Bay Area Economic Outlook Buckles under Strains

Nearly half the millennials “likely” to leave.

Confidence in the economy of the Bay Area has plunged, according to the annual Bay Area Council Poll of voters in the nine-county area.

The respondents would be considered privileged based on their income in most parts of the country: 54% made over $75,000 a year; 26% made over $150,000; another 17% refused to give income data. Only 18% made less than $50,000. And 3% were unemployed.

But in the Bay Area, they’re fairly typical, struggling with the three top issues: costs of living, housing, and infernal traffic. And they’re getting “dour” about the economy and antsy about bailing out.

Even though the Bay Area economy has been booming for years, the people are seeing a chilling reality. Looking back, only 31% said the economy was doing “somewhat” or “much better” than six months ago, down from 53% in 2014:

Their perspective on the near future looks, as the report put it, “similarly dour”:

Where is the optimism of the youth? Millennials – more on them in a moment – were even less confident in the local economy than older generations.

And more of these folks are seeing some dark clouds:

Concern about a future economic downturn also intensified this year, with 45% of voters saying that the Bay Area will experience a significant slowdown sometime in the next three years. That’s up 8 percentage points from 37% last year.

In more granular detail: 15% expect that “significant economic downturn” within the next year; another 30% expect it within 2-3 years. In total, 45% see that threat on a three-year horizon:

The report hammers home the point:

Weakening confidence in the region’s economy is consistent with softening attitudes about the overall direction of the Bay Area. The poll found a significant drop since 2014 in the number of people who think the Bay Area is headed in the right direction. In 2014, that number was 57%, compared to 42% today.

And the percentage of those thinking that “things in the Bay Area” are going “pretty seriously off on the wrong track” rose sharply over the past four years:

How could things go so wrong, despite all the money running amok? The three biggest culprits are cost of living, housing (which is part of cost of living), and traffic – which surged into third place, from an also-ran four years ago. In short, the costs of living and traffic are insane.

“We are playing a risky game with the Bay Area’s golden goose,” said Jim Wunderman, President and CEO of the Bay Area Council. “There’s an unquestionable link between our housing, traffic, and cost of living issues and plummeting confidence in our economy. We’re making it harder and harder for the next generation of leaders and workers to live here, and it will have serious consequences.”

The poll found that 76% of the voters consider the Bay Area’s housing problems a threat to the local economy. And who is bearing the brunt of it?

Millennials and those who have lived the fewest years in the Bay Area appear to be feeling the pinch the hardest. The Bay Area Council Poll found 33% of millennials ranked cost of living as the region’s top problem, and 65% listed it in the top three.

By comparison, of those over 65, only 16% considered the cost of living the top problem in the region, and 44% ranked it among the top three problems.




So what’s next? The inevitable…

According to the poll, 40% of the respondents say they “strongly agree” or “agree” that they’re “likely to move out of the Bay Area in the next few years.” Up from an already high 34% last year.

40% is a stunning number. This place would be empty. It would, of course, never happen. But if just 10% leave, it would still be a huge number. It would bring a catastrophic crash of the local economy, housing, and everything else. How likely is that?

The number of people speaking with conviction is smaller, but soaring: the respondents who said they “strongly agree” that they’d like to leave – those are the folks who’re seriously contemplating a move – jumped from 13% last year to 19% now!

Among millennials, who have a particularly hard time with the costs of living, 46% said they’re likely to leave. Nearly half!

The urge to bail out rises with the percent of their incomes that people spend on housing. Percent who say they’re “likely” to leave over the next few years:

  • 49% of those spending between 45-55% of their income on housing costs.
  • 55% of those spending 60% of their income on housing costs

And logically, it affects those at less elevated pay scales the most: 46% of households making less than $75,000 per year say they’re likely to leave.

The Bay Area is boom-and-bust by nature. The booms last longer than a prudent person can even imagine, and money sloshes through the streets knee-deep, and the costs of living soar. Even the higher local pay scales don’t keep up with housing costs. Then something changes.

It gets too expensive. Businesses are running into trouble or are transferring employees to cheaper areas – already happening, including at Charles Schwab in San Francisco. Eventually, the startup boom falters. Layoffs percolate through the local economy. Some of the people without jobs go back where they came from because it’s too expensive to hunker down. The money sloshing through the street dries up….

The local economy is not at this point, but early warning signs are cropping up that not all is well in this boom, and that this cycle too will end, like the others before it that turned into busts. And people are beginning to see those signs.

And those who lost out on the Fed’s “wealth effect?” Read…  This Economy is Ruined for Many Americans




Share on FacebookTweet about this on TwitterShare on LinkedInShare on RedditPrint this pageEmail this to someone

  143 comments for “Bay Area Economic Outlook Buckles under Strains

  1. Curious Cat
    Apr 4, 2017 at 7:21 pm

    Looks like a toss up between San Francisco and Chicago as to which will be first.

    https://mishtalk.com/2017/04/04/illinois-revenue-freefall/

    • Apr 4, 2017 at 7:30 pm

      Have I mentioned the budget hole in San Francisco? And this is still the boom! Just wait till the bust sets in. But we’ve been there, done that…

      • TJ Martin
        Apr 5, 2017 at 9:15 am

        … and I’m betting being here on the ground Denver’s got to be up and coming on the list of potentially devastating falls as well . Between the city’s budgetary ‘ black hole ‘ problems , the State just announcing its some $400 million in the hole [ despite the promise of 420 tax revenue ] real estate prices continually ascending despite a decreasing market .. what new jobs there are being low paying … over building in commercial real estate … not to mention Denver’s consistent history since its inception of Boom or Bust … well … how much more strain can our bubble take before it goes ……. Bust !

  2. Jason
    Apr 4, 2017 at 7:25 pm

    Wolf:

    Fair enough.. but the minute things snap back to being mildly affordable the historical trend of population growth will continue. The Bay Area is an attractive job market and highly desirable weather all year round. That will keep any bust from lasting too long.

    If the tech mecha of the US was in Iowa then an exodus could be far more recasting. In fact we have such examples in throughout the where entire regions have not recovered from manufacturing plant shut downs or companies leaving altogether.

    If the Bay Area has a bust, you can be sure that a new wave of bargain hunters will flood in and kick off the next Boom.

    Find me a decade where population declined in the Bay Area since 1940..

    • Jason
      Apr 4, 2017 at 7:28 pm

      Corrections:
      ..far more devastating…

      ..such examples in the Midwest…

    • Apr 4, 2017 at 7:28 pm

      Yes, that’s always how it is here. After the bust comes the boom.

      • Jon
        Apr 4, 2017 at 8:39 pm

        But the busts do come for sure..
        BTW: I find the weather in BA pretty bad..
        Looks like Millenials are waking up to the reality in BA where the quality of lives sucks big time despite earning decent money
        One of the reasons, many tech companies are thinking about relocating to other better places.. USA has many good places to offer other than BA

        • Ethan in NoVA
          Apr 4, 2017 at 11:11 pm

          Eh, the VC money is in that area. That’s why the companies are there.

      • Mark
        Apr 5, 2017 at 4:34 am

        I wonder Wolf, will it be humans or the robots and the algorithms

    • Kevin
      Apr 4, 2017 at 8:56 pm

      Jason,

      When you say “Find me a decade where population declined in the Bay Area since 1940..” do you mean foreign or domestic population? Since 1996 only two years (2012 and 2013) have seen significant net positive migration of Americans into the Bay Area. Two out of 21!!! All this talk about the weather and the Bay Area being a great place to live is bunk. Americans simply can’t leave the area fast enough while cheaper labor is brought in amounting to what I can only consider a wholesale replacement of Americans with foreigners. 63% of tech workers are foreigners, and among the 25-44 age group it’s 67%. Among women it’s over 75%!

      Sources:
      http://siliconvalleyindicators.org/data/people/talent-flows-diversity/net-migration-flows/

      http://siliconvalleyindicators.org/data/people/talent-flows-diversity/foreign-born/

      • Paul
        Apr 4, 2017 at 9:18 pm

        Kevin, your missing the point. I lived the last few years in Cambridge MA. My daughters went to to 10 colleges. When I asked my oldest how many gringos (our joke) were in her chemestry class, she said, me and Eileen.

        Go into Darwins on Mass Ave. It’s a cross between Calcutta and Bejing.

        Do you really think these foreign students graduating from Harvard, MIT, Wellesley, Babson and Tufts are low wage? I used to ride my bike across the footbridge on the Charles to the Harvard business school. There are so many foreigners I’m surprised they don’t have a passport control station.

        (some) Americans are low wage because they refuse to work. The Americans are all taking poly sci and human sexuality.

        • Kevin
          Apr 4, 2017 at 9:28 pm

          I’m not sure what your point is. I was pointing out that Americans are leaving the Bay Area in droves, and have been since 1996, and are being replaced with foreigners with a desperately lower standard of quality of life. Are there lots of foreigners in Boston? Do do dogs bark?

        • Jon
          Apr 4, 2017 at 9:58 pm

          Do you think everyone in ba is getting these high salary
          I have friends with 2 kids pulling 100k each and they plan to move out
          Ba is good if you are single warning 150k plus or dinks earning 150k each

      • Kathy
        Apr 5, 2017 at 11:25 am

        Kevin,

        I agree with what you wrote. I’ve lived in Fremont since 2004 and the city — along with the East Bay corridor and areas west and south — has been filling up with foreigners for years. The massive population change and related problems are all by design (just google “Plan Bay Area” to see what the Assn of Bay Area Governments and the Metropolitan Transportation Commission have in store for us).

        I just received a property flyer in the mail yesterday from some Chinese realtors, bragging about how they just sold a property in a less than desirable area at new all-time highs. This morning my daughter and I spent 30 minutes in local traffic to get to school only 5 miles away. There were two accidents on 880 south which caused traffic congestion to spill over into the local streets.

        Except for the sometimes-great weather, and the sometimes-pretty vistas (marred by new developments and ugly trash-filled eyesores), it is all bunk about how this is a great area to live. I would love to leave the area but family and local commitments keep us here for now. We are lucky we bought our home in 2004 so can afford to stay put. Others aren’t so lucky.

        • Your Good Friend
          Apr 5, 2017 at 12:16 pm

          If I was on the hook for a house bought in 2004, I wouldn’t call myself lucky.

        • IdahoPotato
          Apr 5, 2017 at 1:46 pm

          I sold my house in Fremont in 2004 and moved to Boise, Idaho. I had a 350k mortgage in Fremont. Bought a place twice as large with cash in Boise. Cut my commute by 75%. The Bogus Basin ski lift is 35 minutes from my door. The river and hiking trails are a short walk away.

          The first week in my new house in Boise, I saw my neighbour’s garage door open at night. I rang her doorbell to let her know. She smiled and sad: “Hon, we hardly close our garage doors out here.”

          The politics in ID is regressive, summer is blazing hot, winter is very cold, but my husband and I live on 35k a year and are retired at 45. This year, we plan to downsize our home and pocket some change.

        • Your Good Friend
          Apr 5, 2017 at 2:13 pm

          Good luck finding a buyer.

        • Graham
          Apr 6, 2017 at 4:45 am

          “This morning my daughter and I spent 30 minutes in local traffic to get to school only 5 miles away”

          For the UK I’m seeing this more and more, everyone gets in their car to go short distances which clogs up the roads and wears out the cars, then they complain about the traffic :). 5 miles is bicycle territory LOL.

  3. Ehawk
    Apr 4, 2017 at 7:46 pm

    I’m a millennial, and I know that we all talk about leaving… but it’s jut talk.

    A few months ago we were cheering the rents moving down…but now it looks like they’re going back UP…! so there’s no hope.

    I am making adjustments to my life so that I can leave this hell hole, hopefully in the next 18-24 months. This time is not just talk. I have to because I have a 5mo. old baby and I can’t stand it anymore to live in a 1 bedroom peace of Shit apt for 2K a month.

    I am an older millennial at 33. I make peanuts for this area at just shy of 100K, but I have no debt. No student loans, no auto loans, CC is 3K at 0% for next 14 mos. I have 85K liquid cash for a down-payment away from here.

    I’m just getting more experience and learning more, so I could leave this place and work maybe remote from a low cost area.

    P.S. hopefully the market will crash in the next 24mo. so I can get a better deal wherever I move to.

    P.S.S. I can wait to hear all the comments ” don’t let they door hit your way out” type ;)

    • Mark
      Apr 4, 2017 at 9:48 pm

      Man that’s how I feel about living in Seattle. I’m basically the same age, make a great income (for now) as a physician, but I feel very middle class. Certainly can’t afford to buy a nice home in the city without ending up a debt slave for the next 30 years.

      We’ve had so much population growth over the last six years (lots and lots of CA refugees) – it’s like a completely different place. I am so burned out on the overcrowding, the traffic, the potholes, the cost of living, the aggressive homeless panhandlers, garbage, filth and general lack of upkeep. Our neighborhood used to have character with long term residents, now it’s packed full of generic dorms for Amazonbies who can’t be bothered to ever look up from their phones. And they think they’re SO cool.

      Ever seen that Portlandia skit? It’s OVER.

      • Ehawk
        Apr 5, 2017 at 4:35 pm

        For Sure a I know a lot of people whom left for Seattle from SF bay and Silicon Valley because they can make same money but no state tax and I heard better options for commuting.

        It’s fun if you are single and live with roommates. It’s cheaper and you have automatic social life while making the best wages in the nation.

        Time to check out the hell out of here

    • TYxGTB
      Apr 5, 2017 at 2:53 pm

      I hear you buddy, I was born & in raised in SF (I’m 27), and although I love it, it’s time to move if I want a good quality of life. A cousin of mine moved to McKinney, TX (suburb of Dallas). Research that DFW area, there are lots of jobs AND it’s more affordable. Wish you the best of luck.

      Peace.

      • Jerry Bear
        Apr 5, 2017 at 9:21 pm

        As an Eagles song once put it, “Just hang a sign called Paradise around it then kiss it good bye!” Once a place gets known as THE place to go, it is already too late. Of course Dallas never pretended to be paradise, and trust me, it’s not! ^,..,^

      • TheDona
        Apr 6, 2017 at 10:21 am

        TYxGTB: McKinney is great but there are also so many little pocket areas around DFW, especially in between Dallas and Ft. Worth, that still have a small town vibe, trees, and lots of park space. You do have to get off the never ending freeways to find them. There are plenty of things to do outside, great hole in the wall restaurants, chef owned gourmet restaurants, wine bars, craft beer places, music venues, walk around shopping, fantastic public school systems, etc. And the best thing of all is that you always feel safe. You can take a walk at 10 at night and leave your doors unlocked. My older,smaller house, neighborhood never has more than one or two houses listed in the Spring/Summer and they sell within a week. My neighbors range from youngish singles, DINKS, people with kids, to retirees.

        The downside is it does get freaking hot in the summer. Like Hell’s foyer hot.

        To all the Texas haters: Yes we are a car state….because it is so damn huge.

        • Apr 6, 2017 at 12:19 pm

          “Car state?”

          When I was there, Texas and Oklahoma (not to be mentioned in the same breath under normal circumstances) were proudly “truck country” :-)

        • TheDona
          Apr 6, 2017 at 2:37 pm

          Wolf: LOL! In my neck of the woods we are SUV Country.

    • JB
      Apr 5, 2017 at 7:34 pm

      wow 100k /yr peanuts ! you have done good . no debt and have saved 85k of “dry powder”.

    • Happyfamily
      Apr 5, 2017 at 11:22 pm

      Yep, 1 year old baby im 30. Were leaving. Been talking about it for years, but I’m looking for jobs now. Its no place for families to get ahead. Weve been trying to hold out until the market crashes, but with the baby getting older, gotta pull the trigger at some point.

      • Ehawk
        Apr 6, 2017 at 1:22 pm

        yeah, my baby being 5 months. I’d figure she sleeping in her crib next to our bed till she’s 2-2 1/2 years. But by 3 she needs her own room and we need our couple space.

        I know it tough to leave. It’s hard because family and friends are around but at the end of the day. It’s you who has to pay the bills.

        Where are thinking of moving to?

        we’re staying out here in the west. Maybe Texas…

        • George McDuffee
          Apr 6, 2017 at 3:56 pm

          When the going gets tough,
          the tough get going,
          and the smart relocate…

        • Happyfamily
          Apr 9, 2017 at 10:31 pm

          Exactly, re room arraingments. We are looking at Texas, north carolina, virginia, colorado

    • DV
      Apr 6, 2017 at 8:23 am

      Maybe another earthquake will help you. I cannot understand how people can live in the area which may quake any time and how real estate prices may be so high there.

      • Apr 6, 2017 at 9:06 am

        Are you talking about Oklahoma? The earthquake part…

    • Bellinghouse
      Apr 6, 2017 at 10:55 am

      I left San Francisco 3 yrs ago for the CA Desert, which I like quite a bit. Was making $100k, but fortunate to have bought a 2 unit Victorian cheap in the 1980’s, paid off in 10 years. So the $100k felt pretty good since I was collecting rent and not paying a mortgage. But what made me decide to leave is my day to day life was spent on MUNI near home (Church St) and work (Civic Center): both filthy and depressing areas of SF.

      Contrast that to a friend in Marin who is a partner and averages $1M in pay, working in the Financial District. He gets to pick whether he wants to drive to work (based on whether he is meeting folks for dinner after work), or take an express bus that runs almost nonstop from his home to work. He thinks there is no greater place to live, naturally, and why would anyone leave?

      So it is good for some, bad for others — all depends on each person’s situation!

  4. Michael
    Apr 4, 2017 at 7:48 pm

    I am sure someone thought the same about Detroit. Using the past to predict the future might not be a reliable methodology. Looking at the insanity of state and local government I see no hope for rebound. Unless you believe that they actually are in control. As Wolf indicates the slalom has not even started

    • Jerry Bear
      Apr 5, 2017 at 9:24 pm

      A good friend of mine moved from Michigan to Palm Springs California and likes it but it took a long time to sell his house. He says Lansing is about the last city in Lower Michigan that is NOT an unmitigated hell hole but not many wish to move there.

  5. PrototypeGirl1
    Apr 4, 2017 at 7:49 pm

    Only a severe earthquake, or ocean swimmers glowing in the dark will bust San Francisco.

    • Your Good Friend
      Apr 4, 2017 at 9:04 pm

      I recall the busts of 2000 and 2008. Those who were proclaiming it would never happen the loudest were the ones who lost their a$$.

      As I understand it, Fukushima rad is washing up on the west coast now.

      • Paul
        Apr 4, 2017 at 9:06 pm

        Together. They graduated from college three years ago

      • Frederick
        Apr 5, 2017 at 8:39 am

        Yes it is How people want to live there eludes me Lots of great places around the world that are MUCH less expensive and offer a great standard of living Can’t really understand NY and London very much either to be honest

        • Paul
          Apr 5, 2017 at 9:03 am

          Of the top 20 Colleges and Universities in the world, 4 are in Boston. The Boston metro area has 50 colleges.

          If you go from the North End down Mass avenue, you’ll see building after building, right on the MIT campus, Google, Apple, Pfizer, Bayer, Nova Nordisk. There are tens of thousands of PHD’s working in research labs.

          People go to these hubs because that’s where the money is. Companies go to these hubs because that’s where the smart kids are.

          There’s a library next to the Cambridge High school where Matt Damon went. If you go there on a saturday, IT’S PACKED. And it’s a huge library. College kids from Harvard, professors, children… On college holiddays, when most libraries are empty, this one is standing room only.

          I used to go to Darwins, get a coffee and just sit and listen to people talk. The buzz is amazing.

          I’m sure Pfizer doesn’t want to spend $100 a sq foot for office space but they do. This is the same in San Fran. It’s like the old Yogi Berra joke, “Nobody goes to Fred’s bar anymore. It’s too crowded.”

        • Your Good Friend
          Apr 5, 2017 at 11:51 am

          And eventually Boston will become like Buffalo, NY and Buffalo will become like Boston.

          It’s the way the world works.

  6. Goshen
    Apr 4, 2017 at 7:52 pm

    A preview of coming attractions for the 99% as the Wall Street-Federal Reserve Looting Syndicate steps up its asset-stripping of the productive economy.

    https://www.thenationalherald.com/156987/austerity-crushed-greek-households-keep-cutting-food-purchases/

  7. IdahoPotato
    Apr 4, 2017 at 8:06 pm

    A new subdivision across the street from me in Boise, Idaho has tons of Californians and Washingtonians buying properties, ‘cos they can afford a large house for under 300k here and the tech scene is picking up.

    Many local meetups have recent West Coast transplants, younger people, not just retirees. The trend is clear.

    • Your Good Friend
      Apr 4, 2017 at 9:16 pm

      Doubtful.

      Have you seen housing demand in ID(and elsewhere for that matter)? It’s in the gutter and falling.

      • Mike
        Apr 5, 2017 at 12:05 am

        I know of 2 people who recently moved from Seattle to Boise, largely because they could buy so much more house for their money in Boise. I have thought about it myself, but the weather extremes are brutal.

        I bet that outside of Boise, you are right.

      • IdahoPotato
        Apr 5, 2017 at 10:10 am

        The Boise market is very hot right now. Not sure about the rest of ID.

    • Frederick
      Apr 5, 2017 at 8:40 am

      Smart Create a new tech hub in a MUCH lower cost location with a great environment Sounds like a good place to invest in real estate

    • economicminor
      Apr 5, 2017 at 9:48 am

      Yes but the summer temperatures can be brutal. I’ve been in the mountains above Boise when it was so hot the pavement was melting out from under my tires.. To many days over 100+ for me.

  8. milking institute
    Apr 4, 2017 at 8:13 pm

    Just wait til the houses of cards a.i. farcebook,apple,tesla,snapcrap are being “reevaluated”. the I phone will be available at walmart,trader joe’s and your local swap meet fairly soon,competing with 500 chinese equally impressive offerings at around 199.90. i just wish i had a bay area home to put on the market! so anyway,i will go all in on Burritos,namely chipotle mexican grill,at 449.00 per share this could easily go to 800.00,people have to eat,right? i will be riding the burrito train all the way retirement heaven….

    • DH
      Apr 5, 2017 at 12:49 am

      FWIW, you can already buy iPhones at Walmart.

  9. Your Good Friend
    Apr 4, 2017 at 8:21 pm

    -Falling rental rates
    -record housing inventory and rising
    -rising crime
    -located in the poorest state in the US
    -crumbling infrastruture
    -negative population growth

    That’s the bay area.

    • Slyynnns
      Apr 5, 2017 at 4:21 am

      What do you mean that CA is the poorest state? They are one of the WORLD’s largest economies. Not poor. Debt, yes. But their federal taxes get sucked up and handed out to republican states who then complain about taxes and “liberal” states. Irony.

      • Paul
        Apr 5, 2017 at 7:57 am

        90% of Califonia’s economy is trade, real estate, health care and government. People tend to focus on the silicon valley and the bay area but tDP is generated.

        IMO, Califonia is in trouble. I used to work as an actuary. When Calpers comes home to roost, the social problems involved with huge tax hikes combined with benefit cuts will make the government non functional.

      • Your Good Friend
        Apr 5, 2017 at 8:02 am

        It is indeed the poorest state in the US. I’m not sure how to school you on the definition of poor.

  10. Bud Fox
    Apr 4, 2017 at 8:23 pm

    I’m a bay area native and see many empty or under construction office buildings in Sunnyvale, Santa Clara and up the penninsula.

    Any data on commercial RE?

    • Apr 4, 2017 at 9:06 pm

      Silicon Valley CRE article coming soon to a website near you (this one). I’m waiting for my Q1 data set, expected in a week or two.

      • Bud Fox
        Apr 4, 2017 at 10:53 pm

        Thanks. Looking forward to it.

        A google earth map with all the vacant/under construction office space would be eye opening.

      • Paul
        Apr 5, 2017 at 7:38 am

        Wolf, ecomics today is math driven. Modern economists (especially the politicized Fed) are wrong so often that, frankly, anybody can run an economics blog and be as credible as a PHD.

        Historically speaking though, this is the way free trade ends. Free trade doesn’t work and has never worked. But in the process of trading, countries create deficits and surpluses. This money has to go somewhere.

        The people like Ron Paul who run around saying fiat, fiat are idiots which is why Bernanke ignored them. The fed doesn’t create money. For 30 years, right up to 2009, their balance sheet didn’t budge. All of that money was the result of foreign governments using treasury bills as trade notes.

        San Francisco is the same as Boston, New York, Vancouver, yada yada. The classic boom city is Venice, but there was also Antwerp, Lisbon, London.

        OF COURSE the poor have to move out. How many poor people lived in Venice on the grand canal? OF COURSE real estate blows up in value. All this excess money has to go somewhere and since it’s not evenly distributed it goes to cities where the money is made.

        People who think moving to cheap cities is the thing to do miss the point. Rural America will not come back for generations. Sure real esatate will come down. But as long as trade remains relatively free, US cities will prosper. This is where people want to live.

        If you go to Boston, you can’t believe what’s going on. Paul Allen gave Tufts $50 million to grow meat for human consuption in a lab. My daughters boyfriend ran an indoor farm in a warehouse downtown that was price compeitive with imported lerruce. In the MIT Cog lab, they’ve already figured out how to decode text messages to figure out who sent them.

        There are thousands of PHD’s there with unlimited money because it just keeps rolling in. My daughters college is $62,000 a year and it’s damn near impossible to get in.

        This is the future. Until we get tarrifs it’ll keep on trucking.

        • Your Good Friend
          Apr 5, 2017 at 12:14 pm

          If you think that’s “the future” you’re in for the surprise of your life.

        • harvey
          Apr 19, 2017 at 7:10 pm

          What you are looking at are the “recovered” part of the economy, what most commentators here know are the part that is still in depression since the 90’s, you know, the part that sent the orange hair man to the white house.

  11. Rolando
    Apr 4, 2017 at 8:37 pm

    My wife and I are leaving the Bay Area in July. Non-natives; I’ve been here since ’95 and she since ’01. We are unlikely to come back. But hey, if there’s a huge crash, or I make a few extra million, who knows. Maybe.

    We rent in one of the East Bay cities that does not have rent control. It’s bad. We have absolutely no chance of ever being able to buy at these prices, and rent takes a bigger share of our budget every year, and the chance of moving somewhere better within the Bay Area seems to grow slimmer and slimmer. And her commute is about an hour and 15 minutes each way on a normal day. So to hell with it.

    Sample size of two.

    • TYxGTB
      Apr 5, 2017 at 3:03 pm

      Smart move, I was born & raised in SF (27 years old), and although I love it, it’s time to move if I want a good quality of life. I’m a UC grad, making pretty good money, but nowhere near enough to save for a down payment. A cousin of mine moved to McKinney, TX (suburb of Dallas). There are lots of jobs AND it’s more affordable. Wish you two the best of luck.

      • Rolando
        Apr 5, 2017 at 7:31 pm

        Thanks – same to you.

        And FWIW, no matter where you go (assuming it’s in the US) the Fed seems to be signaling that now is not the right time to buy a house – barring a situation in which it’s less than rent and you really plan to stay a while.

  12. Paul
    Apr 4, 2017 at 8:38 pm

    The quality of life in the Bay area is very desireable. My daughter lives there. They ski in the winter, hike in the fall and go to the ocean whenever they want. For professionals the job market is fantastic.

    IMO, unless the US totally shuts off immigration, these cities will stay desireable. A person would have to be suicidal to want to raise a family in Mumbai, Shanghai or Bejing.

    India produces 225 million tons of human waste and 75% of that never goes to a treatment plant. China is not far behind. In Bejing, people wear facemasks all the time.

    The 3rd world is not going to grow, for the simple reason that they are sewers. A per graduating from Harvard that spent 6 years in Cambridge MA is going to live in a soot covered sewer where grocery strores sell rice and eggs made from plastic? Where mother’s milk has arsenic in it.

    Give it time. US corporations will find a way to keep those people here.

    • Your Good Friend
      Apr 4, 2017 at 8:40 pm

      Nonsense.

      The crime, filth, poverty, fog and cold is enough to keep any sane thinking person away.

      • Paul
        Apr 4, 2017 at 8:42 pm

        Poverty? My daughter and her boyfriend make $250k a year.

        • Your Good Friend
          Apr 4, 2017 at 8:44 pm

          That and a dollar will get you a cup of coffee.

        • JZ
          Apr 4, 2017 at 8:54 pm

          250K together or each?

        • BayNative
          Apr 4, 2017 at 9:00 pm

          And yet the homeless encampments grow larger and nite numerous by the day…

        • Paul
          Apr 4, 2017 at 9:23 pm

          Homeless people go to where people are generous. Cambridge was crawling with them. Starbucks has that program called “go forward” where you buy something and pay for two and a homeless person that comes in eats free. The Starbucks in Davis square outside Tufts is a smorgasbord.

          There’s a homeless guy in front of the harvard bookstore. He was rock star status. The ones in the square make more than I do.

        • wkevinw
          Apr 4, 2017 at 11:58 pm

          California is now one of the “have and have-not” economy states, such as the southern states only used to be. California has the highest(!) fraction of its population living in poverty of any state (search for statistics on the “new methodology” of measuring poverty).

          So, you have a lot of pretty wealthy, in the professions, tech, and top of the corporate food-chain. Then you have the decimated middle-working class, and then the poor people (of which there are many!).

          That’s California- I lived there for 20 years, my wife is a native and we have had family continuously for 100+ years in California. We left in the early ’90’s, and it was one of the best decisions of my life.

        • Cyrus
          Apr 5, 2017 at 7:02 am

          Is it before or after tax?

    • NotSoSure
      Apr 4, 2017 at 10:15 pm

      LOL. The US was once a 3rd world too. Next you are going to wax poetic about Manifest Destiny and all that crap.

      As they said: “What goes up must come down” and the US is already on the way down, otherwise what’s the point of “Making America Great Again”.

      And 250K is nothing in the Bay Area. If the “quality of life” is great it’s probably because they have nothing left in terms of savings.

      • junior_kai
        Apr 8, 2017 at 7:22 pm

        125/yr in the bay area is frankly not worth it – the insane state tax, sales tax, fees on every little thing under the sun, rent/housing costs, pervasive corruption, third world hordes and mind melting traffic make it worth less than 75k in a nice place. And yes, there are still a few places in this country that dont completely suck!

        The constant specious argument about being a few hours drive to the snow, ocean, etc. is a joke – it doesnt factor in traffic. I lived in Clownifornia for about 30 years and the traffic got so bad that after a while you dont want to go anywhere because even a modest trip is a huge time sink.

        Unfortunately this eCONomy has destroyed much of this country with fake money, courtesy of the fed reserve and the jackals in DC and on wall street.

        • Your Good Friend
          Apr 9, 2017 at 6:41 am

          ^Precisely.

    • R2D2
      Apr 5, 2017 at 7:15 am

      I want to live in that Bay area that you are describing; can you give me the address?

      Sure, if you are one of these happy-go-lucky people, then Bay area is great. Spend all the money that you earn, and you will have a happy life. But if you want to build a life so that when you lose your job in 12 month, you don’t turn into a homeless, then Bay area sucks.

      There are so many working in Google, Facebook, Cisco, etc. that hardly deserve to be called a techie, and yet are pulling $90K-$100K. So many of these people will be kicked out of these companies as soon as evaluations of the companies comes back to earth. These are people who decide whether Facebook should should be all yellow or have red cheeks, but have zero idea of how it is done. In normal times, these people are not worth even $30K a year. So, just like in 2000, a huge number of these people will be unemployed as soon as the next bust comes.

    • Frederick
      Apr 5, 2017 at 8:48 am

      Paul I live on the Med coast near Marmaris Turkey and I can ski swim in the Med and have great hiking trails passing my home and the environment is great There are lots of great places to live in the world where you don’t need a mortgage and have loads of debt to live well China and India are extreme cases I agree If my wife wasn’t Turkish I think I’d like Czech Republic or Slovenia The Islands of the Dalmatian coast in Croatia are great places to live as well

      • Paul
        Apr 5, 2017 at 11:57 am

        I’ve been near where you live. It’s awesome. My point was, the quality off life has to a persons ability to make money. I lived in Dhahran.. great money, horrid place to live.

        I thing San Fran and Boston are a good mix.

    • economicminor
      Apr 5, 2017 at 10:05 am

      From a recent trip thru SE Asia, many people in most of SE Asia wear face masks all the time.. You can buy them in designer colors. The pollution is awful as is the trash.

  13. Gian
    Apr 4, 2017 at 10:53 pm

    And to compound matters, I understand the illegals are streaming into the BA in order to avoid deportation, work and imprisonment. Get ready to part with more of your dollars to house, feed, educate and medicate the throngs as the Feds get ready to cut off funds to these lawless sanctuary cities.

    • Bud Fox
      Apr 4, 2017 at 10:56 pm

      Go to a post office in the SF Bay Area and the passport line is
      a mile long.

      The Trump effect

      • Apr 4, 2017 at 11:28 pm

        BS. Not Trump effect.

        • economicminor
          Apr 5, 2017 at 10:09 am

          Agreed, not Trump.. we use to be able to go to both Canada and Mexico w/o a passport. No more… Now you need one to travel and just like other government agencies, the rules keep growing yet the number of personnel doesn’t increase. Trump’s budget wants to cut the Dept of State by 29%.. just wait till next year to get a passport or renewal if that goes thru.

      • akiddy111
        Apr 5, 2017 at 12:32 am

        It does tend to look like the Tech firms have found a way around the H1b and L1 Visa limit.

        Most of the people in the Kirkland, WA Costco last Saturday were from India and to a lesser extent China.

        Almost all of the east Indian men have mustaches and drive new Toyota Corollas or Honda Civics.

        Very conservative, studious, serious people. I feel that they could lighten up a little bit. They’re constantly staring at their smart phones.

        • Ricardo
          Apr 5, 2017 at 7:35 am

          > They’re constantly staring at their smart phones.<:{

        • TJ Martin
          Apr 5, 2017 at 9:21 am

          It ‘ tends ‘ to look like they have found their way around the H1B loopholes ? Get a grip … they have been for almost two decades the master manipulators of the H1B program .. followed closely by Big Pharma and the Health Care Industry .

        • economicminor
          Apr 5, 2017 at 10:16 am

          India has a real problem with culture and tradition. If your father is of the middle Cast and can send you to university, there is no job for you in India when you graduate. Only the upper Cast people get hired in India for high paying jobs.. It is a Cast society… It is their religion and culture.

          And the US and the UK and most developed countries understand this.. They can hire a person from India for less than half what an American makes and that Indian will be glad to have the job because there are NO jobs for them in India.

          Plus there are 1.2 Billion people in India with a tradition and culture than keeps women home and pregnant.

        • Paul
          Apr 5, 2017 at 10:19 am

          India still has a cast system? jesus. Or maybe they need more Jesus.

          oh, it’s 1.3 billion. 100 million new babies since 2006.

        • IdahoPotato
          Apr 5, 2017 at 3:35 pm

          I was born and raised in India. In the private sector, caste is irrelevant and India is booming right now. Most of the Indian transplants to the U.S. also happen to be upper caste. (The CEOs of Google, Microsoft and Pepsi are all upper caste Brahmins.) They tend to put a premium on higher education.

          Caste is much less of a barrier in India today.

        • economicminor
          Apr 5, 2017 at 6:23 pm

          I was just in India and I saw no signs of boom. I saw so many hungry people and so much trash and animals in the food markets and people peeing on the walls as there are few public facilities for those without money.

          Speaking of money, Modi has made it very difficult for even tourists to get Rupie because many of the ATMs have no cash in them. India is a mess. No wonder you left.

          And being a member of the higher Caste doesn’t mean you have any more of an idea how the lower Castes live than the CEOs of Microsoft, Google or Pepsi have a clue or a care how most of the people in the US live or feel about how things are going.

          It is just the nature of things..

        • IdahoPotato
          Apr 5, 2017 at 6:58 pm
        • Apr 5, 2017 at 7:26 pm

          Note that India’s GDP numbers are considered among the most unreliable of any major country, more unreliable even than China’s. Part of the problem is the cash-based economy, much of which escapes official scrutiny. So these GDP numbers are to be taken with a grain of salt.

    • TJ Martin
      Apr 5, 2017 at 9:37 am

      Lawless sanctuary cities . Hmmm … well … seeing as how I live in one of those ‘ so called ‘ lawless sanctuary cities [ Denver ] that in fact is standing firm on the LAW [ both Federal , State and Local ] as well as a State’s Rights to protect and uphold its right to offer sanctuary to anyone deemed worthy … not to mention the Right to protect its residents against unlawful search and seizure and illegal harassment from any agency . And suffice it to say there is no law requiring any State County or Local law enforcement to cooperate with either ICE or CBP unless sad ICE / CBP agents have a federal warrant .. bench or otherwise in relation to the specific case or individual implicated . Which in the majority of cases presently .. neither ICE nor the CBP has in their possession . So you tell me … who’s acting in a lawless manner .. the Sanctuary Cities .. or the Jackboot over zealous ICE and CBP running rampant addled and fueled by excess authority they have no right to exercise ?

      Fact .. not alt right lies !

      • Lee
        Apr 5, 2017 at 6:05 pm

        Gee, and here I thought that somebody without a valid visa in the USA was IN FACT breaking the law.

        You know that first word in front of illegal immigrant, “illegal”.

        And since when does a LE agent need a warrant to arrest a person for breaking the law? They don’t.

        And wasn’t there something about Federal law having precedence over State law in that funny document called the Constitution, you know the “Supremacy Clause”.

        Must be some kind of strange , weird new age law and bs going on in the USA or something has been put in the water to make people dumb since I left for foreign shores way back when.

        • Apr 5, 2017 at 6:43 pm

          In terms of the Federal Government trying to get local or state authorities to hand over immigration law violators or to enforce federal immigration law – there are some constitutional issues here regarding states’ rights. This is already wending its way through the courts and will most likely be decided by the Supreme Court.

  14. Bobber
    Apr 4, 2017 at 11:29 pm

    I don’t understand why anyone would live in San Fran area. Taxes and traffic alone are deal breakers. I’ve been to San Fran and San Jose and I don’t get it. The people there are in love with themselves, for no good reason. Not a place to make real friends in my opinion. And now there are so many new people coming and going it has no culture anymore.

    • Mike G
      Apr 5, 2017 at 1:29 am

      I lived in Silicon Valley for a while in the late 80s — the traffic and housing costs were awful then and I’m sure much worse now. Not much culture either, everyone was just self-obsessed with their money and career, and it had the anomic lack of social ties common to places with lots of transitory people. Sure the weather and outdoor recreation is nice but you don’t get to enjoy it much pulling the rat-racey hours at cutthroat tech companies. A sweet life for a few people at the top of the pile in the Saratoga hills, Los Gatos and a few other places, but an awful place if you aren’t a millionaire.

    • R2D2
      Apr 5, 2017 at 7:25 am

      Make friend? In Bay area? I gave up even thinking of having a friend a year after I came here. I’m not full of myself, and I couldn’t care less about my cell phone and my Facebook account, but people who live here, probably stopped thinking of having friends a year after they arrived just like me.

  15. Ty from GR
    Apr 5, 2017 at 4:17 am

    To any Cali peeps thinking of moving to my state I echo the Aussies “Fuck Off We’re Full”

  16. Dan Romig
    Apr 5, 2017 at 6:43 am

    According to Zillow, the median home value in Palo Alto CA is just over $2.5 million, and the median listing price per square foot is $1,498!

    In my neighborhood just west of the Mississippi river and south/southeast of downtown Minneapolis the median home value is $227,100, and median listing price is $219 per sq ft.

    Holy shi#, how the hell do people in the Bay Area get by? Grab a parka and Sorel boots, and come to the Twin Cities, eh?

    • WickedIcePick
      Apr 5, 2017 at 7:00 am

      ‘Grab a parka and Sorel boots, and come to the Twin Cities, eh?”

      Please, no. For the love of all things holy. MSP is full.

    • Bobber
      Apr 5, 2017 at 10:06 am

      The bike trails in Minneapolis are the best I’ve ever seen in a large city.

  17. Silly Me
    Apr 5, 2017 at 6:57 am

    I find it strange that everyone talks about owning a place without mentioning property taxes that alone can be prohibitively expensive for an increasing number of people.

  18. Anon
    Apr 5, 2017 at 7:38 am

    One learns to adapt to the Bay Area or one moves away. This year marks 40 years in the Promised Land for me. Thanks to Proposition 13, my property taxes are not much higher than they were in 1977. I now qualify for senior fares on the area’s public transit systems. There are four supermarkets in my small suburb. The weather is pretty good most of the year.

    175 years ago, the land on which my house sits was part of a Mexican rancho. Then the Anglos stole California and the rest of the southwest from Mexico. Now the Mexicans are taking California back, one illegal at a time.

    • Your Good Friend
      Apr 5, 2017 at 8:05 am

      A child blind from birth doesn’t even know he’s blind until someone tells him.

    • JB
      Apr 5, 2017 at 8:07 pm

      ah yes PROP 13 . They call it the golden tomb . Probably keeps a lot of real estate off the market because the seller would lose his subsidy,

  19. william
    Apr 5, 2017 at 9:23 am

    Demographics is the unmentioned driver in many economic trends. Few will discuss it. Those who have been in the San Jose area recently understand. And, no, the rest of you likely won’t get it.

  20. ft
    Apr 5, 2017 at 9:45 am

    Too much of what Silicon Valley “produces” is just a bunch of crap that nobody needs. As a Bay Area native, I would love to be able to push a button that erases 50 years of so called progress in what once was a beautiful place.

  21. Mary
    Apr 5, 2017 at 10:20 am

    Is it my imagination, or has this blog begun to cherrypick bad news in a way that encourages an orgy of schadenfreude from its commenters? Yesterday it was, “Glad I’m not the kind of idiot who’d buy a condo in Miami Beach” and today it’s “What kind of idiot lives in a hellhole like San Francisco?” Tomorrow it may be, “You lost your savings in a bad investment? Your life is ruined? Hey, more fool you!”

    • Your Good Friend
      Apr 5, 2017 at 10:26 am

      Or has it been a bastion of happy talk and deliberate obfuscation of the facts?

    • R2D2
      Apr 5, 2017 at 10:33 am

      Oh, I’m sorry for not being part of the 0.0001% whose stock portfolio have increased by 2000% in the last few years due to orgy of free money courtesy of the feds. Can you forgive me for not being privileged and constantly whine for being a slave?

    • Apr 5, 2017 at 11:42 am

      We’re peeling the onion (including the article on Miami’s condos that showed that prices of good condos are actually declining, not rising). There are plenty of publications that publish the hype folks like to read. I don’t publish 50 articles a day. I publish 2 or 3, and we’re trying to look beneath some of the layers. That’s why you come here – not to feed on the regular fare. You can get that everywhere.

      So go ahead and “invest” in a condo in Miami. But don’t tell anyone a few years down the road that you were duped, and that no one warned you.

      Oh, and I just published an article on Toronto – average house price soared 33% year over year and doubled in 5 years. That’s good news. Buy now or you’ll be priced out forever, as the logic goes.

      • Paul
        Apr 5, 2017 at 12:20 pm

        Wolf, any chance I could ask you a few questions about your blog? I saw your interview on RT. It was fascinating.

        Paul

        • Apr 5, 2017 at 3:37 pm

          Sure. Contact me via email.

    • Jerry Bear
      Apr 5, 2017 at 10:35 pm

      They are just reflecting the national mood! If you want to start a “happy happy joy joy” type of thread then knock yourself out! Keep in mind though that progress practically requires discontent, otherwise nobody wants change.

  22. TYxGTB
    Apr 5, 2017 at 10:26 am

    I’m an SF native millennial (27 raised in the Excelsior District), and I’ve been wanting to move for a while now. I’m thinking Dallas, TX, and that whole DFW region. From what I’ve seen, there are jobs AND it’s more affordable. Had a cousin move out to McKinney, TX with his wife and kids. Beautiful place, he has no regrets.

    • Mike G
      Apr 5, 2017 at 4:49 pm

      There are jobs and affordable housing in Dallas, but it is the ugliest, most soul-sucking city I have ever been to in my life.

      • Jerry Bear
        Apr 5, 2017 at 10:53 pm

        I have to agree. And the infamous “Dallitude” you run into from the locals. Not to mention such minor considerations as horrifically hot and humid summers, chiggers, snakes and recluse spiders, Neanderthal politics, and a general aura of mean-spiritedness.

  23. Your Good Friend
    Apr 5, 2017 at 10:48 am

    You can bet your last dollar that the majority of these desperate house lives are mortgaged up to their eyeballs. Bay area for certain.

    Half of American families are desperately living paycheck to paycheck
    By Quentin Fottrell
    Published: Apr 4, 2017 10:32 p.m. ET

    http://www.marketwatch.com/story/half-of-americans-are-desperately-living-paycheck-to-paycheck-2017-04-04

  24. mvojy
    Apr 5, 2017 at 1:14 pm

    Once monetary policy tightens up the federal money won’t flow so quickly. States are already under strained budgets and growing public employee benefit costs. Inflation has been suppressed and even hidden through smaller packaging. Large retailers are downsizing or closing altogether. Student debt is well over $1 trillion and only 40% are making payments. Let’s sit back and see what happens when one action triggers default on the rest.

  25. Shawn
    Apr 5, 2017 at 2:50 pm

    The SF Bay Area is not Disney Land, there is nothing magical about this Kingdom. The entire economy lives off of debt and cheap money; from the lowly Starbucks employee to the ivory tower Venture capitalist. All the fed has to do is keep interest rates at near zero and everything will be hunky-dory (I had to duckduckgo that one). Oh wait, the ‘official’ inflation figure are touching 2%, that could really end this party.

  26. Nate
    Apr 5, 2017 at 4:30 pm

    I’ve lived in the Bay Area for the last 20 years and have been employed in tech the entire time. I’m not surprised at all with the pessimism displayed by the millennial population here. When I moved here 20 years ago, it was right as the dot-com mania was starting. Young people were moving here in droves and everybody was making good money. Then the cracks started to form and ultimately the bottom fell out. For many folks who probably hadn’t given much serious thought to whether they planned to stay in the Bay Area permanently, this was their cue to exit.

    The same thing is happening now. The VC funding has gotten tighter, and even the mightiest of “unicorns”, like Uber, are finding themselves under the lens. If you’re in your mid to late 20’s (perhaps recently married) and your once super secure job no longer seems so secure and your once certain payout has been postponed indefinitely, moving back to Ohio doesn’t seem so bad. Hey, you’ve probably got some money saved up, a brand-name employer on your resume, and you know your parents are dying to help out with the grandkids (when they arrive a few years from now). Plus, that crappy apartment in the great location a few blocks off Valencia street has lost some appeal. Yeah, you like the bars and the restaurants and the nightlife, but after 3 years of non-stop partying and socializing, a bit of a hangover is setting in. You’d never given much thought to where you’d settle permanently anyway, so why not make a change?

    This was the mindset when I was in my mid-twenties and the dot-bomb explosion happened, and it’s probably not too far off from the mindset of millennials today.

    The irony for me was that it was the dot-com downturn that solidified my desire to stay here. Over the course of several years, a large part of my social circle dissolved as friends moved away. But I started making new friends, I found a stable job even during the recession, got married, and really began to embrace the California lifestyle. When the housing market bottomed out during the great recession of 2008, I again dug in and rode it out. I bought a house when nobody was buying homes and nobody knew what the true price of a home was. If you stay here long enough, the inevitable bust will occur, and that’s when you can get an edge financially – assuming you didn’t piss your money away during the good times.

    The problems highlighted in this thread are real. Traffic sucks. State taxes are sky high. Homelessness is a visible and disturbing problem. The weather is nice, but all those sunny days during the 5 year drought were hard to enjoy. But all the talk of the Bay Area going the way of Detroit is nonsense now just as it was nonsense before. I’ve heard the “Bay Area is at risk of losing it’s dominance” too many times before to pay much attention to it now. For all it’s faults, the high tech industry is very good at reinventing itself. Apple was near death when I moved here. Hardly anybody knew about Google and Mark Zuckerberg was a goofy middle schooler. Austin and the research triangle area of NC were going to steal all those tech jobs from the Bay Area. Instead what happened was that tech grew there and it grew here.

    The only thing that’s certain is that a bust will follow a boom and a few years later, there will be scant evidence the bust ever happened.

    • JZ
      Apr 5, 2017 at 8:45 pm

      I agree with most what you are saying.
      Every place is competitive, and if one loses in the competition, one moves away.
      Two survival strategies
      1. You suck it up, save money and wait for the bust like you did.
      2.You suck it up until you make IPO.

      Those who do not want to suck it up will never get win in the competition in Bay Area. There is nothing wrong to avoid competition and choose a more enjoyable life, but it is not what Bay Area is about.

      I do want to point out one thing though.
      In the days of microsoft, intel, cisco, their technology is hard to copy and those are true tech. Today’s google, facebook, twitter, uber, tesla, etc.. the chinese and korean folks have their own version. This is NOT true power of technology, it is simply overvalued business that everybody knows how to do.

      • Graham
        Apr 6, 2017 at 5:17 am

        Interesting.

        “Today’s google, facebook, twitter, uber, tesla, etc..”
        I think today I’d class these as state owned corporations, all seem to be the ‘anointed’ company in bed with the state fake news and censorship, spying etc or just simply the recipients of huge contracts like Musk who seems to be chosen to play with rockets with our money.

        Against that support it’s difficult or impossible for anyone to compete like they could 20-30 years ago.

        • JZ
          Apr 6, 2017 at 9:45 am

          I agree that these companies do have a strong government flavor in it.
          Recently there is a lawsuit where US course could fine Chienese ZTE for selling US tech to Iran. The reason ZTE was fined billions is because US threat to stop supplying them with Qualcomm chips. That is the true power and so many years later, the Chinese, Indians, Koreans are still yet to come up with a intel processor, microsoft windows and qualcomm chips.
          Google, Uner, has to beg to get into the business of China and they failed. Because those folks have the same product.

          These bay area companies think they are tech powers. They have no power. When negotiation happens, they would threaten to cut China off netflix? stop playing candy crush?
          Even warren buffet invest in BYD the chinese Battery and electrical car maker but Not telsla motors.

  27. George McDuffee
    Apr 5, 2017 at 4:37 pm

    The depressing truth is that our most of our major metro areas are extremely overpopulated/overbuilt, given the available suitable land area, e. g. no building in the flood plain, and existing infrastructure such as roads, schools, hospitals, etc.

    The remaining urban areas, which are only crowded and not yet over-crowded, are rapidly growing as the people flee the extremely over populated areas, simply extending the problem to new areas.

    This suggests that just as the maximum safe occupancy for public buildings/ spaces is established by the Fire Marshals in many areas, we need to establish the maximum safe occupancy for our major metropolitan areas.

    We are largely bringing this socioeconomic disaster upon ourselves by continuing the overt and hidden tax and other incentives driving this phenomena, to the point that repressive measures such as imposing a system of residency and occupancy permits will be required to avoid collapse.

    The primary driving force seems to be the availability of suitable employment. There are huge areas of the U. S. which are underpopulated, as are many small towns which are shrinking, as the residents are forced to relocate, primarily in search of employment, and secondarily for the perceived amenities offered by our mega urban environments.

    What changes in tax and land use policies will be required to reverse this disturbing and dangerous trend of gross overpopulation in a few areas, and the abandonment of increasing numbers of small towns and land areas?

    We need solutions, not problems and complaints, and we need them quickly!

    • economicminor
      Apr 5, 2017 at 7:11 pm

      In rural Southern Oregon we have done many SWAT assessments and most of the time come up with the same conclusions. What would help our rural area would be a combination of functional retirement places, like a farm/gardening Sun City and small resorts utilizing the unique features of our area, to allow small entrepreneurial businesses to grow.

      The state controls the zoning and they have decided that we are a timber community and nothing more. Oh we can grow grapes and pot but other options are off the table.

      It is a beautiful area with access to the Oregon coast and the many mountain trails and wildernesses but there is no economy to support families. This is typical on the west side of the Cascades other than the bigger cities like Eugene, Salem and Portland.

      State government just don’t function for many of rural areas.

      Those with the power always imagine they know what is best yet they seldom have a clue outside their own front door and I have my doubts even there..

  28. Your Good Friend
    Apr 5, 2017 at 5:41 pm

    “The depressing truth is that our most of our major metro areas are extremely overpopulated/overbuilt,”

    Clearly overbuilt. Not just in metros either. Take a look at the record high empty housing inventory in NYC and SF bay area. Rental rates slipping lower.

    Falling prices is the only path forward.

  29. Happyfamily
    Apr 5, 2017 at 11:16 pm

    Im a millennial, with a 1 year old son. Wife and I bring home around 150k yr combined. Of course most of that goes to paying off debt from starting a business and student loans for tuition. We’re leaving the bay area as soon as I find a job elsewhere. My wife is self employed, so we will have to re establish her business elsewhere. Its painful, we grew up here and out family is here. But…costs are just stupid, and we arent going to buy a piece of shit house in a shitty school district, with a horrible commute, and no time for family. We live in a damn barn apartment so we’ve been able to pay off alot of debt, but there are literally no housing options that are worth a damn and we need to raise our family somewhere. Were getting out!

    • TheDona
      Apr 7, 2017 at 10:34 am

      For those with kids or considering children: More, more and more of your time, energy and money will be placed in your children’s direction. Find another city/state (even though you might make less money) and buy a home in a nice, safe community with good public schools. It is an investment in your children’s future.

      No kids in your future….then party on.

  30. Graham
    Apr 6, 2017 at 5:08 am

    Decades ago in the UK big companies used to build housing alongside the factories and provide parks, places for shops and social amenities. Cadbury’s did this – for example.

    That created a happy, loyal, local workforce without traffic.

    I watch as the self obsessed heads of Google and Apple happily spend $billions on their latest office folly yet seem to have zero $ for the staff they employ. Staff they got at a discount via the H1-B cheap foreign labour scheme.

    They are like a monkey with their hand in the monkey trap – they can’t see their own selfish greed is the root of their own eventual demise and have no vision – even like at Google their staff resorts to living in converted vans in the parking lot.

    Ca. is being hollowed out by greedy corporations and is now eating it’s own roots – the 1970s computer boom was started and staffed by happy middle class americans with houses, families, holidays etc, today it’s resembling a transient area with cheap labour, tent cities and the american dream is now one of not being moved on by the police in the evening stealth camping in the back of their station wagon.

    Meanwhile Apple completes it’s new $5bn building while removing all the useful features and ports from their products because apparently no one in product development uses any of their stuff anymore.

    • rejected by target
      Apr 6, 2017 at 8:56 am

      The situation here in Boston is just as bad. Dan Lyon’s “Disrupted” did a great job of exposing what’s going on in this job market. The majority of the jobs in the “hot” tech areas like Cambridge pay dismal salaries of ~$35K/yr (they make up the difference with foosball tables and keg parties), and good luck getting hired for any job (even secretary) if you’re over 40. My LinkedIn network remains full of tech professionals in the Boston area going on their 4th/5th year without a job. I turn 50 this year, been without a full time job for five years now. I left my rust belt hometown way back in 1989 to capitalize on the “Massachusetts miracle” (recall the unemployment rate here was something like 3%). In the early 1990s I earned anywhere from $12/hr to $15/hr doing basic office work, then I went back to school and became a designer and enjoyed a steadily climbing salary thru mostly contract gigs until 2012 when it all quite suddenly dried up and I couldn’t even land an interview for even a temporary typing gig at the state prison. I also was shocked to see that the $12/hr to $15/hr salary I had earned 20 years earlier had become standard offering for many positions, and continues to be the standard today (I just came across a test evaluator position that offers $13/hr). Making things even worse, the min wage retail sector won’t hire someone like me, either, because “you’re overqualified and you’ll quit as soon as something better comes up” (I was rejected by every big box retailer here). The harshest lesson has been that you cannot be single on a salary of $12/hr, you must have a partner/spouse or parent or even grown children to help you out (I’m currently residing in my mom’s basement after losing my home). As soon as I realized I’d never work in Boston again I began applying nationwide (including hundreds of jobs in CA), but the results were the same, couldn’t even get a telephone screening (thanks, Mark Zuckerberg, for convincing every hiring manager that “young people are just smarter”). I had previously shared my story in another post but if you missed it I am now preparing to head overseas to teach English as I’ve given up here. :(
      http://fortune.com/2016/04/06/tech-workers-and-investors-should-read-disrupted/

      https://www.linkedin.com/pulse/when-comes-age-bias-tech-companies-dont-even-bother-lie-dan-lyons

      • Ehawk
        Apr 6, 2017 at 1:48 pm

        Sorry man. That’s rough…Hope and change for you.

        companies like young people fresh out of college because:

        1. Companies can train them to turn them into what they want
        2. Companies can overwork them
        3. young people don’t have family issues to deal with: (doctors appts, soccer practice
        4. Older people are jaded in the work force specially after layoffs and older people generally have more problems

        These companies are evil.

        P.S. I am 33 year old. I could see myself struggling in about 10 years.

        • rejected by target
          Apr 6, 2017 at 3:04 pm

          “Older people are jaded in the work force specially after layoffs…”

          I was never “jaded,” and even today if I were given the offer to go back to my old middle-class life via a job in my field you’d see no “jade” in me.

          “…and older people generally have more problems.”

          Like, what, specifically?

          Young people are more likely to want to get married and have kids while they’re still young. Old fogies like myself are done with that stuff…just sayin’!

  31. Jason
    Apr 6, 2017 at 8:52 pm

    Age descriminatiom in the Bay Area! Now that’s definitely a major issue..

    Google, Apple, etc are gonna be dealing with a lot of class action lawsuits in the coming years. The data is so blatantly obvious. They’re guilty as hell and eventually they will be heavily regulated by the government to employ older workers.

    This will be timely since we’re in an aging world, time for some geriatric tech to spawn a new wave of economic activity. Smart wheelchairs, robot assistants, VR shuffleboard. So many areas to re-invent!

    • rejected by target
      Apr 7, 2017 at 9:36 am

      “…eventually they will be heavily regulated by the government to employ older workers.”

      Never gonna happen. I’ve learned these past few years that so-called “job creators” can get away with pretty much anything — for one dinky three month temp typing gig they demanded my previous year’s tax returns (!!!). They get to demand an IQ test, a personality evaluation, and a full credit check on you just as a part of the application process. And then there’s the ATS where they demand your date of graduation (making it easy to deduce your age) and ask “Are you currently employed?” (because nobody wants to hire an unemployed person). The guy from the “Ask the Headhunter” blog said some years ago that Congress should be investigating these ATSs, and in 2015 I got slightly excited when the FTC launched an investigation to look at bias in hiring algorithms. I mailed them a 15-page letter full of screenshots of the worst offenders I had encountered…never got a reply. http://www.asktheheadhunter.com/6827/employment-in-america-wtf-is-going-on

  32. DEB
    Apr 6, 2017 at 11:19 pm

    After reading this article and looking at the posts, I get the feeling that the issues faced by residents of SF/BA are similar to other cities. I used to live in the Seattle, WA (prime King County areas) and the income/cost of living pressures faced by residents there are the same as the issues I and others face in the Washington DC area (where I moved to 2 years ago). It is not simply the lack of employment that contributes to the income/cost of living pressures. It is also the fact that many employers do not offer salaries that can keep up with the rise of the cost of living. Currently, I am continually offered positions in the Washington DC area which is between $15,000 and $25,000 less than what I was making a couple of years ago. I am offered the same salary that I would make in either Austin or Dallas, Texas. What I don’t understand is how employers can offer incomes that fail in keeping up with the rising costs. As for technology jobs, I hear complaints from employers that they cannot find the skills to fill the open positions but yet, offer miserable salaries. How does that make any sense???

    • George McDuffee
      Apr 7, 2017 at 1:07 am

      RE: …What I don’t understand is how employers can offer incomes that fail in keeping up with the rising costs. As for technology jobs, I hear complaints from employers that they cannot find the skills to fill the open positions but yet, offer miserable salaries. How does that make any sense???
      =====
      H1b

      • Ravi
        Apr 7, 2017 at 8:20 am

        Sometime back I was on h1b visa and hence I can tell you first hnd about the abuse of h1b visa..
        Although the intention of h1b visa is good but now 80 percent of the h1b visa are used to replace Americans with cheap labor
        Don’t blame Indians for this… blame your politicians who are sold out to big corporate houses

  33. t
    Apr 7, 2017 at 10:54 pm

    I am a cabinet maker in the bay area. Working in the high end – because that’s where all the work is, haven’t done a middle class kitchen in years.
    Our book is full for almost the rest of the year – with really high end (read expensive) jobs. Our work lately has been quite varied, from ridiculous barn wood jobs to really difficult veneer patterns.
    Everyone I know is busy, electricians, plumbers, contractors, and of course cabinetmakers. It seems a lot like 2008 – 2009.
    Just waiting for the next shoe to drop.
    T

  34. T
    Apr 7, 2017 at 11:08 pm

    Let me add that no one can find decent labor. I mean that no one is answering Craigslist ad’s for work. Those that do are almost totally useless – it’s really sad. It’s all pretty screwed up and I’m fairly tired of thinking about it.
    T

    • Your Good Friend
      Apr 8, 2017 at 6:17 am

      A nice narrative but the reality is labor force participation rate is at 30 year lows.

Comments are closed.