Working in Silicon Valley may not be all it was glamorously cut out to. A recent report by job portal Indeed shows that the Valley is currently witnessing the highest rate of outbound job searches of any tech hub in the US. The tech hotspot has witnessed a jump of 67 percent of outbound job searches in the past five years.
But what has led to this notable increase?
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The reasons are many, from high cost of living and the rising gender pay-gap to gross income inequality and frustratingly standstill commutes. In fact, a report by the non-profit Joint Venture Silicon Valley stated that the region's economic inequality continues to grow and that its infrastructure is grossly inadequate.
“Silicon Valley job seekers, including highly paid tech workers, are looking for jobs outside their own metro area at a much higher rate than other metros,” said Raj Mukherjee, Indeed's Senior Vice President of Product, in a statement. “This implies they are aware that highly paid job opportunities are being created not just in Silicon Valley but in other parts of the U.S.”
While it isn’t all too ground-breaking for employees between the ages of 18 and 24 to experiment with their jobs, what is surprising is that it is those in the older demographic, between the ages of 45 and 54, that make up 59 per cent of the report’s outbound job-searches. Pondering over the statistics, Mukherjee suggests, “We think it is because living in the Valley has become unaffordable for so many people or it could be desire for a better work-life balance.”
Let’s examine the factors contributing to this in detail.
High cost of living
According to Index, the median sale price of homes in Silicon Valley reached $880,000 in 2016, a price fewer than 40 percent of first-time homebuyers could afford. The small share of ‘affordable housing residencies’ dropped from 1,758 in 2015 to 1,404 in 2016 – by a good seven percent. In contrast, upcoming tech cities like Austin, Texas seem to offer the same opportunities but offer a greater standard of living. According to the Indeed report, a one-bedroom apartment in San Francisco will run you about $3,000 per month, while the same apartment in Austin is a little more than $1,000 per month.
According to a report, men in Silicon Valley with bachelor's degrees earn 50 percent more than women with the same degrees. These same statistics suggest that a woman with a bachelor’s degree earns 67 cents for every $1 earned by their male counterparts. The Valley's ratio for all women working full-time (74 cents per dollar) is considerably worse than either in San Francisco (77 cents) or California (79 cents).
Taking note of the widening reality of income-inequality in the highly ‘lucrative’ area of Silicon Valley, the Index report states that one out of every 12 residents now lives below the federal poverty threshold and one in 11 children lives in poverty. It suggests, however, that those belonging to the White, Asian, and African-American races aren’t as affected as their Hispanic or Latino counterparts. Twenty-nine percent of the households in Silicon Valley “do not earn enough money to meet their basic needs without public or private, informal assistance, and this share jumps up to 59 percent for those with Hispanic or Latino householders.”
Since 2015, the 35-hour driving time per commuter annually has definitely helped in contributing to the problem of outbound job-searches of Silicon Valley employees. This combined with the fact that the areas near the prime tech-hubs are priced exceedingly high doesn’t help with the commuting problem. Accordingly, since 2005 there has been an increase of 228,000 Santa Clara and San Mateo County residents who commute to work, along with 57,000 additional commuters who come into Silicon Valley from San Francisco and Alameda counties. As a result of the rising number of workers traveling the same congested road to work, commute times have risen by 17 percent.
Speaking about a possible ‘brain-drain’ from Silicon Valley if the percentage of outbound job-searchers continue to stand at the existing numbers, Rufus Jeffris, Vice President of Communications for the Bay Area Council, told CNBC: “These younger folks, millennials, are our future workforce; this is our labour market; this is our talent pool. So, our economy is fuelled by our talent and when folks are saying that they are going to leave, that can create a real problem for us in terms of attracting and retaining the workers and talent that we need to succeed.”
As for constructing practical solutions to these specific problems, Carl Guardino, President of the Silicon Valley Leadership Group, told The Mercury News: “We can whine about this, or we can win by solving our traffic and housing problems. The last time the Bay Area had seemingly solved its traffic problems was the worldwide recession of 2008. A recession is not how we want to solve our traffic and housing problems.”
The cities that these Silicon Valley job-searchers have been researching primarily on include fellow tech-hubs like New York, Austin, Seattle, Atlanta, and Chicago.