The Silicon Valley deepening in inequality in prosperity is especially strong when we compare Big Tech with the small businesses in the San Francisco Bay Area.
Consider this: Alphabet Inc. GOOGL,
GOOG,
is building at an incredible pace – Google’s parent company is planning an 80-acre mixed-use campus in downtown San Jose, which will house 25,000 employees – and the service industry in the valley is in a solid position in ruins. Jobs in the sector tumbled 41% in 2020 amid a spate of closures and downsizing operations at restaurants, beauty salons and mom-and-pop stores, while Big Tech added technical jobs.
“I feel like a survivor of a plane crash, but with remorse and regret,” Victor Escobedo, who owns two Mexican restaurants, a food truck and a salsa business in the San Francisco Bay Area, told MarketWatch. “I consider myself one of the lucky ones because I streamlined the operations in 2018-20 to better handle deliveries.”
“We do not consider our business better than others; we are a restaurant in the area that feeds people who cannot leave their homes, ”said Escobedo. “Once again we are one of the lucky ones.”
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The gap between the Top 15 tech employers in Silicon Valley and their smaller counterparts is just as striking. 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,
– it sold for about $ 1.35 trillion in 2020, which together would give them the 15th highest 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 Joint Venture Silicon Valley Institute for Regional Studies, told MarketWatch. ‘What the data shows us is that we continue to expand the technology workforce, especially among the 15 largest technology employers. The extent of the growth is large compared to anywhere else. ”
The difference, based on key economic indicators compiled by the 2021 Silicon Valley Index, is compelling, suggesting that the concentration of corporate power in the region is increasingly resting with fewer businesses.
The work
Technical jobs grew in 2020, even though the pandemic plagued much of the economy. The share of Silicon Valley employees in technology grew from 26% by mid-2019 to 30% by 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 technology jobs in Silicon Valley and San Francisco, 38% are employed by 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 computer hardware, software, Internet and information services and biotechnology rose (47% higher) in mid-2020 (by more than 147 000 jobs) than the low recession in 2010.
Meanwhile, job losses related to pandemic have a frontier of community infrastructure and service work (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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Transport and contract workers in particular suffered the most, led by 6,700 at Uber (representing 25% of the company’s staff) and nearly 1,000 from Lyft Inc. LIFT,
as consumers stopped using ride service. Consumer technology companies represent the second highest share of layoffs in 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 until mid-year, when most Americans are vaccinated, according to an article on the medium-term outlook for the valley by Steve Levy, senior economist at the Center for Continuing Study of the California Economy in Palo Alto, California.
“The cessation of most economic activity in the spring of 2020 has led to a dramatic increase in unemployment – especially in hard-hit industries such as leisure, hospitality and personal services,” said Sarah Bohn, vice president of research at the Public Policy Institute of California. (PPIC), said in a report released in December. “Nine months later, the labor market has improved somewhat, but it remains uncertain, with low-income workers bearing the brunt of the downturn.”
The offices
The footprint of the big tech companies has increased despite delays in building pandemics. More new commercial space is under construction than ever before (21 million square feet) and another 14 million square feet are in the pipeline.
Just six major technology companies – Google, Apple, Facebook, Amazon, LinkedIn and Netflix Inc. NFLX,
together cover 19% of all available office / research and development space in Santa Clara County, Menlo Park and Fremont, increasing to 48.5 million square feet. Google covers the most, with approximately 22.1 million square feet in 2020.
Major construction projects at the end of 2020 were large
owner-user developments such as Adobe Inc. see ADBE,
North Tower 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. see FTNT,
headquarters in Sunnyvale.
Despite pandemic-related delays, nearly 5 million square feet of new commercial space was delivered to the Silicon Valley market by 2020 – more than one-third of which is accounted for by technology.
While tech workers fled the expensive San Francisco Bay Area to the outskirts of northern and southern California, the ability to work from home enabled them to stay in the field and their employers headquarters in the valley. visited, the technical recruiter Andy. Price told MarketWatch.
The Joint Venture report did not disclose information on the use of real estate for small businesses.
While recessions in the past have exacerbated income inequality in California, the effects of the pandemic have been concentrated among low-income workers, African Americans, Latinos and women, Bohn of PPIC told MarketWatch.
The current crisis threatens to ‘strengthen existing inequalities and deepen the long-standing economic divide in the state’.