by Chase DiFeliciantonio and Roland Li , April 7, 2020, SF Chronicle
With the coronavirus pandemic confining many to their homes, it’s a boom time for video streaming. Collaboration software. E-commerce tools.
While much of the American economy falters and unemployment soars, tech companies in the Bay Area — the industry’s heartland — are seeing demand for their services soar. Some are even hiring.
Whether that wealth spills over to the rest of the economy depends on the depth and thoughtfulness of those companies’ philanthropic efforts and how closely they work with state and local authorities, according to experts.
“Left to its own devices, the situation could lead to an even wider gulf and an exaggeration of the problems the Bay Area is already facing,” said Margaret O’Mara, a professor at University of Washington and a fellow at the Institute for Regional Studies at Joint Venture Silicon Valley.
“In order to deliver for the billions of people and millions of businesses who rely on us, we aim to hire 10,000 people across tech and product in 2020. We also remain committed to making critical hires across the business,” said Chloe Meyere, a Facebook spokeswoman.
The company has plans to build or expand offices in Burlingame, Fremont and Menlo Park. Construction has stopped temporarily under shelter-in-place orders, but growth is still planned.
“We continue to hire and have many open roles,” said a Google spokesman, who declined to disclose specific numbers. Google’s website lists more than 600 openings in the Bay Area. The company said in February it plans to spend $10 billion on offices and data centers.
Salesforce, San Francisco’s largest private employer, said it has 2,200 open positions. The company is prioritizing the hiring of employees’ friends and family members who have lost jobs because of the effects of the coronavirus through a referral program.
Companies like Facebook and Google have gargantuan cash reserves, and can safely continue to hire. As other sectors of the economy wither, mid- and low-wage workers could get pushed out of the housing market, calcifying the economic divide, O’Mara observed. The majority of laid-off and furloughed workers in the Bay Area are in the service sector, according to California’s Employment Development Department, and likely lack the skills to benefit from tech job openings.
Other companies, particularly in e-commerce, may bring some relief to the jobless.
Amazon, which is headquartered in Seattle but employs thousands in the Bay Area from software engineers to hardware designers to Whole Foods cashiers, said last week it already hired more than 80,000 out of an additional 100,000 warehouse employees to handle exploding demand for shipped goods. Grocery stores, shipping firms and other e-commerce operators are hiring, too.
Yet those ambitious hiring plans will do little to thin the skyrocketing ranks of the jobless. The unemployment rate could top joblessness during the Great Depression, economists said.
Other efforts beyond direct hiring, like Google’s plan to distribute 100,000 internet hotspots throughout the state to help students study at home during school closures, could lay the foundation for a stronger, more educated workforce, according to Belinda Archibong, professor of economics and development at Barnard College. Internet access could also ease child care burdens, boosting parents’ productivity while working from home — with concerns about excessive screen time temporarily cast aside.
“How can we use technology so we don’t have to have these situations where the kids are out of school and it’s usually the women who have to take charge of teaching these children?” Archibong said.
She added that with so many out of work, companies should create and strengthen training programs offered to the public while so much of the workforce is idle. Archibong said doing so would create a stronger pipeline of skilled candidates for companies that are hiring.
That kind of retraining could be crucial. Tech job postings in the U.S. have fallen at a smaller rate than other sectors, according to data from the job site Indeed.
As of March 31, U.S. job listings were down 20% from a year ago. But software development was down only 12% compared to 2019, and information technology, operations and help desk listings were down 14% compared to 2019. Hospitality and tourism listings plunged by 62% compared to 2019.
“The Bay Area is not as dependent on leisure and hospitality as some other places are like Orlando or Las Vegas,” said Jed Kolko, Indeed’s chief economist. “The Bay Area has a higher share of professional and technical jobs that can be done from home.”
Still, the industry can expect to take a hit, along with the rest of the economy, he said.
There’s a limit to how much tech’s largesse can blunt the havoc the coronavirus has wrought on the economy, said Sean Randolph, the senior director of the Bay Area Council Economic Institute.
“The longer-term question about exacerbating inequality isn’t something we should necessarily look to the tech companies to resolve,” he said.
Demand for digital work is broader than just the best-known tech companies, said Adam Bennett, director of permanent placement services at recruiting firm Robert Half Technology.
“The big influx over the last three weeks is what I would call general (tech) support type of jobs,” as demand for remote technology services has increased, Bennett said. “Any consistent hiring we’ve seen in the last three weeks has been around supporting remote work.”
The U.S. information technology sector added about 8,500 jobs in March, according to technology industry trade association CompTIA.
Tech’s biggest contribution may be in providing tools and services that help businesses in other sectors get back on their feet, said Issi Romem, an economist and founder of MetroSight and an affiliate researcher and economic adviser to the Silicon Valley Institute for Regional Studies.
“The longer this period continues, it’s a good time for adapting the way work is done,” Romem said. Jobs that traditionally require an in-person aspect, like retail or plumbing, could be done virtually with the right video technology, for example.
“It’s as simple as … finding a group of plumbers who are sufficiently articulate and well-meaning and friendly to be able to guide someone effectively” to do a job themselves, Romem said. That kind of shift might last well past the shelter-in-place orders.