Silicon Valley tech companies use underpaid black and Latino workers, says report

The workers supplied by middle-men are paid low wages and benefits, according to a study

Silicon Valley technology companies use underpaid black, Latino and immigrant workers as janitors, cooks and security guards, according to a study released Monday.

Tech companies have been targeted by civil rights groups, including the Rainbow Push Coalition of civil rights leader Rev. Jesse Jackson, for not employing enough blacks and Latinos.

Following demands from Jackson, some companies like Google, Twitter and Facebook released employee diversity data which showed that their employees in the U.S. were predominantly white followed by Asian.

The study on low-paid workers, hired through middle-men, by labor organization Working Partnerships USA in San Jose, California, adds a new dimension to the demand for higher inclusion by tech companies. "These contracted service workers -- not counted on tech companies' official employment rolls and rarely mentioned in the public discourse -- constitute the Silicon Valley tech industry's 'invisible workforce,'" the report said.

Blacks and Latinos make up 41 percent of all private security guards in Silicon Valley, 72 percent of all janitorial and building cleaning workers, and 76 percent of all grounds maintenance workers, according to data collected by Working Partnerships for Santa Clara County, which is home to a number of key tech companies.

These firms can help counter inequality and ensure long-term inclusion by paying better the workers supplied by contractors, the organization said.

Tech companies have typically argued that they are unable to hire enough blacks and Latinos with the relevant qualifications for their core jobs. Tech companies like Google struggle to recruit and retain women and minorities, wrote Laszlo Bock, Google's senior vice president for people operations in May. Blacks and Hispanics each make up under 10 percent of U.S. college graduates and each collect fewer than 10 percent of degrees in computer science majors, he wrote.

"If tech companies are serious about building a pipeline from K-12 schools for a more diverse tech workforce, it starts with paying parents a livable wage," according to Working Partnerships.

In systems software developers and applications software developers, the two largest tech occupations in Santa Clara County, the respective median wages are US$63.62 and $61.87. In contrast, the median wages for the three largest categories of contracted workers -- landscaping workers, janitors, and security guards -- are $13.82, $11.39, and $14.17, according to the report. Contracted workers also do not have the benefits provided to the core workforce, and have far less sick leave.

The organization recommends that companies should raise the wages paid to the contract workers. Even a raise of $5 per hour to 10,000 contracted workers -- enough to lift a security guard from the median wage to self-sufficiency-- would cost less than 0.1 percent of the $103.7 billion in profits earned by the top 150 companies in Silicon Valley last year, it said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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