The Decline of Silicon Valley Jobs

By Donald Sears  |  Posted 2009-09-09 Print this article Print

I mentioned the decline of jobs in Silicon Valley in passing in an article on IT jobs for the fourth quarter yesterday, but it's really worthy of its own post.

The loss of 85,000 jobs over a seven-year period is not something to gloss over.

That's right. The Bureau of Labor Statistics has taken a more macro look at California's technology employment corridor of Silicon Valley, and the numbers were head scratching to say the least.

The bulk of those jobs lost were in computer systems design and semiconductor—and we all know what happened to those guys in 2008 and 2009 (a very tough year). But why the decline in the Times Square of technology?

Patrick Thibedeou over at Computerworld looks into it a little more closely. From his article on the subject:

"Silicon Valley may well be shedding individuals that possess lower skills, work that can be performed in other areas of the country," said Roberts [Mark Roberts, executive director of the TechServe Alliance]. The BLS study found that some of the disappearing jobs in Silicon Valley may be due to the high cost of working and living in Silicon Valley. Following the dot-com bust, decisions were made by some tech companies to move some aspects of production to areas with lower commercial rents and housing costs.

Of the industries studied, manufacturing had the largest number of job losses. For instance, semiconductor manufacturing companies cut some 30,000 positions between 2001 and 2008. The industry ended the year with about 58,000 workers, 34% less than in 2001.

About one-in-five tech workers in Silicon Valley is employed in what the BLS called the "computer systems design" industry—a catch-all labor category that includes IT managers, programmers, software engineers, systems analysts, database administrators, electrical and electronics engineers.

Out of the total "computer systems design" industry employment of 521,963 in Silicon Valley's high-tech industries in 2001, 107,000 were listed as IT workers. By 2008, the number of IT workers in that industry declined by 7.4%, or 7,900, according to the study.

Obviously, the dot-com bubble burst and the most recent recession with its lack of consumer and B2B purchasing are having an effect, but so is competition in these markets. There are a lot of technology companies, and not all of them are going to make it. And if they do, as the article points out, many are being moved somewhere else that's less expensive.

A couple key points that are worthy of noting: Wages between 2001 and 2008 went up 36 percent in Silicon Valley. That beats inflation by a long shot.

Also, pharma, scientific research and aerospace jobs actually grew in that period. So, if you have a job there, it's probably a decent one.

The only question is, will it stay there? |

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