The San Francisco economy is grinding forward, as the San Francisco real estate market soars. According to Current Employment Statistics (CES) survey data from the U.S. Bureau of Labor Statistics (BLS), total non-farm wage and salary employment in the West Bay portion of the Bay Area (aka the San Francisco Metropolitan Division) was 26,400 (2.8%) higher in May 2012 than it had been in May 2011, with an increase of 27,900 jobs (3.4%) in the private sector. Total employment by this measure remained 26,200 (2.6%) lower than it had been in May 2008, the most recent high point. According to household-based data from the BLS on the number of employed residents of the West Bay, including the self-employed but excluding commuters into the area from elsewhere in the Bay Area, the May-to-May increase was 31,200 (3.5%), faster than the gains in payroll employees working in the West Bay. The City of San Francisco is becoming more popular as a place to live, not only for those who work there but also for those who work on the peninsula and in Silicon Valley to the south, even though it is the most expensive part of the Bay Area.
San Francisco’s high average pay, as in similar places such as New York and Boston, is offset by a high cost of living in general and housing in particular according to Forbes magazine, leaving workers with a lower standard of living. “The ratio of the median home price to median annual household income in Houston is only 2.9, remarkably low for such a dynamic urban region; in San Francisco a house goes for 6.7 times the median local household income. Adjusted for cost of living, the average Houston wage of $59,838 is worth $66,933, tops in the nation.” San Francisco ranks just 39th. One may conclude that people ought to be fleeing San Francisco for Houston. Or that some other factor—a higher community quality of life for example, must be offsetting the lower personal standards of living, at least for the moment. After falling in the early 2000s in the wake of the tech bust, according to Moody’s Economy.com, San Francisco’s population has been rising, with a 1.0% increase (17,360) in 2011 that nearly matched the U.S. average.
The recent San Francisco boom is real but narrowly focused, driven by information technology and new media and social media boom. The Professional and Business Services sector is up 12,900 jobs (6.5%) year-over-year in May according to CES data, with the included Computer Systems Design and Related Services industry up 5,600 (14.8%). The Information Sector added 2,800 jobs (6.9%). Biotech is adding employment, but at a slower pace. The Manufacturing sector added 100 (0.3%) thanks to gains of 100 (1.3%) in the Computer and Electronic Product Manufacturing industry and 600 (6.3%) in the Chemical Manufacturing, which in San Francisco means bio-tech. The Financial Activities sector on the other hand, continues to shed jobs slowly.
Tech related income and employment gains and tourism have led to job growth in consumer-driven sectors. The Retail Trade sector is up 3,000 jobs (3.5%) year-over-year as of May, with the Leisure and Hospitality sector up by 3,400 jobs (2.6%). Over the past 40 years San Francisco has emerged as one of America’s culinary capitals, and within these sectors the Food and Beverage Store industry added 400 jobs (1.9%) and the Food Services and Drinking Places industry added 2,400 (2.9%). With the San Francisco real estate market far stronger than elsewhere in the country, moreover, the Construction sector is once again adding jobs, with an increase of 1,100 (3.4%) year-over-year in May.