Published Friday, April 16, 1999, in the San Jose Mercury News

Divisions: Segregation trends emerge in high-tech industry, experts
say. By Ken McLaughlin and Ariana Eunjung ChaMercury News Staff
Writers

Silicon Valley sees itself as a meritocracy built on brains, a
smoothly working model of diversity in action.

Much of that image is true. But while ethnic diversity is widely
celebrated as an engine of the valley's success, it is virtually
absent from its top ranks. Many high-tech firms have decided that
mixing cultures on the assembly line is more trouble than it's worth.
And even among engineering professionals, subtle ethnic division is
part of the valley's culture.

A half-dozen university researchers studying the valley's workplaces
say the segregation patterns are disturbing.

``You're seeing more and more firms that are homogenous ethnically,
from the entrepreneur all the way down to the production worker,''
said Edward Park, a University of Southern California sociologist who
has visited dozens of Silicon Valley firms over the past decade.

While whites will soon account for less than half the population of
Santa Clara County, a Mercury News survey of Silicon Valley's top 150
public companies shows that 89 percent of the chairmen and CEOs are
white, 10 percent are Asian and 0.6 percent are black.

And a computer analysis of high-tech jobs in Santa Clara County shows
that whites and Asians dominate the workforce. The white-collar force
is about 60 percent white, 31 percent Asian. Among blue-collar workers
and technicians, who represent more than a third of high-tech
employment, the workforce is 57 percent Asian, 21 percent white, 18
percent Hispanic and 4 percent black.

The issue of Silicon Valley's ethnic makeup stirred rancorous debate
after the Rev. Jesse Jackson came to San Jose in late February to push
for more blacks and Latinos in the high-tech workforce and got a
contemptuous reception from T.J. Rodgers, president of Cypress
Semiconductor.

Jackson cried ``de facto segregation.'' Rodgers called Jackson an
``economic train wreck'' and dismissed his claims as ridiculous.

Workplace outlook

Some Asian-Americans face glass ceiling

Despite the tenor of the current debate, most feel Silicon Valley is a
diverse place where people generally get along. A Mercury News poll
shows that 78 percent of high-tech workers believe it's important for
workplaces to be ethnically mixed.

Still, the poll found that ethnicity does affect one's view of the
workplace. Blacks, for example, are more likely than other groups to
think that their race has hurt them in getting a job or promotion.
Whites are less likely to feel that business leaders should reflect
the makeup of their community.

At many firms, Asian-Americans hold the majority of engineering and
research-and-development jobs. But they're sometimes denied sales and
marketing positions, which have more potential for advancement, said
Alan Tien, a computer consultant for WESTT Inc. in Menlo Park.

Tien, 29, said stereotypes cut both ways for Asian-Americans.

He said the values their parents instilled in them -- a respect for
education and elders, a disrespect for short-term gratification --
``make us good worker bees at the lower to middle levels. But what
we're perceived to lack is some of the social skills -- the boisterous
personality -- which work so well in sales and marketing.''

Jan English-Lueck, one of three San Jose State anthropologists probing
the valley's culture as part of a decadelong project, said most big
high-tech firms have made large investments in diversity training and
hiring for their white-collar workforce. But she and other researchers
say that companies take blue-collar diversity far less seriously.

``We've come to this point that we feel that integration is important
only at the highest level of the economic system,'' USC's Park said.
``People will raise a lot of protest about the composition of
executives, but there has been a lack of attention when it comes to
bread-and-butter types of jobs that the vast majority of Americans
rely on.''

Karen Hossfeld, a San Francisco State sociologist who has studied
manufacturing workers here for 20 years, said many Silicon Valley
managers openly prefer Asian immigrants in lower-level production jobs
because they are perceived as model factory workers with a strong work
ethic. Some hiring managers, she said, perceive Asian immigrants as
less aggressive about asking for raises and promotions -- and less
likely to join unions.

``I'm amazed at how several employers and managers were willing to
express these incredibly racist attitudes,'' Hossfeld said. ``One of
them even described Mexican-American workers as bean pickers; others
said there's no way they'd ever hire a black.''

Among the least diverse companies are the valley's contract
manufacturers, which since the early '90s have been grabbing an
increasingly large chunk of Silicon Valley's manufacturing. An
analysis of U.S. Equal Employment Opportunity Commission data found
that in 1997, the last year for which statistics were available, the
blue-collar workforce at contract manufacturers was overwhelmingly
Asian. Asians also made up 72 percent of ``technicians,'' an emerging
job category that includes engineering design as well as assembly
work.

About a fifth of Silicon Valley manufacturing is done by 100 to 150
large and mid-size companies that contract with giants like
Hewlett-Packard and Cisco, according to Mark Giudici, a Dataquest
analyst. The firms, which do everything from assembling modems to
stuffing user manuals into cardboard boxes, will capture about 30
percent of the market within five years, he predicted.

Victron, a Fremont company that assembles motherboards, is a typical
contract firm.

Founded in 1983 by Korean immigrants, the company employs mostly
Koreans and some Vietnamese and its managers believe grouping their
work teams by ethnicity and language is good business.

Yoon Tong, human resources manager, said line supervisors prefer to
work with people from their own ethnic group. ``Koreans for Koreans
and Vietnamese for Vietnamese. . . . It's easier to communicate. And
better communications means better quality of work.''

Indeed, new academic research suggests that diversity in the workplace
is a mixed blessing: It is often an asset in creative fields like
advertising and computer programming, but can be a liability in
tedious assembly-line work.

One Vietnamese emigre, who owns a San Jose contract firm, said she
agreed with that assessment. Before she started her company in the
early '90s, she talked to high-tech managers who had hired Asians and
Latinos for the same assembly lines and come to regret it because of
the petty bickering that resulted, hurting productivity.

So she developed a business plan that called for hiring only
Vietnamese emigres. ``I speak Vietnamese and my workers speak
Vietnamese. I have control,'' said the woman, who did not want to be
identified. ``If I also hired Hispanics, it would be very difficult to
control them.''

Boy Luethje, a visiting scholar at the University of
California-Berkeley, and USC's Park said some large Silicon Valley
companies routinely group workers into ethnic teams and then spur
inter-ethnic competition by offering bonuses to the teams that meet
production goals.

Luethje said ethnic segregation has another downside: ``intra-ethnic''
exploitation. He said managers often use ethnic loyalty to prevent
workers from reporting illegally low wages and dangerous work
conditions.

``It's one of the secrets of success which people don't usually talk
about,'' he said.

Silicon Valley's contract manufacturing companies tend to rely on
informal recruiting practices much more than other industries, said
Chris Benner, a research associate for Working Partnerships USA, a
pro-labor think tank in San Jose. As a result, segregation occurs
unintentionally when workers refer friends and relatives from their
ethnic communities to their employers.

Even large contract manufacturers, such as Milpitas' Solectron and San
Jose's Flextronics, often hire by word-of-mouth rather than advertise
widely.

In one building at Flextronics, about half of the assembly line
workers are Vietnamese, said Raymond de Graaf, director of operations.
There also are large groups of workers of Indian and Mexican descent.
Combined, the three ethnic groups make up approximately 95 percent of
the workforce.

Flextronics gets so many applicants that it never has to go further
than advertising in local newspapers. That's why, for instance, the
recruitment offers don't reach many blacks from Oakland, de Graaf
said.

He said the company understands that by using the family and friends
of employees to find workers, the firm doesn't attract as diverse a
workforce as possible. But, he added, ``I don't want to stop that
because at the end of the day you get a high degree of loyalty.''

Looking for a break

Jackson's plea strikes a nerve

The view from outside the industry is not so upbeat.

Ethnic job networks reinforce inequality in industry, Benner said.
``When you're in, it's easy. But when you're out, it's almost
impossible to break in.''

Making sure more blacks and Latinos can break into the white-collar
workforce was primarily what brought Jesse Jackson to Silicon Valley.

Some black and Latino tech workers thought Jackson was out of touch
because he implied that corporate racism was endemic in the industry.
But for many, it also struck a nerve.

Despite the valley's reputation for tolerance, Kenneth Jackson, a
40-year-old black entrepreneur, often senses an initial chill from
fellow executives in an industry unaccustomed to black faces. ``After
all, I look like a linebacker for the San Francisco 49ers, not a
Silicon Valley engineer,'' said Jackson, the owner of Innetix, an
Internet service provider in San Jose. ``But as long as you deliver,
they don't have a problem.''

Evangelina Calderon, 49, the Mexican-American president of Micon
Telecommunications in Fremont agreed: ``To me this valley is the land
of opportunity, more open to diversity than any place else. Anyone who
tries hard can succeed.''

But Calderon and other Latinos and blacks in the industry agreed with
Jesse Jackson's opinion that a key solution is more educational
opportunities for minorities.

``There's a serious crisis in the education system,'' said Lavonne
Luquis, 39, the Puerto Rican owner of the Web site LatinoLink. The
high-tech disparity will continue until minority students are offered
better math and science courses, she said.

Still, Luquis and other Latinos said they thought that valley firms
could do a better job recruiting Latinos and blacks. ``They have to do
more than say, `It's a level playing field. We're here. Come to
us!' '' she said.

Other pockets of tension exist: between American-born whites who feel
they have lost opportunities to immigrant engineers as well as between
the different groups of immigrants. Workers say the tension is
especially pronounced between engineers from India and mainland China.

The Indian engineers coming on temporary H-1B work visas now outnumber
the Chinese by 5-1.

Some Chinese immigrants say they resent their Indian counterparts
because, having spoken English since grade school, the Indians have a
major advantage for advancement.

``They use American engineering textbooks in schools,'' said one Intel
engineer who emigrated from mainland China. ``Many Chinese think that
Congress has a policy of favoritism toward India.'' He asked that his
name not be used, saying it would hurt him in his largely Indian work
group.

Many Indian engineers say they sense the resentment and feel
uncomfortable. Others shrug it off.

``In my group we have Indians, Chinese, Americans and Europeans,''
said Manish Tandon, 26, a Cisco engineer who arrived from India two
years ago. ``There are no problems.''

Tandon's boss, project manager Marty Kagan, said that at his workplace
ethnicity ``is completely a non-issue, which is nice.''

Added Kagan, 28, who is white: ``Having people from all over the world
makes it a friendly, fun place to work. We share ethnic food. We share
jokes. The Romanian guy does a great Count Dracula imitation.''