Median income soars in Bay Area, but some are left out

Tech salaries paid by employers like Salesforce have hiked the median income in the Bay Area to nearly six figures. Tech salaries paid by employers like Salesforce have hiked the median income in the Bay Area to nearly six figures. Photo: Noah Berger, Special To The Chronicle Photo: Noah Berger, Special To The Chronicle Image 1 of / 1 Caption Close Median income soars in Bay Area, but some are left out 1 / 1 Back to Gallery

With tech companies flooding the Bay Area with high salaries, San Francisco and four neighboring counties have risen to the top of the list for median income among the country’s 25 largest metro areas.

According to numbers released Thursday by the Census Bureau, the median income for the San Francisco-Oakland-Hayward metro area, which also comprises Alameda, Marin, Contra Costa and San Mateo counties, jumped by 9 percent from 2015 to 2016, surpassing the Washington, D.C., area, which held the No. 1 spot last year. But in a region where the gains are disproportionally enjoyed by white and Asian households over other groups, and even those with six-figure salaries are being priced out of the region, experts worry that this growth may not be sustainable.

“We’ve had a lot of job growth and a lot of pressure throughout the economy of raising salaries in the region,” said Jim Lazarus, the San Francisco Chamber of Commerce’s senior vice president of public policy. But, he said, “it’s hard to get unemployment much lower than it is” at 3 percent.

In the San Francisco metro area, where Salesforce, Oracle and Facebook are among the major employers, median income was estimated at $96,677 in 2016 compared with $88,518 in 2015, according to the new statistics. Were the Census Bureau to include Santa Clara County, home to Apple and Google, the numbers would be even higher: Median income in that smaller census division rose about $9,000 over the past year to $110,040.

According to the Census Bureau, the national median income rose to $59,039 in 2016, a 3.2 percent increase from 2015. This is the second year that median income has grown in the U.S. Across the country, the poverty rate dropped to 12.7 percent, leaving 40.6 million people in poverty — 2.5 million fewer than in 2015. Those numbers are close to the poverty rate before the financial crisis of 2007-09.

Jobs in science, technology, engineering and mathematics appear to be a major driver behind the increase in median income over the past two years. According to the most recent available data from the Bureau of Labor Statistics, the majority of jobs in such technical fields had wages significantly above the national average for all occupations in 2015.

And there is still room for wages to grow, said Valerie Wilson, an economist with the Economic Policy Institute, a left-leaning think tank.

“We’ve finally gotten to a point where people are beginning to really experience economic recovery,” Wilson said. “We continue to see job growth and continue to see some nominal wage growth, and it appears we are still on a path of expansion this year.”

While wages increased across the country, the gains have not reached most minority populations.

In San Francisco, median income for white households grew from $98,961 to $106,919 in 2016. Asian households, which earned more than white households in 2015, slipped to second place, increasing to $105,295 from $100,256. The median income for black households inched up by $960 to $46,571 in 2016. Hispanic and Latino households’ median income grew from $61,875 to $70,290.

The racial trend seen here is persistent around the country: The median African American household in the U.S. earned only $39,490, compared with more than $65,000 for white households. Asians earned over $81,000 across the country.

“That is an enormous gap,” said Frederick Jordan, president of the San Francisco African American Chamber of Commerce. “There is a level of restrictions on mobility here in terms of African Americans … which is exacerbated by the Twitters and Googles, and other high-tech companies coming in and not hiring African Americans.”

Facebook, one of several tech companies that report their workforce composition, said that as of August, 3 percent of its workforce was African American and 5 percent was Hispanic. Both figures were up one percentage point from 2016. African Americans held only 1 percent of technical roles at Facebook.

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As salaries rise but minorities remain left out of the workforce, Jordan said, people of color are going to leave the region.

“I have been calling it benign neglect,” Jordan said. “There are so many people chasing the dollar here and in this city … and those who aren’t as fortunate to live up in those multimillion-dollar condominiums are being pushed out.”

Recent census figures show that some parts of the Bay Area are losing population, a trend that hasn’t been seen since last decade’s financial crisis.

Housing prices in San Francisco, which has the highest rents in the country, are a big factor. The median price paid for a home in the Bay Area in July was $758,000 — a 9.1 percent increase from July 2016, according to an August CoreLogic report.

An April report by the Department of Housing and Urban Development, which helps determine who’s eligible for subsidized housing, said that a six-figure income qualifies as “low income” in parts of the Bay Area.

In San Francisco, Marin and San Mateo counties, a household income of $105,350 for a family of four now counts as low income. In those same counties, an income of $65,800 is “very low,” while $39,500 is considered “extremely low.” In other areas, including Alameda and Contra Costa counties, $80,400 is considered low income for a family of four.

This “race to the top” in terms of salaries and housing costs even affected people like former Google engineer Jake Hamby, who moved from the Bay Area to Los Angeles this year.

Among his reasons for leaving: “Everything revolves around making money in the tech industry,” he wrote in a March Medium post.

“It wasn’t like that when I first arrived, in 2005,” he wrote. But as the years went on, “San Francisco and Palo Alto became too expensive to justify, even on my tech salary.”