Silicon Valley Jobs Report: Job growth slows, but remains positive; housing crisis impacts economy

Today's employment report from the state shows that the San Jose metro region lost 13,100 jobs last month. This isn't nearly as bad as it sounds: we always lose jobs in January, as retailers and others lay off the extra help they hired on for the holiday season.

However, with just a 1.3% increase in jobs since Jan. 2007, this month's employment continued to show evidence of a slowdown in Silicon Valley. The annual growth rate peaked in September 2006 at 2.8%, and has been on the decline ever since (see graph).(Continued...)

Job growth is still positive, but at just over 1% it is unlikely to keep up with the growth of the working-age population. The jobs picture may well continue to weaken, driven by actions like the recent layoffs at Yahoo and planned layoffs at the Mercury News, both of which won't show up in the jobs data until next month.

Sheila Bair, chair of the Federal Deposit Insurance Corp. (FDIC), warned last week that "Silicon Valley is not immune" to the economic challenges brought on by the national mortgage crisis. With foreclosures exceeding home sales in California last month, industries tied to the housing market are feeling the pain. Construction firms in Silicon Valley lost 500 jobs in January, and the financial activities sector dropped 1,200 jobs.

In more encouraging news, Silicon Valley added 4,500 manufacturing jobs in the past year: a small but significant reversal of the decade's trend of devastating losses in manufacturing, the region's largest employment sector.

Highlights of the local jobs report:

• The San Jose metro area lost 13,100 non-farm jobs in January, due in part to seasonal declines. The retail sector eliminated 3,500 jobs, accompanied by declines of 2,500 jobs in leisure and hospitality (mostly in restaurants), 1,900 jobs in construction, and 1,600 jobs in professional & business services.


• Over the year, the San Jose metro area added 11,400 jobs, a 1.3% increase from January 2007.


• The biggest year-over-year gains were in manufacturing (+4,500 jobs), educational & health services (+3,300 jobs), trade, transportation & utilities, which includes retail (+2,000 jobs), information (+1,900 jobs), and government (+1,000 jobs).


• The construction and financial activities sectors -- both strongly tied to the housing market -- continued to weaken, with construction losing 500 jobs over the year and financial activities losing 1,200 jobs. The region also lost 300 jobs in leisure & hospitality and 100 jobs in professional & business services.


• For January 2008, the unemployment rate stood at 5.3%, up 0.2 percentage points from last month and up 0.5 points over the year. That translates to 4,900 more unemployed residents (by official measures) than in January 2007.


• Seven years after the tech crash, Silicon Valley holds 151,000 fewer jobs than it did in January 2001.

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3 out of 10 elders face inadequate incomes in Santa Clara County

In high-priced Silicon Valley, families of all types and ages find it hard to make ends meet. But older adults face particular challenges.

A new standard developed by UCLA indicates that the basic costs of living for elders (age 65+) in Santa Clara County range from $17,632 for a single senior homeowner with no mortgage, up to $47,354 for a couple with a mortgage -- and at least 31% of elder households in the county do not have enough income to meet these minimum standards of living.

The Elder Economic Security Standard Index, released today by the UCLA Center for Health Policy Research and the California Elder Economic Security Initiative, measures the costs for older adults of meeting their basic needs for housing, food, transportation and other necessities.

Here are the annual costs of basic needs for older adults living in Santa Clara County:

Elder Standard Per Year

Elder Person:
Owner w/o mortgage: $17,632

Owner w/ mortgage: $37,641

Renter, one bedroom: $25,391

Elder Couple:
Owner w/o mortgage: $27,345
Owner w/ mortgage: $47,354
Renter, one bedroom: $35,104

Source: UCLA Center for Health Policy Research. Standard per year is based on basic monthly costs for housing, food, transportation, health care (assuming good health), and miscellaneous needs.

(Continued...) As of 2006, at least 31% of households including elders had incomes below these standards, meaning that they face serious challenges in affording the basic necessities of life.

This points at the urgent need in Silicon Valley for initiatives to tackle the high cost of living, including affordable housing for families of all types and income levels; affordable and accessible health care providers; public transit that meets the needs not only of commuters, but also of retirees and transit-dependent residents; and planning future development so that grocery stores, pharmacies, clinics, hospitals, parks, community centers, and other amenities are nearby and accessible by walking or transit for all neighborhoods. We've made progress on many of these fronts, but with more than three out of ten elder households still struggling to make ends meet, it's clear we need to do more.


Source: Elder Standard Index from UCLA/WOW. Housing and population data from the American Community Survey was used to approximate the number of Santa Clara County households containing seniors which fall below the income levels provided in the Elder Standard Index. Because the Index does not provide standards for elders living in larger households, the standard for an elder couple was also used for elders in households of three or more, resulting in a conservative estimate of elders living below the standard.

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Bay Area private sector workers achieve highest unionization rate since 1999

Bay Area union membership was on the rise in 2007, driven by increased unionization in the private sector.

An estimated 57,000 additional private-sector workers chose to join unions last year, bringing the private-sector unionization rate for the San Jose-San Francisco-Oakland region up to 12.1%: the highest rate this decade.

Combining the public and private sectors, 18.2% of all workers in the Bay Area were covered by a union contract in 2007, up from 17.1% in 2006.

The United States as a whole saw an uptick from 12.0% to 12.1%: a small increase, but notable as the first recorded growth in the nation's unionization rate since the 1970s.

However, union membership in the Bay Area -- and the United States -- remains near historic lows following decades of decline. In the 1960s, about 30% of workers belonged to unions. Today, union coverage has been cut to the rock-bottom rate of 12%, despite the fact that survey after survey shows most U.S. workers want a union.(Continued...)

Although a majority of nonunion workers say they would vote for union representation, few ever get that opportunity, due to employer intimidation combined with ever-more-regressive federal labor laws that block workers from exercising their right to choose a union. This assault on workers intensified under the Bush administration, with the appointment of a strongly anti-labor National Labor Relations Board (NLRB) and Secretary of Labor.

The New York Times writes:

There is little doubt that American workers need unions. Wages today are almost 10 percent lower than they were in 1973, after accounting for inflation. The share of national income devoted to workers' wages and benefits is at its lowest since the late-1960s, while the share going to profits has surged. The decline in unionization has been a big part of the reason that workers have lost so much ground.

Source: Union membership data for the SJ-SF-Oakland region is from the Union Membership and Coverage Database, http://www.unionstats.com/, constructed by Barry T. Hirsch (Georgia State University) and David A. Macpherson (Florida State University). All unionization data used originates from the Bureau of Labor Statistics.

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Community Budget Working Group presents San Jose Excels! recommendations to City representatives

The final report of the Community Budget Working Group was presented to officials from the City of San Jose today.

The seven-page document articulates the community's driving budget principle and 10 keys to assure excellence from the City's budget process. Each key includes specific recommendations that stemmed from multiple conversations with scores of community members and suggestions that were submitted through the Working Group's website, MyBudgetIdea.com.

"We're pleased to be able to provide the community's thoughts on how best to allocate the City's resources," said Working Group member Tamara Alvarado. "We heard repeatedly that the City's top budget concerns should be public safety, neighborhood services, the environment, a vibrant artistic and cultural life, and a government that is community-oriented and friendly. Today, we're able to present the ideas of some of the City's brightest minds on how to ensure that those concerns are met."

Representatives from the Mayor's office and several Councilmembers' offices were on hand to receive the report, which the Working Group intends to present to the entire City Council during an upcoming Council meeting.

The full document can be downloaded from the group's website, MyBudgetIdea.com.

The Community Budget Working Group was formed by a group of community leaders to ensure that a broad range of voices is heard by elected leaders as the City of San Jose discusses how to allocate increasingly scarce resources. Convened by Working Partnerships USA, the Working Group features a steering committee of representatives from a broad range of community organizations and constituencies. Participants include City commissioners, heads of ethnic Chambers of Commerce, religious leaders, environmentalists and neighborhood activists.

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Breaking news: Firefighters get paid more than cashiers

That should have been the title of this weekend's USA Today article. Instead, the front-page article was titled "Public jobs see pay gains" and purported to show a trend of "better pay and benefits for public employees" as compared to their counterparts in the private sector.

But USA Today is comparing apples to oranges. Different industries have different cost structures (think of the costs involved in running an auto plant versus a beauty salon), and the mix of skills and occupations involved in state and local government is entirely different from the mix of occupations in the private sector.

Nationwide, the top five occupations in the private sector, making up 12% of the workforce, are:

• Retail salespersons


• Cashiers


• Office clerks


• Combined food prep and serving workers, including fast food


• Waiters and waitresses

And the top three occupations employed by state and local governments, making up 15% of the workforce:

• Police and sheriff's patrol officers


• Fire fighters


• Correctional officers

Do we really want a force of firefighters and police officers who get paid minimum wage with no health care? Or maybe correctional officers should all work for tips. (Continued...)


Not only is USA Today's analysis flawed, but they can't even seem to keep their own numbers straight.

The chart accompanying the article claims to show "Average hourly wages" in the public and private sectors, revealing that public sector employees in 2007 earned an expansive-seeming average wage of $39.50. Two mistakes here. First, the article is about state and local government only, not the entire public sector; if you factored in federal employees (who aren't included in the survey), results would be different. And second, the average wage for state and local government in 2007 was not $39.50, but $26.26. (What's the difference? For a full-time worker, nearly $28 grand per year...)

That $39.50 represents not wages but total compensation, factoring in the high cost of health coverage (a nationwide problem not confined to the public sector) and retirement. The text of the article gets this right, but apparently whoever drew up the chart didn't bother to read the article. Can't say I blame them.


(All data is from the Bureau of Labor Statistics. The National Compensation Survey is available at http://www.bls.gov/ncs/; occupational employment is at http://www.bls.gov/oes/.)

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