SAN JOSE, Calif. (KRON) — Silicon Valley’s income inequality is getting worse, new findings show.
Ahead of Joint Venture Silicon Valley’s annual Silicon Valley Index, officials released some of its latest findings that show the region’s employment rebounding to pre-pandemic numbers, commercial development continuing at unprecedented levels, and extreme levels of inequality.
The new findings highlight the region’s income inequality, which has grown twice as quickly as the state and nation — where the top 25% of earners hold 92% of the region’s wealth.
At the same time, health and wealth disparities were magnified by race and ethnicity.
“Silicon Valley is showcasing our fabled dynamism but is also exposing a whopping set of fallibilities,” said Russell Hancock, CEO of Joint Venture and President of the Institute.
According to Joint Venture, Hispanic residents are two and a half times more likely than white, non-Hispanic residents to be hospitalized with COVID-19 and are three times as likely to die from the virus.
Hispanic or Latino workers make an average wage that is 65% less than those with a similar education level as white residents — whereas Black or African American workers earn 50% less.
“We’re generating wealth faster than ever before – personal assets, real estate, private company valuations, public company market cap, and in a million other ways,” said Rachel Massaro, Joint Venture Vice President and Director of Research for the Institute.
“This report shows us that many in our region working full time are barely scraping by. Explain Silicon Valley to any kindergartner, and they’ll tell you it’s not fair. We need to make sure the wealth generation that drives up prices and demand for services also feeds back into the system.”
The latest findings also reveal that Silicon Valley gained back most of the jobs lost early on in the pandemic by mid-2021 — and the rest in the second half of the year.
Most of the recovery is led by the tech sector, as jobs went up 4%.
Despite pandemic-related restrictions, Silicon Valley’s technology companies broke several records — the market capitalization of public companies in the region and San Francisco was $14 trillion last year, doubling the market low of February 2020.
Additionally, venture capital reached an all-time high of $95 billion in 2022, fueled by a record 257 megadeals, and more IPOs than any year since 2000 with 32.
Major tech companies centrally located in Silicon Valley, including Meta, Google, NetApp, and Apple — have continued to build new space and execute leases for growth and expansion in the region.
Over the last year, the region saw an unprecedented amount of new commercial development gaining planning approvals — with 21.5 million square feet of new space across 135 sites.
Homes selling at an all-time-high as homelessness looms
In 2021, the median sale price of a home in Silicon Valley reached a record of $1.3 million — 69% of homes sold above $1 million, up from 59% in 2019.
Average rents declined by 8% in 2020 and another 10% in 2021.
The findings show the share of renters severely “burdened” by housing costs, those paying more than 50% of their income on rent, varies widely by industry — 27% of service workers compared to 4% of tech workers.
Consequently, Santa Clara County ranks at the top of the list of nearly 400 U.S. regions for the total number of unsheltered homeless, as well as the unsheltered share of unaccompanied youth.
Silicon Valley’s population is declining
According to the new findings, the region’s population is back to the size it was in 2015 — partially due to the declining birth and increasing mortality rates, low numbers of foreign immigrants including refugee arrivals, and more residents moving to other parts of California and the U.S.
Joint Venture’s 2022 State of the Valley conference is set to take place on Feb. 18 from 9 a.m. until noon.