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The Silicon Valley hometown of Mark Zuckerberg and Tim Cook is relying on millionaires to keep the economy booming — and it signals a huge problem

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  • Palo Alto, California, is the proverbial capital of Silicon Valley.
  • Its 94301 zip code is home to tech billionaires Mark Zuckerberg, Tim Cook, Larry Page and many millionaire and billionaire executives.
  • Palo Alto’s affluence runs deep — residents of its two zip codes paid a total of more than $1.5 billion in personal income tax to the state of California in 2016.
  • A recent story by the Los Angeles Times cites experts who are wary of California’s reliance on wealthy taxpayers: “If the millionaires get a cold, we all die of the flu.”

In Palo Alto, California, a 67,000-person town in the San Francisco Bay Area, affluence runs deep.

The median household income in Palo Alto is $137,000, more than double the United States median. And yet, many residents consider themselves middle class as they stretch their incomes to afford high-priced homes and necessities like childcare, according to The Palo Alto Weekly, the community’s newspaper.

Their sense of inadequacy may be attributable to living in the shadows of America’s super rich. Facebook’s Mark Zuckerberg, Apple’s Tim Cook, and Google’s Larry Page all call Palo Alto home. These billionaires, and many more millionaires, are the real stewards of the town’s booming economy.

According to a recent story by the Los Angeles Times, California’s economic success is increasingly contingent upon the wealth of residents of tony enclaves like Palo Alto.

“We are very dependent on millionaires,” Mike Genest, former budget director for Gov. Arnold Schwarzenegger, told the LA Times. “If the millionaires get a cold, we all die of the flu.” Because 70% of California’s revenue is derived from personal income tax — a nearly sixfold increase since the early 1950s — a hit to Facebook’s or Google’s or Tesla’s stock could be a hit to many.

In 2016, 9,000 tax returns from Palo Alto residents in the 94301 zip code — which includes the Stanford University campus — resulted in $934 million in tax revenue for California, more than any other zip code in the state, according to the LA Times. And Palo Alto’s 94303 zip code generated an additional $636 million in tax revenue for the state.

Those tax dollars fund government programs in less affluent areas of California, and eventually “determine whether promises to build more houses, overhaul healthcare or invest in schools can actually be kept,” writes the LA Times’ Melanie Mason.


Palo Alto's economy is booming.play

Palo Alto’s economy is booming.

(Lynn Yeh/Shutterstock)

Palo Alto’s main drag is dotted with obvious signs of a booming economy. “Teslas, so ubiquitous they’ve been nicknamed the ‘Palo Alto Prius,’ roll by in regular intervals. Cooler-shaped robots on wheels and their human handlers maneuver around pedestrians to deliver food and other goods,” writes Mason. But it still feels like a small town and that’s why big-time CEOs love it, a city manager told the LA Times.

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It’s not just a business boom — real estate is surging too. The typical home is valued at more than $3.2 million as of September 2018, according to Zillow. A 1-acre dirt lot was listed for $15 million earlier this year; an 897-square-foot bungalow is for sale for $2.59 million; and a billionaire tech company founder listed his expansive Palo Alto mansion for $100 million in June.

But the innovation and investment can’t last forever, some analysts say. This current economic boom is approaching a decade, writes Mason, and some experts think that’s pushing the limit. And when the prosperity of the 1% declines, the state’s will too.

“Analysts at S&P Global noted in August that the state’s reliance on high-income earners and capital gains from Palo Alto and its ilk has increased its ‘susceptibility to fiscal volatility,'” Mason writes, adding that some budget experts suggest there’s a way to reduce reliance on the wealthy — but that’s ultimately a job for California’s incoming governor.

But the super rich don’t seem to mind. Since 2010, Palo Alto residents “have voted overwhelmingly to impose higher taxes on themselves” on two separate measures, according to the LA Times.

“In many ways people take [the current prosperity] for granted,” the city manager told the LA Times. “There’s a kind of faith that we can transform ourselves as needed.”



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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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