As a result, when the market crashed and the economy froze last October, they were in better shape than most U.S. companies to take the shock -- and. indeed, several, including Intel and Cisco, maintained their R&D investment levels in order to come roaring out when good times return.
They also maintained and, occasionally, even increased salary levels for their employees that remained -- almost a first in high-tech history. Hence, the 2008 BLS numbers and the impressive gains since 2001 (not to mention, one suspects, that the 2008 survey came before the October crash).
That's the good news. Here's the bad.
With a closer reading of the BLS report, one finds that, even as wages were climbing during those seven years of the survey, 85,000 jobs were also lost by the region. In fact, the only areas in which total employment actually grew were in aerospace, pharmaceuticals, and scientific research -- in other words, not in the traditional Silicon Valley electrical engineering and software jobs.
I will even make the guess that most of those 85,000 lost jobs occurred in 2001-2002, when all of those dot.commers went home to their parents, and that job numbers grew slowly and steadily after that. So, rather than being the apparent job and wage boom that these statistics seem to show at first glance, what we are really seeing is a market that stripped out all of its volatility (and much of its risk) and that is now dominated by large, stable companies that have continued to reward their limited pool of employees.
In other words, if you think you can escape this recession by coming to Silicon Valley for work, forget it. In fact, just last month, Santa Clara County (southern Silicon Valley, including San Jose) saw unemployment reach just short of 12 percent. That's the worst unemployment in this area since the post-war crash of the late 1940s, when the Valley was mostly orchards.
But it is worst than that. What the numbers don't show you is that, the big established companies aside, Silicon Valley is economically very ill. Not mortally -- at least not yet -- but the Valley of myth, the Valley that sparked the digital revolution, that drove much of the new job growth and new wealth in the United States in the past two generations, and that transformed our daily lives forever, is now a fading shadow of its former self.
Government regulation (Sarbanes-Oxley, options expensing and now the White House's insane plan to crush the venture capital industry under banking-type oversight) and Washington's anti-Small Enterprise/pro-Big Business animus is quickly destroying the Valley's historically unique environment for growing entrepreneurs and new companies.
There is no available venture capital, the cost of running a start-up, in terms of time and money wasted on government paperwork (and probably taxes soon, as well), is through the roof, and there is no exit strategy -- i.e., a liquidation event where the risk-takers get rewarded for their success, such as an IPO -- other than selling out to one of the big companies.