The Fight Over Silicon Valley’s Congressional Seat Is All About Money

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"The Fight Over Silicon Valley’s Congressional Seat Is All About Money"

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CREDIT: Screenshot of Ro Khanna campaign video

Veteran congressman Rep. Mike Honda (D-CA) and his tech company-backed challenger, Ro Khanna, both garnered enough votes Tuesday night to advance to the general election. That means several more months of fundraising in what’s become an exorbitantly expensive fight to conquer the shifting political character of Silicon Valley.

Khanna, an intellectual property attorney, raised nearly $2.5 million in the primary and won the support of venture capitalists and wealthy tech leaders, including Sheryl Sandberg of Facebook and Marissa Mayer of Yahoo. Honda, facing his first serious challenge in over a decade, fell short of Khanna, raising $1.9 million.

Honda’s district, which was redrawn last year, has transformed drastically since the civil rights icon first took office. When Honda was elected in 2000, the region’s tech companies were floundering after the dot-com bust. “Reeling from massive hits to market capitalizations, many high-tech firms trimmed jobs or went out of business entirely,” a Bureau of Labor Statistics report noted. “Others left the area and set up offices in less expensive locales.” From 2000 to 2004, wages and employment levels in the area dropped. Honda was beloved in the area for working on poverty issues, pushing immigration reform, and bringing in money to fund public transportation.

These progressive goals for the most part coincide with tech companies’ priorities, but those priorities are shifting as once fledgling startups become global giants. As Honda campaigned for his freshman spot in Congress, for example, Google was only just moving into its first Mountain View office with fewer than 50 employees. Now it owns 10.7 percent of the town and is voracious to expand, creating tensions with locals who remember the region before the tech boom.

The industry, which once prided itself on ignoring Washington, is starting to flex its political muscle in earnest. Major tech companies have expanded their lobbying efforts and now wade directly into fights over issues like guest worker visas, surveillance, and patent trolls. They even made a flashy appearance at the White House Correspondents Dinner. The sudden interest in handpicking a “tech groupie,” as Khanna calls himself, to represent them in Congress, makes sense as part of this new political awakening.

But as the region’s prosperity and global influence grows, so too does its underbelly. Income inequality and homelessness have skyrocketed in recent years, while the middle class has essentially vanished. The area has become the least affordable metropolitan area in the country, even pricing out mid-level tech workers and programmers. Black and Latino residents are increasingly being displaced. “These are the hard facts: our income gains are limited to those with ultra high-end skills,” Joint Venture Silicon Valley, which publishes the Silicon Valley Index each year, warns. “Median wages for low- and middle-skilled workers are relatively stagnant and the share of households with mid-level incomes has fallen in Silicon Valley more than in the state and nation. Disparities by race are more persistent than ever.”

But Silicon Valley’s income inequality problem may not get much play in the campaigns going forward. Khanna has pitched his campaign on what he can offer business interests, and addresses local income inequality mainly in the context of investing in tech education and skill training. He’s not likely to challenge concentrated tech wealth structures on behalf of the poor. Honda, while a long-time progressive, has also been relatively slow to tackle regional income inequality. As the fundraising race climbs into an even higher stratosphere, the two Democrats will inevitably spend the next several months promising to make things easier for the tech elite.

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