Silicon Valley was late to the recession "party," but the global financial crisis is causing companies to tighten their belts, leaving a stretch of Highway 101 relatively traffic-free and out-of-work entrepreneurs with some difficult choices.
A new report from the Joint Venture Silicon Valley and the Silicon Valley Community Foundation, as The New York Times details, indicates a 1.3 percent drop in Silicon Valley employment. That may not sound like much, but if you've driven in Silicon Valley lately in rush-hour traffic, you can see a real difference.
Not everyone, however, is being hit equally:
The report also showed that the gap between the wealthiest and the poorest residents continued to grow. The percentage of households earning more than $100,000 a year rose to 42 percent in 2008, from 35 percent in 2002, while the number of households earning $35,000 or less rose to 20 percent, from 19 percent in the same period.
In other words, venture capitalists and successful technology executives are likely to weather the recession in comparative style, but the fire fighters, janitors, and rank-and-file technology workers are going to feel significant pain.
Importantly, such people really have nowhere to go: many live at a considerable distance from Santa Clara and other primary places of employment, commuting an hour or more to get to work each day. There are few alternative industries in Silicon Valley to absorb technology's outcasts.
This has always been a problem with Silicon Valley's technology-fixated economy, and it's about to get worse. Hope springs eternal in Silicon Valley, however, and clean technology and other cutting-edge technologies will almost certainly spur investment and, hence, jobs. In the long term, Silicon Valley will also benefit from a trend toward the creative class congregating in urban centers.
But that's later. For now, Silicon Valley won't be the land of opportunity for too many that support, but don't commensurately profit from, the technology economy. Move on, Tom Joad. Move on.
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