San Jose, which lies near Oakland and San Francisco, has experienced some severe job losses due to the recession.  It’s official unemployment rate, which sits at nearly 12% in September, is near the state average but significantly higher than the national average.  This may be due to the fact that San Jose has a very high cost of living coupled with the fact that the area’s economy is not as diverse as that of San Francisco.  San Jose is still doing much better than its neighbor to the north, Oakland, but its heavy reliance on the tech industry and highly skilled employment has put it in an unenviable position economically.

Tech giants IBM and Cisco Systems have huge facilities in nearby Silicon Valley, which has helped to keep the unemployment numbers relatively low.  But reliance on a single industry for economic robustness spells disaster.  The US cities that have been most successful during the recession have had diverse, modern economies.  San Jose’s is certainly modern, but lacks much diversity.  This was a problem during the internet bubble in the late 1990’s and has become a problem today as well. 

Since the early 1980’s the city has gone through numerous boom and bust periods, nearly all of them as a result of the San Jose’s economic dependence on the tech sector.  It’s a great place to go if you’ve got a background in this sector and are looking for work, as many of the software firms and tech firms are doing quite well even though there is a recession going on.  An excellent example of this is computer industry giant Google.  While others have been cutting jobs, this company has remained resilient, only having to let a minimal number of employees go after trouble with a merger in early 2009.

The economy of the San Jose area has benefited from its more diverse neighbor, San Francisco, but really hasn’t been able to make it on its own during the recession.  There is too much economic reliance on Silicon Valley firms and not enough diversity elsewhere.  Other San Jose employment sectors include manufacturing and health care.  The former has not been doing so hot while the latter has.  But the employment numbers in these sectors are not enough to have any real impact on San Jose’s economy positively or negatively.

The city is a tough place to be for those who find themselves out of work.  The cost of living is about 70% higher than the national average, which is 20% higher than that of neighboring city San Francisco.  While layoffs loom, its inevitable that many will not be able to make ends meet in a place where rent alone can cost a person an arm and a leg.  There are far better employment prospects in other cities like San Francisco, and even outside of California in cities like Seattle, Austin, and Charlotte.  These cities have remained fairly strong economically even during the recession, and owe much of this strength to the fact that they have diverse, healthy economies and a highly skilled, highly educated workforces.