Point, Counterpoint: Farhad Manjoo Responds to Criticism About His Cover Story

Farhad Manjoo | September 23, 2013 | Story

I'm glad SF Weekly's Rachel Swan found my cover story from this month's magazine interesting enough to write about. But I think she missed a few things.

Swan is right that the rise in San Mateo County's average income tells you little about the distribution of prosperity in the county. Indeed, that's exactly what my piece says. (See page 2: "the IPO windfall enjoyed by a few thousand workers at Facebook’s Menlo Park headquarters showed up in national statistics as a blessing bestowed upon the entire population of San Mateo.") That's why I followed up that stat with a probing question: "When workers at companies like Facebook and Google get rich, how widely are those gains shared across the local economy?"

I presented a few stats that I believe provide an optimistic answer. Swan swats away these figures. Let's go through them one by one.

• I point out that San Mateo County's unemployment rate has hovered around 5 percent for much of the summer, and that its civilian labor force is nearing an all-time high. Each of these suggest that it's not just San Mateo's tech workers who are doing well. Swan offers no argument here.

•I point out that the county government has also enjoyed a windfall, and recently proposed a new budget that "allocates hundreds of millions of dollars for improvements, including a new fire station, a new jail, new housing shelters, an overhaul of the county’s information technology systems, and a paydown of its pension liabilities." Swan argues that the budget increases are meaningless because, as "any cub reporter" would have found, they're mainly due to a new sales tax, Measure A, "which has little to do with the tech sector."

Nope. That's misleading. Actually, in June, the county proposed a budget that does not include any revenues or expenditures related to Measure A. (Cub reporters reading the budget might have noticed this line—emphasis in original: "The Recommended Budget does not include Measure A sales tax revenues or expenditures.") That budget projected that the county's revenues would increase by 12 percent in the 2013-2014 fiscal year—again, this does not include revenue from the new sales tax, and instead reflects the improved economic climate across the country. The county is funding much of its new spending from the general fund, including its paydown of its pension liabilities. (Swan bizarrely poo-poohs the $50 million the county is contributing to its pension liabilities; she's right that San Mateo's pension system is in bad shape, but isn't that only more reason to cheer the fact that the county can now make extra payments?)

As Swan says, Measure A does add to the county's coffers; in revisions to the budget that the county recently published, it outlined $50 million in more spending that will be funded by the sales tax. But that's on top of the spending it had already outlined from the general fund. It is plainly incorrect to say that "most" of the new spending is due to the sales-tax increase.

• Signs of broad-based prosperity extend far beyond San Mateo. As I pointed out, the unemployment rate in San Francisco has also slipped dramatically over the last three years—and many jobs are coming from beyond the tech sector. If Swan is really arguing that only techies are benefiting from the boom, I wonder what she makes of the huge spike in hospitality employment in San Francisco; the decline in unemployment across the Bay Area (going from above the national average to below); the decline in "consumer distress," a measure of financial stability; and the rise of the civilian labor force.

One last thing. Strangely, Swan lumps me in with "predecessors" who "believed the Internet would create a world without boundaries." She argues that my anecdote about Austen Allred, a young entrepreneur who braved living in his car to get a foot in the Bay Area, disproves this notion, because in a digital world, Allred could have started his company in his native Utah.

What's strange about this argument is that it isn't an argument. It's an echo: This is the entire point of my essay. In the third paragraph of my piece, I argue that rather than free us from "the petty constraints of geography," the Internet has only made the Bay Area and its tech-business culture more important. Swan concedes this point. That is, she seems to agree that the Bay Area has become the center of the global economy. The Internet hasn't diminished our region. It's made us more central than ever.

I'm certainly not arguing that the prosperity created by the tech boom will automatically lead to prosperity for everyone in the Bay Area; as Nitasha Tiku points out in Valleywag, inequality in San Mateo County (as well as the rest of the Bay Area) is a growing problem. But that's precisely why we've got to think about the long-term consequences of this boom—we can only deal with the problems caused by tech's prosperity if we first recognize that tech is going to stick around as a permanent feature of our local landscape.

In my piece, I outline a single policy prescription—that we recognize that our new prosperity isn't a blip, and instead discuss measures to help us deal with the new climate over the long run. My ideas include beefing up transportation and building a lot more housing, which I argue would ease the supply constraints that are currently causing huge spikes in real estate prices (a way to make life better both for people who are and aren't starting Internet companies).

Swan may have other ideas. I'd love to hear them. What I don't understand is the odd pretense that the new boom isn't happening. Look around you: It is.

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