FOREIGN WORKERS ARE arriving in Silicon Valley at record levels while the general labor force is getting older and leaving in droves — driven away by soaring housing and health care costs and enabled by the seismic shifts of remote work.
That’s according to the 2025 Silicon Valley Index, an annual report on regional economic and demographic data published by research firm Joint Venture Silicon Valley. The report defines Silicon Valley as Santa Clara and San Mateo counties, as well as portions of Alameda and Santa Cruz counties. Economists discussed the findings Friday during the State of the Valley conference at San Jose State University, attended by hundreds of government leaders and business figures. Speakers at the event seemed to double down on last year’s tone of cautious optimism.
The report shows the region’s stark concentration of wealth — tallying 56 billionaires and 145,000 millionaires — has fueled deep social divides and contributed to a growth in homelessness. Thirty percent of Silicon Valley households are not self-sufficient, and 37% of children live in households at risk for food insecurity. The report also found the top 10% of earners hold 71% of the collective wealth. If Silicon Valley’s liquid wealth were evenly distributed, it would amount to $1 million per household.
“Most people would say those are the conditions for instability and revolt,” Joint Venture CEO Russell Hancock said on stage at the conference.
Hancock gave plenty of indications the region is still an economic and innovative powerhouse. But for each hopeful sign there’s an indication of the valley’s waning might. Employment has rebounded from the pandemic, but job growth is stagnant. Patents awarded to local inventors reached an all-time high of 23,600 in 2024, but the valley’s biggest tech firms are expanding offices in other cities at faster rates while local projects like Google’s Downtown West campus languish.
“The Silicon Valley ecosystem is rife with contradiction,” Hancock said on stage.
The Bay Area’s workforce continues to work remotely at higher rates than other parts of the U.S. Fully-remote workers with Bay Area jobs living outside the region peaked in 2022 at approximately 18% of the total workforce, before declining to 9% during the past two years. At the same time, office vacancy rates have surged to 20%.
“We haven’t seen a high number like that since the dot-com imploded on us,” said Hancock said, which was back in March 2000.
Silicon Valley’s population is also in flux. Birth rates in Santa Clara and San Mateo counties have dropped by 34% over the last 33 years. Meanwhile, the number of residents ages 65 and older has grown by 28% since 2013, while the number of children has declined by 14%.
Fewer births and higher life expectancies are trends occurring nationally. But Silicon Valley’s uniquely stratospheric housing and health care costs could make the region’s older adult boom stand out in challenging ways.
Nearly half of Silicon Valley residents are considering moving away, according to the Index, which shows residents are often moving to the valley’s outskirts, such as Alameda County and other parts of Northern California. Hancock attributes this to a lack of affordable housing, which stems from barriers to development such as inflation and rising material costs. But one of those cost drivers, labor, best illustrates California’s housing paradox.
“Labor costs are also going up and of course they would, as it’s increasingly more difficult to live in a high cost region,” Hancock said.
The median home price hit $1.92 million in 2024, with fewer than 26% of first time home buyers able to afford it. The number of evictions in Santa Clara and San Mateo counties increased by 132% in the 2022-23 fiscal year due to the end of the statewide moratorium on evictions.
Despite a longstanding housing shortage, 2024 logged the fewest housing permits in 12 years at 4,900 — with 2,900 of them categorized as “affordable.”
“When we look at these numbers, we should ring alarms when the Black population is declining while at the same time our unhoused community is increasing.”
Chuck Cantrell, economist
“It’s harder to get (housing construction) done here,” San Jose Housing Director Erik Soliván told Hancock at the conference. “The cost of land is higher, the cost of construction is higher, in order to get to faster production there are more challenges, more roadblocks to that path.”
Hancock then questioned Soliván as to whether San Jose is going to meet its state-mandated Regional Housing Needs Allocation, which is the process that determines a city’s “fair share” of the housing it must build to meet the needs of its population. That number is set by the state’s Department of Housing and Community Development. San Jose is required to build 62,200 new homes by 2031, with more than 15,000 required to be affordable to people making 50% of the area’s median income.
“At this time probably not,” Soliván said.
Chuck Cantrell, a local economist and San Jose Planning Commission Vice Chair, said he wants future conferences to emphasize the economic suppression of the valley’s Black residents. The region’s Black population stands at 2%, compared to 4% in the 1990s.
“When we look at these numbers, we should ring alarms when the Black population is declining while at the same time our unhoused community is increasing,” Cantrell told San José Spotlight.
Black people are far less likely to own a home than white people and make up less than 20% of the region’s driving tech workforce, with less than 10% in leadership roles, according to the Index.
“It’s really important for us to give focus to one of our most marginalized communities that is disappearing from our valley,” Cantrell said. “If that was a topic of discussion, with all of the wealth and power in that room, we could make real change.”
Contact Brandon Pho at brandon@sanjosespotlight.com or @brandonphooo on X.
This story originally appeared in San Jose Spotlight.
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