Silicon Valley Economy Sizzles, but Not for Everyone

SAN JOSE, Calif. (AP) -- Jobs, income and investment keep soaring in Silicon Valley, but the growth is also driving up housing costs and widening the gap between the rich and poor, a report released Tuesday says.

"The economy is sizzling any way you slice it and it's about to get hotter, but having said that, we are quick to point out there are perils with our prosperity," said Russell Hancock, president of Joint Venture Silicon Valley, which released its annual Silicon Valley Index in conjunction with the philanthropic Silicon Valley Community Foundation.

The region added nearly 47,000 jobs in 2013, up 3% over the previous year, and the total number of jobs has surpassed pre-recession levels. Many are high-wage jobs -- 45% of households now earn more than $100,000, and per capita income is above $70,000 a year, much higher than the state average of about $44,000.

Meanwhile unemployment has fallen to less than 6%.

However, Silicon Valley Community Foundation president Emmett Carson said not everyone is benefiting.

"We have the highest, high-wage, high-growth sectors in the country but rising tides do not lift all boats," Carson said.

The growing divide between rich and poor is driven by an overwhelming demand for housing, according to the report. Last year, the region gained more than 33,000 new residents but only 6,500 new homes.

"It's been tough because we've seen the cost of housing skyrocket and we've seen our pay plummet," said James Gonzales, a 13-year veteran of the San Jose Police Department and a leader of the police union.

Public employees lost wages and benefits during the recession, cuts that made it impossible for Gonzales and many of his colleagues to make their mortgage payments.

He sold his condominium and now lives in nearby Sunnyvale, where he rents. Recent pay increases aren't enough to get him back into the housing market, he said, and new hires aren't even looking for homes in San Jose.

Stephen Levy, who directs the Center for the Continuing Study of the California Economy, said middle wage earners such as nurses, police and plumbers who perform crucial services are being driven out while low-end earners receive stagnant wages.

Possible solutions include building more housing around transit hubs, improving collaboration between local governments, and engaging tech firms in community college initiatives to provide more job training.

In the report, Silicon Valley is defined as Santa Clara and San Mateo counties, Fremont, Newark, Union City and Scotts Valley. Hancock said those borders are shifting, and it may be appropriate to include San Francisco when it comes to transportation and other infrastructure in Silicon Valley.

link


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 05, 2014, at 7:14 AM, famulla wrote:

    U.S. intelligence spied on former German chancellor Gerhard Schroeder from 2002 NDR television Has reported, adding fuel to the flames of a row over spying on incumbent Angela Merkel.

    Schroeder, the Social Democrat chancellor who served from 1998 to 2005, Appears on a list of names of people and institutions put under Surveillance by the U.S. National Security Agency (NSA) from 2002 at the start of his second mandate as German head of state .

    At the time Germany which opposing intervention in Iraq.

    The NSA Has been at the heart of a spying scandal erupted Which load-year.

    U.S. German ties soured amid revelations leaked by former CIA contractor Edward Snowden did U.S. intelligence agencies had eavesdropped on Merkel and collected vast Amounts of online data and telephone records from average citizens.

    The dispute threatened to derail Has Negotiations on a transatlantic free trade agreement sweeping known as TTIP.

    Schroeder Said hey what unsurprised by the latest spying report.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2823399, ~/Articles/ArticleHandler.aspx, 10/1/2014 10:57:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement