February 2023 Newsletter
What happens when you multiply a negative?
My eight-year-old daughter has been learning math in her second-grade class, and I am frequently getting questions like “what happens when you multiply a negative?” Unfortunately for my daughter, I have forgotten a lot of what I learned in grade school math classes (not my favorite subject). Having said that, I do know what happens when you multiply a negative. It becomes an even bigger negative number.
What does this have to do with ReWorking the Bay? It seems like every day, we see another news story about massive layoffs happening in the tech sector. Pundits wage predictions on whether this is a sign of an impending recession, the potential impact of tech layoffs on the housing market, and what key insights we should take away from what’s happening in Big Tech.
What is notably absent are stories about the impact of these tech layoffs, which predominantly impact white men, on the workers who rely on the disposable income of tech workers for their jobs.
Which brings me back to multiplying a negative. A 2022 report found that each tech job created results in the creation of approximately 4 and a half local jobs in sectors that produce goods and services that are consumed in the same region where they are produced, such as health care, restaurants, education, hotels, personal services, and (to a lesser extent) construction. These jobs tend to be lower paid and more frequently held by women and people of color.
So what happens when you apply that 4x multiplier to job losses instead of gains? It’s hard to pin down the number of tech jobs in the Bay Area that have gone away in this recent round of layoffs. For argument’s sake, let’s say 10,000 tech workers have gotten laid off. Based on the tech multiplier effect, that would mean over 40,000 jobs in other sectors could be eliminated!
We care about tech workers, and we wouldn’t wish a layoff on anyone. What concerns us is the lack of attention paid by the media to the impact of these tech layoffs on some of the lowest-paid workers in our region, who are less likely to have the ability to weather unemployment and are in far greater numbers.
The Bay Area is not just Big Tech, but our reliance on it to drive our economy means that it has an outsized impact on all of us, not just tech workers. In times like this, where the tech multiplier effect means a much larger negative impact on our regions’ workers than other sectors, we need to name that, collect and share data to understand it and talk about whether the boom and bust tech sector can create an equitable Bay Area economy.
Rob, Kayla + Brianna