Economy in Crisis

05/01/2001 English German

Edition # 30
San Francisco, 05-01-2001

Photos in San Francisco City Hall Economy in Crisis Changes in Immigration Law Pink-Slip Parties Filing an Income Tax Return Accounts/Checks/ATMs in the USA American Expressions: "Gung Ho" Preparing For the Marathon Wine of the Month Top Product: The TiVo Box

Economy in Crisis

Angelika You have probably already read in various newspapers that the American economic boom has significantly slowed down. Now, it's one thing to read about it in the newspaper and another to sit at the gates of Silicon Valley and witness it live. Michael and I were quite surprised at how quickly the whole situation changed. As late as the end of 2000, high-tech companies were desperately looking for people, and three months later, there were mass layoffs, and newly founded and highly praised dot-com companies closed their doors. It was foreseeable that the party couldn't continue indefinitely, as everyone knows that lean years follow fat ones. Additionally, many of the young dot-com companies (where "dot" means point and "com" means commercial, both referring to components in an email address) received millions in investor money but made absolutely no profit. And even millions eventually run out.

It is somewhat difficult to understand why even established companies like Intel, Cisco, etc., which are essentially swimming in money, have laid off hundreds--and in the case of Intel, even thousands--of employees. This trend certainly reflects the fast-paced nature of California's Silicon Valley, but also the American "hire and fire" mentality in the union-free high-tech world. In Germany, unions would go berserk over this kind of mass layoff. I am firmly convinced that the established companies have used the stock market collapse and the end of the boom as an opportunity to get rid of employees, as many of the specialists and software engineers were completely overpaid.

Figure [1]: Due to the economic crisis, used Italian luxury cars are available for purchase at a low price.

In San Francisco, the wave of layoffs has suddenly resulted in apartments becoming available for rent again. As recently as December, there was absolutely nothing on the market. Walking around our neighborhood, you would only occasionally see signs for outrageously overpriced house sales. Now, we suddenly come across signs saying "Apartment for Rent." Many people have to move away because they have lost their jobs. Stock options that were part of their salary are now worthless, making the exorbitantly expensive life in San Francisco and its surroundings unaffordable. Unfortunately, the slight easing of the housing market has not yet led to a decrease in rental prices. Landlords probably still don't quite believe that the golden age is over.

Figure [2]: There are apartments available for rent again in Noe Valley.

They are already complaining that they no longer earn anything from rentals. However, I have no sympathy, as the high-price policy has driven many artists and poorer families out of this city. Perhaps the end of the myth "the internet can do everything and will make us all millionaires" is a good thing for San Francisco. The city can breathe again and return to its old friendliness, where there is once again plenty of room for outsiders, families, older people, artists, and not just for young, dynamic dot-commers with cell phones (oh dear, this will earn me harsh criticism again). We only hope that we will still be here to enjoy it, because for us, the changing job market can have much more far-reaching consequences. After all, we are only here because there weren't enough American software engineers to handle the boom. And we are already wondering if soon the first people will start shouting that foreigners are blocking jobs that Americans could fill.

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