Palo Alto's economy and jobs

Palo Alto is a small city with a big economy. It has roughly three jobs for every resident who works. Hospitals, Stanford, the companies of Stanford Research Park and a long list of startups pull tens of thousands of commuters in each weekday. Meanwhile, the people who live here are mostly highly educated professionals, many of whom work at those same employers.

This page uses three kinds of official data. The City of Palo Alto's financial reports and Housing Element describe employers and jobs located in the city. The Census Bureau's American Community Survey (ACS) 2020 to 2024 5-year estimates describe residents' jobs. The California Employment Development Department (EDD) publishes unemployment rates. For job hunting advice and wage data by occupation, see our guide to finding a tech job in Palo Alto.

Jobs versus working residents

The city's 2023 to 2031 Housing Element counts 99,977 jobs in Palo Alto and 31,353 employed residents. That is 3.19 jobs per working resident. The plan describes the city as "a net importer of workers." The passage does not give a year for those counts. The document was also prepared before remote work became common, so treat them as a measure of scale rather than a current tally.

The same document reports two longer trends based on the Census Bureau's employer data (LEHD):

• Jobs located in Palo Alto grew 52.3 percent from 2002 to 2018.
• The ratio of jobs to households rose from 2.78 in 2002 to about 4 in 2018.

The imbalance shapes daily life. It drives the region's housing pressure, since most of those workers have to live somewhere else. It also explains why traffic, parking and Caltrain crowding can feel heavier than a city of 69,000 would suggest. Our commute statistics page shows the other side: 54.7 percent of employed residents also work inside the city.

Major employers

The city's Annual Comprehensive Financial Report for fiscal 2025 names these as major, relatively stable employers in Palo Alto:

• Lucile Packard Children's Hospital
• Stanford Health Care
• Stanford University
• VA Palo Alto Health Care System
• Palo Alto Medical Foundation
• Palo Alto Unified School District
• Stanford Shopping Center
• Hewlett-Packard
• Tesla
• Rivian

The report's statistical section includes a principal employers table with head counts. The most recent counts we could confirm come from the city's fiscal 2020 report, as reproduced in the Housing Element:

The Housing Element warns that these figures may be unreliable and may include employees who work outside city limits. That matters most for Stanford, whose campus is mostly outside the city. Several names have also changed since 2020. Broadcom bought VMware in 2023 and has its headquarters on the old VMware campus. Siemens Healthineers completed its purchase of Varian in April 2021. Space Systems/Loral is now Lanteris, which Intuitive Machines bought in January 2026. Newer arrivals include Tesla's engineering headquarters, Rivian and General Motors, which leased nearly 340,000 square feet in Stanford Research Park in mid 2026.

Health care and education dominate the list. Four of the top five are hospitals, medical groups or the university. Our Stanford Research Park page covers the tech and research tenants, which the park says number more than 150 companies.

What residents do for work

The ACS counts 32,617 employed residents aged 16 and older. The labor force participation rate is 62.3 percent, a little below the county's 67.4 percent because Palo Alto has more retirees.

Source: ACS table C24030, men and women combined by us. Compared with the county, residents are far more likely to work in professional services and education and less likely to work in manufacturing, which is 16.2 percent countywide. Median earnings for employed residents were $140,767; our income and wealth page has the detail.

Unemployment

Unemployment numbers for a single city come with caveats. Here is what each official source shows:

EDD's monthly report for the San Jose metro area, released May 22, 2026, gave the April 2026 county and state rates, not seasonally adjusted. The city's financial report does not name the source of its June 2025 figures. EDD does produce monthly city estimates, but its page on city and census place data explains that they are calculated by giving each city a fixed share of the county's totals based on the latest ACS. The method assumes a city moves in step with its county, which EDD says is untested. In practice, Palo Alto's rate tracks the county's and runs a bit lower.

The ACS rate is our calculation: 1,334 unemployed out of a civilian labor force of 33,951. It averages five years that include the 2020 pandemic spike.

Wages and workplace rules

• Minimum wage. Palo Alto's local minimum wage is $18.70 an hour in 2026 and $19.25 from January 1, 2027. California's is $16.90 in 2026.
• Business registry. Businesses in the city register each year for $54, due March 31. See starting a business in Palo Alto.
• Office market. The brokerage Kidder Mathews reported Palo Alto office vacancy of 15.1 percent in the third quarter of 2026, with asking rents of $7.50 per square foot per month. Our office space guide has the context.

How the economy funds the city

Business activity feeds City Hall directly. In the adopted fiscal 2027 budget, sales tax is projected at $33.4 million, hotel tax at $32.0 million and the business tax at $6.9 million, alongside $76.1 million in property tax. Sales tax fell in fiscal 2025, mainly because of lower auto sales and leasing, according to the city's financial report. Our city budget page explains where that money goes.

Frequently asked questions