Friday, April 21, 2006

Bay Area: population leaving

The bursting technology bubble sent people packing from the San Francisco Bay area. The rate of domestic migration out of the area nearly tripled to an average annual net loss of 14.7 people per 1,000 population, compared with a loss of 5.5 people in the 1990s. At the same time, the Boston area, another high-tech hub, lost workers at an average annual rate of 9.5 domestic residents per 1,000 population, nearly double the '90s rate.

Some economists say the losses of skilled workers, coupled with high housing costs, could hamper the ability of the tech industry to attract new labor, at least in those areas. "Today, housing in both Boston and the Bay area is unaffordable" relative to other parts of the country, says Mark Zandi, chief economist at Moody's "If the tech sector takes off, it's going to be much harder to bring in skilled labor for these positions."

During the latter half of the 1990s, when housing prices were lower and the tech sector was booming, San Francisco's job market expanded at an average rate of 3% to 4% a year, compared with 1.3% today, Mr. Zandi estimates. Boston's job market was growing an average of 2% to 3% a year in the late 1990s, compared with roughly 1% today.

More than half of the roughly 973,000 tech workers employed in California in early 2000 had left the industry or the state by 2003, according to the Sphere Institute, a Burlingame, Calif., think tank.


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