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Tue. 4 May 2021, 7:41pm ETBenzinga
In: General

After the news on Monday that Bill and Melinda Gates, America's business power couple, would be divorcing after 27-years together, the philanthropic community of course went into shock, given the public good and sway the couple's foundation has had over the course of the last 21-years.

"After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage," they said in a joint statement via Twitter on Monday, "Over the last 27 years, we have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives."

The couple created the Bill and Melinda Gates Foundation in 2000, which as a private philanthropic organization, funds research and advocacy work across the globe. The foundation has given billions over the years to support issues like global health, development, and education, while combatting both climate change and the COVID-19 pandemic.

The Gates Foundation's assets are estimated to be around $50 billion, according to the foundation's financial statements. It is widely considered to be one of the world's largest philanthropic organizations, issuing close to $5 billion in grants annually during 2018 and 2019.

The Microsoft Corporation (NASDAQ:MSFT) founder stepped down from Microsoft's board last year, shifting his focus on philanthropic efforts as COVID-19 hit its worst. Bill Gates still owns close to 1.3% of Microsoft's shares, with an estimated net worth to be around $130 billion, according to Forbes. Gates' net worth alone makes him the fourth-richest person in the world, alongside Amazon.com Inc (NASDAQ:AMZN) founder Jeff Bezos, LVMH Moet Hennessy Louis Vuitton's (OTC:LVMHF) Bernard Arnault, and Tesla Inc's (NASDAQ:TSLA) Elon Musk. 

According to the petition and court documents, Melinda Gates said that "spousal support is not needed," given the fact that both she and Bill have no children who are under the age of 18.

Will the American 'Nuclear Family' Die Off?

However, the future of the Gates Foundation, while important, isn't the takeaway here. The significance of the Gates' announcement yesterday brings in something bigger: the pressures of Silicon Valley upon America's nuclear family. In other words, how has the relationship between Silicon Valley's culture affected household relationships across the U.S.?

Jeremy Knauff, founder of Spartan Media, says technology, in general, has played a significant role. 

"The problem is multifacetedthe Silicon Valley culture is certainly not ideal, but its not something new," Knauff explains. "It's no different today than it was during the 'dot com' bubble two decades ago, and it's no different than the culture in the financial industry throughout the eighties and nineties, or the advertising industry in the sixties. I think the bigger problem is our overdependence on technology. People are addicted to their devices and to instant gratificationwhich they can achieve through these devices. This is great for marketers, but terrible for long-term relationships," he explained.

For decades, the nuclear family has been long held in esteem by society as being the "gold standard" in which to raise children. And it seemed to work. From 1950 to 1865, divorce rates dropped, fertility rates rose, and the general American family structure seemed healthy and stable.

Think back to American sitcoms like I Love Lucy and Leave It to Beaver, and compare it to the modern-day television series Modern Family, depicting the reality most Millennials attribute to today's nuclear family.

Fifty years ago, approximately 42% of all American households were nuclear families; today, that number is down to 22%. Research continues to suggest that this family structure is rapidly dying off. The number of parents with children under age 18 and living at home declined by approximately 3 million over the past decade, according to newly released estimates from the U.S. Census Bureau's Annual America's Families and Living Arrangements release. These numbers have dropped from about 66.1 million parents in 2010 to 63.1 million in 2020. 

But why?

#1 - Silicon Valley Breeds Toxicity in the Workplace

Silicon Valley's work culture adds an element of toxicity to both the work-life, as well as the household. "I think that in some ways a lot of unhappiness in the workplace emanates from Silicon Valley, and in two forms," New York Times bestselling author Dan Lyons says.

Lyons, the author of Lab Rats also attributes blame to technology, as Knauff explained earlier, adding that because of this technology, the habits and business practices which have both originated and evolved in Silicon Valley, are now starting to surface in other industries, and not always for the betterment of that industry.

Today's "startup" culture breeds endless hours of devotion and time, at the expense of everything and everyone else around you. This culture regularly looks to recruit millennials, who are either setting up shop in Silicon Valley to absorb the culture or bring it back home to their own everyday life. 

Either way, startup life is both exciting and incredibly stressful, requiring excessive hours in order for new entrepreneurs to break the skin and/or crack the code of what it means to successfully launch a new company. 

"The modern workplace has become a place that is almost set up as a psychology experiment full of stressors that overrun your brain," Lyons said in one of his books

#2 - Today’s “Nuclear Family” Requires a Minimum $100,000 Budget, According to One Study

Sure, factors such as lower marriage and fertility rates come into play, along with the prevalence of co-living with nonnuclear housemates and of course, the housing market itself. 

But if we take another examination through the looking glass, today's demographic, particularly Millennials who are starting families and buying homes later than previous generations, face an even more challenging obstacleeconomic stress. 

Over the years, many women were relegated to the home to care for the household, despite the systemic injustice and disempowering treatment of women that carried over well into the mid-20th century. Many corporations barred married women from working, where companies would hire single women under the condition that they would have to quit if they were to ever marry. The result of which forced women inside, faced with long hours at home raising children under the rules of their husband.

Yet, the drive to grow a business, especially one in the heart of Silicon Valley brings a number of unhealthy habits home to the dinner table, including hours spent away from the house and family, to address the needs of the company, while also honoring any company-required commitments. All of which comes at the expense of spending quality time with loved ones and children.

Comical certainly isn't the word here, but isn't it absurd to think that to achieve today's version of a "nuclear family," which has been described as part of the "American dream" for over 70 years, that the average family today needs to have over $100,000?

One study, conducted by Apartment List, looked to the category of nuclear households comprising of the highest earners compared to other family arrangements observed. The median household income of the nuclear family bracket exceeded $100,000, according to Rob Warnock, a researcher at Apartment List and co-author of the study. 

"This is far higher than the national median which hovers around $60,000," Warnock explained. "It's kind of striking that in order to achieve this kind of traditional classic American houeshold arrangement, you as a family need to have over $100,000. That's pretty outrageous."

For over 70 years, the nuclear family has served as a benchmarks for legislators and everyday people to measure and compare a family's economic health, from taxes and eligibility thresholds for public health insurance, to Section 8 eligibility. 

But here's the catchthese measurements are shaped around a single household's income. 

Case Studies: Gates and Bezos

For our society's elite, the notion of being part of a nuclear family seems more like a "luxury" to the wealthy, than something easily achievable to the everyday person. You certainly cannot "buy" love today, or maybe you can. But at what cost? 

Two of the attorneys on opposite sides of the Gates' divorce also represented the opposing sides in 2019 after Amazon founder Jeff Bezos and his ex-wife MacKenzie Scott divorced, according to CNN

Ted Billbe, one of the lead attorneys for Bill Gates in the recently announced divorce, also represented Scott in her divorce from Bezos. Sherri Anderson, counsel for Melinda Gates, previously represented Bezos. 

Once recognized as the richest couple in history, Bezos and Scott have gone on to create their own pathways, with Scott retaining a $38 billion stake in Amazon, establishing her position as the world's third-richest woman alive. Despite a hit to his Amazon fortune, Bezos now has an estimated net worth of $194 billion, while Scott holding strong at $59 billion.

Both Scott and Melinda Gates launched a $30 million venture back in June of last year, called "Equality Can't-Wait Challenge," funding companies that will help to expand women's influence in the U.S. by 2030. 

As for how the rest of the Gates' family is dealing with the recent news, Jennifer Gates, daughter to the soon-to-be separated couple, posted her statement to Instagram:

"I'm still learning how to best support my own process and emotions as well as family members at this time, and am grateful for the space to do so," she said. "I won't personally comment further on anything around the separation, but please know that your kind words and support mean the world to me. Thank you for your understanding of our desire for privacy while we navigate the next phases of our lives."

At the end of the day, this divorce will reflect another perspective on the realities Silicon Valley brings to the world of American business.