Economy: Silicon Valley suffers huge job losses in 2020, but tech gains.
Besides prefab homes, residents will help clean and maintain the park
Silicon Valley suffered mammoth job losses during 2020 that affected nearly every industry except the tech sector, whose employers managed small job gains despite coronavirus-linked economic woes, a report released Tuesday shows.
The job losses in Silicon Valley were so severe that they exceeded the employment setbacks in the region during the dot-com debacle, according to the new report by Joint Venture Silicon Valley, a San Josebased think tank.
Yet while overall job losses in Silicon Valley — defined as Santa Clara County, San Mateo County, southern Alameda County, and northern Santa Cruz County — were dramatic, some industries were hit far harder than others, and some managed to actually gain jobs, such as tech, according to the report.
“We have a tale of two economies and a tale of two recoveries,” Russell Hancock, president of Joint Venture Silicon Valley, said during a news briefing to discuss the report.
Over the one-year period that ended in June 2020, overall employment in the Silicon Valley geographic region fell by 8.9%.
However, community infrastructure and services jobs — an economic term to describe jobs in retail, food services, hotels, arts, entertainment, transportation, and personal services — suffered a decline of 15.4%.
“This has wiped out the service sector and the inperson economy,” Hancock said. “There is real carnage out there.”
In sharp contrast, tech companies, consisting of innovation, information products, information services, and computer hardware, increased their job totals in Silicon Valley by 1.8%.
“The tech sector didn’t miss a beat,” Hancock said. “During the pandemic, demand for Silicon Valley services skyrocketed.”
People who began to increasingly work from home quickly embraced remote conference services and systems such as those fashioned and offered by San Jose-based Zoom.
The largest Silicon Valley tech companies continued to add jobs, but at a slower pace than was the case in the rest of the United States and the world. The 15 largest tech companies increased their staffing levels by 3.7%.
But the Bay Area’s share of those jobs fell because other regions were growing even more quickly.
“We are increasing our numbers of tech jobs here, but we are losing some share of those jobs” worldwide and nationwide, said Rachel Massaro, director of research for the Silicon Valley Institute for Regional Studies.
The 15 largest tech companies based in Silicon Valley had 28% of their U.S. workforce located in the Bay Area during 2018, but that share dropped to 26% in 2019, and to 24% in 2020, according to the report. Globally, the largest Silicon Valley tech companies had 16% of their worldwide workforce located in the Bay Area during 2018, 14% in 2019, and 12% in 2020.
Still, the size of the Bay Area tech sector dwarfs other regions, the report determined.
At the end of 2019, the most recent year surveyed by Joint Venture Silicon Valley, the Bay Area accounted for about 379,700 tech jobs. The next largest region for tech employment, the Washington D.C. metro region, had about 263,700 tech jobs.
In contrast to the strong showing of the tech sector, the experience of the hotel industry is decidely bleak and threatens the health of the budgets of city government agencies.
“Silicon Valley city revenues are expected to decline by an average of 5% due primarily to the effects of the pandemic, with the most dramatic declines expected in transient occupancy taxes,” the report stated.
Transit occupancy taxes are expected to decline by an average of 38% and produce an aggregate loss of more than $100 million regionally for local government agencies that levy these taxes, according to the report.
Despite the currently grim landscape for certain segments of the economy, Joint Venture Silicon Valley believes a rebound could be swift — although Hancock didn’t provide a time frame for when the rebound might start.
“The economy will recover very quickly,” Hancock said. “The economy will come roaring back.”
As the COVID-19 pandemic wears on, income inequality soars and housing remains scarce, homeless encampments have multiplied along San Jose’s riverfront — pushing the city further from its goal of turning the beleaguered green space into a destination park.
Now city leaders are considering a different approach: housing homeless residents near the river, while enlisting them to help clean and maintain Guadalupe River Park.
“Can we create something new that perhaps has a benefit for everyone?” asked Ragan Henninger, deputy director of the San Jose Housing Department. “It benefits the homeless person in providing some work experience and training and some housing and supportive services, and it benefits the park in terms of maintenance and beautification.”
A cluster of prefab modular units would serve as temporary housing for between 80 and 100 homeless occupants. It would be the fourth modular housing site set up by the city during the pandemic, but the first to train residents to help take care of their surrounding environment. And it comes as changes to the city — including Google’s new campus and the overhaul of Diridon station — have prompted a renewed focus on revamping the park.
Guadalupe River Park, a 3-mile ribbon that meanders through the heart of San Jose, for years has failed to live up to its potential as a scenic gathering space. Trash piles up along the riverbanks, while tents and makeshift shacks line the trails, a stark reminder to every runner and cyclist of the city’s dire homelessness crisis.
And it’s gotten worse over the past year as the city has stopped most efforts to remove encampments, following federal health guidelines aimed at reducing the spread of COVID-19.
“It’s something that I’ve never seen before, honestly,” said Jason Su, executive director of the Guadalupe River
Park Conservancy. “This is just on a scale that’s just so, so large.”
In an effort to quickly house people during the pandemic, especially as some hotel programs that sheltered homeless residents end, San Jose has used emergency COVID-19 funding and new rules streamlining the permitting process to get temporary housing for more than 300 people built in a matter of months.
Officials are considering setting up the fourth site off West Mission Street near the park, using a sliver of city-owned land and part of the neighboring police department parking lot. Like other sites, occupants would have their own private sleeping quarters and bathrooms, as well as access to mental health care, case management and other services. Ideally, residents also would have access to a paid work-training program that involves caring for the park, Henninger said. But the details haven’t been worked out.
“We’re still in the early planning stages,” Henninger said. She hopes to put a plan before the City Council next month.
Romale Glosson, who sleeps in a parking lot under the Highway 87 overpass, just off the Guadalupe River Trail, is cautiously optimistic about the idea.
“I would check it out,” the 72-year-old said. “You never know until you try it.”
Bill Wells, who has spent 20 years camping off and on along the river, said the housing program sounds better than a tent. But it all depends on whether the site allows pets, Wells said, looking down at Junior, the dachshund and rat terrier mix sitting in his lap.
“If he can’t go, I can’t go,” the 51-yearold Wells said. Nearby were several green garbage bags — part of San Jose’s “Cash for Trash” program. Launched in November as another effort to beautify the Guadalupe River area, the program pays encampment residents for the bags of trash they collect.
For Su, additional help can’t come soon enough. Conservancy volunteers will spend hours cleaning the park, only to see it covered in trash a week later, Su said. It’s gotten so bad that some volunteers have stopped coming.
“People will go deadhead roses and they may find feces or trash or condoms, or things like that,” he said.
It’s a particular concern during heavy rainstorms like the one at the end of last month. The Guadalupe rises and floods encampments, creating dangerous conditions for unhoused residents and washing debris into the river.
In a typical year, the Santa Clara Valley Water District removes about 1,000 tons of trash along the river. Last year, because of COVID-19 concerns, staff were told to stay 100 feet away from encampments.
“That really does limit what we can do,” said Jennifer Codianne, deputy officer for the Watersheds Operations and Maintenance Division. In 2020, Valley Water picked up 800 tons of trash.
The situation is weighing on residents and businesses near the park. At La Piccola Scuola nel Parco, an English and Italian-language school in San Jose’s Little Italy, interactions with unhoused neighbors have become increasingly tense over the past year, said Theresa Sabatino, the school’s founder and executive director.
The school, which serves children ages 2 to 7, is holding classes outside to reduce the risk of COVID-19. But Sabatino often has to usher students inside because there’s someone outside screaming at nothing or causing some other kind of disturbance. People throw trash into the playground while the children are there. There’s been vandalism and people trying to break in.
Two families have gotten fed up and pulled their kids out of the school, Sabatino said.
“It’s frustrating,” she said. “It’s scary.”
The mayor of the nation’s 10th- largest city is boosting his résumé with a new personal venture: an advocacy group aimed at offering a voice to those lost in the shuffle.
But union advocates are calling the mayor’s move “disingenuous” and “an attempt to further the agenda of his corporate backers.”
San Jose Mayor Sam Liccardo recently filed paperwork to start a 501(c)(4) organization called Solutions San Jose. The organization doesn’t yet have a website or a board or any staff members. How it will operate, who else is behind it and its relationship to San Jose City Hall remains vague at this point.
Though backed by and aligned closely with local businesses throughout his career, Liccardo vows that this new group will not be a business organization. It will not campaign for political candidates. And it is not meant to be an indication of any future plans for Liccardo, who terms out of his mayor seat in less than two years, he said.
The mission of Solutions San Jose, Liccardo said, is to give a greater voice to residents who have been drowned out by a vocal group of advocates on the extremes of San Jose’s political spectrum, with powerful labor unions at one end and strong business alliances at the other.
“People are tired of being told what to do, whether it’s by big business or big labor,” Liccardo said in an interview.
“We think that most folks in our community would rather pass on divisive political battles among clans and engage in discussion and action that produces solutions.”
Liccardo, under the email address info@solutionssanjose.com, has sent out two mass emails on behalf of Solutions San Jose to a small group of constituents in the past week. Those messages, which were first reported by San Jose Inside, centered around the mayor’s call for reopening San Jose schools and asked recipients to sign a petition to support the cause.
In the Feb. 11 email, Liccardo wrote that “failure to re-open public schools violates the civil rights of our poorest families, creating a ‘separate but unequal’ education system.”
Within just 24 hours, the petition gained more than 2,000 signatures of support — a promising sign for new organization, the mayor said.
The organization’s launch comes just two months after Liccardo lost his business-aligned majority on San Jose’s 11-member city council to a labor-endorsed majority. It also comes four months after Silicon Valley’s largest chamber of commerce, the Silicon Valley Organization, dissolved its campaign arm as part of a fallout from a racist attack ad posted on its website against a San Jose council candidate.
The decision to dissolve the SVO PAC upended a business-vs.-labor political dynamic that has dominated San Jose campaign cycles for decades.
As of 501c4 organization, Solutions San Jose will not be replacing the
SVO PAC, as it is not allowed to take part in any overt political activity, such as funding political campaigns. But its representatives can hold press conferences and appear before local governing bodies to advocate for certain policy decisions.
Some San Jose insiders consider it a counterbalance to Working Partnerships USA, an organization that works closely with unions in Silicon Valley to push pioneer policy campaigns but does not outright fund or endorse candidates.
The mayor and Working Partnerships USA do not typically align with one another on contentious policy decisions. And, Derecka Mehrens, executive director of Working Partnerships USA, said she sees the new organization as a way for the mayor to “further his political ambitions and the agenda of his corporate backers.”
“After voting just last week against hazard pay for essential workers who are overwhelmingly Black and Brown, it’s frankly disingenuous that his new organization purports to be about equity while seeking to pit parents against teachers and divide our community against one other,” Mehrens said in a statement.
Jean Cohen, executive officer of the South Bay Labor Council, added that “instead of bringing people together to solve the biggest problems we face as a community, the mayor is spending time raising money and circulating petitions to advance his political agenda.”
In addition to reopening schools, Liccardo said he plans to use the group to advocate for a more efficient and equitable CO
VID-19 vaccination system and in the future, to rally around certain affordable and homeless housing projects. The organization will also host a “speaker series” in which prominent city or community leaders and innovators share their ideas around hot topics and issues in the city.
Since these are issues he is already involved in, Liccardo said the new organization will not distract him from his regular duties as mayor.
“These are things that I care about and they are strongly aligned with serving the city,” he said. “We’re hoping that this organization will serve the community long past the duration of my term. I’m just the catalyst trying to get it up and running.”
Liccardo has declined to say who else he has been working with to launch the organization or identify the group’s source of funding. When he kicks off a fundraising campaign, Liccardo said he will file reports as required by law.
Former councilmember Lan Diep, who lost his bid for a second term in November, said he has been invited by the mayor to offer his ideas and contribute to the organization, prospects that he said he’s excited about.
“I think it’s being pigeon-holed by some as a group trying to get schools reopened, but my understanding is that it’s really about creating civil discourse and shaking people out of their political corners and into the center,” Diep said. “That is certainly a vision that appeals to me, and I think meets the moment of a post-trump, Biden administration era.”