Silicon Valley’s deep decline in wealth inequality is particularly strong when comparing Big Tech to small businesses in the San Francisco Bay Area.
Consider: While Alphabet Inc. GOOGL,
GOOG,
is building at a breakneck pace – parent company Google is planning an 80-acre mixed-use campus in downtown San Jose that will house 25,000 employees – and hiring at a steady pace, the valley services industry is ruins. Jobs in this sector fell by 41% in 2020 amid a wave of closures and reduced operations at restaurants, beauty salons and mom-and-pop stores, while Big Tech added jobs in technology.
“I feel like a plane crash survivor, but with remorse and regret,” Victor Escobedo, who owns two Mexican restaurants, a food truck and a salsa company in the San Francisco Bay Area, told MarketWatch. “I consider myself one of the lucky ones because we simplified operations in 2018-2020 to better manage deliveries.”
“We don’t consider our business better than others; we are a neighborhood restaurant that feeds people who can’t leave their homes “, said Escobedo. “Again, we’re one of the lucky ones.”
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The chasm between Silicon Valley’s top 15 employers and their younger colleagues is just as blatant. Anointed Group – Apple Inc. AAPL,
Google, Cisco Systems Inc. CSCO,
Tesla Inc. TSLA,
Facebook Inc. FB,
Intel Corp. INTC,
Gilead Sciences Inc. GILD, Oracle Corp. ORCL, Lockheed Martin Corp. LMT, Nvidia Corp. NVDA,
LinkedIn and the parent company, Microsoft Corp. MSFT, Amazon, Salesforce.com Inc. CRM and Uber Technologies Inc. UBER,
– had sales of about $ 1.35 billion in 2020, which would collectively provide them with the 15th largest gross domestic product in the world, between Spain and Mexico.
“Will Silicon Valley remain Silicon Valley? It depends on your perspective, ”Rachel Massaro, research director at the Silicon Valley Institute for Regional Studies, Joint Venture, told MarketWatch. “What the data shows us is that we continue to increase the technological workforce, especially among the top 15 largest technology employers. The magnitude of this increase is immense compared to anywhere else. ”
The disparity, based on key economic indicators composed of the Silicon Valley Index 2021, is compelling, indicating that the concentration of corporate power in the region is increasingly the responsibility of companies.
Jobs
Jobs in technology have increased in 2020, even though the pandemic has devastated much of the economy. The share of the Silicon Valley workforce in technology increased from 26% in mid-2019 to 30% in mid-2020. At the same time, the share of community infrastructure
and services have fallen from 50% in 2019 to 46% in 2020.
Of the 619,000 technology jobs in Silicon Valley and San Francisco, 38% are employed at one of the largest 15 companies in the region. Google and Apple use the largest shares, about 7% each, followed by Facebook (4%), as well as Cisco, Amazon and Oracle AMZN,
(3% each). Jobs in hardware, software, the Internet and information and biotechnology services remained 47% higher in mid-2020 (up more than 147,000) compared to the Great Recession, which fell in 2010.
Meanwhile, pandemic-related job losses have hit community infrastructure and jobs (down 15% between mid-2019 and mid-2020) – especially personal services such as beauty salons , nail salons and dry cleaning services (-54%), and accommodation and food services (-41%).
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Transportation, and especially contract workers, were the most successful in the workplace, driven by 6,700 at Uber (representing 25% of the company’s workforce) and nearly 1,000 at Lyft Inc. LYFT,
as consumers stopped using travel services. Consumer technology companies accounted for the second largest share of layoffs during the Bay Area pandemic, with the largest losses at Yelp Inc. YELP,
(1,000 employees), Juul Labs (900) and Eventbrite Inc. EB,
(500).
Few workers will return to work by mid-year, when most Americans are vaccinated, according to a paper on the medium-term outlook for the valley by Steve Levy, a senior economist at the Center for Continuing Economic Studies in California in Palo Alto, California. .
“The closure of most in-person economic activity in the spring of 2020 has led to a dramatic rise in unemployment – especially in severely affected industries such as leisure, hospitality and personal services,” Sarah Bohn, vice president of research at the Policy Institute The California Public Service (PPIC) said in a report in December. “Nine months later, the labor market has improved somewhat, but remains precarious, with low-income workers bearing the brunt of the consequences.”
offices
The footprint of large technology companies has grown despite pandemic construction delays. More new retail space was under construction than ever before (21 million square meters) and another 14 million square meters are underway.
Only six major technology companies – Google, Apple, Facebook, Amazon, LinkedIn and Netflix Inc. NFLX,
– occupies a combined percentage of 19% of all available office / research and development space in Santa Clara County, Menlo Park and Fremont, swallowing 48.5 million square meters. Google occupies the most, with about 22.1 million square meters in 2020.
Major construction projects underway at the end of 2020 included large
owner-user developments such as ADBE from Adobe Inc.,
North Tower in downtown San Jose, Google’s 1.1 million-square-foot Office project in Mountain View, Nvidia’s 755,000-square-foot Flex / R & D building in Santa Clara, and FTNT Fortinet Inc.
Sunnyvale headquarters.
Despite pandemic delays, nearly 5 million square feet of new retail space will be delivered to the Silicon Valley market by 2020 – more than a third of which is technology.
While technology workers fled the expensive San Francisco Bay Area to the suburbs of northern and southern California, the ability to work from home allowed them to stay on the field and visit the employers’ headquarters in the valley at their whim. , technical recruiter Andy Price said MarketWatch.
The Joint Venture report did not disclose data on the use of real estate for small businesses.
While past recessions have exacerbated income inequality in California, the effects of the pandemic are concentrated among low-income workers, African Americans, Latinos and women, Bohn told PPW for MarketWatch.
The current crisis, she says, threatens to “strengthen existing inequities and deepen the state’s long-term economic division.”