SAN JOSÉ, Calif. – Feb. 7, 2018 – Silicon Valley’s persistent economic growth shows few signs of slowing down while it exacerbates the region’s housing and transportation challenges year after year, reports the 2018 Silicon Valley Index released today by Joint Venture Silicon Valley’s Institute for Regional Studies.
The latest annual Index again shows more jobs, income, venture capital and commercial construction pouring into Silicon Valley, yet workers struggle to afford housing, endure longer commutes and face rising costs for such everyday needs as food, clothing and child care.
The new study found the regional economy created more than 47,000 new jobs in the year between the second quarters of 2016 and 2017, dropping the unemployment rate to 2.5 percent, its lowest since 2000. Venture capital investments approached $25 billion, inventors registered more than 19,000 patents and 5.4 million square feet of new office space was constructed.
“Without question, Silicon Valley is still a hotbed,” said Russell Hancock, CEO of Joint Venture and President of the Institute. “But our spectacular success has created a harsh environment for families. Housing is out of reach for all but a very few. Those who can’t afford it are living challenging lives, or commuting from far-flung places, spending ghastly amounts of time in traffic.
“We’re an affluent region and that also makes us a high-cost region,” Hancock added. “Middle-skill and mid-wage jobs are vanishing, and this places a limiting factor on our local families and those headed here. Income inequality becomes more pronounced with each passing year. Today nearly a third of Silicon Valley households require some form of assistance in order to get by, and ten percent of our residents are food insecure.”
At the same time, Silicon Valley’s population is changing in age, nativity and educational levels. Some 38 percent of residents are foreign-born and a majority, 51 percent, speak a language other than English at home. The percentage of residents over age 65 has risen 31 percent over a ten-year period and 51 percent of residents have a bachelor’s degree or higher, up seven percentage points since 2006, a figure that varies significantly by race and ethnicity.
Average annual earnings in the region were $131,000 in 2017 while median household income outpaced inflation, reaching $110,000, higher than any year since 2001.
The cost of housing continues to climb. Median home prices (adjusted for inflation) rose 7.4 percent in 2017, up nearly $67,000, while median apartment rental rates, down slightly over the past two years, have nevertheless risen 37 percent since 2011. Child care costs rose by as much as 31 percent (after inflation adjustment) since 2012.
Rachel Massaro, Joint Venture vice president and chief researcher for the Institute, authored the Index with assistance from Stephen Levy, director of the Center for the Continuing Study of the California Economy and a senior advisor to the Institute.
The 92-page Index reports the latest data and trends in economic development, workforce, housing, education, public health, land use, environment, governance, arts and culture and other sectors throughout Santa Clara and San Mateo counties and portions of Alameda and Santa Cruz counties and San Francisco.
The Index is published in conjunction with the annual “State of the Valley” conference, a town hall-style gathering of regional leaders, elected officials and citizens in a daylong discussion of Silicon Valley’s economic opportunities, challenges and future. The 2018 conference takes place Friday, Feb. 9, at the San José McEnery Convention Center.
About Joint Venture Silicon Valley
Established in 1993, Joint Venture provides analysis and action on issues affecting the Silicon Valley economy and quality of life. The organization brings together established and emerging leaders—from business, government, academia, labor and the broader community—to spotlight issues, launch projects and work toward innovative solutions. For more information, visit www.jointventure.org.
About the Silicon Valley Institute for Regional Studies
The Silicon Valley Institute for Regional Studies provides research and analysis on a host of issues facing Silicon Valley’s economy and society. The Institute is housed within Joint Venture Silicon Valley. For more information, visit www.siliconvalleyindicators.org.