SAN JOSE — Silicon Valley’s economic boom has created a huge number of jobs and propelled regional wages to double the national level — but has also set in motion a housing crisis, brutal commutes and income disparity — according to an economic report formally presented at a conference on Friday.
The 2019 Silicon Valley Index unveiled by Joint Venture Silicon Valley was described as a mix of tremendous upsides and troublesome downsides, prompting Joint Venture president Russell Hancock to quip that the report could be viewed as a the classic ink-blot psychological exam whose interpretations vary dramatically.
“This year’s index is like a Rorschach test,” Hancock said during a speech to present the annual economic survey. “It’s possible to be upbeat or to be downcast because of it. We can look at it both ways. Silicon Valley is a very complex place.”
The region remains a beehive of cutting-edge breakthroughs poised to dramatically alter the way people live, work and play, according to speakers at the annual event, held Friday in downtown San Jose at the city’s convention center.
“Silicon Valley is a unique place where extraordinary things happen,” San Jose Mayor Sam Liccardo said in comments to kick off the presentation of the Joint Venture report. “The economy here is based on technology and fueled by innovation.”
The jobless rate in Silicon Valley has improved to an 18-year low, the report determined. The report defined Silicon Valley as Santa Clara County, San Mateo County, San Francisco, the Fremont-Newark area of southern Alameda County and the northern Santa Cruz section of Scotts Valley.
The jobless rate recorded in May 2018 for the region was 2.15 percent. The only time the unemployment rate was lower was December 1999, when the rate was 1.97 percent, according to the report.
In 2018, Silicon Valley added 35,600 jobs, compared with a gain of 47,300 jobs in 2017, the Joint Venture study said.
The steady job growth has fueled a rise in household income that has taken that metric to levels that dwarf what’s happening nationally and statewide, the report revealed.
In 2018, median household income was $118,357 in Santa Clara and San Mateo counties, $110,816 in San Francisco, $71,805 in California and $60,336 in the United States, according to the report, which was prepared by the Silicon Valley Institute for Regional Studies.
Yet at the same time, the report found that from 2013 through 2017, the number of high-income households, those earning $150,000 or more, rose 35 percent in Silicon Valley. The numbers of middle-income households with earnings in the range of $75,000 to $150,000 were flat or slightly lower. The number of households with incomes in the range of $50,000 to $75,000 plunged roughly 22 percent, charts presented as part of the report showed.
“Income disparity is a problem,” Hancock said. “We are adding high-income households. But we are losing middle-income and low-income households.”
Plus, Hancock stated in his presentation, the top 2 percent of wage earners command 27 percent of the wealth in Silicon Valley.
And the problems of expensive homes and brutal commutes persist, Hancock said.
“Housing is our Achilles heel,” Hancock said. “But our region is mobilizing in ways that we have never done before” to tackle the housing and traffic problems.