The bay region’s labor market, a long -standing engine for the economy of California, was bad after the coronavirus epidemic, reflecting a deep change in the fortune of Silicon Valley.
The slowdown is so pronounced that the region has become a brake on the California labor market. In 2024, employment growth in the state only ranked 37th among all.
Adjusted for seasonal volatility, total Californian plans in 2024 increased by only 1%, according to data from the Employment Development Department. The bay region’s labor market during the same period increased by 0.2%.
“The performance of the labor market in the bay region in the past year has been among the bottom of the peloton in the state and the nation,” said Scott Anderson, US BMO capital markets.
Several factors are at the origin of the slow results of the region.
“A high cost of living and business, slow demographic growth and a technological sector for a new world focused on AI are large parts of this puzzle,” said Anderson.
Before the arrival of COVID-19 in 2020, the labor market in the Bay region fell to advanced performance.
Over a period of 10 years which ended in 2019 – the last year before the start of business closings to combat the spread of the deadly virus – the labor market of the Bay region exceeded California by a margin important.
During this section, regional jobs of jobs increased by 30.5%, while the California labor market increased by 23.5%, according to figures compiled by the Department of Employment Development the state.
From 2020 to 2024, however, the total jobs in the bay region fell 0.8%, against an increase of only 3.2% for California, according to the analysis of this organization of new EDD reports .
“These figures on employment growth are amazing,” said Michael Bernick, lawyer for the law firm Duane Morris and former director of the EDD state.
On the other hand, total jobs in the United States increased by 4.7% in the five years from 2020 to 2024. Throughout this time, problems with the employment markets throughout the state and the bay persisted in 2024.
Hiring in the state is partly increased due to the conditions of the region. Local offense in the normally robust technological sector, which seeks to rationalize its operations, are an important factor in the slow pace of hiring.
In 2024, the South Bay region, East Bay and the San Francisco-San Mateo region all produced job gains that have not reached the state-of-scale average. A plunge in hiring for the San Francisco metro region was a main factor.
Here is how the employment markets behaved in 2024 in the three main urban centers in the Bay region:
– The San Francisco-San Mateo region lost 8,200 jobs in 2024, a drop of 0.7%.
– South bay added 3,100 jobs for a 0.3%gain.
– East Bay has won 8,400 jobs, an increase of 0.7%
The cuts from the technological industry may not disappear from so early while the sector relentlessly endeavors to appeal to investors and analysts, in the opinion of Bob Staedler, principal director of the Silicon Valley Synergy Silicon Country Council.
“The operational efficiency requested by Wall Street is a factor that should not be overlooked,” said Staedler. “Companies that strive to efficiency by layoffs or travel jobs elsewhere are rewarded by the markets. I don’t see it slowing down anytime soon.
Meanwhile, employment growth in rural regions of the state has largely exceeded the job activity in more urban places.
In 2024, five metro centers displayed employment gains of at least 2%: the county of San Joaquin, the county of Yuba, the county of Sutter, the county of Madera and the county of Butte. The County of San Joaquin experienced the largest employment gains, with an increase of 5.3% in 2024.
On the other hand, the San Francisco-San Mateo region was the lowest metropolitan area in California, with a 0.5% drop in the total payroll jobs last year.
Several other major metro regions have also managed a slight increase in jobs in 2024. The total jobs increased by 0.9% in the County of Los Angeles, 0.7% in the County of Orange and 0.5% in the County of San Diego.
Some observers, however, believe that a more fundamental problem appeared for the bay region compared to 30 metropolitan zones questioned by the EDD state.
“During each of the last two civil years, 2023 and 2024, the counties of the Bay region ranked near all the main California counties in terms of employment growth,” said Bernick.
Regional leaders must take solid measures to approach the region’s economy, in the opinion of Jeff Bellisario, executive director of the Bay Area Council Economic Institute.
“After two consecutive years of negligible net employment growth in the bay region, it is time to carefully examine the fundamental engines of our economy and the policies that limit our growth,” said Bellisario.
This time, problems cannot all be posed at the feet of the usual suspects, he argued.
“It has become commonplace to blame the pandemic, contraction in technology and high interest rates such as the reasons for the region’s reversal of a decade of employment growth at five years of underperformance”, said Bellisario.
The Bay Region Council has long urged state and local political leaders to find a way to treat housing prices and traffic jammer that haunt the nine counties region and California.
“Without serious and urgent action to eliminate obstacles to investment and job creation, attract new businesses and promote this region to the world, it is difficult to see a short -term path to gains from ‘more robust employment in the region and the state, ”says Bellisario.
For Russell Hancock, president of the San Jose -based reflection joint venture, Silicon Valley, one thing is certain: the Bay region and its technological centers went to an unexplored territory.
“Silicon Valley has entered a new phase of our current development,” said Hancock. “The previous waves of layoffs could be understood as companies recalibrating after the whole survivor during the pandemic.”
Things appear different this time, he said.
“We have entered a period of low growth and without growth,” said Hancock. “I suspect that we are going to be scrambled for a while.”
Originally published:
California Daily Newspapers
