The deepening of Silicon Valley’s decline toward wealth inequality is particularly severe when comparing Big Tech to small businesses in the San Francisco Bay Area.
Note: While Alphabet Inc. GOOGL,
GOOG,
is building at a breakneck pace: Google’s parent company plans an 80-acre mixed-use campus in downtown San Jose that will house 25,000 employees and, hiring at a steady pace, the service industry in the valley is left in ruins. Jobs in this sector fell 41% in 2020 amid a wave of closures and reduced operations at restaurants, beauty salons and mom and pop stores, while Big Tech added tech jobs.
“I feel like a survivor of a plane crash, but with remorse and remorse,” Victor Escobedo, owner of two Mexican restaurants, a food truck and a sauce company in the San Francisco Bay Area, told MarketWatch . “I consider myself one of the lucky ones because I streamlined 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.”
Don’t miss it: Silicon Valley is not experiencing a technology exodus and money is flowing at a record pace
The chasm between Silicon Valley’s top 15 tech entrepreneurs and their younger peers is just as blatant. The 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 parent company, Microsoft Corp. MSFT, Amazon, Salesforce.com Inc. CRM and Uber Technologies Inc. UBER,
– had sales of approximately $ 1.35 billion in 2020, which would collectively give them the 15th highest gross domestic product in the world, between Spain and Mexico.
“Will Silicon Valley stay in Silicon Valley? It depends on your perspective, “Rachel Massaro, research director at the Joint Venture Institute for Regional Studies in Silicon Valley, told MarketWatch.” What the data shows us is that we continue to grow the technology workforce. “especially among the top 15 leading technology entrepreneurs. The magnitude of this growth is huge compared to anywhere else.”
The disparity, based on key economic indicators compiled by the 2021 Silicon Valley Index, is compelling, indicating that the concentration of corporate power in the region is increasingly dependent on fewer companies.
The jobs
Technology jobs grew in 2020, although the pandemic ravaged much of the economy. The proportion of Silicon Valley’s workforce in technology grew from 26% in mid-2019 to 30% in mid-2020. At the same time, participation in community infrastructure
and services fell from 50% in 2019 to 46% in 2020.
Of the 619,000 technology jobs in Silicon Valley and San Francisco, 38% work in one of the 15 largest technology 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, internet services and computer information and biotechnology remained 47% higher in mid-2020 (up to more than 147,000 jobs) than the casualties of the Great Recession of 2010 .
Meanwhile, the loss of pandemic-related jobs hammered the infrastructure and services of the community (15% less between mid-2019 and mid-2020), especially personal services such as beauty salons, beauty salons. nails and dry cleaning services (-54%), and accommodation and food services (-41%).
Small Business Newspapers: Read how a bar in the Bay Area and a San Francisco corset maker are suffering from the pandemic
Transportation, and in particular contract workers, received the most job success, led by 6,700 at Uber (representing 25% of the company’s workforce) and about 1,000 from Lyft Inc. LYFT,
as consumers stopped using attraction services. Consumer industry tech companies accounted for the second highest share of layoffs in the Bay Area pandemic period, with the largest losses at Yelp Inc. YELP,
(1,000 employees), Juul Labs (900) and Eventbrite Inc. EB,
(500).
Few workers will return to jobs until the middle of the 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 Study of the Economy Palo Alto, California.
“The shutdown of most face-to-face economic activity in the spring of 2020 led to a dramatic rise in unemployment, especially in industries as affected as leisure, hospitality and personal services,” he said. Sarah Bohn, vice president of research at the California Institute of Public Policy. (PPIC), it was said in a report published in December. “Nine months later, the job market has improved a bit, but it remains precarious, and low-income workers bear the brunt of the consequences.”
The offices
The footprint of major technology companies increased despite pandemic-related construction delays. More commercial space was built than ever (21 million square feet) and there are 14 million square feet under construction.
Only six major technology companies: Google, Apple, Facebook, Amazon, LinkedIn and Netflix Inc. NFLX,
– It will occupy a combined 19% of all available office / research and development space in Santa Clara County, Menlo Park and Fremont, swallowing 48.5 million square feet. Google occupies more, with about 22.1 million square feet by 2020.
Major construction projects underway in late 2020 included major projects
owner-user developments such as Adobe Inc.’s ADBE,
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’s FTNT Inc.,
its in Sunnyvale.
Despite pandemic-related delays, nearly 5 million square feet of new retail space were delivered to the Silicon Valley market in 2020, more than a third of which were explained by technology.
While tech workers have fled the expensive San Francisco Bay Area to the suburbs of northern and southern California, the ability to work from home has allowed them to stay in the countryside and visit the headquarters of the San Francisco Bay Area. his entrepreneurs in the valley at will, technical recruiter Andy Price has told MarketWatch.
The Joint Venture report did not reveal data on the use of real estate space 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 MarketWatch, PPIC Bohn.
The current crisis, she said, threatens to “strengthen existing inequalities and deepen the economic division of the state.”