By Ed Frauenheim, 15 September 2004 08:50
NEWS The information technology industry lost 403,300 jobs from the start of the recession in March 2001 to April 2004, with nearly half of those jobs disappearing after the recession's official end, according to a new study.
The report said 200,300 IT jobs were lost after November 2001 and found steep job losses in the San Francisco, Boston and San Jose, California, regions. The study was written by researchers at the Center for Urban Economic Development at the University of Illinois at Chicago for union group WashTech.
Officials from the centre and WashTech argued that the job losses resulted from several factors, including the shift of work to lower-cost nations and the use of H-1B visas, which can be used to import computer programmers and other skilled workers.
Nik Theodore, a co-author of the study, said US technology workers are experiencing something worse than a jobless recovery.
"For America's IT workforce, this has been a job-loss recovery," he said.
In recent weeks, conflicting information has emerged about the job scene for tech professionals. Unemployment in the field has dropped, as has the total number of jobs -suggesting discouraged workers may have dropped out of the field.
A survey by a staffing firm found gradually increasing confidence among IT workers in the job market. But a recent study by the Information Technology Association of America trade group found just a "slight" recovery for the IT job market in 2004.
That report concluded that the number of US IT workers rose two per cent, to 10.5 million, in the first quarter of this year but demand for IT workers is dropping.
ITAA's report included workers in the internal IT departments of many types of corporations, while the new study for WashTech is limited to companies in the technology industry, such as internet service providers and software publishers.
WashTech's study considered how IT industry employment has fared in a number of major tech regions and concluded that the San Francisco Bay Area has taken the largest hit in percentage terms. IT industry employment in the San Francisco region dropped 49 per cent between March 2001 and April 2004 to 28,000. During the same period, IT employment in the
Boston region fell 34 percent to 46,900, and industry employment in the San Jose area declined 33 per cent to 61,900.
In the Dallas region, the IT industry shed 30 per cent of its jobs to 39,300, and the Chicago metropolitan area lost 26 per cent of its IT industry jobs to 47,000. In the Washington state region that includes Seattle, IT industry employment slipped 11 per cent to 52,800.
The study said these numbers may not reflect all IT job losses, because data for certain sectors of the IT industry aren't available for several regions. For example, employment data for the software publishing industry is not available for the Chicago, Dallas and San Francisco regions, according to the study.
Theodore said that partly because of the rise of so-called offshoring - in which services work is sent abroad - IT industry employment is likely to drop further. "All indications are that job losses will continue," he said.
Defenders of offshoring say it ultimately benefits the US economy and US workers, and that protectionist measures would result in lower economic growth and higher unemployment.
Critics respond that offshoring costs US workers jobs and threatens the country's long-term technology leadership. The exact scale of the trend has been somewhat murky.
But Marcus Courtney, president of WashTech, said a tally of jobs "offshored" since 2000 has passed 250,000. The tally, a project involving WashTech and other groups, is based on media accounts.
Courtney said one of the first steps to improve the job situation for technology workers is to reform the H-1B and L-1 visa programs. L-1 visas allow companies to temporarily bring in employees from other countries for managerial or executive work, or for work that entails specialised knowledge.
"It's almost economically impossible to argue that there are not enough skilled, high-tech workers domestically," Courtney said.
Ed Frauenheim writes for CNET News.com
Comments
There are 2 comments. Join the discussion
1. Ludger Solbach
How could importing NEW H-1b visa holders have contributed to the job loss? Obviously, if a job is lost, noone works in it and that includes H-1b visa holders. It rather seems that so many more visa holders had to leave the country than came in on new visas. If anyone is looking for an explanation as to why the unemployment rate in Silicon Valley is relatively low even when so many jobs were lost - here it is.
2. Wotan
Just as I have before so it has come to pass and still we remain like ostriches in the sand. Can you explain the logic? "If you send 250,000 Jobs offshore the people made unemployed and loss of revenue benefits the industry and workersin the exporting country?"
Discuss!!!!
I think some 'nasty-money-grubbing- ruthless-profiteering-on-the-backs- of-poor-overseas-workers' are having us on. If the overseas people were paid the same as the exporting country there wouldn't be so much off-shoring.
Where's the next generation of home educated IT people coming from if there is no indigenous IT industry in the country and no prospects in any IT there is? nobody will want to work for a company that sees an opportunity to make profit by sacking the home workforce and off-shoring as a the reward for loyal service or attempting to build a career.