Class rage: Twitter joins the 1 percent; killer IPO will drive San Francisco more insane

Citizens angry about evictions and the price of toast will not take heart from another tech economy success story

By Andrew Leonard

Published November 8, 2013 12:44PM (EST)

A protester outside Twitter's headquarters on Nov. 7, 2013, in San Francisco.            (AP/Noah Berger)
A protester outside Twitter's headquarters on Nov. 7, 2013, in San Francisco. (AP/Noah Berger)

Just after dawn on Thursday, a group of about 50 protesters gathered outside Twitter's headquarters in San Francisco to call attention to the tech economy's destructive impact on Bay Area living standards.

Some of the protesters dressed in white and laid their bodies on the ground, "to represent corpses and 'the death of the city," reported Bob Redell of NBCBayArea. Prominent pride of place was given to a coffin with the words "R.I.P. Affordable Housing" written on the front of the casket. And, of course, there was a hashtag: #ThrownOutByTwitter, a reference to the rash of the evictions currently plaguing the city.
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Inside Twitter's headquarters the scene was a little different. Hundreds of employees packed the company's cafeteria to watch Sir Patrick Stewart and the founders of Twitter ring the opening bell of the New York Stock Exchange at 6:30 a.m. PST. When trading in Twitter finally opened an hour and a half later, cheers rang out. The stock had "popped," jumping 73 percent from its initial $26 valuation up to $45. (The price held remarkably steady all day, closing at $44.90.)

There was much rejoicing! The company had raised around $1.8 billion. Twitter's investors and employees now stood to make a great deal of money, a fact cagily recognized by a representative of one of San Francisco's strip clubs, who arrived at Twitter HQ and passed out "IPO party cards" granting Twitter employees free admission and "VIP perks." Hashtag: #Tatas4Twtr.

Politics as political theater in San Francisco is nothing new, nor is protest that crosses the line into self-parody. Activists in the Bay Area have been raising risible ruckuses since long before we all started logging on and exchanging pixels with each other. So for the people busily retweeting pics of Twitter boss Patrick Stewart, the critique outside was easy to ignore. As Twitter cashed in on the biggest IPO-day of the year, most of the commentariat concerned themselves with question of whether Twitter's stock price was justified, or whether the company had left "too much on the table" for Wall Street to gobble up, or just how Twitter would continue to refine its business model. Very little attention was devoted to how Twitter's IPO will influence the increasingly tense relationship between those who are enjoying the spoils of the tech economy, and those who feel like they are being despoiled.

But if there's one thing we should learn from the Twitter IPO, it's that those tensions are likely to increase. At a time when the sight of a $4 slice of toast is already inspiring angry petitions, imagine what will happen when an explosion of Twitter millionaires starts going out to breakfast? The market signal sent by Twitter's IPO? Those high rents that are pissing you off and inspiring all those eviction notices? They are about to get higher.

A petition attacking the mayor of San Francisco that uses the price of toast to claim that the tech economy is ruining San Francisco sounds like a joke, and not a very good one at that. But just two days earlier, voters in San Francisco proved that there is a limit to their willingness to go along with policies that they perceive to be overly friendly to the wealthy.

On Tuesday, San Francisco overwhelmingly rejected two measures that would have permitted the development of a 144-unit luxury condominium on the Embarcadero waterfront just north of the San Francisco Ferry building. The measure was backed by both the current mayor, Ed Lee, and his predecessor, Gavin Newsom. A city increasingly agitated about its ongoing transformation put its foot down. It almost certainly didn't help that Mayor lucrative Lee was the main political player in pushing through tax breaks and exemptions catering to the tech sector -- and designed, in the case of Twitter, specifically to keep the company located in the city.

The San Francisco Chronicle reported that, in the case of Twitter alone, the tax breaks could cost the city as much as $50 million in revenue (and possibly much more, if Twitter maintains its first-day stock performance. In response, defenders of the tax break made the reasonable argument that if Twitter had moved out of the city, there would be no jobs or tax revenue of any kind. Certainly, the question of who benefits the most from the policies that have helped move Silicon Valley into the metropolitan center is complicated.

But the negative vote on the condominiums is a very concrete sign that a significant portion of San Francisco's voters are unhappy with how wealth is transforming the city. And in that respect, they're striking a chord that might resound nationwide.

Earlier this week, David Cay Johnston reported in Al Jazeera that new figures released by Social Security Administration in October reveal that in 2012 the median wage in the United States dropped to its lowest point since 1998.

Those numbers are stunning and depressing. Anyone who lives in Northern California has a visceral sense of how much wealth has been created by the tech economy over the last 15 years. But the unavoidable truth is that for most people, wages have not kept pace. They've flat-lined.

A political reaction to increasing income inequality is inevitable. And that's why Twitter's IPO success is so meaningful. The stock pop announces loud and clear that the Silicon Valley wealth machine is as healthy as ever. The party is still on. If the past is any guide, the tech industry will take Twitter's fortunes as a sign to rev up the IPO calendar. Twitter co-founder Jack Dorsey is already rumored to be steering his mobile cash payment system Square to an imminent IPO, which would give him the rare two-fer.

This is what Twitter's IPO tells us. If rents are high now, they're going to get higher. If the middle class can't afford to live in San Francisco now, it's going to get even tougher. If the elite counting their stock options are inordinately self-satisfied now, they're only going to become more obnoxious. The longer the benefits of the tech boom aren't widely distributed, the angrier people will get. There's a hashtag for that too: #classwarfare.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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