While the seven biggest firms in Silicon Valley have had big profit gains, employment in their home county continues to fall.
The names of businesses like Cisco and Electronic Arts have global recognition, and earnings to match their vaunted reputations and quality output. According to the New York Times, their resurgence over the past three years hasn’t been matched with an uptick in jobs.
Not domestic jobs, anyway.
That theory will probably receive a resounding snort of derision from the thousands of people who have seen jobs evaporate, with no prospects of returning to the IT profession. This writer has heard from people with 10, 20 years of experience in the field, people with skills well above those needed for assembling components.
Plenty of skills, but no employment prospects. And it’s a situation that is not going to change, not with productivity gains of tens of thousands of dollars per employee, according to research firm Joint Venture Silicon Valley.
“It’s a high-productivity jobless recovery,” said Stephen Levy, director for the Center for the Continuing Study of the California Economy.
Profit at the top seven companies increased an average of 500 percent over the past three years. Meanwhile, Santa Clara County saw nearly 20,000 jobs depart.
Venture capitalists, who have begun placing more money into startups, aren’t riding to the rescue. New investments have come with new requirements to watch costs and outsource work, according to UC-Berkeley economist Cynthia Kroll.
The work that is staying domestically with the startups may be going to friends and acquaintances of the venture capitalists. One job-seeker was noted in the Times report as “finding it pretty closed” when perusing the job market, and theorized that backers are hiring people they know, when they do hire.
So what might happen to these job seekers in the future? Will they retrain or enter new professions? Do they go into business for themselves, providing services for the same corporate machines that cast them aside in favor of huge profit growth?
America wasn’t built to be a nation of chiefs and cooks. For a profitable, productive middle class to return and even improve its fortunes, a lot of people are going to have to do the work themselves. Especially if it looks like no one wants to give you a job.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
