Building Economic Equity Will Take More Than Diversity

A collective of Bay Area tech companies committed to requiring diversity from vendors within their supply chains. The stated goal is to increase job opportunities for workers from underrepresented and marginalized communities.

This is a step in the right direction, but building solutions to systemic inequity will require more than just diversity. Tech companies must also require vendors to provide safe and stable conditions for workers. Committing to broader responsible contracting practices improves economic opportunity by establishing a structural solution to systemic inequity.

Tech companies increasingly rely on subcontracted workers to lower costs and increase profitability and growth. In 2018, subcontracted workers at Google outnumbered direct employees for the first time in company history. Across the tech sector, companies employ a variety of vendors to provide subcontracted work including legal support, marketing, janitorial, and food supply. In the Bay Area, this rise in subcontracted work in the tech sector is linked to the rise in inequality. 

Subcontracted workers encounter a variety of obstacles and barriers to maintaining a foothold in the economy. They face unstable and often unsafe working conditions, earn significantly less, and aren’t granted the same access to benefits as directly employed workers. Even before COVID-19, the Bay Area was reported to be the worst region in the country for service workers, due to skyrocketing rents and stagnant wage growth. These conditions are creating an underclass of workers, expanding the growing inequality in the Bay.  

The divide between this underclass of subcontracted workers and their directly employed counterparts often falls along racial lines. A recent report from Silicon Valley Rising estimates that 58% of subcontracted service workers on tech campuses are Black or Latinx. Many of the largest contract occupations are low-wage service roles. The racial divide extends beyond service roles with white-collar subcontractors 2.6 times more likely to be Black or Latinx.

In 2019, TechEquity launched the Responsible Contracting Initiative in partnership with Silicon Valley Rising. The goal of this initiative is to define what high-quality service jobs on tech campuses look like and push tech companies to adopt and enforce this standard within their supply chain. Beyond fair pay and benefits, responsible contracting includes ensuring workers have a voice on the job, opportunities for upward mobility, and safe and secure workplaces. TechEquity and Silicon Valley Rising are deploying a variety of tactics to illuminate the subcontractor industry and drive solutions for these workers. 

There is no silver bullet to building racial and economic equity. It’s critical that tech companies understand the root issues of rising inequality and invest in more holistic solutions. Committing to a broader set of responsible contracting processes will ensure tech companies are not only creating opportunity, but are creating high-quality, family-supporting opportunities for all workers.