The Color of Money in Silicon Valley

Why is there so much wage disparity in Silicon Valley, the breadbasket of lush compensation? Katie Benner explores.
Something's still missing ...

Silicon Valley's most powerful companies released statistics on race and gender in their workforces last summer, largely because Google revealed its own employee data and said that it would strive to be more diverse. The numbers confirmed long-standing suspicions about the culture of tech. White men made up the biggest piece of the worker pie at Apple, Google, Facebook, Twitter, Yahoo, LinkedIn and eBay.

But there seemed to be a bright spot in that otherwise grim parade of diversity numbers. Asians comprised a big chunk of the tech workforce -- 23 percent at Apple, 34 percent at Google, 41 percent at Facebook and 34 percent at Twitter. Asians were the majority at Yahoo, LinkedIn and eBay, coming in at 57 percent, 60 percent and 55 percent, respectively.

All these statistics make a recent compensation study from the American Institute for Economic Research showing that Asian tech workers earn less than women and most other racial groups a fairly surprising read.

Asian-American techies made $8,146 less in average annual wages than their white counterparts in 2012; $3,656 less than black employees; and $6,907 less than those who checked the box as "other" (which includes mixed-race people). Women in tech made $6,358 less than men in 2012. The pay gap was most egregious for Hispanics, who earned, on average, $16,353 less than white workers in 2012.

Jeff Yang, a prolific writer on race and culture, thinks that tech can be a dead end for Asian employees even though Silicon Valley companies hire them in droves. He writes:

The statistics on leadership-level employees show that most Asians in the tech industry hit a ceiling well before they reach management status.

The percentage of whites, blacks and Hispanics who are executives is the same as their percentage in engineering roles. Asians, meanwhile, are about half as likely to be managers as they are to be coders and hardware hackers.

I offer up all this not to single out Asian employees as particularly victimized or to revisit the notion that cultural stereotypes might be keeping them out of the C-suite. I bring it up to show that a high head count in a company doesn't necessarily translate into more robust and equitable paychecks. If it did, we'd have as many Satya Nadellas as we do Jack Dorseys.

I'm not all in on Sheryl Sandberg's opus, "Lean In," but I agree with the book's larger point that in a world where paychecks are a key measure of success and respect, there should be equal pay for equal performance. When that doesn't happen, as is the case for women and minorities in tech, it implies that their contributions are considered less valuable than those of their white, male colleagues.

One of the reasons that the furor over the diversity data released last summer died down is that most people agreed that the numbers were symptomatic of a larger problem, a so-called "pipeline problem." As long as the kids who love math and science look like Mark Zuckerberg, the tech workforce will continue to look like Mark Zuckerberg. Tech can only become more diverse, the thinking goes, after the U.S. overhauls its education system and the coveted STEM professions are rebranded to appeal to girls and black kids -- and not just white guys.

While that narrative has elements of truth, it also diminishes any immediate pressure for change and makes schools and families -- and not the companies themselves -- largely responsible for tackling tech's diversity problem.

It also dodges confronting the apparent reality that those white guys at the top don't value their nonwhite, nonmale coworkers enough to give them their fair share of the wage pie. And it will take a lot more than a shift in demographics for that attitude to change.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.