Reporter JONATHAN HOLMES
70,000 runners and joggers and walkers take part in San Franciscos annual Bay to Breakers fun run.P.A. SYSTEM: the largest race in the world is San Franciscos Bay to Breakers
"I said, young man, what do you want to be? I said, young man, you can make real your dreams. But youve got to know this one thing
"
And they are, overwhelmingly, young men and young women well educated, awesomely well-paid, racing towards tomorrow through the capital of cyberspace.
VALERIE BRITT: I think were going to look back and say its just an extraordinary, exciting, fantastic period. People have just an immense opportunity to do what they wanna do, to go with what excites them
JANITORS MARCH:ARE WE READY TO STRIKE? DAMN RIGHT
But 40 kilometers down highway 101, in the heart of Silicon Valley - the richest, most inventive conurbation on the planet - a different scene, a different attitude, a different language.
LETITIA [marching]: Si se puede! Si se puede! Viene .. con esperanza
SUB TITLES: YOU COME HERE FULL OF HOPES, BUT ITS A DIFFERENT REALITY WHEN YOU GET HERE.
realidad aqui, verdad?
In their headlong rush towards a half-imagined future, the dot.com denizens of San Francisco Bay have come upon an unexpected roadblock.
The people who clean their offices, teach their children, police their neighborhoods and take away their garbage are being left too far behind. Without them, even a Valley of Dreams cant function.
In cyberland, its known simply as The Valley. In two decades, its gone from chips and mainframes to pcs and VCs, b-to-cs and b-to-bs. From Boston and Bangalore, from Texas and Taipei, the cybernauts converge to join the start-ups, hoping they havent missed the wave.
Nimish Mehta has already caught a big one. Stock options from his previous job at Larry Ellisons Oracle Corp have netted him something like eighty million US dollars.
NIMISH: Ok, are we ready to go?
Hes hoping that Impresse dot com will make him a lot, lot more.
MEHTA: Last week we trained up the printers and some of the buyers for Chase, Merrill, Metlife and Earl Palmer Brown all in one shot. And the team really
this was awesome teamwork.
From a standing start a year ago, Impresse has 200 full-time staff, and its CEO is just back from a sales drive in Europe.
MEHTA: Oh we did demos in French and in German, with the real product, and we showed them side by side with the English version, and that really plays well. People like that a lot. So Im expecting therell be very good write ups on Impresse over at Dusseldorf, which is great.
The relentless optimism is part of the culture of the Valley. The competition for talented staff is as ferocious as ever.
MEHTA: There are so many start-ups and theres such choice for them, that they want this one to be successful, so they want assurance that the company is headed down the right direction they want to be led. Fundamentally they wanna feel good that this company will succeed and not the one next door.
NIMISH: When you click on the calendar icon theyll pop up that window.
Impresse is a classic business-to-business web start up. Its a net-based intermediary between publishers and printers.
WOMAN: That looks like a bug and should probably be fixed
Its system, Nimish claims, will dramatically cut the cost of all the glossy literature, from annual reports to sales brochures, that big companies churn out each year a 25 billion dollar market.
Howre ya doin David.Good, we got our first customeR. A buyer, Genus systems, thats all we know
Of course, everyone at Impresse has stock options you cant get a receptionist in the Valley without them. But the NASDAQ is down, and Impresse has already had to postpone its public offering. Still, Nimish Mehta insists that he isnt concerned about deserters.
NIMISH: There are some people who join start-ups only to make money, the whole conception is Ill join a start-up and 6 months later Ill be worth ten million dollars and retire someplace. Frankly I dont want those people in the company, its fine, they can leave, because the people you want are the ones that in addition to wanting to be rich, theres nothing wrong with that but also want to have fun, to create an environment thats fun to work in.so you can get like-minded people who share the same passion and have a great time disrupting the world.
All very well for the boss, some of his employees might say. Hes sitting pretty. He bought his first house in the Valley thirteen years ago..
NIMISH:We moved into a small home with actually money that my wife had saved that I actually did not know about. we put together a down payment on the house. And then, you know, then the stock options hit.
In the last few years, dot.com squillionaires have pushed house prices in the Valley into the stratosphere and not only for the grand mansions that line the leafy lanes of Woodside and Atherton.
PAM HAMMER: This house is listed for eight ninety nine
Thats eight hundred and ninety nine thousand American dollars or one and a half million of ours for a three bedroom bungalow, forty years old, that would look ordinary in any Australian suburb.
Pam Hammer has grown used to the shock that newcomers feel when they see how little their money can buy.
Kim Limbick is a software engineer, recently arrived from New Zealand via London, to join a Valley start-up. American wife Lynne is a product manager with another internet firm. Between them they earn around four hundred and fifty thousand a year. And yet
KIM: We cant afford, just on our wages both of us working full time, I dont thinkwe cant afford the mortgage payments. If we can somehow get some money for a bigger down-payment, and maybe look at the numbers. This is really pushing the limits for what we can afford.
Its the iron law of supply and demand. Between the earthquake-prone mountains and the Bay, suitable land is scarce. For every six new high tech jobs created in the Valley, only one new house gets built.
Once-empty freeways are now clogged, as people commute for hours from fifty miles away, where the houses are still just affordable.
And the biggest homeless shelter in San Jose offers refuge to the most unlikely clients
A MUM: We have to give him some breathing room. OK
Among the families that Elmo of Sesame Street has come to comfort, with a hug and a barrowful of goodies, are the Houda kids.
DAD:What did you get, Hayley?
Their father Richard is a former Navy Seal, a building project manager who makes around a hundred and forty thousand dollars a year. But when they hear he has six children, no landlord in Silicon Valley will rent Richard a house. Why risk crayons on the wallpaper, when single engineers working 20 hours a week will happily pay the same sky-high rent?
MAURY KENDALL (EMERGENCY HOUSING TRUST):Those with wealth have cornered the market on a commodity which is housing driving the costs up for them is one thing their incomes have risen astronomically, they can afford to keep up with skyrocketing costs, those of us at the other end of the spectrum cannot keep up. The poverty line for a family of four is 56,000 dollars. That kind of salary anywhere else in the rest of America would put you on easy street. Here its often enough money to earn you entrance into the homeless shelter.
Which is why the schools in this most prosperous corner of America are facing a crisis. In a couple of weeks time, when the school year ends, four of San Martin Elementary Schools best teachers will be leaving.
GERALD TRAYNOR (PRINCIPAL, SAN MARTIN/GWINN SCHOOL): They came to me and they said Jerry, we just cant make it any more. Some of them have been living in hovels, some of them living in apartments, the housing costs are just out of control and these are good hard-working people and they just cant make it.
As it happens 2 of the 4 are taking special maths lessons for slow learners this afternoon. Monique Tarzian and her colleague Debbie Jones have both been teaching at San Martins for nine years each earns around $70,000 a year.
Now both have had enough of one room apartments at crazy rents but buying a house in the Valley just isnt an option.
MONIQUE TARZIAN:When I started looking for loans and Id call Can I, you know, can I get a loan? theyd ask what our occupations were and when I told them teacher, theyd laugh and theyd say, Do you have another job? Because you wont be able to get a loan to afford anything here!
JONES: Oh and its too bad cos the kids are the ones wholl be suffering
DEBBIE: We got our classes down to 20, but when you dont have the teachers to a staff those rooms, does 20 to 1 make a lot of difference?
NIMISH: My children go to a local school here a private school and they have a very difficult time recruiting because of housing prices
If theres one thing that affects everyone in the Valley, rich or poor, its a teacher shortage.
Nimish Mehta had asked me home to meet some of the giants of the Valleys expatriate Indian community the most startlingly successful group of immigrants, perhaps, in America.
For people who really want to teach, I mean they dont want to do anything else, at the same time they are under pressure
.
Chandra Shekra, for example, sold his data housing company, Exodus, for fifteen billion dollars not so long ago.Satish Guptas company makes semi-conductors.
Naren Gupta invented the integrated systems that go into embedded chips and is worth billions too.
But what everyone wanted to talk about was schools.
CHANDRA:How about if I help you guys network the whole school? Oh, by the way, lets also talk about computers for everyone
All of these men have poured funds into schools in the Valley and into the technical colleges that gave them their start back home in India.
But networking the classrooms doesnt solve the problem of paying the teachers
MARION: Youre not gonna buy clothes for the kids or food for the kids on a computer.Our police, nurses, teachers, who have had wage increases which in the past would have been respectable and yet they cannot afford to buy a home and at the lower end do not make it possible for people to rent a home.
To janitor Leticia Tovar, a teachers or nurses salary would look like riches.
Its 2.30 on a Sunday afternoon, and shes just finishing a shift that started at six this morning. The Oracle Corps training center must look spick and span for Monday morning.
No chance for her kids to cool off in the fountains in San Joses central square as usual, shes been too busy to take them.
As well as her Sunday shift, she works as a janitor four nights a week, from six in the evening till three in the morning. In the daytime she cleans houses as well. Even then, she cant afford the four hundred dollars a week she pays in rent for a 2-bedroom apartment in the poorest part of town.
LETICIA: Tengo que rentar un cuarto
I have to rent out one room and use only the other because
por que so yo no rento cuarto
If I didnt rent out a room, I couldnt live here.Because everything I earned from my janitors job at night would got to paying the rent...pagar la renta entonces con que..So how would I pay for food, for shoes for the kids, for the necessities?I couldnt do it.
no podia
So Leticia, her two younger sons and her daughter, whos away in Mexico just now, all share a small double bed.
Leticia is expecting three more strangers to move into the spare room next week, to replace the three whove just left.
LETICIA:Its difficult because you have to share everything with people you dont know
Normally, four adults and four children share the cramped kitchen and the one small bathroom. Leticias oldest son, Aldo, sleeps on the living room couch.
LETICIA: Todos es muy arriba
Everything gets more and more expensive and were getting nowhere. Well soon be on the street because our pay is too low and prices for everything are going up
subre todo. Por esos que
Thats why were getting ready to strike,and we wont give up
.adalante
The janitors three-year contract expires in a week and in their campaign for a dramatic pay rise, the union is targeting the high profile firms in the Valley.
But companies like Hewlett Packard dont employ the janitors directly. They contract cleaning companies to do the job and those companies tell the union that if they pay higher wages, theyll lose their contracts to rival, non-union firms.CHANT: Are you ready to strike
MARION [CHANTING]: DAMN RIGHT! That is the heart of the problem. There has to be an ownership here - the client companies hold the key to a solution to a lot of these problems with low-income workers, they have to take responsibility, they are the ones who are making the money, they are in the high rise buildings, theyre in the new economy, and yet they want to wash their hands and say, Well, she doesnt work for me, she lives in a garage, not my problem
The fact is, theres a culture clash here and it has nothing to do with Latinos versus Anglos.
Its a clash between the quaint old notion of worker solidarity and the Valleys passionate belief in self-enrichment.
SATISH GUPTA:I would thoroughly oppose the increase in pay. I would say why dont we pay them in stock? Id rather have my janitor be worried about security of my building rather than be worried about his pay going home in the evening.
Stock options are not what they need, they need houses to rent, they need a bedroom, they need to have medical care. Lets talk about real dollars for folks who are living dollar to dollar and pay check to paycheck.We have to have a measure of equity here.
NATSOT: So how do you make money on this? The way we make money in this thing is we share with them advertising and merchandising revenue
Almost every evening, somewhere in San Francisco, a venture capitalist is throwing a lavish party to publicize its new investments.
NATSOT: The buyer doesnt pay anything, and we facilitate the trade
And every evening, in downtown San Jose, Leticia Tovar earns 14 dollars an hour.
MAURY KENDALL:The growing disparity of wealth that is happening in the Valley leads the rest of America, and America leads the rest of the world, and these problems are going to start happening increasingly around the world, and everyone better watch us for solutions that we can come up with.
The Valleys entrepreneurs have started to take the housing shortage seriously. There are schemes to make low interest loans available, especially for teachers, and for the vital newcomers the talent-hungry valley still needs.
NATSOT: Ive been recruiting a lot for engineers, biz-dev, marketing, Ive also placed upper-level executives
But the valley knows perfectly well that as long as life south of the border is wretched, therell be no shortage of janitors here. Almost no matter how little they are paid. Its the future that matters to Lititia Tovar.
LETICIA: Es muy difficil
Life in Mexico is very hard. Thats why so may people come hereI mean, two of my kids are now in high schooland the other two are in elementary school
en la primaria. Por esos
Its hard here, but I keep going for their sake
por ejos
NIMISH: of all the countries I know, I dont know any country that offers the amount of opportunity, and the ability to assimilate as the US does. Everyone of these folks has an opportunity more so here than anywhere else.
If you don't make it, your children will. It's been the hard creed of the american migrant for a hundred and fifty years - and it applies with full force in the valley today. And if you're a battler, or a loser, or behind in the race, there's always the No 22.From San Jose to Palo Alto, the bus shuttles back and forth all night long.The driver calls it Motel 22. At four bucks a ticket, it's the cheapest night's sleep in the Valley of Dreams.