## The Reality of Data Center Employment

**Data centers generally provide few permanent jobs** despite occupying massive amounts of land, according to multiple experts, news organizations, and company records. These facilities, which house computer servers and often span hundreds of thousands of square feet, have become a controversial topic in economic development discussions.

## What Are Data Centers?

Data centers are specialized facilities designed to house computer servers and networking equipment. They typically cover enormous areas - often hundreds of thousands of square feet - and require significant infrastructure investments. Many states, including **Nevada**, offer substantial **tax breaks** to attract these facilities to their regions.

## The Employment Impact

Contrary to popular belief, these technological hubs **"do not bring high-paying tech jobs to local communities,"** according to a 2025 policy brief by University of Michigan researchers. The employment picture reveals a significant disparity between temporary and permanent positions.

### Temporary vs. Permanent Jobs

Data centers do create **temporary construction jobs** during their building phases. Researchers have compared their economic impact to infrastructure projects like bridges or highways - significant during construction but minimal for ongoing operations.

A specific example illustrates this pattern clearly: Business records from 2024 for a **Vantage Data Centers** facility located outside Reno showed that the 1.1 million-square-foot operation would create:

- **73 permanent jobs** over the next decade
- **More than 4,000 temporary construction jobs**

This represents a ratio of approximately 55 temporary construction positions for every permanent job created.

## Expert Perspectives

A University of Pennsylvania professor told NPR in 2025 that **"most data centers employ about 100 to 200 people"** - a surprisingly low number given their physical scale and technological importance.

## The Broader Context

This analysis responds to ongoing public conversations about the true economic benefits of data center development, particularly as communities weigh the trade-offs between land use, tax incentives, and job creation.

## Supporting Evidence

Multiple sources confirm this employment pattern:

- University of Michigan researchers documented the limited job creation in their 2025 policy brief
- NPR's 2025 investigation questioned whether data centers truly bring jobs to small towns
- Business records from actual data center operations show the disparity between construction and permanent employment
- Historical analysis from The Washington Post dating back to 2011 shows this has been a consistent pattern
- Forbes' 2024 analysis specifically examined how tax breaks for data centers bring few jobs

![Data Center Facility](https://gigafact-app-images.s3.us-east-2.amazonaws.com/factBriefImage.jpeg)

## Methodology Note

This analysis follows rigorous fact-checking methodology developed through partnerships with organizations dedicated to verifying trending claims and providing accurate information to the public.

The Data Center Job Paradox: Why These Tech Giants Create Few Permanent Positions Despite Massive Investments

## Tech Hiring Stagnation: AI Skills Skyrocket 111% While Overall Tech Employment Remains Flat

Technology-related employment activity remained stuck in neutral in December, according to analysis by **CompTIA**, the leading global provider of vendor-neutral IT training and certifications.

### Key Employment Metrics

**Tech industry employment** was essentially flat, with technology companies reducing staffing by an estimated **1,461 positions** last month. Staffing reductions included workers in both technical and non-technical occupations. An estimated **5.3 million people** are employed by companies in the tech sector.

**Tech occupation employment**, which encompasses technology professionals employed in all industry sectors, declined by an estimated **7,000 workers**. The unemployment rate for tech occupations dropped to **3.3%** in December, compared to the national unemployment rate of **4.4%**. More than **6.6 million workers** are employed in tech occupations.

### Job Postings and AI Demand

Active employer job postings for technology positions totaled nearly **380,000** in December, down about **10,300** from November. Of this figure, employers deployed **162,000 new tech job postings** for the month to recruit for positions spanning **software, data, systems, infrastructure and AI**.

"Stuck is a fitting characterization for a labor market where employers and workers face uncertainty on so many fronts," said **Tim Herbert**, chief research officer at CompTIA.

### The AI Skills Revolution

The data confirms employers continue to increasingly prioritize **artificial intelligence (AI) skills** among candidates across just about every type of job role. The total volume of active job listings citing an AI skill requirement totaled **94,067** for the month, an increase of **111% year-over-year**.

### AI's Complex Impact on Workforce

The impact of AI on the tech workforce, and the broader labor market, remains difficult to untangle. Both the direct and indirect effects of AI on employment and hiring are not always apparent in the labor market data. Further clouding the situation is the **64% of companies** that acknowledge using AI as cover for staffing decisions, such as hiring freezes or layoffs, according to research from CompTIA.

The same report revealed that among businesses reporting an incidence of replacing staff positions with AI, **48% also moved staff to other positions** and another **36% added new staff**.

### About the Data

The "CompTIA Tech Jobs Report" is available at https://www.comptia.org/en-us/resources/research/tech-jobs-report/.

![CompTIA Logo](https://mma.prnewswire.com/media/2608749/CompTIA_Logo_Logo.jpg)

Tech hiring remains stuck, CompTIA analysis of latest employment data finds






Tech hiring remains stuck, CompTIA analysis of latest employment data finds
PR Newswire
DOWNERS GROVE, Ill., Jan. 9, 2026



Key tech employment metrics move in step with broader labor market
DOWNERS GROVE, Ill., Jan. 9, 2026 /PRNewswire/ -- Technology-related employment activity remained stuck in neutral in December, according to analysis by CompTIA, Inc., the leading global provider of vendor-neutral information technology (IT) training and certifications.

    
                
                        
                     
                        
                

    
Tech industry employment was essentially flat, with technology companies reducing staffing by an estimated 1,461 positions last month, CompTIA analysis of U.S. Bureau of Labor Statistics (BLS) #JobsReport data shows.1 Staffing reductions included workers in both technical and non-technical occupations. An estimated 5.3 million people are employed by companies in the tech sector.
Tech occupation employment, which encompasses technology professionals employed in all industry sectors, declined by an estimated 7,000 workers.2 The unemployment rate for tech occupations dropped to 3.3% in December, compared to the national unemployment rate of 4.4%. More than 6.6 million workers are employed in tech occupations.
Active employer job postings for technology positions totaled nearly 380,000 in December, down about 10,300 from November. Of this figure, employers deployed 162,000 new tech job postings for the month to recruit for positions spanning software, data, systems, infrastructure and AI.
"Stuck is a fitting characterization for a labor market where employers and workers face uncertainty on so many fronts," said Tim Herbert, chief research officer, CompTIA.
The data confirms employers continue to increasingly prioritize artificial intelligence (AI) skills among candidates across just about every type of job role. The total volume of active job listings citing an AI skill requirement totaled 94,067 for the month, an increase of 111% year-over-year.
The impact of AI on the tech workforce, and the broader labor market, remains difficult to untangle. Both the direct and indirect effects of AI on employment and hiring are not always apparent in the labor market data. Further clouding the situation is the 64% of companies that acknowledge using AI as cover for staffing decisions, such as hiring freezes or layoffs, according to research from CompTIA.3 The same report revealed that among businesses reporting an incidence of replacing staff positions with AI, 48% also moved staff to other positions and another 36% added new staff.
The "CompTIA Tech Jobs Report" is available at https://www.comptia.org/en-us/resources/research/tech-jobs-report/.
About CompTIACompTIA, Inc. is the world's leading provider of vendor-neutral information technology (IT) training and certification products. CompTIA unlocks potential in millions of aspiring technology professionals and careers changers. Working in partnership with thousands of academic institutions and training providers, CompTIA helps students build career-ready skills through best-in-class learning solutions, industry-recognized certifications and career resources. Learn more at https://www.comptia.org/.
ContactSteven OstrowskiCompTIAsostrowski@comptia.org 630-678-8468
1 Labor market data from the U.S. Bureau of Labor Statistics and employer job postings from Lightcast may be subject to backward revisions.2 Monthly occupation level data from the U.S. Bureau of Labor Statistics tends to experience higher levels of variance and volatility.3 AI's Impact on Productivity and the Workforce, November 2025. | Among companies that made a staffing decision




  View original content to download multimedia:https://www.prnewswire.com/news-releases/tech-hiring-remains-stuck-comptia-analysis-of-latest-employment-data-finds-302657489.html
SOURCE  CompTIA

Tech Hiring Stagnation: AI Skills Skyrocket 111% While Overall Tech Employment Remains Flat

For decades, California enjoyed a powerful first-mover advantage in the tech industry. Dense networks of talent, capital, and research institutions allowed the state to absorb policy mistakes that would have crippled competitors elsewhere. High spending and taxes, restrictive housing rules, and regulatory complexity were seen as nuisances rather than binding constraints, because growth could outpace their costs.

However, that margin of error has dramatically narrowed. What California is experiencing is not a cyclical tech downturn or a post-pandemic anomaly. It is a measurable, policy-driven decline in relative competitiveness. The most telling evidence is not that tech employment has fallen in absolute terms, but that **California’s share of national tech employment has been shrinking**, while other states gain ground.

## Employment Share, Not Headlines, Tells the Story

According to Bureau of Labor Statistics data, California’s technology employment growth has underperformed national trends for several years, including during periods when tech hiring stabilized or rebounded elsewhere. California’s share of US tech jobs is falling from roughly 19% pre-2020 to closer to 16% in recent years—a significant shift for an industry this large. This is a classic example of relative decline: California still employs more tech workers than any other state, but it is no longer where the marginal job is being created.

Commercial real estate data corroborates these employment figures. Office vacancy rates across Silicon Valley remain elevated well beyond what remote work alone would explain. Bay Area office markets have not recovered in the way peer regions have. Persistent vacancies signal not just a shift to hybrid work, but a geographic reallocation of firms and labor.

## Migration as a Labor Market Signal

Labor mobility reinforces the same conclusion. US Census state-to-state migration data show continued net domestic outmigration from California, particularly among working-age adults. While international immigration partially offsets population losses, domestic migration is more relevant for employer location decisions, especially in high-skill sectors. Economic theory predicts that firms follow labor when relocation costs are low and regulatory frictions are high. California now faces both: high regulatory frictions at home and increasingly credible substitutes elsewhere.

## Founding Versus Scaling: A Crucial Distinction

California still dominates early-stage venture capital totals, as shown in venture investment data. This is often cited as evidence that concerns about the state’s competitiveness are overstated. However, that interpretation conflates firm formation with firm expansion. Founding activity reflects legacy advantages such as universities, networks, and capital concentration. Scaling decisions reflect marginal costs. Increasingly, firms are choosing to incorporate or raise seed funding in California while expanding headcount in lower-cost, lower-regulation states.

From an economic standpoint, this is predictable. Scaling in California exposes firms to the **nation’s highest marginal income tax rates**, comparatively punitive capital gains taxation, rigid labor mandates, slow permitting processes, and volatile regulatory expectations. These costs rise nonlinearly as firms grow.

## AI Regulation as a Binding Constraint

Artificial intelligence policy may become the clearest illustration of California’s regulatory overreach. A recent analysis documents how California lawmakers have pursued some of the most expansive state-level AI regulations in the country. These proposals extend liability, mandate preemptive risk assessments, and impose compliance obligations before alleged harms are empirically demonstrated or even defined.

From an economic perspective, this approach treats innovation as a presumptive externality rather than a productivity-enhancing input. AI is widely understood as a general-purpose technology. Research shows that such technologies generate broad, economy-wide productivity gains, not sector-specific benefits. Overregulating AI therefore depresses expected returns not only in software, but across healthcare, logistics, manufacturing, finance, and education.

California’s AI regulatory framework has drawn federal scrutiny, which is instructive. State-level AI mandates were referenced in a recent presidential executive order, citing concerns over fragmented and inconsistent state regulation. Regardless of political framing, the economic concern is straightforward: regulatory fragmentation raises fixed costs and discourages upscaling.

## Regulation, Market Structure, and Incumbency

California’s regulatory posture also has implications for market structure. Extensive empirical literature shows that high fixed compliance costs reduce entry and increase concentration. The OECD’s work on regulation and competition consistently finds that heavier regulatory burdens favor large incumbents at the expense of startups and challengers. This dynamic undermines the very competition that drives innovation. Europe’s experience with digital overregulation offers a cautionary parallel. California risks reproducing that outcome domestically, exporting innovation to other states rather than other continents.

## Costs Complete the Incentive Structure

AI regulation is best understood as the marginal constraint layered atop an already expensive environment. California has the highest top marginal income tax rate in the United States, and taxes capital gains as income. Housing scarcity raises labor costs without increasing real purchasing power. Energy prices remain among the nation’s highest. In combination, these policies alter the expected return on investment at the margin. States like Texas and Florida offer credible alternatives: no personal income tax, faster permitting, lower housing costs, and a lighter regulatory touch.

Firms do not need ideological motivation to relocate. The incentive structure does the work.

## Opportunity Costs and Distributional Effects

The economic cost of tech job relocation extends beyond headline employment figures. When tech employment relocates, these spillovers disappear as well. The distributional consequences are regressive. High-skill workers are mobile. Lower-income workers tied to local economies are much less so. Policies that suppress growth (even under the banner of equity) often hurt the poor most.

## A Predictable Outcome

Unless California changes course, the trajectory is clear. AI firms will incorporate elsewhere. Venture capital will follow labor. Scaling will increasingly occur in states that treat innovation as an asset rather than a liability. California will remain an important source of ideas. It will be a diminishing source of jobs. Markets are not ideological. They respond to incentives. On that front, the verdict is already in.

Silicon Valley isn't dying — it’s decentralizing. Tech firms are expanding in lower-cost states and taking jobs with them.

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