California's Silicon Valley is hiring again

The Sacramento BeeFebruary 15, 2011 

PALO ALTO — You don't have to stray too far from Sacramento to find a place where economic recovery is more than just an idea.

Silicon Valley is starting to pop again. Green tech is alive, as is anything in social networking. Venture capitalists are investing. Google is hiring 2,000 workers this year; Facebook is moving into new quarters with room for hundreds of additional employees.

"We've got a lot of recruiting to do," said Dena Quinn, facilities manager at Skype's Palo Alto office. The Internet phone company will hire 280 workers in Palo Alto this year, more than doubling its Silicon Valley employment.

What's happening in Silicon Valley, and throughout the Bay Area, is a striking example of California's "bifurcated recovery," said Palo Alto economic consultant Stephen Levy.

Simply put, inland California remains depressed while coastal California is showing life.

The Central Valley and Southern California's Inland Empire, which gorged themselves on housing during the boom, remain crippled by foreclosures and weak job growth. Unemployment is in the high teens in many Central Valley cities; it's 20 percent in Yuba City and Merced.

Sacramento, stuck with a 12.5 percent unemployment rate, carries the extra burden of the state's budget deficit. Furloughs have erased tens of millions of dollars from the economy, and budget cuts could lead to layoffs.

The coast, meanwhile, is starting to rev up. Unemployment is still high –just under 11 percent in the East Bay, 10.7 percent in San Jose, 13 percent in Los Angeles. But signs of growth are abundant. Exports, tourism, and movie and television production are creating jobs in Los Angeles. Unemployment is falling in a broad range of industries in San Diego.

Why the split? The economy doesn't recover all at once. Coastal industries like technology and international trade are doing better; housing isn't. Wealthier Californians, who tend to live on the coast, are making money off the stock market.

"Bonuses are being spent," said Chris Thornberg, head of Beacon Economics consulting in Los Angeles.

To read the complete article, visit www.sacbee.com.

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