Silicon Valley’s deep decline into wealth inequality is particularly strong when comparing Big Tech with the small businesses of the San Francisco Bay Area.
Consider: While Alphabet Inc. GOOGL,
GOOG,
Building at a rapid pace – parent company Google is designing an 80-acre, mixed-use campus in central San Jose with 25,000 employees – and hiring at a steady rate, the valley’s services industry is in ruins . Jobs in that sector fell 41% in 2020 amid a wave of closures and back-work at restaurants, beauty shops, and mom-and-pop stores, while Big Tech added tech jobs.
“I feel like a survivor of a plane crash, but with regret and remorse,” 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 as I streamlined operations in 2018-20 to better handle delivery.”
“We don’t think our business is better than others; we are a neighborhood restaurant that feeds people who cannot leave their homes, ”said Escobedo. “Again, we are one of the lucky ones.”
Don’t miss out: Silicon Valley is not suffering from tech exodus, and money is flowing in at its peak
The rift between the Top-15 tech employers in Silicon Valley and their smaller peers is just as glaring. Anointed Body – 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 parent company, Microsoft Corp. MSFT, Amazon, Salesforce.com Inc. CRM, and Uber Technologies Inc. UBER,
– they had sales of about $ 1.35 trillion in 2020, which would bring them together the 15th highest gross domestic product in the world, between Spain and Mexico.
“Will Silicon Valley stay in Silicon Valley? It depends on your vision, ”Rachel Massaro, director of research at Silicon Valley Venture Institute of Regional Studies, told MarketWatch. “The data shows us that we are growing the technical workforce, particularly among the 15 largest technology employers. The size of that growth is enormous compared to anywhere else. “
The contrast, based on key economic indicators compiled by Silicon Valley’s 2021 Index, is strong, indicating that fewer companies have increasing corporate power density in the sector.
The works
Technical jobs grew in 2020 even as the pandemic affected much of the economy. The share of Silicon Valley employees in technology grew from 26% in mid-2019 to 30% in mid-2020. At the same time, the share in community infrastructure
and services fell from 50% in 2019 to 46% in 2020.
Of the 619,000 technical jobs within Silicon Valley and San Francisco, 38% are employed by one of the 15 largest technical companies in the region. Google and Apple employ the largest shares, around 7% each, followed by Facebook (4%) as well as Cisco, Amazon and Oracle AMZN,
(3% each). Jobs in computer hardware, software, internet and information services, and biotechnology were still 47% higher in mid-2020 (up more than 147,000 jobs) than the downturn in the downturn in 2010.
At the same time, the loss of pandemic-related jobs has affected community infrastructure and service jobs (down 15% between mid-2019 and mid-2020) – particularly 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 contract employees in particular, received the largest employment, led by Uber’s 6,700 (representing 25% of the company’s employees), and nearly 1,000 from Lyft Inc. LYFT,
as consumers stopped using drag-and-drop services. Consumer industry technology companies represented the second highest segment of Bay Area pandemic time layoffs, with Yelp Inc.’s biggest losses. YELP,
(1,000 employees), Juul Labs (900), and Eventbrite Inc. EB,
(500).
Very few workers return to work until noon, when most Americans will be vaccinated, according to a paper on the midterm outlook for the valley by Steve Levy, a senior economist at the Center for the Continuing Study of the California Economy in Palo Alto, Calif.
“With the closure of most people’s economic activity in the spring of 2020, unemployment fell sharply – especially in hard industries such as leisure, hospitality and personal services,” said Sarah Bohn, west president of the research at the California Institute of Public Policy (PPIC), said in a report released in December. “Nine months later, the labor market has improved somewhat but remains fragile, with low-income workers having a significant impact.”
The offices
The footprint of the major technical firms increased despite construction delays associated with pandemic. More new commercial space was being built than ever before (21 million square feet) with a further 14 million square feet planned.
Just six major tech companies – Google, Apple, Facebook, Amazon, LinkedIn and Netflix Inc. NFLX,
– occupies 19% of all available office / research and development spaces in Santa Clara County, Menlo Park and Fremont, building up 48.5 million square feet. Google takes over the majority, with approximately 22.1 million square feet by 2020.
Major construction projects that had begun at the end of 2020 included major works
user-owned enhancements like ADBE 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 Fortinet Inc.’s FTNT.
head office in Sunnyvale.
Despite a pandemic-related delay, nearly 5 million square feet of new commercial space was delivered to the Silicon Valley market in 2020 – more than a third of which was accounted for by tech.
While technical workers have fled the expensive San Francisco Bay area to the outer fringes of northern and southern California, the ability to work from home has allowed them to stay in and visit the field. their employers ’headquarters in the valley at the whim level, tech employer Andy Price told MarketWatch.
The Joint Venture report did not reveal data on the use of property space for small businesses.
While a decline in the past has exacerbated income inequality in California, the effects of the disease have spread among low-income workers, African Americans, Latinos, and women, Bohn from PPIC told MarketWatch.
The current crisis, she said, threatens to “consolidate existing inequalities and deepen the long-term economic separation of the state. ”