack of public infrastructure, the shortage of housing and the failure of the region’s leaders to work together for the greater good.

A little progress is being made. Stephen Levy, director and senior economist of the Center for Continuing Study of the California Economy, who helped with the report, pointed to a boomlet in home construction, especially around transit hubs. Permits for nearly 8,000 new residential units in Silicon Valley were granted in 2013, approaching the highest levels since 2000.

But with more than 33,000 new residents arriving in the same time frame, it’s still not enough. The public opposes most new construction, not realizing that it’s the key to keeping jobs, especially middle-income jobs, growing, Mr. Levy said. “People don’t see that connection,” he said. “They see it as somebody’s else’s problem, not their problem.”

Emmett D. Carson, chief executive of the Silicon Valley Community Foundation, was more blunt. Silicon Valley likes to think of itself as the land of opportunity â€" and it is, for many. Despite four years of a growing regional economy, however, lower- and middle-income families have made little progress.

“Rising tides do not lift all boats,” he said. “We have to be intentional as a community about addressing inequality.”

Mr. Carson and Mr. Hancock focused most of their criticism on government policy makers.

For example, the private bus systems of Google, Facebook, Yahoo and other companies exist, Mr. Carson said, because public buses stop largely at county lines. “Companies are having to make their own stopgap to take over where public policy has failed,” he said.

Jim Wilson/The New York Times Commuters in San Francisco boarded a bus last month bound for Silicon Valley.

Mr. Levy sees more construction as an answer to many problems â€" overcrowded roads, inadequate public transportation, the housing shortage and the lack of jobs. “A construction revival is the largest possible source of middle-wage jobs,” he said.

But it’s hard not to read the report, and listen to the discussion, and wonder: With all this wealth in the region, do Silicon Valley’s companies need to do more to improve the place that supports them?

As George Packer observed last year in a much-discussed article in The New Yorker, the brilliant minds that bring us Facebook’s news feed and Google’s search engine and Uber’s car-sharing often seem to live in their own virtual worlds.

Tech companies have stepped up on the job-training front, working with local community colleges to get workers the necessary technical skills for at least entry-level tech jobs. But with nearly half of Silicon Valley high school graduates lacking the required coursework to go to college in the first place, that’s a drop in the bucket.

Marc Benioff, the co-founder and chief executive of Salesforce.com, told The Wall Street Journal last week that tech companies have a responsibility to give back more to the communities in which they operate to solve pervasive problems like homelessness and transit.