Silicon Valley's Dirty Side

SAN FRANCISCO (04/19/2000) - Guadalupe Herrera puts in more than her share of late nights at Cisco Systems Inc., but don't count her among that company's paper millionaires. For the past 14 months, Herrera has worked from 6:00 p.m. to 2:30 a.m. emptying the trash, cleaning the latrines and wiping down the work areas of the senior programmers who are paid a starting salary somewhere between $100,000 and $125,000. Herrera, by contrast, makes less than $17,000 a year.

That's the top pay for janitors at even the most cash-rich of the Valley's technology companies, no options or retirement benefits included. Silicon Valley has created more than its share of stock-option millionaires, but it's also given rise to people like Guadalupe Herrera and Laura Arreola, a janitor at 3Com. Arreola lives in a converted garage with her husband, her brother and two children. All three adults work. They show the flip side of the Valley's boom.

The disparity has been there since the beginning, but despite all the talk of bridging the digital divide, the gap continues to widen, even within the halls of the Internet Economy's shining stars. Here, housing is the most expensive in the country. There's so much venture money floating around the Valley that the pundit Paul Saffo once joked that there are "not enough rat holes to stuff it down." Yet at the same time, the Valley garage, once the symbol of the startup spirit that gave rise to the tech boom, suggests a deeper, less romantic reality.

In 1999, Cisco CEO John Chambers was compensated at a rate - including the options he exercised - that was 7,176 times that of Guadalupe Herrera's pay.

Chambers lives in a pink stucco palace high up in Los Altos Hills, and Herrera is one of four people living in a drafty, musty garage in a San Jose neighborhood known for its gangs. Where it was once the perfect low-cost lab for banging out prototypes, the garage is now the best housing that janitors can afford. Herrera, 30, is a sad-faced woman with beefy arms and a heavy brow that seems frozen in a constant state of worry. Herrera braces every time the phone rings, fearing it's someone from the collection agency that has been hounding her ever since one of her two children fell seriously ill.

Her partner holds a full-time job as a janitor in a nursing home. Yet when the car they share broke down, Herrera was forced to work a second job at Kmart for six months while her partner picked up extra work as a day laborer so they'd have enough money to buy a slightly newer used car. "I'm one of the lucky ones," the Mexican-born Herrera says through a translator. "Most of the other janitors I know at Cisco work second jobs full-time. They get home at 3 a.m., get a few hours' sleep, then get up to clean homes, work as maids at a hotel, clean windows, work as a busboy. Any work they can find." Most of the Valley's janitors are Spanish-speaking immigrants from Mexico or other points south.

Some janitors commute from as far away as Stockton, Calif., two hours to the east. According to a survey by the Service Employees International Union, the children of nearly 1 in every 3 janitors must sleep in the living room. Nearly 40 percent rent out a portion of their apartment to friends, families or strangers. Many must make the Hobbesian choice of living in substandard conditions or working a second full-time job - if not both.

Yolanda Marquez is a mother of four, and a janitor at Hewlett-Packard who also works a full-time day job as a maid at a downtown San Jose hotel. To make ends meet, she also rents out one of the bedrooms in her two-bedroom apartment.

"It's not so bad," Marquez says. "Until a year or two ago, we all slept in the living room and I rented out both bedrooms." Her parents live in one of the bedrooms, and a family of three lives in the other. That means 10 people share a single bathroom, and three families take turns in the kitchen. "No one should live in a garage, regardless of where they work," says Cisco spokesman Steve Langdon. "But the reality is that there have been phenomenal successes in the Valley, and that has made life better for some. But to some extent, it's made life more difficult for others." Still, Langdon accepts no responsibility for people like Herrera who clean his company's sprawling facilities.

The janitors, Langdon points out, work not for Cisco, but for outside contractors. "We hope and expect our vendors treat the people they employ fairly," Langdon says. And if they don't? "You don't seem to understand the way it works. The janitors work for the vendor. They don't work for us." The majority of the Valley's janitors are represented by the Service Employees International Union, or SEIU. Salvador Bustamante, the union's lead organizer in Northern California, accuses companies such as Cisco of hiding behind a technicality. "These companies benefit directly from the labor of these janitors," says Bustamante. "And yet when it's time for them to take responsibility for the situation, they wash their hands. They say, 'Well, they don't work for me, they work for contractor X.' Yet they set the terms under which the contractor is brought in to clean a facility.

They're the ones who decide how much they're willing to pay." The union plans to turn up the heat in Silicon Valley, especially underneath the area's most successful tech companies. The contract between the union and a consortium of outside firms that hire its workers expires at the end of May. And though representatives from only these janitorial services firms will be at the bargaining table, the union recognizes that its best weapon will be to place the spotlight on the image-conscious tech companies. "We intend on calling attention to the unfairness that these companies are so prosperous while our members are living in poverty," Bustamante says. The pending battle, whatever the outcome, is certain to generate plenty of noise - and to serve as a flash point for the growing tensions between the Valley's rich and poor.

The SEIU is seeking a wage increase of 56 percent over three years. That number might sound remarkably ambitious until you figure - as did a member of Bustamante's staff - that in one hour, Cisco generates more than enough revenue to cover the cost of the entire three-year raise for its 120 or so janitors.

Already, the union has staged several protests at area companies, including Sun Microsystems, Apple and Oracle. Next on the agenda are a series of larger demonstrations, including one that the union is promising will be the largest in Valley history. It will be held in Mountain View on April 27. "You can expect some civil disobedience," Bustamante says. A unionized janitor cleaning office space in San Francisco, a staunchly pro-union town, makes $14.45 an hour, or $30,000 a year. By contrast, a janitor belonging to the same union but working in San Jose or Santa Clara County, makes just $8.04 an hour.

Those working in San Mateo County, the county just south of San Francisco, make $7.64 an hour, or just under $16,000 a year. That's in a part of the world where it's normal to hear single people who make more than five times that amount complain, with justification, about the high cost of living. The union is demanding a raise of $1.29 in the first year of the contract, and raises of $1.50 in each of years two and three. That would mean an hourly wage of $12.33 an hour by mid-2002. The last time the SEIU local negotiated a new contract, the union launched a series of one-day walkouts up and down the peninsula, hitting Cisco, Sun Microsystems and Hewlett-Packard, among other companies. At that time, the two sides were haggling over much less. The final deal hammered out between the two sides gave the janitors a raise of 90 cents per hour over three years. "People's expectations are much higher this time around," says Inmar Liborio, a janitor who sits on the union's negotiating committee. "We want a raise that will let us live in decent conditions."

Liborio, a father of two, works five nights a week at Hewlett-Packard and then logs another 25 hours a week cleaning homes with his wife. In the old days, established firms like Hewlett-Packard hired janitors in-house. But HP was part of a national trend that saw firms turn to outside contractors to save money during the 1980s. So, whereas 20 years ago, according to the union, HP included its janitors in its generous benefits plan and paid them more than $14 an hour, their custodians now receive $8 an hour and receive only the barest bones of benefits. An HP representative could neither confirm nor deny the earlier figure of $14 an hour. Jim Edwards is a senior VP for American Building Maintenance. ABM is one of the area's larger janitorial-services firms, and Edwards is a veteran of negotiations with the union. He said he wouldn't comment specifically about the wage increase the union is seeking, but then it seemed as if he couldn't help himself. "I started a long time ago as a janitor," Edwards says. "I'm now a senior vice president. It's all about applying yourself. I don't care what they say - you work hard, you improve yourself, you take advantage of the opportunities that are presented to you."

Edwards didn't exactly point an accusing finger at the Valley's highflying technology companies, but he made it clear that companies like ABM felt stuck in the middle. He says his company is at the negotiating table but that the wages are not entirely up to companies such as ABM. "After we negotiate with the union, we have to negotiate with our clients. It's all driven by what employers are willing to pay," he says. Therein lies the rub. The key players in these negotiations can sidestep responsibility because they can accurately say that it's an issue between the janitors and their employers. At least Cisco's Steve Langdon was willing to discuss the issue - his counterparts at other companies declined comment. Langdon noted that Cisco had recently donated $1 million to a new Housing Trust Fund aimed at expanding the area's supply of affordable housing, and that the company also donates money to programs aimed at educating minority youth. Still, the company's commitment stops short of helping the 120 or so janitors who actually clean its facility.

"We respect the collective bargaining process," Langdon says. "We're talking about some of the wealthiest corporations in the world," says Mike Garcia, a former janitor who now serves as president of the SEIU local. "They can easily share a tiny portion of profits to improve the health and economic well-being of the communities they operate in."

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