Five cities account for vast majority of growth in U.S. tech jobs: study
wsj.com
wsj.com
Edit: the report seems to define the areas as "San Francisco-Oakland-Hayward" and "San Jose-Sunnyvale-Santa Clara", so it looks like they're including more than just SF and SJ. But the strange way they draw those lines seems arbitrary, making me wonder why they split up the Bay Area to begin with. And again: are they leaving other parts of the SF Bay Area out? and how much bigger would the total get if so? Edit: they're not. See below.
> The U.S. Office of Management and Budget defines a set of core based statistical areas (CBSAs) throughout the country. CBSAs are delineated on the basis of a central urban area or urban cluster – in other words: a contiguous area of relatively high population density. CBSAs are composed of counties and county equivalents.[3] The counties containing the core urban area are known as the central counties of the CBSA. A central county is a county in which 50% of its population lives in urban areas of at least 10,000 in population, or where a population of 5,000 are located in a single urban area of at least 10,000 in population where that urban area is split between more than one county.[4] Additional surrounding counties, known as outlying counties, can be included in the CBSA if these counties have strong social and economic ties to the central counties as measured by commuting and employment. Outlying counties are included in the CBSA if 25% of the workers living in the county work in the central county or counties or, conversely, 25% of the employment in the county is held by workers who live in the central county or counties. All counties in a CBSA must be contiguous, and a county can only be included within one CBSA.[4] In New England, towns have precedence over counties, so statistically similar areas are defined in terms of town-based units known as New England city and town areas (NECTAs).
> Adjacent CBSAs are merged into a single CBSA when the central county or counties of one CBSA qualify as an outlying county or counties to the other CBSAs.[4] One or more CBSAs may be grouped together or combined to form a larger statistical entity known as a combined statistical area (CSA) when the employment interchange measure (EIM) reaches 15% or more.
https://en.wikipedia.org/wiki/Metropolitan_statistical_area
San Jose and SF are combined in a combined statistical area, but the linkages are not strong enough to consider them a single metropolitan statistical area.
https://www.google.com/maps/dir/Los+Angeles,+CA/orange+count...
It's almost twice as long as SF to San Jose: https://www.google.com/maps/dir/San+Francisco,+CA/San+Jose,+...
Sort of...
Have you ever tried to commute to San Jose/Cupertino/Sunnyvale from, say, Walnut Creek, Pleasant hill, Richmond, etc..??
While they are all still in the greater SV orbit - commuting between many of the greater SV cities is a fucking nightmare.
BART, Caltrin, LightRails, Freeways, buses, etc -- are all disconnected and fucking suck.
I have turned down multiple positions in the south bay due to commuting and housing cost issues.
And if you don't think I know what I am talking about, my family is 5th generation San Franciscan, with family in Saratoga since 1959. I lived in San Jose an commuted to San Francisco from San Jose for over a decade - and lived all over.
My best commute ever was a bike+bus commute from Alameda Island to SF for almost a decade.
Worst commute was from Alameda to Sunnyvale.
The biggest problem with SV is transit first, housing second.
So to treat San Jose and San Francisco as if they were different freaking states, is to me, fair play.
The same could be said about commuting across opposite sides of LA.
But I think it's asinine to think of San Francisco and San Jose as two markets in this context. To me, the top five (four) markets are no surprise.
I'd love to hear stories about the next five and the next five after that. It's far more interesting to understand how code and technology are being advanced by those outside the mainstream.
I would recommend techies go work at one of these big tech companies, at least for several years and save up for your future. Then move to the Midwest if your goal is to live in a suburb in a several thousand square foot home.
Senior FB engineers make more than double that at E5.
People see the word senior and think it’s an apples to apples comparison. I’m not saying the FB engineers are “better”, but I am saying the level of ownership, design, code quality, etc is day and night different... an environment like FB, Amazon, Google etc will force you to become a great developer (rigorous code reviews, various levels or owning what you wrote, supporting your services, developing run books, etc etc.
My 2 cents from my experience on both sides (working in non tech companies and big tech companies).
That is actually exactly what you're saying... but I agree, and thanks for including Amazon in this. Usually people don't, I've noticed.
I have no idea where you guys are working and getting those salaries in the Seattle area, which is what I’m talking about.
Plus that isn’t including stock and bonus
Go to levels.fyi
Quoting the paywalled WSJ story: "Just five metropolitan areas—Boston; San Diego; San Francisco; Seattle; and San Jose, Calif.—accounted for 90% of all U.S. high-tech job growth between 2005 to 2017, according to the research by think-tank scholars Mark Muro and Jacob Whiton of the Brookings Institution and Rob Atkinson of the Information Technology and Innovation Foundation.
The nation’s 377 other metro areas accounted for 10% of the 256,063 jobs created during that period in 13 high-tech industries such as software publishing, pharmaceutical manufacturing and semiconductor production. Among the smaller cities that gained tech jobs were Madison, Wis.; Albany, N.Y.; Provo, Utah; and Pittsburgh."
It just goes to show you that our intuitions about some of these things are flat out wrong.
Even Apple's huge new campus in Austin is going to be manufacturing, sales and customer support; the actual tech jobs are staying in Cupertino. It's just cheaper to hire for non-tech positions outside the bay area. So tech companies from the bay area use Austin as a tax haven to cut the costs of non-technical work, but the jobs aren't tech jobs.
For example, Silicon Valley and San Francisco gained a huge number. However, Madison Wisconsin was in the top ten and is a much smaller metro area. Washington lost 7k but it's a big metro - especially compared to Wichita.
https://www.nytimes.com/2019/12/09/business/economy/innovati...
And North Carolina is just weird - Durham lost 6k but Raleigh gained 12k? Are people just moving from Durham County to Wake County?
From the NYtimes piece it looks like they use absolute numbers but the study itself seems to run a mix of analyses including absolute, % change etc.
Their definition of an innovation job might have something to do with it, too.
I think it's time to create incentives for companies to move to cities that actually want to grow. where jobs go, people WILL follow.
Make Existence Less Expensive. Or, keep paying exorbitant real estate rents and mortgage payments while complaining, and being permanently behind financially unless you strike it rich with RSUs or some sort of liquidity event.
Nothing is stopping other cities from creating incentives. Some cities have even tried. Of course, some cities have certain undesirable features that make in infeasible to attract companies without going to ridiculous lengths which local voters would not approve of.
Everything else in the area is of the highest quality. SF bay area scores high on weather, food, pollution, average quality of schools, average quality of people, crimelessness, lively cities, international educated people, jobs, vibrant societies, vibrant economies etc.
Housing is a major cause of all remaining evils there. Besides that, life is pretty good tbh.
I would add those are some areas where the cost of living is insanely high. Getting a "hi-tech" job in any of those metro areas is one thing, figuring how to live with in your budget is something completely different.
I've had a myriad of friends who've gone out west and moved back after a few years because the cost of living is so high, even when they're clearing well over 100K in salary, its not enough.
- They cannot force their population to have more progressive attitudes towards different types of people.
- There's not much they can do to make themselves culturally important in the way that cities like SF, LA, and New York are.
- It's unlikely that they will be willing to spend what it would cost to build public transportation.
The only way I could see cities getting tech workers to want to live there is if they did something that resulted in the workers having significantly higher salaries. Something like having no state or local income tax and paying part of their federal income tax.
Ever notice how everybody here knows Austin even though it is flyover small town? I feel like I repeat myself a hundred thousand times. Almost EVERY city in the midwest, every city, would be as viable a location as Austin is, if the companies there weren't cheapskates and paid people what they were worth.
Every time I think about going back, I say "minimum $120k," and they say "ope, that's a bit much for us, dere" and never call me again. It saves time, I'm sure, but very disappointing nonetheless.
From Minneapolis-St.Paul to Pittsburgh is the Midwestern megacity, with zero serious geographical limits on densifying, or adding to suburban sprawl. And every company in it would happily offer $70k/year to someone with 20 years of experience, and still believe it to be "extremely generous".
At first, I thought they were all lowballing for the purposes of negotiation, but it turns out that they're all uniformly miserly.
You have at least 15 years of experience and can't get an offer of 120K in Chicago? I don't believe that it’s plausible. Well, unless it's not a "high-tech" job you are talking about, meaning that your comment is not relevant to the article or discussion at all?
If you are a software developer (or data-scientist, or anything that qualifies as "high-tech"), it is very strange that after 15 years your skills did not appreciate or improved enough to qualify for a 120K offer.
Your post came across as vaguely insulting. A company that maxes out under my minimum isn't looking for someone with a higher level of skill--or even a median level of skill. A lot of these companies ask for the Moon, and want to pay for river rocks, then don't list salary range in their advertisements. If I can't weed them out quickly, they will waste more of my time than I care to give up.
It's not about securing an offer, it's about finding a company that isn't both tight-fisted and greedy. Now that I have left already, why would I expend the extra effort to find a Midwestern-based job that pays well, when other regions are falling over themselves to make even new graduates rich?
Midwestern companies can only attract local talent, and that talent is fleeing to cities that don't pay peanuts. I would move back, if companies there could raise the average pay of their tech employees, and maybe also get a bit more sun during the winter.
I'm baffled that SD made it on the list.
https://library.municode.com/tx/austin/codes/code_of_ordinan...
> Austin is the capital of Texas and the 11th largest city in the United States, and the 3rd largest state capital. The population of Austin is estimated at 964,254, which is an increase of more than 3% over the last census in 2010. [1]
Midwest cities are not viable Austin replacements. One of the many reasons for it's success is the University of Texas. It's a research university and one of the largest in the world. Add to that the fact that Austin has a pretty rich culture, temperate climate, and plenty to do; and now you have a place that people want to relocate to.
[1]: http://worldpopulationreview.com/us-cities/austin-population...
Of course, there's snow in the winter.
I wonder if that's because American cities tend to have much of the population in surrounding suburbs and towns that are often separate municipalities. For example the city of Atlanta is pretty small, with a population of under 500,000, but the metropolitan area has about 6 million in total spanning a number of counties
https://en.wikipedia.org/wiki/List_of_largest_cities breaks down the list across several measurement methods.
But I don't really disagree with the broader point. In addition to being the center for at least a certain segment of the tech industry, it has progressive attitudes that are important for many, has what perhaps most would consider one of the best climates in the country, and has easy access to some of the best recreational opportunities in the country.
Detroit may have significantly cheaper housing but it's going to be a tough sell for a lot of Californians--and therefore for companies that want at least a local core of tech talent--i.e. not 100% distributed. [ADDED: Although as the other comment says, very generous salaries relative to the local norms may not convince everyone to move, but they'll sure convince some.]
Nashville is more important than HN readers probably appreciate. Dunno how to rank cultural impact, but it's culturally strong enough to be well into the plus column.
New York has a lot of culture, diversity, and history, don't get me wrong, but it doesn't really define American culture in the way Californian cities do.
It's not hard to make a top twenty ranking of films set in NYC, regardless of what you pick in what order. Same for TV shows. How many cities get to say that?
But, yeah, other than that there is not much of a cultural impact.
I'm not making the case that it had the biggest or best cultural impact, but it's definitely important, even if you think it is a drag, which I guess you're allowed to think that, but it's subjective at best.
NYC has half of the US TV and film industry. Pick a random movie or TV show, and it’s probably set in New York, if not filmed there. Turn on a talking head on cable TV...it’s probably coming from a studio in Manhattan. I encounter film productions literally every day while walking around the city.
The global finance industry. The global fashion industry. Essentially all theater. Art production and sales. Sothebys and Christie’s. The Tony awards and The Thanksgiving day parade. The Yankees, Mets, Rangers, etc. The Met, MOMA, Whitney, Guggenheim and about a dozen others. All of these are either based in NYC, or split the honor with LA.
Like I said, I love SF, but culturally, outside of tech it’s a backwater.
I lived in SF for 25 years and this isn't remotely true. Indeed, it might have been remotely true 20 years ago when artists could afford to live there. There used to be dance studios everywhere. SF Carnival was huge. Burning Man got its start at Baker Beach. No more. Anything cultural in SF now is store bought.
Anyways, that's what I think. How do you think SF defines American culture now in 2019? What is it that we export more web presences?
Almost every American 'culture war' issue has been centered in SF. This is incredibly important, more so than movies, plays, or art. It's one thing to produce a popular play. It is something completely different to be so influential that you manage to convince an entire nation to give up on their tens of thousands of years old definition of marriage. And yes, SF was the center of that. It was the center of the 'sexual revolution', arguably the kick off to all the culture war issues we see today. Regardless of how you feel about them, it is incredibly difficult to argue that the values often espoused in and around SF are not winning.
The issue is that you are assuming culture means cultural products -- movies, songs, books, etc. I'm talking about culture as fundamental values. In my opinion, the cultural products are a product of culture. In the grand arc of history, cultural artifacts are influenced in design by the culture that made them, not vice versa.
> no one walks around in bell bottoms anymore
Right, that's because the bell bottom wearers all became really rich selling you the phone you're always on. The idea that this is not also part of culture is some kind of weird double think.
It doesn't seem to have a lot of production of note in the arts or media (TV, movies, games, music, books, etc).
It also doesn't seem culturally aligned with the rest of the USA, so I think that would be evidence to point to it not having a big influence or impact on US culture.
I always thought Pixar was close to Oakland, not SF. Lucasfilm is a pretty good pick. But there are a lot of other higher impact studios in SoCal.
EA's talent is spread all over the globe. What games are developed in SF? I don't see how a corp HQ that mostly buys studios after they make a breakout game as a center of culture (center of power, yes. culture, no)
> It also doesn't seem culturally aligned with the rest of the USA, so I think that would be evidence to point to it not having a big influence or impact on US culture.
I'm not sure what you mean by this, can you explain? I would actually argue the opposite. Almost all modern American culture wars have been centered around San Francisco in some way, shape, or form.
Speaking as someone who has spent their entire life on the West Coast, I almost never even think about New York or the East Coast. To me, it's the east coast that seems disconnected from reality.
I don't want to live in the Bay Area, I find almost nothing I like about it--with one exception: 2-5x what you are going to make in most other cities for work that is often easier.
Almost any city in the Northeast and large parts of the Midwest have better transportation and housing.
I don't get why people throw around the word "capitalism" like that. The U.S. legal system isn't organized around "capitalism" in any real way.
The U.S. historically was a liberal republic, though lately the republicanism had given way to a stronger administrative state on all levels.
And it's that that really influences how things are influenced with respect to urban development: regulators, HUD, local zoning boards, transportation planning, transportation energy regulations, etc. Not much of that screams "private control of the means of production" or even "free market".
Free market has, in my opinion, very little to do with capitalism; contrary to popular belief.
The former don't want growth in the form of more housing (It devalues theirs), and the latter don't want growth in the form of more jobs (Because that just means more rich people to bid up the cost of their housing.)
Talk about locking the door behind you on the way in.
Additionally, I'm guessing they probably don't even count traditional tech jobs (i.e., those at big companies doing boring things).
Perhaps I misread the study, but it also looks like they were counting the absolute number of new jobs, not the percentage over the population.
I was just surprised to see that Boston, San Diego, Raleigh, Madison beat out Austin and NYC in absolute numbers.
https://www.forbes.com/sites/joelkotkin/2017/03/16/technolog...
If NYC had captured an absolute numeric count of tech jobs, even if it were a small fraction of its existing tech or total jobs, it would have made the list.
It did not.
Here's the list from the report: • Basic chemical manufacturing • Pesticide, fertilizer, and agricultural chemical manufacturing • Pharmaceutical and medicine manufacturing • Computer and peripheral equipment manufacturing • Communications equipment manufacturing • Semiconductor and other electronic components manufacturing • Navigational, measuring, electromedical, and control instruments manufacturing • Aerospace product and parts manufacturing • Software publishers • Satellite telecommunications • Data processing, hosting, and related services • Other information services • Scientific research and development services
It's likely that growth concentrating in few cities is outcome from agglomeration effects, not some random fluke or error. Cities have more growth per capita than non-urban areas. Big cities have more growth than smaller cities. Largest cities have even more growth.
It's likely that you can't spread the growth more evenly without slowing it down, but you can reduce the negative externalizes. Help big cities grow even larger and help smaller places to prosper as much as they can.
I suspect this is partially due to the specialization needed to globally compete. You have to hire lots of specialists to compete and put them in the same building so they are collaborating efficiently. Tele-work hasn't yet lived up to the promise, perhaps because office politics matter, and tele-work hides one from the real going-ons.
Cities are like hivemind. The mind works better when things bump together constantly. Network theory can be used to explain some of that. There is more edges between nodes and more integration.
Some of the effects is just accidental information transfer when people are more likely to meet by accident. Other are knowledge spillovers like intellectual connections among inventors and diffusing useful knowledge. There are returns to scale, clustering effects. Labor market pooling is important. The easiest to understand is reducing the costs of moving goods over space (Pizza delivery has higher productivity when distances are shorter).
When I bring home 20k a month and only 7.5k goes to rent, I still have 12.5k remaining, which is more than most of the country's entire take home pay.
When I travel the world, everywhere else feels so inexpensive.
But even London and Paris are often pretty reasonable compared to random mid-tier business hotels around the US.
Living in SF, with a family, what I would observe is that people mostly just live in housing units / arrangements that their peers in other cities would find "unacceptable," for the "percentage of budget" reason mentioned in a sibling comment.
I know some married couples that still have "roommates" to cut costs. I know a lot of families with one or more kids in apartments < 1000sqft. The majority of single folks I know have 4-5 roommates in small apartments, some sharing bedrooms.
None of that is, in and of itself, that unusual or problematic. What's unusual is that the people who do this often earn somewhere from $200-$500k/yr.
It's pretty difficult to explain to people who live elsewhere why you'd be willing to live in a small apartment and pay $4k/mo... unless you're willing to break out your budget spreadsheet and show them that by putting up with the housing, you get to have a very interesting job and that you are putting six figures a year into savings.
When you know that you only have to put up with it for 5-10 years to be able to semi "retire" to anywhere else in the country, it's much easier to put up with.
See also places like the North Slope in Alaska, where living conditions are rather harsh but people take the work because of the extraordinary pay.
Anything over 250k is not a typical salary though, even in SV land. It is definitely attainable, but most engineers will never see that type of salary.
There certainly are jobs that some mostly younger people take with the expectation that they come with sort of a lousy lifestyle but they'll put away lots of money and they'll do them for a fairly limited length of time. (A lot of these jobs are in the oil business but it arguably also applies to things like investment banking and Big Law where you pay your dues for a few years and either make partner or get out.)
I'm not sure how many people working for big tech companies in the Bay Area have that sort of mindset though. [And, as root_axis notes, I'm not sure the numbers work for most developers starting out. One difference with the North Slope, etc. example is that you don't have a lot of expenses with those kinds of jobs.]
(Of course, I pay more in rent than my SF and Seattle friends..)
I think the funnier part is that anecdotally, a lot more people think they're going to do 5 years and bounce than actually do. Because they end up getting romantically involved with and having kids with someone who also values their career, or they get a big break (e.g. promoted quickly or rsu/options exploding... try walking away from $500k/y at 28 to move somewhere where the most you could make is $100k/y). So while a lot of people have that mindset, adherence is less.
I think the differences regarding expenses aren't that much. Yes, you have to pay for rent and utilities. But you'll probably get some food at work (I get 15 meals a week). You might have a gym at work. You might have entertainment options arranged through and paid for by work. Work might pay for your public transportation or have a private transportation network. They might even pay for your internet bill and give you a phone with an unlimited plan (caveat usor).
It wouldn't be this way if we figured out how to use this Internet thing for communication.
This is pretty common in most of the world. Only in America is 1000sqft "small".
BTW I think the real problem is the hyper-concentration of all opportunity in only a few cities. The US is enormous. There is no housing shortage unless we decide that we must cram all economic activity into five cities.
We're talking people being millionaires in their twenties and tons of earning potential for the future carrying a three year old smartphone.
I think it's because tech folk are good at min-maxing and at focusing on specific goals. It's nothing at all like the nonsense you see on /r/personalfinance. It's all ruthless optimization.
Why 2005 and why'd it drop off post-2017?
Also surprised DC and NYC aren't on the list. Lots of new companies and growth in those areas, but I guess they may not qualify as "innovation-sector growth".
"Potential growth centers" sounds promising.
https://markets.businessinsider.com/news/stocks/top-12-tech-...
It just goes to show just how unreliable the data can be used depending on the desired effect.