While it seems that Bay Area residents are free to live in a bubble, comforted by the wealthy cushion of privilege to even care what’s beyond that, citizens actually have to battle rising housing prices and increasing unemployment in major industries that dominate the Bay Area.
Ever since its statehood in 1850, California has been a major economic powerhouse, starting with the gold rush that helped it reach its popularity. Now, in 2026, California is still retaining massive amounts of income, with its cost of living being around $53,000 per year, and the mean income of a person being $134,491. For reference, the average income for a person living in the United States is $66,622. And the Bay Area is no stranger to this, requiring a salary of at least $130,000 to live comfortably.
But why is it so expensive? Back in the 1990s, when technology had become a new and innovative thing, the Bay Area was quick to become the hub for it, fostering so many users and exemplary tech companies, according to Richard A. Walker in his academic paper. In fact, Silicon Valley got its name from its spectacular manufacturing and innovations using the silicon chip, a key component of computers, phones, and practically anything that has an electronic interface.
Over the years, as the Bay Area’s economy grew, the differences between it and the other states grew as well. The Bay Area fostered a supply-demand system in which supply was low, but demand was high, making some goods near impossible to attain unless a person retained a certain amount of money.
Suddenly, the Bay Area didn’t feel as “united” with the U.S., as a bubble formed around the region. People have been distracted from needing to retain their houses, a good that is high in demand, and making enough money to meet that threshold, rather than worry about anything else.
In addition, the Bay Area is one of the most competitive regions in education and industry. 49% of the population over 25 holds a bachelor’s degree, compared to the 33% of US citizens who retain some sort of higher education. San Jose is the second most educated city and generates $1.5 trillion from goods alone.
Furthermore, because of its tech craze, the Bay Area held 880,200 jobs in 2024, holding the top spot for the number of tech jobs in the U.S.
With all that being said, it is understandable that such a beneficial sector would be sought by many in the Bay Area and even across the United States. This leads to ardent competition from students who want to get into top colleges in order to build up an impressive resume and get noticed by these tech companies.
Given this, expectations for students born in the Bay Area to get into top colleges and join the tech industry or have a wealthy income in the future are high.
And with more people joining these high-paying industries, more income is made for the Bay Area. With more income comes more jobs, but with more jobs comes more people.
That leads to overpopulation and displacement of several as industries can’t keep up with the surging population. CBS News stated that in just 2026, tech companies have issued more than 92,000 layoffs, and one-third of residents, or about 2 million people, fail to make ends meet, as found by Brookings.
Additionally, with the rise of AI, many companies don’t find the need to employ people, since the tools AI provides suffice.
With the economy increasing, and unemployment from tech jobs spiking, prices of other things such as housing follow suit. The average housing value for a home in San Francisco, Oakland, and Hayward was roughly $1 million. Thus, it creates this disconnect between the Bay Area and the rest of the U.S., as the Bay Area creates this bubble that grows and grows without stopping.
To prevent this bubble from expanding even further to the point where it pops, slowing down the economy and leading to massive unemployment, the Bay Area needs to increase supply to meet its demands. Once that is in place, demands such as housing and gas prices will slowly drop from their incredulous prices to be more affordable.
This editorial reflects the views of the Editorial Board and was written by Ziya Myneni. The Editorial Board voted in 11 agreement, 2 somewhat in agreement, and 5 refrained from voting.
