Not All Is Rosy for Middle Class, Silicon Valley Index Shows

According to the latest index from JointVenture Silicon Valley, 2007 looks like a pretty good year compared to 2006 when you look at many standard measures of economic performance. There were 28,000 new jobs created, a 1.5 percent increase in population, and 21 percent growth in solar and wind energy installations. Water use also dropped 6 percent, venture capital investments were up 11 percent, median household income rose, and city revenues were up 37 percent.

 

A closer look at some of the socio-economic indicators in the Silicon Valley Index, first published in 1995, suggests all is not good for the sustainability of the Valley’s economy, however. Foreclosure rates were four times higher than the previous year, high school graduation rates dropped, and reading proficiencies dropped.

 

Receiving special attention in this year’s Index are the challenges facing middle-wage earners trying to keep or find employment opportunities with growing salaries or maintaining benefits. The number of these workers in the Valley - defined as earning $30,000 to $80,000 - dropped by 60,000 individuals during the 2002-2006 period. Lower-wage jobs increased from 22 percent to 27 percent of the total workforce during the same period while higher-wage jobs held nearly steady.

 

The local employment environment, the JointVenture Silicon Valley observes, is experiencing a restructuring that:

• Requires more frequent employer switches, resulting in shorter job tenure;
• Requires retraining or upgrading of skills;
• Results in more frequent wage gaps and fluctuation;
• Increases the number of self-employed individuals; and,
• Requires geographic mobility.

As Silicon Valley remains a model of aspiration or measurement used by many regions of the country, it may be worth reviewing the index to see how the core science and technology occupations and office and clerical positions are being downscaled in either number or salary or both.

 

The 2008 Silicon Valley Index is available at: http://www.jointventure.org/publicatons/siliconvalleyindex.html