August 16, 2009

Mountain View Voice : Report: Silicon Valley jobs decline while pay increases

Mountain View Voice : Report: Silicon Valley jobs decline while pay increases
Despite record unemployment rates, some sectors of Silicon Valley’s high-tech economy continue to shine, according to a report released Wednesday.

“While the employment picture may sound a bit negative, the wage picture was much more sunny,” said Amar Mann, regional economist with the U.S. Bureau of Labor Statistics, who co-authored the report titled “After the Dot-Com Bubble: Silicon Valley High-Tech Employment and wages in 2001 and 2008.”

Mann said the six-county Silicon Valley region lost more than 85,000 high-tech jobs between 2001 and 2008, a decline of about 17 percent.

The region comprises Santa Clara, Santa Cruz, San Mateo, San Francisco, Alameda, and Contra Costa counties.
However, the average Silicon Valley tech worker’s salary grew by 36 percent during the same period, from about $97,000 a year in 2001 to $132,000 a year in 2008, Mann said.

By contrast, salaries nationwide grew by just 25 percent between 2001 and 2008, he said.

I don’t know about you, but is excellent news. This means that we’re finally getting rid of all the undesirable, ignorant, people from Silicon Valley.

Silicon Valley will be now the true center of the intelligent world. Seriously. If you’re not clearing $85,000 – please just leave. Please. You’re a disgrace to the Bay Area. Thank you.

Comments (60) -- Posted by: burbed @ 6:32 am

60 Responses to “Mountain View Voice : Report: Silicon Valley jobs decline while pay increases”

  1. UnrealAlex Says:

    What’s their definition of “tech worker”? They must be looking at titles like “Design Engineer” which there may still be 4 or 5 of, in a statistical sample that small, I can see wages going up perhaps.

  2. Alex Says:

    Damn. The average tech worker now makes $132,000 a year. And freaking Obama complains that doctors make a lot of money. Poor pediatricians and family doctors make less than $80,000 in many states :(

    I’m going to quit my job, find a tech job and maybe I can afford a house in the RBA — well any part of the Bay Area.

  3. UnrealAlex Says:

    LOL is your real name Alex too?

    Invasion of the Alexes!

    There’s no way they’re counting techs, the guys who work for Geek Squad, etc. I think if you counted them pay would be down.

    As for me, $85k? I think I grossed $80k one year, not sure. Net was half that. ow I live on less than 1/10th that, and am starting an EMT training program financed through a “handshake” loan from a friend and my earnings of $200 a week. If all goes well in 3 years I’ll be a Paramedic and will I earn anything like what I made before? I doubt it. I’ll be happy to make min. wage.

  4. steve Says:

    and poor tech workers make $40K in many states. your point? also, no one goes into peds for the money. what does the average plastic surgeon in vegas make? how about opthamologists in florida? or cadiologists in texas?

    for the record, the only profession whose salaries I take issue with are bankers who get to privatized gains and socialized losses. got to love playing with house money when you get to keep the winnings.

    moreover, I am extremely sympathetic to careers that *require* high earnings to make up for so many years of training. those folks are not rich and should not have to pay excise taxes. to make this clear, let’s say I make $1M over 12 years. if I was in med school for 4 (paying), residency for 3 (barely making anything), and earning decent money for 5, it is criminal that my tax burden could be 2x on the same eanings as someone with a steady 80K income stream.

  5. Pralay Says:

    If layoffs in Silicon Valley continues in same rate I am sure average leftover Silicon Valley Engineers will earn $200,000 a year in 2012.

  6. Cramer Says:

    I heard from multiple sources in Silicon Valley that many high-tech companies canceled bonuses in 2009, which in many cases amounted to 20-25% of the total compensation. Effectively, eliminating bonuses is an easy way to cut compensation.

  7. bob Says:

    Again, it sort of amazes me that the BA can compete with other tech cities. Sure- you might make 150k in SV but then again houses are 6-700k and taxes eat up almost 30% of that income. The reality is that a tech worker making 40-50k in just about any other city likely does better than a tech worker in SV making 150k.

  8. Herve Estater Says:

    > The reality is that a tech worker making 40-50k in just about any other city likely does better than a tech worker in SV making 150k.

    And yet you are still here, maybe making $50K :-)

  9. bob Says:

    And yet you are still here, maybe making $50K

    Actually I make a pretty decent 6 figure salary and so does my wife. We both started out making diddly squat ($8 an hour)and definitely appreciate what we now make. The thing is though is if we stayed here none of that salary would mean much.

    Sure- we would be able to buy what I’d call a starter home and pay our mortgage like a good BA resident. In other words we would buy into the idea of paying executive level salaries for middle class living standards, if that even. I’m not interested in playing that game. You can sugar coat it all day long, tell me how great the weather is, how special it is and so on. But to me its a matter of simple economics. I plan on buying a modest house somewhere else out of the state and when I do so the price will also be modest. I have no interest in living an extravagant lifestyle but I also have zero desire to pay extravagant prices and get little in return for my money. Again- I’m not going to play the game.

  10. nomadic Says:

    I love how they quote “average” tech salaries. How about throwing out some medians for a touch of reality? Sure Google or Facebook engineers may earn top dollar, but what about all of the struggling startups or just plain old smaller, less “sexy” companies? They aren’t paying the same wages, are they?

  11. bob Says:

    My guess about the salary numbers is that there’s probably a huge disparity between exec ad “average” tech worker salaries. Its pretty obvious from the craploads of enormous mansions that I drive by to work in the heart of the RBA that are constantly attended by armies of architects and landscape service people that there’s people in the area making probably millions and millions of dollars per year, which if you throw into the mix of regular workers making say- $50-60k a year then bingo- you get your high median salary.

  12. nomadic Says:

    actually, to argue semantics, you get your high average salary that way.

  13. Tyrone Says:

    What I’ve been telling friends an co-workers is that they should be prepared for no pay increases or pay reductions in the coming years. Companies tried to keep pace with the torrid cost of living rise in the Sillycon Valley, which was heavily influenced by housing costs. The pendulum needs to swing back the other way, and we need to give back the future earnings growth that we stole.

    Or, I could be wrong. Cheers!

  14. Real Estater Says:

    You know why salaries are going up despite fewer jobs in the valley? Because the valley is at the top of the food chain. The lower level jobs such as call center, support, programming are commoditized and outsourced to developing nations like India and China where labor is cheap. Meanwhile, we are focused on innovation and management, which result in jobs with higher pay.

  15. Pralay Says:

    You know why salaries are going up despite fewer jobs in the valley?
    —–

    Fewer jobs? You are sounding too negative lately, RealExcreter (you did yesterday too). This is taking the entertainment value away from your comments. I would recommend you to sound like the way you did one year back. For example, this one:

    This place is sort of like Disneyland, AKA the happiest place on earth. There’s no recession, no layoffs, no downturn, no hurricane, no snow.

    Let’s not talk about “fewer jobs”. Let’s talk about Disneyland.

  16. Pralay Says:

    Or let’s talk about how fewer more jobs will result “job stability” and more real estate transactions.

  17. Real Estater Says:

    Pralay,

    Depends on your skill set. Fewer of your kind of jobs here (in exchange for more in your homeland), but more of my kind of jobs here.

  18. Alex Says:

    realExcreter,

    aren’t you an average tech guy? or is your salary above average tech guy salary because you are now in management, unlike pralay and his countrymen?

    your thinking is too deep. you conf00se me sometimes.

  19. Pralay Says:

    but more of my kind of jobs here.
    —-

    You mean real estate agent, right?

  20. Pralay Says:

    or is your salary above average tech guy salary because you are now in management,
    —-

    Alex,
    He is confused whether he is in management or not (as described here). Probably he is neither. Based on his retarded comments here, I would say he is a Realtard(TM).

  21. Herve Estater Says:

    > to make this clear, let’s say I make $1M over 12 years. if I was in med school for 4 (paying), residency for 3 (barely making anything), and earning decent money for 5, it is criminal that my tax burden could be 2x on the same eanings as someone with a steady 80K income stream.

    Someone making $80K is in the 25% tax bracket and the federal income tax would be 20.23% of his income.
    If you make $160K, you end up in the 28% tax bracket and tax is 24.08% of your income. If you make $200K that’s 25.57%.
    California income tax would be the same for both.
    These examples are for someone filing as single.

    Long story short, you would still be quite far from your tax burden being double.

  22. Jojo Says:

    I thought we were going to move to Vegas guys?

  23. BuyersAreIdiots Says:

    The primary reason for the increase in the average salary around here is due to the continued outsourcing trend. We have talked about this before.

    A lot of the general code monkey type jobs are now being transferred to India and China. As well as the majority of tech support. Thus, the remaining folks in the Bay Area are usually in the management or architectural realm of software and hardware development.

    I see that statistic played out at my own company and many others where my friends and colleagues work. Now how will this affect housing in the Bay Area? It will drive it down further of course since we have had a decrease in previously well paying mid to low tier tech jobs. If you used to write code for a high flying dot com and are now relegated to working at Best Buy as part of Geek Squad, it will likely reduce your likelihood of being able to purchase a nice house. :-)

  24. sonarrat Says:

    But if everyone is forced to work for Geek Squad, then the prices of those nice homes will have to come down to match. It’s a lowest common denominator thing.

  25. Pralay Says:

    But at least real estate agents will be here, as stated in #18.

  26. BuyersAreIdiots Says:

    Depends on your skill set. Fewer of your kind of jobs here (in exchange for more in your homeland), but more of my kind of jobs here.

    Almost, but not quite.

    Fewer of the code monkey jobs here, which increases the number of more management type jobs from a relativistic standpoint. But quantitatively, the number of management jobs has not increased by large amounts in the Bay Area. They actually probably shrunk.

    Then again, I don’t work on a ‘Mega Project’. So what do I know.

    P.S. Does the ‘Mega Project’ involve those Mega Blocks from Toys R Us? :-D

  27. anon estater Says:

    Probably.

  28. DreamT Says:

    “Does the ‘Mega Project’ involve those Mega Blocks from Toys R Us?”

    Millions of them!

  29. anon estater Says:

    Is it possible excreter’s mega project contains millions of parts?

    Is it also possible that he doesn’t know what even one of them does?

  30. Pralay Says:

    I don’t know whether mega-project has of million parts or million Toys-R-Us blocks. But I know his project has millions of “sub-teams”.

    PS: In case you are curious how I know this, read outrageous and obnoxious comment:

    The fact is I’m far more productive than you. I can work from anywhere at any time. That’s why I am put in charge of a mega project, and you’re just like a worker bee on one of my sub-teams. I can get you laid off anytime.

    :)

  31. DreamT Says:

    oh yes, the one where RE said I was “terminated” :) one of millions of “see I’m always right” insights :D

  32. bob Says:

    Meanwhile, we are focused on innovation and management, which result in jobs with higher pay.

    Not sure if I agree. Seems to me that if you looked back to the 50′s-90′s, there was a lot of what I’d call real tech innovation in the valley: The invention of miniature circuitry, microprocessors, PCs, Apple Computer company, Ampex, and so on. Now all we do is bullsh!t startups that have poor monetary models and are disguised as being successful only because there’s enough idiots with venture capital to throw at it.

  33. Pralay Says:

    oh yes, the one where RE said I was “terminated” :) one of millions of “see I’m always right” insights :D
    —-

    The whole thread is very funny. Especially the excuse why an all-powerful-can-layoff-anybody-super-productive guy stays awake till 2AM. :)

  34. DreamT Says:

    Oops, Palo Alto didn’t make the cut. No-respect zip did.
    http://finance.yahoo.com/real-estate/article/107521/best-places-for-the-rich-and-single=realestate-buy

  35. Herve Estater Says:

    > [...] it is criminal that my tax burden could be 2x on the same eanings as someone with a steady 80K income stream.

    Looks like my comment from yesterday never made it…

    Anyway, according to this, the federal tax would be (filing status: single):
    20.23% if you make $80K (25% tax bracket)
    24.08% if you make $160K (28% tax bracket)
    27.06% if you make $250K (33% tax bracket)
    (add 9.3% for California income tax)

    I hardly call it “double” (bob would disagree though) or “criminal”.

  36. DreamT Says:

    Herve, I suspect the reference was in reference to the absolute tax amount after same-amount tax exemptions for both.

  37. DreamT Says:

    sorry for abusing the word “reference”. The poor word is innocent. So is the word word.

  38. SHBH Says:

    Sure Google or Facebook engineers may earn top dollar, but what about all of the struggling startups or just plain old smaller, less “sexy” companies?

    Actually I know for a fact that engineers at Google don’t have a very high base. They do have some very decent perks and stock options/grants though.

    That brings up another point. Do they just count the base, or do they include bonus, options/grants, and benefits as well? An average of $132,000 does seem high to me on base salary alone.

  39. not surprised Says:

    I’m not surprised. Mediocre college grads make $85k starting at Major Brand Tech firms. Great college grades make $95k starting at these same firms.

    With a pathetic 2.3% annual raise (and that’s pathetic, really) the Great college hire would be making $133k after just 15 years. Actually, he’d probably make that in 10 years if he really were great.

    Compounding interest works wonders.

  40. nomadic Says:

    DreamT (#33) – that’s because mostly old farts live there, sitting in their homes until they die so they can pass on their prop 13 basis to their heirs. The students don’t count since they don’t earn much until after they graduate.

  41. BuyersAreIdiots Says:

    An average of $132,000 does seem high to me on base salary alone.

    Seems a tad high to me too. Even for someone with an MIT or Stanford pedigree.

    Salary dot com has some good examples of what one can expect salary wise for various Bay Area positions. But I still think the skew is largely due to the lower tier jobs being shipped overseas thereby adjusting the frame of reference.

  42. Herve Estater Says:

    > Oops, Palo Alto didn’t make the cut. No-respect zip did.

    No surprise. Living in Santa Clara does not really attract mates…

  43. anon estater Says:

    Arrgh, matey!

  44. SHBH Says:

    I’m not surprised. Mediocre college grads make $85k starting at Major Brand Tech firms. Great college grades make $95k starting at these same firms.

    Are kids fresh out of college really making that much these days? Can someone provide more data points on this?

    With a pathetic 2.3% annual raise (and that’s pathetic, really) the Great college hire would be making $133k after just 15 years. Actually, he’d probably make that in 10 years if he really were great.

    Salary doesn’t always go up. I worked for a top tier consulting firm back in 2001 and everyone got a double digit pay cut that took years to recover. Ditto for 2009.

  45. not surprised Says:

    I know it is just an anecdote, but my nephew just graduated from a UCs from the South and joined a company that makes stuff you can buy at Fry’s. $85k. Seriously.

    One of his best buddies from HS who went to the Harvard+Yale+MIT of the West and joined the same company? $95k.

    That’s how I know. He was pretty steamed about it. (But his parents sure saved a ton! Hahahaha.)

    But his other classmates who got jobs at big tech houses cleared about the same salaries.

    I don’t know where you’d get data like this.

  46. Pralay Says:

    No surprise. Living in Santa Clara does not really attract mates…
    —-

    And lack of diploma.

  47. SHBH Says:

    I don’t know where you’d get data like this.

    Glassdoor.com has some good salary info. If you select the company and region, it will give you the range for a specific job title.

    Take Cisco Systems Software Engineer Salary in San Jose, CA Area for example, it goes from 60k-150k with an average of 88k.

    I assume kids fresh out of collect will fall into the lower end of the spectrum. And 85k-95k for someone just have 4-year college degree does seem very high to me.

  48. BuyersAreIdiots Says:

    I just went onto salary dot com and did a check for a ‘software engineer’ for the Mountain View area. Which I would assume carries a pretty good premium being that it resides in the primary Silicon Valley corridor.

    According to their information, a junior software engineer (college grad) makes in the range of $54k (10th percentile) to the $81k range (90th percentile). While I am sure certain grads will make a premium based on their school (MIT, Harvard, etc), I don’t think a salary of $85k to $95k is the norm.

    I also know of recent grads that were hired at my company from fairly good schools (UCLA and such) and they are making in the $60k range.

  49. nomadic Says:

    but don’t salaries double every 10 years, just like RBA real estate??? Twenty years ago, a typical engineering starting salary was about $30k, maybe a little more. That means it should be $120k now!
    ;-)

  50. DreamT Says:

    Ha, the salary discussion again. I have seen people holding the exact same title – software engineer – where one person would have a $60k base and the other $120k base. Same age too, doing more or less the same thing, in the same company. Once you factor in stocks or options and segment by company type (startup versus public company for example), you end up all over the spectrum. Salaries artificially inflated in the 99-02 period when people would sometimes switch jobs every four months to score a 100% increase over two years. And subsequently we all know that layoffs and mandatory salary reductions wiped out a good part of that. Same happened this year. As for whether a $90k starting salary is high or not is rather irrelevant IMO. I have no doubts that some graduates manage that starting salary in some companies, but that tells us nothing about the norm.

  51. BuyersAreIdiots Says:

    DreamT,

    Remember, its the statistical outliers we are interested in. The rest is ‘useless aggregate data’. ;-)

  52. cardinal2007 Says:

    For 2007 if you graduated with a Masters from Stanford in CS the median starting salary was $85k, with a median starting bonus of $10k, as we know all average tech guys got Masters from Stanford, MIT, CMU, Cornell, UC Berkeley, or another such school. So obviously that is pretty much the typical starting salaries for average tech guys.

    If you can’t tell I’m being sarcastic.

  53. not surprised Says:

    Sounds like you guys don’t believe me. :(

    I’m really not making this up. I was surprised as you.

    Back to lurking I guess.

  54. SHBH Says:

    It may true in your nephew’s case.

    What I find hard to believe is that an average college graduate with very little experience can expect 85k-95k base.

    And to a lesser extent, the average wage of $132,000, although I don’t have any data to refute the latter.

  55. BuyersAreIdiots Says:

    What I find hard to believe is that an average college graduate with very little experience can expect 85k-95k base

    Anything is possible. We are dealing with aggregate data sets here. So if you have a bachelors in comp sci from, say, UC Davis, my suspicion is that you will fall into the standard range based on salary dot com’s numbers. If, however, you graduated with a phD in computer science from MIT, then yes, I can believe a $95k (or even six figure) starting salary.

    But as a good frame of reference, one of my old colleagues who worked for my (current) company as a contractor years ago got recently hired full time to do development. He has a phD in comp sci from a pretty decent school (not an ivy league one, but a good one nonetheless). He has also been working in the industry since 1988. So effectively, 20 years experience. His salary was $160k here and he brings a very unique experience set that our company was explicitly looking for that made him stand out. So I find it hard to believe that someone such as him would command only a $60k premium over a newbie college grad with a bachelors, considering the pedigree he brings to the table.

  56. SHBH Says:

    It’s precisely because we are dealing with an aggregated data set, that I find the 85k-95k starting range (which may be true in isolated cases) unbelievable. Of course, I assume we are talking about someone who just received his bachelor, or master or doctor’s degree here.

    There is not a whole lot of variance in terms of the experience a new graduate can bring to the table vs. the next guy. On the other hand it’s a much harder task to predict the range of an experienced professional.

  57. nomadic Says:

    not surprised – no one here is calling you a liar.

    We’re just mulling over your two data points. :-)

  58. anon Says:

    I swear, like, my buddy makes 81k a year bumming change on University avenue!

  59. Not Surprised Says:

    I know it is just an anecdote, but my nephew just graduated from a UCs from the South and joined a company that makes stuff you can buy at Fry’s. $85k. Seriously.

    One of his best buddies from HS who went to the Harvard+Yale+MIT of the West and joined the same company? $95k.

    ————–

    Ok. I finally had lunch with my sister yesterday. Here’s what I found out.

    Nephew who went to a UC joined major tech that you’ve all heard of had a starting salary of $85k. He had a BS in EE.

    His best bud from high school went to Stanford. And here’s where I goofed – the bud has a MS in CS. Same company. The Stanford kid’s starting salary? $94k.

    There’s the scoop. I just thought I would follow up on this. You can choose to believe me or not.

  60. StanfordPhD Says:

    Here are the hard numbers for 07-08 straight from Stanford, in case people are interested or still don’t believe the hype:

    Computer Science
    B.S. Average 82K
    M.S. Average 89K

    Electrical Engineering
    B.S. Average 59K
    M.S. Average 91K

    http://cardinalcareers.stanford.edu/surveys/0708/engineering.htm


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