April 17, 2019 / 9:21 PM / 4 months ago

Breakingviews - Silicon Valley has a millennials problem

The skyline of San Francisco, California showing the Transamerica Building framed by the north tower of the Golden Gate Bridge is pictured at sunset February 27, 2008. REUTERS/Robert Galbraith

SAN FRANCISCO (Reuters Breakingviews) - Silicon Valley has a millennials problem. Recent surveys show young adults want to leave the San Francisco area. Of the seemingly intractable issues they cited as reasons, few are new. But they’re now threatening the region’s ability to attract and keep talent.

That has not been much of a problem in the past. The Bay Area’s strong economy and the lure of tech companies helped spur a steady increase in population, adding a 10-year peak of more than 102,000 net residents in 2013, according to the California Department of Finance.

But since then, growth has slowed with the region adding 38,000 net residents in 2018, reflecting a 10-year low. Domestic migration out of the region played a big role. Affluent Santa Clara County, located south of San Francisco and home to the headquarters of Google parent Alphabet and Apple, saw the largest decrease.

Recent polls show millennials are among the most likely to leave. Some two-fifths of people between the ages of 18 and 34 working in the technology sector say they plan to leave the San Francisco area in the next 12 months, according to a Brunswick Group survey released last week.

About two-thirds of people living in the Bay Area said the quality of life has deteriorated in the past five years, according to another poll released by the San Jose Mercury News and the Silicon Valley Leadership Group. They blame housing costs, homelessness and traffic jams. Increasing wildfires, the prospect of long-term water scarcity and other climate change-related concerns also made the top 10. That has larger implications for California, a $2.6 trillion economy representing 12 percent of U.S. GDP.

In addition, that survey shows the area risks becoming less diverse. African-Americans topped ethnic groups who said they were likely to move out of the Bay Area at 71 percent, followed by 53 percent of Latinos.

Boston, Austin, Texas and Raleigh, North Carolina could be attractive alternatives for younger workers given their lower cost of living and concentration of universities. Last year, North Face parent VF Corp announced it was moving from the San Francisco area to Denver, another growing hot spot. The Bay area’s loss will be other cities’ gain.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below