Sure. Personally, I believe San Francisco restaurants (for example) had less ability to bid up salaries in a highly-competitive labor market while using generous endowments from VCs flush with cash in a ZIRP climate in order to weather many unprofitable quarters the way that San Francisco tech unicorns like Uber and Twitter did. I believe that San Francisco restaurants, like restaurants anywhere else, cannot survive more than a few unprofitable quarters. Besides restaurant workers, I believe this applies to education workers, retail workers, and many healthcare workers who nevertheless have to compete in the same city as tech workers for: housing, food, services, etc. I believe that contributed to the income inequality which we already know grew in San Francisco over this period. Moreover, I believe when housing prices tilt upward dramatically in the way they did in San Francisco over this period, people at the bottom margin predictably will fall off of that margin. Some of them will become homeless, and homelessness tends to intersect with substance abuse.
That's what I believe tends to happen when one group of people (let's say, "tech workers") have salaries wildly divergent from everyone else who lives in that place. But, maybe I'm wrong. Maybe everyone benefits equally when only a subset of people get very large salaries. I dunno. What do you think?
It's hard to predict the future. All I can say is that these are forces pushing in various directions, creating tendencies. Personally, I would say ZIRP is a factor in income inequality, but not the only one. There are others:
You forgot the part where a lot of these big companies are still making buckets of cash and now those buckets are distributed amongst fewer people within the company further straining inequality, especially considering investors are generally rewarding companies for their reductions in force.
10,000 software developers losing their jobs in SF or Palo Alto are not going to make either of those areas affordable. Facebook's stock increasing in value 175% in 1 year is likely going to push some engineers into home buying compensation territory and the ones that can will start bidding wars for houses.
I'm not actually taking too much of a side here but its interesting how you view the ZIRP and VC industry as drivers of inequality as if VCs throwing enough money at startups so that some late 20s/early 30s person can make 180k/yr (plus some largely valueless equity) is the real problem. If anything VCs have made capital accessible to a class of people that would have otherwise been kept out of the party. During downturns and high interest rate periods, incumbents and bigger companies do well as they can weather the storm and buy up more of the market at a discount.
Even if you could drive up the interest rates to the point that these "generous endowments from VCs" and large companies cease to exist, the restaurant worker in SF won't start thriving. VC funding subsidized a lot of people's lifestyles in SF including the restaurant worker. There is not a substitute for building more housing.
>You forgot the part where a lot of these big companies are still making buckets of cash
I can't forget something that's not a fact and wouldn't be relevant if it were. A lot of companies did make a lot of cash. Also, a lot didn't. Moreover, revenue is not profitability. Generally speaking, unprofitable firms will find it harder to survive than profitable ones will, without financing.
> you view the ZIRP and VC industry as drivers of inequality
Who ever said that was my view? I never said that. What I said in another comment is that ZIRP and VC funding are were factors that contributed to income inequality. As someone who benefited from that arrangement, I would like to believe otherwise. Unfortunately for me, I don't. Give me a good reason to and maybe I will.
have seen increased profit and profit margins over the last year as well as huge increases in their stock prices. Not sure how you don't find that relevant in a discussion about income inequality but I also don't find anything else you said very compelling.
This isn't a thought experiment you have to run, there is actual data. All things considered VC's and high salaries for workers willing to take on risk has generally been good for SF. Look at other areas with similar politics and no VC funding and you don't see restaurant workers thriving. Portland's inequality has gotten worse and the livability for service workers has gone down even though its not a major benefactor of VC funding or ZIRP. If you removed all VC funding from SF, a lot of those restaurant jobs disappear. Tech workers making a middle class living off of investment money shouldn't be demonized. SF leadership and housing policy is your issue.
Let's put aside making and taking things personally, shall we? One way to do that is by sticking to the relevant facts, so here's a relevant fact: two of those three companies aren't Bay Area companies. All three of them aren't even San Francisco companies. I think that's relevant if we're talking about San Francisco.
> All things considered VC's and high salaries for workers willing to take on risk has generally been good for San Francisco
That's a matter of judgment. If, say, a SFUSD teacher makes a different judgment because she has to commute from Tracy, I'm not going to say she's wrong.
> Tech workers making a middle class living off of investment money shouldn't be demonized
Who has demonized them? I haven't. I haven't made a moral judgment about this at all. I'm just arguing that economic policy and conditions tend to lead to predictable outcomes, and if we want different outcomes we should choose different policies.
Yes. Homelessness in San Francisco tended to diverge from the national average over this period. So did San Francisco housing prices. This was the period of many unprofitable Bay Area and San Francisco unicorns.
Now, I shared my beliefs. Let's hear yours. What do you think happens when one group of people like tech workers in a city is handed large salaries that are not constrained by market forces like profitability? How does that help someone in that city who is not a tech worker?
Correlation doesn't equal causation. Having lived in SF during that period, there was a lot of governmental policy that contributed to that rise in homelessness. Saw the same thing in Oregon: homelessness increased when housing prices increased but there was also measure 110 which decriminalized all drugs. SF's similarly lax policies probably have more to do with their homeless issue than their housing prices. If it were purely housing prices, these people would just move to somewhere cheaper. And before you say, they can't move, they surely could move into Oregon when meth became de facto legal.
For a lot of addicts, the criminal justice system is their only chance at substance abuse help (mostly because they won't seek it on their own on the outside as we've seen in Oregon).
I know, but I wasn't asked for causation or proof. I was asked for data, or evidence. Presumably, I was being asked for evidence consistent with my hypothesis and unlikely to have occurred by random chance. That's what I gave.
Besides which: I never claimed that this was the only factor. I claimed it was a factor. Elsewhere, I acknowledged that there are other factors. I'm sure the the Oregon policies you list are among them.
Everybody not-tech and many tech did move to Sacramento and Oregon. They must have missed all the locals there screaming about getting priced out over the last half decade.
Layoffs and back-to-office mandates are the best thing that could happen to SF.
And homelessness is out of control in Sacramento, arguably worse than SF. But, I'm sure that has nothing to do with the influx of people and rising housing costs
