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  3. Written Testimony of Ron Edwards Office of Research, Information and Planning Director Program Research and Surveys Division

Written Testimony of Ron Edwards Office of Research, Information and Planning Director Program Research and Surveys Division

Meeting of 5-18-16 - Promoting Diverse and Inclusive Workplaces in the Tech Sector

Today, we are pleased to present to the Commissioners our report on the high tech industry as it stands today.

Because the tech sector is a fast-growing field, and technology plays such an outsized role in how we all work and communicate, our report seeks to identify potentially important employment trends. Over the past several years, a number of leading tech firms have chosen to publicly release their EEO-1 data as part of the national dialogue around diversity and inclusion. Our office is responsible for collecting the EEO-1 report from employers, and we are always pleased to see the information utilized by those high tech firms. Indeed, the collection of the EEO-1 over the past 50 years has produced rich databases and extensive use in a vast collection of research.

Today, with the release of this report we hope to shed a bit more light on employment patterns in the high tech industry. One challenge in conducting this research is that the terms "high tech" and "Silicon Valley," while popular in our vernacular, are not official definitions. The report generally defines high tech industries as those with a high concentration of technology jobs, and utilizes a few alternative "official" labor market areas to replicate those likely to be used by firms. Keep in mind that the EEO-1 is collected annually from employers with 100 or more employees and from federal contractors with 50 or more employees with federal contracts of $50,000 or more. The data collects information in a matrix of demographic groups based on gender, race and ethnicity and 10 job groups. The EEO-1 is a snapshot of an employer's workforce during one payroll period. The EEO-1 data presented here comes from thousands of high tech firms, small and large. Three different approaches are used to examine the high tech industry. The first is a brief literature overview. The second examines high tech firms nationally and in two areas associated with Silicon Valley -specifically, the San Francisco-Oakland-Fremont metropolitan area and Santa Clara County. The third approach focuses again on Silicon Valley and the firms identified as the 75 top high tech firms in Silicon Valley.

Thus, our report drills into useful data to show what the workforce of the high tech industry looks like both in national and local views. The local view is Silicon Valley and the surrounding areas. This report relies on descriptive statistics in order to provide insight into the nature of the industry, and not to explain the why and how of current employment patterns. At this stage, we simply attempt to identify disparities rather than account for factors that might explain these disparities.

We find that the high tech industry displays overall disparities in the employment of women, African Americans and Hispanics when compared to all industries nationwide. The distribution of workers among job groups in the high tech industry nationwide suggests a pattern where women and nonwhite employment decreases as the job group increases from technicians up to executives. For example, whites make up 83.3 percent of Executives in high tech firms nationwide. African Americans make up 9.01 percent of high tech technicians but just 1.92 percent of executives. Similarly, Asian Americans make up 19.49 percent of professionals, but about half that figure, 10.5 percent, of Executives. Women display a similar pattern making up 31.89 percent of professionals and 20.4 percent of executives. This pattern suggests that there may be barriers to advancement for some groups.

Santa Clara County, where many of the top High Tech firms are headquartered, has demographic patterns that differ from the broader private workforce, and differ even from the nearby metropolitan area of San Francisco-Oakland-Fremont. Asian Americans make up 32 percent of the workforce in the San Francisco metro area, but 45.6 percent in Santa Clara County. White workers make up 54 percent in the San Francisco metro but 44.1 percent in Santa Clara County; for African American workers it is 3.4 percent versus 2 percent; for Hispanic workers it is 6.7 percent versus 5.9 percent; for women, it is 28.9 percent versus 36.7 percent.

Compared to all industries in the U.S. private sector, high tech firms had a relatively larger share of whites (68.5 percent vs. 63.5 percent), and Asian Americans (14 vs. 5.8 percent). African Americans (7.4 v. 14.4 percent) and Hispanics (8 vs. 13.9 percent) had lower representation in high tech industries by a substantial margin, compared to all private industries. For women, there was an over 12-percentage-point difference with a smaller share of women at 35.7 percent in high tech compared to 48.2 percent in all private industries.

Within high tech industries nationwide, white employees were over two-thirds of the professionals; Asians Americans were nearly one fifth. African American and Hispanic employees were each just over five percent of professionals. In terms of high tech industry technicians, African Americans, Hispanics and Asian Americans each represented about 9-10 percent and whites made up 68.58 percent.

In Section III of the report, we examine the top 75 high tech firms in the Silicon Valley area based on a ranking by the San Jose Mercury News that looked at revenue, profitability and other criteria, women comprise only 30 percent of employees of these firms. Asian Americans are 41 percent of employees, while African American and Hispanic workers are three and six percent respectively. This is in contrast to non-high tech firms in the area where employment of women and men is about equal with 49 percent women and 51 percent men. Further, whites make up less than half of total employment at 41 percent; Asian Americans comprise 24 percent, Hispanics 22 percent and African Americans, 8 percent.

A striking characteristic of the 75 Silicon Valley high tech firms is the contrast between professional and management jobs. In this instance, Executive and Management job groups from the EEO-1 reports are combined. Asian Americans make up 50 percent of professional jobs among these firms yet only 36 percent of combined management positions. This is roughly a negative gap of 14 percentage points. White employees make up 41 percent of professional jobs and 57 percent of combined management jobs. This is roughly a positive difference of about 16 percentage points.

Our data analysis largely supports previous analysis of the data that certain companies chose to make publicly available. I hope that the findings I've presented today and those in the report help advance the conversation around these important issues, and have