City unemployment low, but statistics don't tell whole story
By Megan Ma, Town Crier Staff Writer
 Los Altos resident Fritz Gustafson, right, listens intently to lecturer Dilip Saraf at a recent Promatch employment seminar. |
As a bastion of high-tech innovation, Silicon Valley may be defined by its endless possibilities, but many have come face-to-face with its limits. While the high-tech boom may have put the valley on the map, its damaging aftermath is still being felt.
With a 2.2 percent unemployment rate, Los Altos appears to be pulling through relatively well. But try telling that to those residents out of work or in between jobs. The pressure of huge mortgage payments can exacerbate the stress of looking for work, some argue.
“You don’t see it walking down the street, but unemployment is a big problem in Los Altos,” said Gil Goodrich, a Los Altos resident of 27 years, currently looking for a job. “I wouldn’t call it an affluent community when people are buried in mortgages,” he said.
Longtime Los Altos resident Fritz Gustafson is looking for a job in his field - technical sales. For nine years, while his wife pulled long hours in her start-up firm, Gustafson stayed at home, caring for their three children, helping with homework. More time with the children was better for the family than the extra income, the couple decided. But the sacrifice wasn’t easy, Gustafson admitted. In order to pay off a large mortgage and the family’s growing needs, Gustafson said they had to “penny-pinch.”
Re-entering the high-tech field for the first time in nearly a decade, the job market has vastly changed, Gustafson said. “Companies are looking for more specifics. You can’t just shotgun resumes out there as in the past, but you have to almost tailor your resume to fit that position,” he said. Networking and connections can mean the difference between a resume’s being considered and getting buried at the bottom of a stack for weeks, Gustafson said.
The goal is to stay in Los Altos, where his three children attend Almond Elementary School, he said. “It’s expensive,” said Gustafson, “but it’s hard to leave the community. We have a nice, old kind of neighborhood.”
When Susan Chen was laid off from her job at a major networking firm two years ago, she worried about paying off the mortgage on her Los Altos home. She weighed and examined her assets and spoke to her husband about retirement.
“If I wasn’t living here, I wouldn’t work. But living in Los Altos forced me to look for a job,” said Chen, now employed at Gigamon Systems in San Jose.
Dot gone
Optimistic observers point to an economic recovery in Silicon Valley since the dot-com bust of 2000 and 2001, but others could successfully argue the opposite. In the last four years, more than 215,000 jobs, about 20 percent of the labor force, were lost, a nearly unprecedented figure by modern standards, said Mike Curran, director of NOVA Center, a government-funded employment agency that serves Los Altos and six other area cities. The tech bust produced the largest job loss in an urban area since the Great Depression, he said.
It was enough to send thousands more packing. More than half of the roughly 973,000 tech workers employed in California in 2000 had left the industry or the state by 2003, according to the SPHERE Institute, a think tank in Burlingame.
Even for those able to inject themselves back into the work force successfully, it hasn’t been all smooth sailing.
Phil Trounstine, director of San Jose State University’s Survey and Policy Research Institute, said consumer confidence since 2004 has turned slightly more pessimistic than in previous years. In the institute’s most recent survey, 31 percent of Santa Clara County residents believed there would be more unemployment in store in the coming year and 42 percent said the rates would stay the same. People’s expectations for the future are not as strong as their current economic situation, Trounstine concluded.
“Historically, expectations for the future have been very strong compared to people’s current conditions,” Trounstine said. “(But) people have seen the bubble burst and they’re very cautious now. The Valley’s sense of unbridled optimism is a relic of the past.”
Another boom period in store?
As ephemeral as a fireworks display, the boom launched instant millionaires as employees cashed in on IPO stock options - then just as quickly faded away. Layoffs and reduced benefits became the order of the day. While some optimists still hold out for a repeat performance, insiders, these days, remain cautious.
According to the California Labor and Workforce Development Agency, as the economy picked up in past economic cycles, rehiring followed the layoffs. The same jobs are not coming back as they used to, Curran said, citing current labor department statistics.
“There’s been very little net job increase. We do create jobs, but some are disappearing altogether,” Curran said. “Someone is laid off, the company restructures and that job is eliminated.”
These days, layoffs are permanent and the jobs that are created in a recovery period are different from the jobs lost, he said. Jeannette Langdell, the employment training manager at NOVA, predicted a major change in the way the Silicon Valley typically recovers from a recession.
“The boom and bust periods are not coming back. We’re seeing a structural change. Not everyone is going to be able to work in high-tech anymore,” Langdell said. Due to the effects of globalization, corporations are cutting costs and moving operations overseas, she said.
It’s not entirely bad news, Langdell said. While large corporations like Sun Microsystems, Yahoo! and Cisco Systems may have put to rest their sweeping hiring rounds of the mid-1990s, smaller firms will play key roles in a future upswing, Langdell predicted. Creative and innovative start-ups may provide the muscle to drive the Valley’s economy, she said.
Los Altos Mayor pro tem Curtis Cole, a longtime software engineer, argued that the fundamental structure of the high-tech economy has not changed. Cole left his high-tech job in February to open a start-up firm.
“It’s always been the case that innovation and jobs occur in small companies. Large companies don’t create jobs - that’s a common myth. It’s no different than it’s been for 50 years,” Cole said. In the software and hardware engineering industry, the diagnosis appears more buoyant - jobs have improved in the field the past year, he said. He was skeptical that another boom was in the near future.
Unemployment rate is only the beginning
Rarely has such fierce debate loomed over as seemingly harmless a statistic as the unemployment rate. While current unemployment numbers remain relatively low - 4.7 percent in March for Santa Clara County, according to the California Employment Development Department - the figures don’t tell the full story, some argue.
For NOVA Program Supervisor Larry Sanguinetti, familiar with the federal government’s data-collecting methods, the unemployment rate is a poor measure of economic health. It is defined as a fraction of the labor force - those actively seeking work and available for it - that can’t find a job. But it is that subjectivity that makes the unemployment rate a flawed statistic. The survey doesn’t include those receiving state unemployment benefits.
It doesn’t take a trained statistician to notice the gap in the numbers, he said. While the county population has risen in the last four years, the labor force has gone down. Put simply, a portion of the population is not counted in the unemployment rate, Sanguinetti said.
Many people, in less than desirable employment situations, simply fall off the federal radar. Some include those receiving unemployment benefits, those who have lost hope and stopped looking for work and those vastly underemployed, he said. Older downsized employees often retire from the game altogether. Unemployed professionals often change their title to consultant - a euphemism for the unemployed - that may, in fact, not pay.
“Under the veneer, there are still more people struggling and out of work,” Sanguinetti said. “You can’t deny things are getting better, but it’s just not as quickly as in the past.”
Despite some pessimistic outlooks, Carl Guardino, CEO of Silicon Valley Leadership Group, is more confident. “Jobs are definitely coming back. The Google effect has created a very tight market for skilled labor, but it’s not as bad as it was in 2001 or 2002,” he said.
Los Altos Hills resident Judy Lin, vice president and general manager of VeriSign Security Services in Mountain View, said she has observed a comeback. “My impression is that the job market has improved significantly over the last six months after a long period of stagnation. We’re seeing a lot of movement,” Lin said.
Overcoming unemployment stress
Critics of the statistical methodology and optimistic industry insiders alike fail to illustrate the personal side of the problem. For those who have been out of work for months, looking for a new job can be an isolating and psychologically stressful experience.
“What everyone says after a certain point is you become demoralized. Your worth is measured by what your job is,” said Karen Purtich, human resources director for Yosemite Technologies, a software company in San Jose.
According to Susan Flesher of Flesher & Associates, a recruiting firm in Los Altos, while there is a bias for companies to hire employed people, there are still ways for those out of work to stay plugged in. “Don’t go idle, take a class, do volunteer work. You can still make a contribution even if you’re not able to do it through a paid medium,” she said.
Taking advantage of rich community resources can prove crucial. James Dai of Mountain View enrolled in IT courses at Foothill College’s Cisco Academy when he resigned from his self-proclaimed “dead-end” job as a Windows administrator last year.
“I wanted to advance my skills and find something better,” said Dai, now a senior systems administrator. He is completing the Foothill certification course.
Pressure to find a job can incubate alone at home. The CONNECT! job seeker center, a division of the NOVA work-force board, offers free job services in an office setting. Members can sign up for job-search workshops, visit the drop-in career advising center and receive resume critiques among other services.
Equally, the Promatch program connects out-of-work professionals with each other for networking and referral opportunities. Many hold advanced degrees and are highly skilled industry veterans.
“Working professionals need our service just as much as entry-level applicants. The goal is to make yourself the most marketable candidate,” said Kathy Puryear, the CONNECT! One-stop Manager.
Promatch meetings are held twice weekly. In a structured setting, members are encouraged to speak frankly about their job-hunting status and ask for help. They actively solicit each other for referrals to a desirable company or trade industry knowledge. Emotional support can make a huge difference in the direction of any job search.
The mantra for all job seekers, said Cole, is networking. “Keep in touch with people you’ve known for years. Give help to people who ask you - you may need theirs someday.”
Kate Day contributed reporting to this article.
