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Silicon Valley's year: 'amazing' but with 'perils'

Original post made on Feb 11, 2016

Joint Venture Silicon Valley's annual economic study found that 2015 was a year of record-breaking growth and prosperity, but it cautioned that there are perils associated with this kind of break-neck trajectory. It cautioned that a fourth-quarter slowdown, raised the question of whether it marks the beginning of the burst of a bubble.

Read the full story here Web Link posted Wednesday, February 10, 2016, 8:34 PM

Comments (44)

Posted by Flash
a resident of Downtown North
on Feb 11, 2016 at 8:55 am

"annual earnings in 2015 were $122,000, with San Francisco earners making $11,000 and the Bay Area overall average was $99,000."

The middle number looks like an error.

Posted by Sue Dremann, Staff Writer
a resident of Evergreen Park
on Feb 11, 2016 at 11:37 am

Right you are! Thank you. It should read $111,000. I've fixed the story.

Posted by Discouraged
a resident of Barron Park
on Feb 11, 2016 at 1:57 pm

Yeah and many of those low wage earners are having to commute sometimes 2 hours each way into the astronomically high income towns for work. Many of those workers do not have any job benefits and have to be away from their families for long extended hours.

Posted by Engineer
a resident of Downtown North
on Feb 11, 2016 at 5:18 pm

Check out all the engineers laid off by Bay Area companies who live in other states, and then are "replaced" by employees brought into the Bay Area on H1B visas.

More and more STEM jobs are not being even offered to Americans.

Posted by xyz
a resident of University South
on Feb 11, 2016 at 5:25 pm

At a certain point we came to a general bias against american workers in the bay area. Above and beyond wages or other factors. [Portion removed.]

Posted by Mikey
a resident of another community
on Feb 11, 2016 at 5:45 pm

[Post removed.]

Posted by zimbawi
a resident of Old Palo Alto
on Feb 11, 2016 at 6:10 pm

[Post removed.]

Posted by Jonathan Smith
a resident of another community
on Feb 11, 2016 at 6:17 pm

The same is true of Fortune 500 companies across the country: Americans being systematically and deliberately replaced by H-1B visa holders from India. Ignore the lies that Americans need "training" -- it's all about increasing corporate profits. Politicians are paid-off by corporate donors to ignore the problem. And people wonder why Donald Trump is so popular.

Posted by jim
a resident of Adobe-Meadow
on Feb 11, 2016 at 6:18 pm

Must be counting managers in that 75% total. If counting just programming/sw engineering or anything nearly related that's not a paper pusher, has to be higher, at least 90%. As a corporate tech whore myself with almost 30 years experience, I can't recall the last time we hired a us born naturalized college grad for that type of work, but we sure can find boatloads of H1Bs to do any available work.

Posted by Bill Fox
a resident of Evergreen Park
on Feb 11, 2016 at 8:16 pm

[Post removed.]

Posted by cm
a resident of Downtown North
on Feb 11, 2016 at 8:26 pm

When are we going to get an insightful article on the damage that massive overpopulation of the Bay Area, the State and the world is causing. All this growth is not without consequences. Our pollution levels are deadly. California is one of the most polluted states, has the most endangered animals, the most dammed rivers and the greatest loss of habitat in the US. We allow mega-developments around the bay without regard to the fact that they will either need to be walled in or will be flooded when the water in the bay starts to rise from global warming. The traffic is at gridlock, the schools overcrowded, the infrastructure crumbling and housing prices skyrocketing from all the growth. Our quality of life is diminished by the overcrowding and all we hear is how great it is. Only for those at the top - the rest suffer. Time to call for zero growth in this area. Send it to Detroit - they need it more than we do.

Posted by Joe E in the IE
a resident of another community
on Feb 11, 2016 at 8:46 pm

"Jobs for qualified citizens first" is the sensible policy heralded by the industrialized world as a responsible way to treat a nation's working people.

Insert one word in two places, changing it to "American jobs for qualified American citizens first" and it's denounced as racist xenophobia by those who want to broaden and even deregulate guest worker programs.

Wotta country.

Posted by Jim
a resident of Downtown North
on Feb 11, 2016 at 8:57 pm

Cruz and Rubio both were ready to support H1B types. The only economic experience these guys have is the 3 credit economics course they took in college. Why people think these two could fix the economy in this country is beyond me... they don't even know the language to use or the questions to ask. Trump is the only one who has high level economic experience.

Posted by gman
a resident of another community
on Feb 11, 2016 at 8:57 pm

"foreign born, but in the tech, computer and STEM industries, that number rises to 75 percent"

doing the jobs americans won't do ....

Posted by Jerry
a resident of another community
on Feb 11, 2016 at 9:18 pm

If you want to see the effect of these absurd laws, go look at biomedical research. Biomedical science is the highest demand field of all for advanced education, graduating 5x more PhDs than computer science. Yet you see American graduate schools full of foreigners, most of whom already have a foreign masters or doctorate that is really only equivalent to a US bachelors if that. 800,000 Americans applied for 300,000 graduate school slots last year. We already have a 3-fold surplus. But almost 800,000 foreigners also applied, and at the end of the day the graduate schools extended 250,000 offers to foreigners while hundreds of thousands of Americans were passed over.

Web Link

Posted by Bob
a resident of Old Palo Alto
on Feb 11, 2016 at 9:46 pm

One day soon companies kicking American citizens to the curb will come back to bite them.

If we do not have a decent job, we cannot buy your products!

It's a disgusting way to treat citizens, by both politicians and CEO's.

In my book, they are ANTI-AMERICAN WORKER!

Posted by gadfly
a resident of Menlo Park
on Feb 11, 2016 at 9:47 pm

To amplify Jerry"s point: In general PHD programs are essentially tuition free and grad students get paid to teach or assist in research. Much of the endeavor is financed by government grants. So US taxpayers are paying to educate foreign students that are preferred for acceptance over americans because they have better test scores, because they have often been to grad school already in their home country. Grad schools do this so they can obtain high US NEWS & WORLD REPORT rankings, which are heavily test score based. Once foreign students get their US taxpayer financed advanced degree they get US based jobs and with the support of politicians and corporate donors H1 visas that allow them to stay indefinitely. Those with H1 visas do depress wages, but the real crime is that we do not have a stated preference for american students in all advanced degree programs, many of which are actually financed by US taxpayers.

Posted by Joe999
a resident of Mountain View
on Feb 11, 2016 at 9:51 pm

[Post removed.]

Posted by john
a resident of Atherton
on Feb 11, 2016 at 9:55 pm

The US will be destroyed from within, between liberal progressive policies and Corporate greed.
The H1B was needed and we get more foreign students while they Know Corporate America will hire the first while they are so cheap. I am speaking of Multi Billion dollar Corporation's who's leadership is liberal so long as I is not an American. Greed will bring us down.

Posted by ceecee
a resident of another community
on Feb 11, 2016 at 10:38 pm

why aren't the tech workers and the STEM workers/grad students not making more of a stink about this in the press -apparent destruction of their job market by H1B visa-holding foreigners - I thought my son would do well to study in the biomedical field but now I do not believe this is smart or viable ? why are these greedy companies allowed to obliterate American jobs and American livelihoods because of their corrupt greed while expecting the American consumer to support/buy/use their products ?- both democrats and republican establishment elitists in bed with this disgusting policy -- Sanders should be all over this since he represents the young college students who will hope to enter into their respective tech fields upon graduation loaded down with student debt, but will pitifully discover they are unable to find a job? folks should boycott Facebook Google Apple etc ! aren't those ceo's democrats the party for the people ? this is evil wicked and needs to end !

Posted by American Programmer
a resident of another community
on Feb 11, 2016 at 10:39 pm

I am in Southern California. I have been up there and there is plenty of buildable space, so there is no reason to jack up rental prices like this. [Portion removed.]

Posted by Kirk
a resident of Palo Alto Hills
on Feb 11, 2016 at 11:29 pm

If there were really a shortage of American tech workers, then the H1-B workers would be earning more than the 25% that are Americans. That is not the case -- it is more about having employees who are trapped with the deportation Sword of Damocles over their heads, and not having to pay the payroll taxes they do for American workers. Just the tax difference means a foreign worker costs $20K/yr less than an American worker even before accounting for the lower wage the H1-B worker will accept.

We should change the visa fees for H1-B visas to be $100K/yr and see how fast Silicon Valley dumps most of those H1-B workers and starts really looking for American replacements. Of course, they may instead just expand their overseas offices and rely on video conference with the Silicon Valley offices. The Labor Relations Board has gone after businesses that relocate within the US to get cheaper workers, mostly at the behest of unions, but tech workers do not seem to have that clout with the LRB.

Posted by Longo
a resident of another community
on Feb 12, 2016 at 1:18 am

[Post removed.]

Posted by Dan Austin
a resident of another community
on Feb 12, 2016 at 4:50 am

There seems to be some contradictions between the article and the comments. How can the average salary be $122,000 when there are supposedly so many low paid foreign workers? How can so many low paid workers afford to live there?

Having moved from Silicon Valley to Austin for a better and more affordable lifestyle several years ago, I see a similar pattern of many foreign high tech workers in both places. But at least in the companies I've worked in, a big part of hiring foreign workers is that they cannot find enough qualified American workers.

Indian and Chinese cultures put a lot of emphasis on education. They work hard on advanced degrees, and are indeed more qualified than many American workers for high tech jobs.

I'm not sure what pay differential there is between foreign and American workers, but it's not uncommon for foreign workers to get green cards and eventually US citizenship, so their salary will be based on their skills as much as with any American born worker.

Posted by RobinNJ
a resident of College Terrace
on Feb 12, 2016 at 5:06 am

[Post removed.]

Posted by Realitycheck
a resident of another community
on Feb 12, 2016 at 5:17 am

Geee too bad..... If anyone deserves this, it's the liberals in Silicon Valley that helped create the problem.

Posted by Robert R
a resident of another community
on Feb 12, 2016 at 5:23 am

[Post removed.]

Posted by Joey12
a resident of Palo Verde
on Feb 12, 2016 at 6:32 am

This is just horrible and treasonous. This companies hire foreigners over Americans, destroying the American dream. These tech companies are hurting America more than ISIS.

Posted by GoldenRudy
a resident of another community
on Feb 12, 2016 at 6:50 am

Our college STEM graduates leave school with $80-120K in debt and cannot get a real job because of these foreign interlopers that do not carry with them the large debt. And our government still wants to import more of them? Why does America have ANY immigration at this time?

Posted by tyler kent
a resident of Adobe-Meadow
on Feb 12, 2016 at 6:54 am

"Among the working population, 45 percent are foreign born, but in the tech, computer and STEM industries, that number rises to 75 percent, according to the Index."

Anti-American tech billionaires have done quite a job depriving Americans of work and importing foreign workers . . .

Posted by David
a resident of another community
on Feb 12, 2016 at 7:07 am

This is a very good article and well written. A departure from a lot of reporters these days. It is sad to see how many foreign nationals are working in our tech centers. I know there are a lot of college graduates that would love to have a job like that and could do a great job if given the chance. H1B is out of control and needs to get a reset to zero for a few years until we as a nation can absorb all the newcomers that have come into this once great country.

Posted by Carrie
a resident of Mountain View
on Feb 12, 2016 at 7:26 am

Now I understand why my college graduate daughter with a degree in Molecular and Cellular Biology and certification in Biotechnology has not been able to find a job. She had a good GPA and has put out hundreds of resumes with not one single interview! After all that education she works a minimum wage job! Meanwhile the whole bay area has a huge influx of foreign workers! The political candidates for president need to be grilled regarding their stance on the HB-1 visa program. Americans are becoming angry and rightfully so!It started with all the factory jobs leaving. Now they have figured out a way to bring the cheaper labor right over here to replace the American worker! This is so wrong! If Bernie Sanders gets elected and is able to institute socialist policies it is because of this rampant disregard for the American worker by the wealthy, amoral, corporate elite. I won't vote for ANYONE who doesn't put the American worker first. Corporate greed has become the parasite that is going to kill America@

Posted by Maya
a resident of Midtown
on Feb 12, 2016 at 7:34 am

An additional impact of the increase in foreign workers is the burden it places on our schools, especially for English as a Second Language learners. There are no net savings. The amount the corporations "save" are passed on to our schools who have to accommodate students who do not speak English.

Posted by rocky
a resident of another community
on Feb 12, 2016 at 7:35 am

The big question here is what Politicians and Judges did the tech companies bribe to be able to violate Federal Laws under the H1-B Visa Program ?
Both, American workers that were removed from their jobs and the foreign hires that are paid below prevailing wages are in the position to file law suits and criminal charges. Neither worker has ever studied the Federal Laws under the H1-B program.
The tech industry runs on what is known as the Al Capone business plan. Disney now faces law suits for their violation of the program.
Sharp Attorneys would be looking into this and start filing paper work with the courts.

Posted by HS Teacher
a resident of University South
on Feb 12, 2016 at 7:43 am

I am a high school science teacher. Everyone is brainwashed by the "Stem Mantra." It borders on being a religious cult. Of course, I would never tell my students about the huge numbers of STEM grads who fail to find work in their field. I also would never tell my students about all the middle-aged, laid-off STEM workers who can't get rehired. The H1B jihad is imploding the prosperity and dreams of so many Americans. It is criminal.

Posted by Tom Thumb
a resident of Menlo Park
on Feb 12, 2016 at 7:54 am

Hardly surprising...Silicon Valley is getting a bad reputation as far as being livable. Not much draw if you're not all gushy and idealistic about new technology and you have any other priorities in your life.

[Portion removed.] If an H1-B gets fired or leave their job they have to leave the country quickly. Switching jobs is painful and leaves you at the mercy of the government paperwork skills of the new company and is scary. So the only option is to stay put, and if leaving a position the move must be done quickly without a gap in employment so no leaving the general area.

So, I really think the high amount of foreign employment is mostly via attrition rather than a crusade against domestic workers. Plucky entrepreneurs who set up shop there just feel the lack of available workers, and being "superhuman" they don't have a basic understanding of people that are normal human beings that have other priorities in life other than work. These workers are not being offered a big enough piece of the pie to care about the valuation benefits of carrying the "Silicon Valley" brand, yet shouldering depressing wild west-style downsides easily shirked by taking work elsewhere.

Posted by bernard ross
a resident of Adobe-Meadow
on Feb 12, 2016 at 8:02 am

only Trump will end the HB1 visascam putting american workers in tech out of work

Posted by TM
a resident of Old Palo Alto
on Feb 12, 2016 at 9:02 am

TM is a registered user.

Question: Its been a while since I was in the tech field. However, I remember the days of people hopping from company to company for more pay and bonuses, and this basically drove up salaries for these companies. At that time, they could absorb the costs of paying these people. Things have changed quite a bit, and now they can't get qualified American workers who aren't demanding top dollar with all the creme and sugar. Add onto that, colleges are filled with students who don't put their best effort into studying (or anything for that matter...) We have a child in college and its remarkable the stories I hear, of students more interested in their night life than in academics. I also hear stories first-hand of employers who receive these college students demanding triple-digit immediately. Granted, they have loans to pay can thank the US government for getting involved in supplementing tuition and professor incomes, etc. Used to, you could get through college on summer jobs. Not any more! But really? Whatever happened to starting at the bottom and working your way up? That's what I had to do!

I don't like the H1B visas, either; it invites corruption and abuse. But honestly, we American employees AND the colleges had better get serious, too, or we will not survive into the next decade. Colleges need to quit kidding themselves--kids go to school to get decent jobs, not to broaden their world, LOL. The foreigners are coming in better educated than we are. What are we doing about it? And yes, H1B is and will kill us if we aren't careful, and the politicians are in the pockets of these companies who are pushing this.

Posted by lmorris
a resident of Palo Alto Hills
on Feb 12, 2016 at 9:11 am

lmorris is a registered user.

What's up with the highest earnings being for "Security Services" in Palo Alto? Is that the CIA business--Palantir?

Web Link

Posted by Griffin
a resident of University South
on Feb 12, 2016 at 10:12 am

Griffin is a registered user.

(I'm writing this again because the system ate my first post.)
To Dan Austin, the difference in the $122K salary and the low salaries being paid to H1Bs can be easily explained. That salary that is quoted is for people on the tax/census rolls, not all salaries. H1Bs are not counted in these figures typically, so on the surface it looks like the citizenry is not damaged. But they only count those in the "workforce" in these numbers --W2 earners. Not the citizens who have dropped out of the workforce.

Consulting firms bringing these kids over are getting paid one rate for the H1B and are paying the visa holder a lot less. Plus, they tend to take a portion of the visa holder's wages for housing in apartments shared with several others. It's easy to find out about it if you look at the question/answer forums for H1B hopefuls to the consulting firms. There's a lot more that is told to them that will never appear in those forums.

Businesses are getting not only cheaper labor, but slave labor. These kids will do anything to make the business happy. They'll work 70 hours a week and book 35. They are polite to all their superiors. Then there is the fact that the business will not pay certain taxes/fees on the visa holder for the first 6-8 months of employment until their visa status is established. They don't have the education levels of a US citizen because their universities are 3-year. Not as many fluff courses as the US, but the math/science seems to be a lot less rigorous too. Then again, it may be that they are not the cream of the crop now. Those have been cherry-picked from the system.

Women and blacks in IT are disappearing. I wondered what happened to them when I'm seeing 1/3 of the graduating Comp Sci classes are women. You'll see women hired as entry level, but I don't see too many black students hired even for entry level. Once they progress beyond entry jobs, they are basically hounded out of the businesses by Asians that don't want to have a woman boss or a woman making decisions about any part of a project. I've seen it done many times now.

The thing that is going to infuriate everyone is that some of these kids aren't paying taxes. I have had 3 H1B workers tell me they didn't pay taxes. Another only started paying taxes after he decided to file for Green Card status. No, it's likely not legal, but they don't really care since all that would happen is maybe they have to leave the US though probably not. They send their money home to Indian banks to collect 5%-9% interest (google it. "interest rates in Indian banks for Indians"). You must be a Resident Indian to get those rates, but Mom can open the account for you.

Posted by Jenni Li
a resident of another community
on Feb 12, 2016 at 11:50 am

Jenni Li is a registered user.

Jonathan Smith:

> And people wonder why Donald Trump is so popular.

They do, considering Trump also hires plenty of visa workers because they're cheaper, despite his anti-Latino rhetoric, and Bernie Sanders, on the other hand, is saying the same thing, and practices what he preaches. (He pays his interns, for example; Hillary and Trump do not.)

So yes, people wonder why some of you are taken in with image and bravura over actual deeds and facts.

Posted by Ed Barbar
a resident of another community
on Feb 12, 2016 at 12:15 pm

Ed Barbar is a registered user.

I've been working in Silicon Valley for 30 years. It's been a great ride, as people from all over the world have come here to make the internet happen. Absolutely awesome.

That having been said, it is criminal the housing costs are so high, and the roads so congested. What software person hasn't put in the 30+ hour work day?

It's terrible for young people too. The Silicon Valley leadership, San Jose, and others have decided they don't want people living in detached homes. They want them packed like sardines in dense downtown housing, but oops, the place best suited for that is San Jose, and because of the airport in the middle of the city, well, it's kind of hard to build up downtown.

Moffet field should be opened up for housing. There is also plenty of land up by Palo-Alto. It's swamp-land, with a trail that maybe a few dozen people take advantage of a day. Instead, thousands could be taking advantage of that everyday by living in homes.

Most people like me don't care about housing prices because we have ours. In fact, we love it as our homes increase in value. But that's terribly inconsiderate of us to our young people. As is, I might add, the Silicon Valley leadership's position on open swamp land no one cares about, being "preserved."

Posted by Ed Barbar
a resident of another community
on Feb 12, 2016 at 4:27 pm

Ed Barbar is a registered user.


"They do, considering Trump also hires plenty of visa workers because they're cheaper"

There is a problem with compassion when competing. If your competitor takes advantage of the laws, or even breaks the laws (as I'm certain many farmers do by hiring illegal labor), if you don't do the same you will lose out and go out of business.

I don't blame Trump for doing what he did, and given the way our country enforces immigration laws, it's hard to blame farmers either.

So, I don't blame Trump. I blame our government for the perceived woes of immigration, particularly when it comes to flooding low/unskilled jobs. When it comes to high tech competition for jobs, as I was discussing at the startup I work for today, you have to compete with the best from around the world. It's very difficult. I think the policy of letting in high skilled workers makes a lot of sense, even though it makes life harder on engineers like me. The alternative is to let even more shops setup outside the US.

In short, I would rather have high skilled workers here than there.

Posted by Ed Barbar
a resident of another community
on Feb 12, 2016 at 8:06 pm

Ed Barbar is a registered user.

""Growth income is not evenly distributed," Hancock noted. High-wage jobs -- more than $125,000 annually -- account for 25 percent of the ."

Please fix this. My engineering brain can't fill in the blanks!

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