Silicon Valley Firms Beginning to Make Labor Concessions

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In June, labor activists demonstrated in front of a vendor’s office in San Jose. They’re part of a campaign called Silicon Valley Rising which is pushing for better wages and benefits for service workers in high-tech companies. (Beth Willon/KQED)

Update, Monday July 21: Laszlo Bock, head of Google's "people operations" (aka human resources), appeared on KQED's Forum on Friday to discuss his book, "Work Rules! Insights from Inside Google That Will Transform How You Live and Lead." Some listeners called in or emailed questions regarding unions and benefits for social workers. You can read excerpts on his answers here or listen to the program here.

This is Part 2 of a two-part series on the growing labor movement in Silicon Valley over wages for service workers. Read Part 1 here.

Silicon Valley's tech giants are used to bottom-line pressures from their shareholders. Now they're facing new  pressures from the other side of the economic divide: low-wage service workers.

Since February, a new labor campaign called Silicon Valley Rising has been choreographing a movement to raise families out of poverty by pushing for livable wages, affordable housing and corporate responsibility.

Hundreds of mostly immigrant shuttle drivers, janitors, cooks and maintenance workers have been regularly demonstrating for higher wages and benefits in front of tech companies and contractors' offices.


At the same time, some big-name companies are beginning to improve the wages and benefits of service workers who keep their sprawling campuses running.

Two months ago, for example, Menlo Park-based Facebook announced that service contractors with more than 25 employees must provide them with improved wages and benefits if they work a substantial number of hours.

"The minimum wage is $15 an hour, 15 days of paid time off a year and a new $4,000 new-child benefit for both men and women," said Lori Goler, a Facebook spokeswoman.

On Facebook's website, Chief Operating  Officer Sheryl Sandberg posted, "This will give both women and men the flexibility to take paid parental leave, an important step for stronger families and healthier children."

Was Facebook's pay increase prompted by labor activism?

"We've really been working on it awhile, and it sort of came from us and within," said Goler.

Last fall, Google let go of its security guard contractor and hired the contractor's employees directly. In March, Cupertino-based Apple made the same move. Bringing workers in-house generally means better wages and benefits.

Also in March, Google, which is based in Mountain View, gave its shuttle drivers wage increases.

A Google shuttle bus at the company's Menlo Park campus.
A Google shuttle bus at the company's Menlo Park campus. (Beth Willon/KQED)

Corporations won't talk about their wage policies and the current labor campaign in Silicon Valley. But observers say that Silicon Valley companies know they can't ignore the organizing activity and public opinion.

"They are being bludgeoned on these issues, and I don't think anyone enjoys that," said Russell Hancock, president of Joint Venture Silicon Valley, a consortium of business and civic leaders. "I think they generally want to be a positive force, a societal force. We're seeing the leading-edge companies looking creatively at these questions."

San Jose City Councilman Ash Kalra said he sees a trend in tech companies directly hiring service workers or being more conscious of which contractors they hire, opting for more "responsible" ones.

"There's no excuse in this valley to contract with companies that aren't treating their employees well. No excuse," said Kalra.

Sara McDermott of Unite Here Local 19, which represents cafeteria workers, said unions want companies to work in unison with their contractors.

"I don't think we're trying to get rid of the contracted companies," said McDermott. "It's more we need to show the companies that are paying for their services that they have to have a joint responsibility in making sure those employees of the contractors are treated fairly."

But many companies are still under fire for the treatment of the service workers on their campuses.

Case in point: Intel changed cafeteria vendors last November. The new contractor didn't retain the 70 employees who worked under the old manager. McDermott said Intel is responsible because it could legally have protected those workers.

"When you have a company changing contractors, Intel has the power to say, 'Yes, we will give you the contract but we want you to hire the current workforce,' " said McDermott. "It was very disheartening to see a company that is in the midst of trying to talk about diversity at their own company have a group of primarily Spanish-speaking people of color who have good jobs just be fired."

An Intel spokesman declined comment, citing the company's policy not to discuss issues related to its suppliers.

South Bay Labor Council Executive Director Ben Field said competition among vendors bidding for jobs is the culprit for these kinds of worker dismissals.

"Part of the problem is there's a race to the bottom among contractors for service-sector work in high tech," said Field. "And high-tech companies can stop that from happening."

Not surprisingly, labor groups are pushing unionization.

In February, shuttle bus drivers for Yahoo, Apple, Genentech, eBay and Zynga voted to join the Teamsters union. Drivers for Google did not, but the very next month the company gave drivers pay raises and better benefits.

Was that a tactic to keep the drivers from unionizing? Google spokeswoman Wendy Pauli said no, because workers have a right to organize.

"In this case we were being competitive with the other wages and benefits being offered at other companies in the Bay Area," said Pauli.