Palo Alto Weekly

Cover Story - February 12, 2010

Valley residents hurting, but better off than others

By most measures, the Valley workers earn, and contribute, more

The Valley's unemployment rate of 11 percent stands above that of the state and nation.

But by nearly every other economic measure, Silicon Valley's skilled workforce is considerably better off than California's or the nation's as a whole.

Median household income in Santa Clara and San Mateo counties is $87,000 — 69 percent higher than that of the U.S. and 44 percent higher than that of California.

Forty-four percent of Valley households earn $100,000 or more — a far larger proportion than in the state or nation as a whole.

And the proportion of area households earning $35,000 or less has dropped to 18 percent from 20 percent since 2002.

With higher incomes come more taxes. Silicon Valley is a solid contributor to state coffers.

While representing only 7 percent of the state's population, the region contributed 16 percent of total state revenues from personal income tax in 2008. The region's share of state tax revenue reached a high in 2000, accounting for 24 percent of state tax revenue, according to the Index.

Despite relatively high incomes, local households have not escaped the ravages of the recession.

"Evidence of increasing pressure on the region's households can be observed in rising personal bankruptcy rates and residents receiving food stamps," the report said.

Yet bankruptcy rates, at 2.6 per 1,000 residents, were significantly lower in the Valley than in California as a whole, where they were 4.5 per 1,000.

And while the Valley had 5,400 home foreclosures in 2009, the Palo Alto area was relatively unscathed. Cities with the least amount of foreclosure activity relative to population size included Palo Alto, Los Altos, Atherton and Portola Valley.

Food-stamp usage, at 4 percent of Valley residents, was half that of statewide usage.

The recession's silver lining for many families has come in housing costs.

Average rents declined 6 percent from 2008 to 2009 — the first drop since 2005.

And last year, 54 percent of first-time home buyers could afford to buy a median-priced single-family home, up from just 22 percent in 2007.

—Chris Kenrick

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