A project manager's downgrade

Kacie Barrett, 26, moved from a $2,000 studio to a $1,850 shared room and cut her internet bill from $120 to $40 a month. She now lives like a college student, cooking at home and going out once monthly.

“I definitely feel like I am living like a college student, not an adult.”

The permanent underclass concept

The term describes tech workers who don't reach top AI labs falling behind their peers financially. It's been dismissed as a meme by OpenAI CEO Sam Altman and venture capitalists, but it's becoming real for non-tech workers.

“so dumb”

AI wealth concentrating fast

Companies like OpenAI, Anthropic, Cognition, and Databricks are offering high salaries that concentrate wealth in San Francisco. Upcoming IPOs will mint overnight millionaires and billionaires, widening the gap further.

Housing market spiraling upward

Tech workers with deep pockets are driving up home prices. One buyer offered $1.86 million for a Sunset District house listed at $1.56 million. Rental listings for shared apartments average $2,500 a month.

Barrett considers leaving

After six months searching for an affordable rental, Barrett is weighing three options: live frugally in an expensive studio, commute into the city, or find a higher-paying tech job. She's contemplating returning to tech despite leaving McKinsey because her heart wasn't in it.

“It's almost like a catch-22. You can't afford to enjoy the fun things about San Francisco unless you are in tech.”

A bakery owner's struggle

Tolgay Karabulut opened BaklavaStory in 2022 and made $40,000 last year. He pays $1,300 for a shared apartment with no closet, rotating between four pairs of pants. He dreams of owning his own apartment and expanding his kitchen.

“I have a four-drawer unit that I put my stuff in.”

Homeownership locked out

Not owning a home has long-term consequences for wealth building. For most Americans, homeownership is the biggest asset and a key pathway to middle-class wealth accumulation through property appreciation.

“For most Americans in the US, their home is their biggest asset.”

Service workers can't afford to move

Parachute Bakery serves 600 customers daily, many from nearby AI firms, but struggles to hire because service workers can't afford housing. In one week, three job candidates withdrew after deciding they couldn't move to the city.

“In this last week, we've lost three employees, interviewees who were given a green light to join, with them having changed their mind and decided not to move out here because they feel very unsafe about what's going on.”

Small-business owners retain staff

Karabulut offers his seven-member crew free lunch to keep them from leaving, even though it means taking less home himself. He prioritizes his employees' financial stability over his own profits.

“I don't want these people to leave. And I just don't want them to struggle with their life.”

Some tech workers see opportunity

Grace Ling, a 29-year-old UX designer, lives in a five-bedroom hacker house with six others but believes AI won't eliminate creative jobs. She thinks people should lean in with curiosity rather than fear the technology.

“Permanent underclass is like you're stuck in your ways, you're stuck at this job, you're stuck clocking in 9-to-5 or 9-9-6 and having the lack of freedom.”

Concern about city's social fabric

Ben Kennedy, 27, cofounder of Gecko, worries that as more people are pushed out, San Francisco will become a city where only tech workers can afford to live. He values the diversity of hanging out with teachers, doctors, and lawyers.

“I don't want to just hang out with tech people all the time.”

The catch-22 for non-tech workers

Non-tech workers can't afford San Francisco's lifestyle without a tech salary, but many left tech careers because they didn't align with their values. The city is forcing them to choose between their principles and their survival.