Value added is a proxy for productivity and reflects how much economic value companies create. Increased value added is a prerequisite for increased wages. Four clusters have value added per employee significantly above the average. Except for bioscience, value added by Silicon Valley clusters is higher than the national average. This accounts for their exceptionally high wages.
All sectors add more value than their respective national average.
Our economic growth results in a higher standard of living for lower-income people. Household income includes income from wages, investments, Social Security and welfare payments for all people in the household. Though the data presented are the best available at the regional level, data are derived from an annual sample of as few as 200 households. In fact, over time, specific households and individuals move up and down the distribution. The increase in the lowest 20th percentile follows a national trend where tight labor markets are increasing average wages.