SAN FRANCISCO (CBS SF) — More jobs and more money may sound like the formula for a successful economy, but in the case of Silicon Valley, there are so many jobs and so much money the Bay Area can’t keep up.
A new study says economic growth in Silicon Valley’s technology sector has swelled to such unprecedented levels that housing, transit and highways are “bursting at the seams” in an effort to accommodate the sudden surge in prosperity.
Joint Venture, a Silicon Valley think tank just released its 100-page annual report, titled the 2016 Silicon Valley Index. It basically deconstructs the burgeoning Bay Area economy and points out a string of positives and resulting negatives, with no quick fixes in sight.
For example, between 2014 and mid-2015, some 134,000 new jobs were created in the Bay Area. But while income and wages have grown significantly in the region, the gap between high and low wage earners has also grown. The study points out that race, gender and occupation continue play a big part in these wage disparities. Job creation has been mainly high-and low-paying jobs, with far fewer in the middle.
More jobs means more people. Unfortunately, housing has failed to keep apace with population growth in the region, hence the dramatic increases in rents and home prices. As more people are priced out, more residents have moved in, including some 14,000 foreign immigrants. The rise in population has also put more people on the roads, creating traffic congestion and fuel consumption. The average daily commute has risen 27 minutes over the last 10 years.
Still, the Index sheds a positive light on the Bay Area’s ability to attract and nurture its incredible intellectual power. It sees the Silicon Valley as a home to strong innovation, entrepreneurship and investment, and its knowledge-based economy as something to celebrate. To assure its future, the success of young people is crucial and education is key. A thriving arts community, access to affordable healthcare, environmental quality, and overall public safety are key components of the “Silicon Valley ecosystem.”
Joint Venture Silicon Valley’s President and CEO Russell Hancock tries to sum up the challenges and comparative advantages when he describes the region as an “box”, both open and closed: “If the rising tide doesn’t lift all the boats, it replaces those boats.”
“These are the perils of prosperity,” he writes, “and the region needs to address them even while we celebrate our remarkable dynamism.”