Bloomberg presents an interesting argument: Technology jobs create disproportionately more high-paying other jobs.
Technology has a wider reach than traditional sources of jobs both because those companies tend to need more business services to operate and their workers have bigger salaries to spend, UC Berkeley’s Moretti said.
For every new technology job, two positions in professional work – doctors, lawyers – and three others in non-professional occupations – waiters, store clerks – are supported over time, according to Moretti’s analysis of 11 million U.S. workers in 320 metropolitan areas. Technology’s multiplier of five compares with 1.6 for manufacturing, Moretti said.
From greater Seattle, home of Amazon and Microsoft, to Boston, to Austin, Texas, and Raleigh, N.C., jobs in the country’s other innovation centers are growing at a faster pace than the national average. A similar dynamic is at play in all of these areas, where early technology-driven growth in employment is now spreading to local services, Moretti said.
Driving economic growth in the tech clusters are programmers like Simon Murtha-Smith, co-founder of Singly Inc. of San Francisco, which provides software services to engineers. He says he spares few expenses, including a $9 half-gallon of orange juice from his local Whole Foods store every week. He and his fiancee also have been spending an additional $150 on rent since August, when they moved into a one-bedroom apartment with a hilltop view of the city.
His company also drops plenty of money in the local economy, he said.
So, in a nutshell, technology companies create more jobs because they are willing to buy $9 orange juice.
I understand that they need to provide high wages and lots of perks to retain top tech talent, but is that all really sustainable? Or is it a bubble itself? Certainly the frugality fad never made it’s way to San Francisco.