Recession Lingers On in Silicon Valley
Much has been made recently of the huge valuations of rising Internet players like Facebook, Twitter and Zynga, but while Web 2.0 is doing well, the Silicon Valley region itself is not. A new report from Joint Venture: Silicon Valley Network and Silicon Valley Community Foundation shows compensation and unemployment in the region haven't improved since the downturn, and it's not entirely due to the tech layoffs during the recession. The problems of poor pay and joblessness stem from widespread troubles which have plagued the region for years.
"Per capita income ended its two-year long fall in 2010, stabilizing at 2005 levels of roughly $62,400," the report says. Further, it notes: "The region added 12,300 jobs during 2010, bringing employment back up to 2004 levels." Those are hardly the signs of a healthy economy. The report covers Santa Clara and San Mateo counties and portions of Alameda and Santa Cruz counties.
Under the surface of the headlines in the report is the fact that tech jobs have recovered somewhat. Engineers and other tech workers aren't streaming out of the region anymore. But in other sectors that rely on the health of the local tech industry, employment is flagging, and most of all, it's the public sector that is suffering.
The problems of the region aren't unusual. The recession eroded tax bases, which meant services had to be cut. As local government deficits continue to grow, public sector employment continues to drop. Without a recovery in property taxes, the process will not reverse itself, and there is no sign the decline in home prices will reverse itself sharply anytime soon.
Silicon Valley is often viewed as a region that stands apart from the rest of the nation, prospering come rain or shine thanks to it status as the cradle of the tech movement that has transformed America. But in terms of the recession, the housing crash, and the effect of the tax base collapse on public services, Silicon Valley is just like the rest of the nation -- fervently hoping for a faster recovery.