When an industry is growing fast, being understaffed tends to be much more costly than being overstaffed, because it means missing out on big growth opportunities.
The marginal worker at Google, Meta, or Uber might actually produce more value for the economy if they worked at a midsize retailer, manufacturing company, or hospital. In the past, Silicon Valley could capture many of the best engineers by offering them stock options that became worth a lot as their stock rose. But in an era of rising interest rates and falling share prices, that won’t be such a draw.