Individuals can simply move to a better and cheaper location. There's many more mature and cheaper tech hubs now than there were in 2007. The city is stuck with itself and its tax liabilities. And in a place where you can't cut down a tree without posting 90 days notice, good luck rolling back some of that spending.
This may have changed 8 years on, but I'm skeptical from what I hear from friends and acquaintances in Texas. From an R&D operational point of view, you cannot just up and move all major operations from SV to <insert any tech hub> on a whim. It may work for a 10 person startup, not for a company with thousands or even hundreds of employees.
Everybody just put their heads down and kept working. Nobody was recruiting, nobody was switching jobs, nobody was quitting. I know OF people who lost jobs in related fields; sales, marketing, etc, but not in technical fields.
Obviously people did lose tech jobs, I'm just saying it wasn't like a techpocalypse.
I was unemployed from February 2010 to March 2012 because of the recession. What I'd observed was that if you had skills that were in high demand in enterprise environments, like Java with J2EE/Spring/Hibernate or the .NET stack, then you'd land on your feet, but if you specialized in something less common, then you were out of luck. My experience was all specialized in Linux platform and Python development, and I only had a little over 2.5 years (since I graduated college in 2007, right before the recession hit), which meant I was in the worst case scenario.
It was tough. I applied for job after job after job, was rejected constantly, had a few interviews that never panned out. It took a terrible toll on my mental health. Eventually, I found a very young startup that needed a Linux platform person and couldn't afford someone with a lot of experience, which was what saved me from homelessness. I spent a few years there, picked up a lot more experience with Linux platform work and Python, got some Java under my belt as well, and eventually moved on to greener pastures (because they were still a skeleton-crew startup that couldn't afford to pay much when I left in late 2014).
Still, there's a lot of shortsightedness here. I'm just coming out of another, much shorter (2.5 months), unemployment spell, and I learned that I shouldn't even bother applying to Java positions anymore. My Java experience is all core Java, with no J2EE/Spring/Hibernate/other web frameworks. I spent quite a bit of time doing Java for both the above mentioned startup and the company I went to after there (hell, I was the one who put together materials educating my entire company on Java 8), but almost nobody counts it as valid experience because it doesn't involve a big web framework.
It's aggravating, really. For most companies here, it's "big enterprisey web frameworks or bust", and if you didn't get into that straight out of college, you're screwed because no employer's going to bother training you later on, because now you're considered locked into some other development track. I _want_ to broaden my experience so a few years from now, I can tell employers I've got some of everything under my belt, but here, once you're considered locked into something, that's it.
So cities and states should just give up? Just because they won't be able to protect against everything doesn't mean they shouldn't be working on sound budgeting plans to offset whatever amount of pain that they have. You're right that the regulatory structure of the city makes it very difficult to make the kind of infrastructure investments truly necessary to address the issues of the city, but building up cash reserves is simply sound planning.
I predict the city will try and suck any profitable enterprises dry before they cut back on social spending, despite what the messaging suggests.
[...]
> And in a place where you can't cut down a tree without posting 90 days notice, good luck rolling back some of that spending.
A change of the individuals in the city of the type you suggest would, quite likely, solve the later problem you point to. So the problem seems to be self-limiting.
That's probably true, and if they do find a way to start squirreling away large amounts of money it could bring about the pop sooner and possiblle make it worse. A large contraction in government spending when things are already shaky can instigate more problems in the economy.
What languages or frameworks do you recommend learning? Which industries need engineers and are relatively insulated from economic downturns? If the Bay Area slams the brakes on growth, where will you move? What non-tech skills would you recommend brushing up on?
Perhaps most importantly: if things went bust today, how fucked would you be?
You could be the greatest developer, who has honed skills in every language and still be in bad shape. What you know has NOTHING to do with your ability to survive.
You need cash on hand. A lot of it. That recommendation about three months in the bank, you should have six months or better yet a year of your current salary. If you get laid off, you better start living lean. Cut every expense you don't need to make that money last as long as possible.
You need to have a network, cause skill alone won't get you work. Its quickly going to turn into "who do you know" and "who can get you in the door". It is vital that you build and maintain these relationships NOW, cause when it hits the fan, its going to be too late.
Honestly, the down has always been good for the bay. There is a lot of "medium talent" in the bay right now, and a down market is very much going to clear all of that out.
I've been laid off in Austria before (a few years ago, the company I worked for downsized about half its workforce around ~2010) & was IIRC entitled to unemployment benefits for about half as long as I worked there (ended up finding a new job before the benefits ran out).
If anything it means that you'll be able to bounce back quicker than others because your skills will be in demand (just not as much as before and it'll take a while to get back to a hiring market).
What will help is financial planning: 3-6 months of expenses in the bank is a good guide. Know how to live frugally, etc.
The recession that happens next is likely to not be as big as 2008 (or as dramatic) but it will eventually happen. You're already seeing the economy and job market slow down due to that + election season nerves.
But it's the same for tech workers as it is for anyone else: financial planning. Not in the "where to invest" sense that HN loves but "how much do you have in liquid assets" and by liquid I mean "if rent is due in a few days can you access that money by then?" kind of liquid.
I should also point out that after the 2008 crash, none of my tech worker friends were unemployed. That's anecdotal, but whatever. Tech was the first industry to bounce back, and the larger companies didn't lay many people off.
Even if the tech bubble bursts, instead of slowly deflating as I expect it to, I think tech workers will still be the most recession-proof demographic around here.
> What non-tech skills would you recommend brushing up on?
Simple for me - have your clients be based outside of SV, and focus on clients who actually make profits, not those who have funding.
I'm not worried at all. 2008 was nothing but a blip. As I mentioned elsewhere, I don't personally know any tech workers in the valley who lost their jobs. People always freak out for no reason.
However, because hiring was down, if you WERE one of the unlucky 5 or 10%, it takes a longer time to find a job.
Save some cash. There's plenty of time to learn new skills while you're unemployed.
https://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_...
And FYI, technology was not a significant factor in the economy of the City of San Francisco at that time.
So was the 80's tech boom in Silicon Valley limited to the valley proper?
In addition, the reconstruction was spread over a long period (for example they haven't finished with the bay bridge).
edit: several major cities actually
It depends upon who you ask, but mainstream consensus [1] is financial industry, specifically via the then-newly-common program trading. The supposed resultant market crash is usually identified in mainstream analysis as the incipient early 1990s recession.
US residents at the time possibly more commonly associated the market crash and recession with the savings and loan (aka "S&L") crisis. [3] Significant portions of the Finance, Insurance, and Real Estate (FIRE) industries [4] were adversely affected at the time, though IMHO the resultant regulatory response only acted as a perverse incentive to further financialize the US economy.
[1] https://en.wikipedia.org/wiki/Black_Monday_%281987%29#Causes
[2] https://en.wikipedia.org/wiki/Early_1990s_recession
Now both huge companies and local governments are hoarding cash. Which is problematic for the economy as a whole.
Only if you insist on maintaining aggregate demand.
Which we all probably do - certainly I do.
But it bothers me that people trot out the "accounting identity" that public and private sector output cannot simultaneously fall - typically in a very condescending, mansplaining fashion - without acknowledging that they can absolutely be disconnected, provided you're willing to accept a drop in aggregate demand (and, presumably, deflation, hurt feelings, etc.)
Greece, Spain and Portugal haven't shown us that austerity damaged the economy. _Their economies were already bleeding_ but they were throwing enough money & debt at the problem to cover it up. Austerity is the fix that they needed to do eventually, and it's better that they did it now rather than later.
Saving for a rainy day is prudent fiscal policy.
Yes, in your textbook it is. In reality, in 2016, banks are hoarding that cash outright, or "lending" it to other banks, etc., for near-zero returns.
Also - for large infrastructure investments, certainly issue bonds for things like water, sewer, hospital, basic infrastructure - but don't get too crazy/extravagant with Sport Stadiums, or overly complex derivative hedges that blow up if the economy tanks.
If you really want such nice toys for your city, consider saving for them rather than going into debt.
Municipal finances are not like Federal (or heck, even state) finances - you really do have to balance your books.
Bracing for a bubble is just being wise with money. You know roughly what the lows look like, you know what the highs look like, so you pick somewhere in the middle to sustain your life (city) and save the surplus for the lows.
To an extent you can't totally prepare for a massive event (everyone leaves SF; all jobs disappear overnight, now what?).
Recessions, while painful, are much less extreme than bubble-bursts, and can (and should) be planned for.
It’s that we have an awful degree of citizen participation, being directed with a dumb combination of social feel-good and suspicion of authority. So, a couple days ago, we had Proposition B, which forbids the City of San Francisco from spending less than $64 million of the general fund on parks, gradually increasing to $89 million, even if the city is running a $100 million deficit, in addition to a percentage of property tax, with additional committees and reports. This proposition passed overwhelmingly. Along with every other proposition that suggested increased taxes.
It’s hard to run a city effectively when you’re being hamstrung by all sorts of requirements and interminable committees.
Streets could be in better condition if fiber and sewers could be coordinated with each other and with other street maintenance.
Homeless could be better if we acted like we were a state-level region with state-level decision-making, so let’s build housing for the people already, and not a cluster of democracies squabbling over a homeowner’s right to what’s in the sky over a several-square-mile region.
Public transit… It reminds me of the James Madison quotation, “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” Sadly, public transit is run by men (and women), not angels, so there’s all sorts of possibilities for corruption and selfish decisions. From requirements designed for the benefit of campaign contributors, to iron-clad income security for people whose jobs should have been automated away. It’s a mess, and attempts to fix it with regulations tend to block sensible decisions and cause loopholes.
In summary, it’s not the money that is mismanaged. It is the people.
I don't think anyone has good solutions for homelessness, for example, and transit is complicated by the fact that all the neighboring counties have to agree to most changes/upgrades to transit systems, and some have a history of vetoing or refusing to participate.
What goes up must come down. Here's my completely opinionated ideas of how an individual in San Francisco can ride out the economic change:
1. Sell your home.
2. Have a 6 month nest egg saved up.
3. Have an up-to-date resume.
The "sell your home" part is not valid in the near-zero interest rate world, which who knows how long that will last.
For example, if inflation starts picking up, rates will have to come up to tamper it. Otherwise you get runaway inflation.
If inflation increases in other countries, then the US rate will follow, otherwise our dollar will take a huge hit due to the interest rate/exchange relationship.
No, the main two things that the Fed manages with monetary policy (and they tend to be balanced against each other) are inflation and employment. Low rates are used to spur employment at the cost of risking inflation, high rates are used to constrain inflation at the risk of harming employment.
EDIT: Ah, the parent edited their comment to clarify. I see what they meant now.
the great depression lasted 12 years from 29 to world war 2.
every time the tech bubble has popped since 99 the fed lowered interest rates and increased money supply. i dont think that one will work so easily after the next bubble because interest rates will have to go negative and money supply has EXPLODED in the last 8 years.
the fed doesn't like high gold or oil prices so how much more can they increase money supply after the next bubble busts?
the fed has taken 25 years post volcker to paint itself into this corner. the results of the next bubble bursting will be multi-decade cycle in nature meaning a bigger bustup than any of the 2008, 2004 , 99 bubbles.
http://budget.data.cityofboston.gov/#/ http://sfmayor.org/ftp/uploadedfiles/mayor/budget/SF_Budget_... (see page 11)
One example, public safety is almost 3 times more expensive. It looks like social services is also about 3 times higher. On a per capita basis, it looks like SF actually pays less for transportation. But since the budgets are broken down by different categories, it's kind of hard to tell. I'd need to do more research.
SF doesn't have to worry a lot because they're already insulating themselves from tech by not bothering to tax Twitter or other big tech companies in the first place :)
If things were that bad, people wouldn't be willing to pay current SF real estate prices to live there, no matter what the supply of housing was like.
If that is all there is to it -- and it is -- this process can very easily go into reverse mode. SF is insanely expensive. You do not need any part of SF to write good software. It only makes your software more expensive.
Some day -- that could take quite a bit of time though -- SF will crash and burn, simply because there is no reason why it wouldn't.
Some ephemeralities are more durable than others. Not that they cannot change.
