February 23, 2008

Good news: Midwage jobs vanish in Silicon Valley

Report: Midwage jobs vanish in Silicon Valley
For the first time, this report documents an alarming fact: The middle fell out of the region’s payroll between 2002 and 2006.

Federal and state jobs data show that 62,050 midwage jobs – defined as having salaries between $30,000 and $80,000 – vanished during that four-year period, according to the report.

During the same four years, employers added 66,200 jobs that paid less than $30,000. And despite bullish times for the likes of Google and Apple, Silicon Valley employers added just 16,790 jobs during that period that paid more than $80,000.

“We have indeed documented a squeeze on the middle. Now we have to figure out what it means and what to do about it,” said Russell Hancock, president of Joint Venture: Silicon Valley Network, the public-private partnership group that has been issuing such reports since 1995.

I’m sure some losers will bemoan this situation. Boo hoo – middle class jobs are disappearing.

But actually, this is a good thing – for homeowners. As more middle class jobs disappear, that means the population mix will include more people earning good $100k salaries – and that means they can afford to pay more for houses.

Or more simply: less middle class jobs = more rich people = increased housing prices. Can you say: Manhattan?

And, this works on the bottom end too: less middle class jobs = more low wage people = more renters = more rental income for homeowners.

Either way, this is great news and it’s a great time to buy a home in Silicon Valley.

If we all work together, we can make 2009 the year we beat Manhattan in housing prices. Let’s pull together and make it happen!

Comments (13) -- Posted by: burbed @ 5:12 am

13 Responses to “Good news: Midwage jobs vanish in Silicon Valley”

  1. rick Says:

    Err, how does $30k job pay for more rental income?

    I would prefer to hire more Mexicans.

  2. ex-sunnyvale-renter Says:

    Good, good news indeed!! The rich will have plenty of poor, desperate to wash and detail their car for $2, or clean their front walkway with a toothbrush for a loaf of only slightly moldy bread. And no more middle class to threaten to take jobs away from the well-to-do.

    This is what I observed out there, that the gap between poor and middle class was widening faster than any amount of work could bridge it, and it was hard to dodge all the falling middle-classers on their way down.

    The rich in their gated and guarded enclaves, and the poor starving in the streets, this will be the new America!

  3. DensityDuck Says:

    Big deal; the dotcom crash happened, and people are no longer willing to pay $75K to a fresh-out CS major. They’ve seen how that story ends.

    Also, no surprise that all the chip-fabber jobs are gone; the factories have moved overseas to China, where you’re allowed to dump industrial solvent into the creek as long as you pay off the right people. There’s none of those silly laws about “minimum wage” and “mandated benefits” and “worker’s comp” and “proper safety equipment”.

  4. ex-sunnyvale-renter Says:

    Density – right on. All this BS about “the right career” the right field to go into, is in the shitcan now. Good riddance, Might as well do what you like, you’re going to be broke anyway so might as well enjoy it a bit more than otherwise.

  5. Renter Says:

    No surprise. My 10-year experience in the software industry in the valley told me that. Entry level software engineer jobs for new graduates are replaced by engineers in China or India with much lower wage. Companies in the valley usually only hire senior people who make much higher than $80K. A lot of newly founded startups hired 10 architect level guys in the valley and 100 junior people in China or India. Google/Facebook alike only hire genius type new graduates, which most new graduates don’t qualify. Junior level software jobs with salary less than $80K are gone.

  6. burbed Says:

    Unless you graduate from stanford. Then starting is $90k

  7. Name Says:

    $90K fresh from Stanford? Um, maybe if you’d interned at Google in the summers and majored in CS.

    The vast majority of Stanford grads I know (who get degrees in a random assortment of fields, from English or Anthropology to Psychology or Public Policy, from Economics or History to Dance or Biology) start with offers that pay about half of that.

  8. burbed Says:

    Err, I don’t think anyone would dispute that. But this thread was about people that matter: people in tech.

  9. hedda Says:

    But unless you’re poor, Burbed, if you graduate from Stanford you already owe $120,000 (less grad school) in student loans. Ouch!

  10. rick Says:

    I thought the starting salary is 75k?

    Actually it is a pretty tight market right now.

  11. Crossroads Says:

    There’s no way the starting is just $75k. When I graduated from a Top 25 school in 1999, I got a job at $75k. And that was almost 10 years ago.

    The starting for a Stanfordian has to be at least $90k. Inflation alone would take care of that.

    And as for debt… uh… why would they have debt? That’s what parents are for.

  12. been_there_done_that Says:

    Anyone working in tech for less than 90k needs to ask for a raise, no matter which school they graduated from. Often times you just have to ask, or start looking for another job, if the company values your work they will give you a raise.

  13. Target-Addict Says:

    Um, people….”tech” encompasses a LOT more than just engineering jobs. I’m a middle manager for a Fortune 500 software company, and all my direct reports make under 90K. Are you just talking engineering, or also finance/hr/marketing/ops/manf./etc. for HIGH TECH?

    PS: I cannot believe that 80K qualifies as a MID WAGE JOB. Only in California…..

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