The Benefits of High-Tech Job Growth Don’t Trickle Down

I wonder how the equation would change in the absence of zoning restrictions.

The way it's supposed to work is that when a new high-tech industry comes to town, their highly-paid workers move in; there's a construction boom to provide new housing for them; new restaurants, supermarkets, and other local services go up to support the higher population; new workers are hired at these establishments; there's a construction boom for them; and so on, until the population equilibrates to account for the increased number of dollars flowing into the region.

The way it actually works is that a new tech company moves in with its flood of high-tech workers; all new construction is held up indefinitely in permitting; the high-tech workers bid up rents and housing prices to what they can afford, displacing all of the existing residents; teachers, waiters, firemen, construction workers, etc. can no longer afford to live in the town where they grew up; they move out; there's nobody to perform the essential local service work; wages and prices get bid up because of the dearth of supply and lots of excess demands; and basically all the value gets captured by the owners of the company, landlords and homeowners who sell and move out. The new tech workers become the old middle-class workers who were displaced; the old middle-class workers face severe disruption in their lives; and basically nobody is better off.

This makes sense: a software company does not need to build a factory, has less physical suppliers than a manufacturer, requires less office space, and requires less people to produce equivalent value. Any trickle down effect that software provides is insignificant to other efficiencies and gains.

They're measuring jobs created in the same commuting area as high-tech jobs. This seems like a poor metric: operations like Google put the high-tech jobs in a few places and the low-tech jobs in other places. There's no reason to co-locate them, so they can each be where the labor with the right skills is available.

They don't specify whether gig jobs (like Uber drivers) are included. At any rate, these are rarely colocated with the high-tech jobs so they wouldn't count for much in their methodology anyway.

I think there’s a vague hope that when there are a bunch of people who get paid 200k in your city that it means there will be more people who get paid 50-100k... the reality is more like there is a big increase in the amount of people who get paid like 20-50k.. people who do house cleaning, drive cars, child care, work at restaurants, coffee shops, etc.. and to a lesser degree some more teachers get raises and more teachers get hired.. people that get paid a lot in a built up city aren’t going to be effectively paying out of their salary more than a certain percentage of it to contractors and luxuries.. if you get paid 200k per year you can likely only afford to spend like 50k per year for things like buying a car or boat or upgrading your house. So if you have 20k amazon employees it means maybe you have around 5-10k people who benefit from them tremendously, and maybe 30k who benefit from them slightly.

Nope. I have 25 years experience and just got an offer to interview at Apple for $55/hour in the bay area. I made $75/hour back in 2001.

The landlord of the apartment I live in, disagrees with this statement.

is the actual study paywalled?