It was a great day to be in Silicon Valley. I had just landed from New York and was showing my friend Leonard Cicchetti my new home in San Francisco. I walked to a local food truck and ordered a cold beer. "See it's 90 degrees here," I said. "Is everyone going to sleep tonight?" he responded. "No," I said, "I think they'll be out trying to sell you stuff."
The streets were packed with happy people like me buying and selling whatever they could find. People were motivated and hungry. California is, indeed, a beautiful place to live. When working to create economic opportunity, the warm California climate is one of the greatest assets that the tech industry and all businesses have.
In a few hours of being in Silicon Valley, I saw why: There are thousands of people working in corporate headquarters around San Francisco who would be either earning a real living elsewhere or would be lining up for opportunities at a starting salary of $70,000. Their job opportunities are limited to those who have the financial wherewithal to save a lot of money while borrowing heavily from their parents. It's an unfortunate fact of life.
Since our corporate job that combined marketing, sales and planning responsibilities, I've worked and worked and worked in the Silicon Valley. With the tech industry rising to the highest level of corporate status we have seen in the past 60 years, the situation isn't very different from it was 50 years ago. Those whose family history dates back to the golden days of the first Great Depression—those old school, blue collar jobs—haven't been replaced. They're trading coffee houses and golf courses for headquarters and data centers and assembly lines.
Traditional manufacturing companies suffered the same fate as they faced a sea change in technology, as the manufacturing cycle was completely disrupted by innovations in areas like automation and 3D printing. Today, without adding meaningful skills, the manufacturing sector isn't even keeping up with demand in sectors like aerospace and agriculture.
Employment in manufacturing in San Francisco fell from an average of 94,000 jobs in 1950 to 33,000 in 1970, with little to no job growth. Manufacturing employment has increased over that period, but with no actual employment growth. To fix the traditional American work culture, our solutions must consider a deeper understanding of where we've come from, how the economy and work place have changed, and the implications of new technology and globalization on the economy and our existing traditional work force.
That goes for traditional corporations as well as the fastest growing tech companies. Retailers can't compete with the technological and social advances of Amazon and other digital retailers, but they're trying to keep pace. There's no point in increasing the price of goods without more customers coming in. We're still learning how to serve the customers on all sides.
Fast paced, digital technology is changing the way we work and live—all over the world. I'm in the same bind as other boomers who remember the golden days of the Great Depression and who see economic mobility through businesses and government programs, including Social Security and Medicare. The government makes a big contribution to our economic growth through tax revenue.
Wherever the economic growth is coming from, including California, the middle class is disproportionately impacted by it. In addition to employment loss, government spending has also been cut back. Since we can't continue the pattern of spending without revenue growth, there are fewer employers and fewer workers to create the jobs that replace the ones that have been lost.
So what can be done to reverse this trend? The solution is a combination of better education and the innovative use of technology by enterprises in order to create new sustainable, high-paying opportunities for the workforce and society.