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IT Unemployment Hits Record High


An InformationWeek analysis of Bureau of Labor Statistics employment data shows unemployment among IT workers reached 5.23% last year, up from 3.72% in 2001.

By Eric Chabrow
InformationWeek
March 18, 2003 12:00 AM

Unemployment among IT workers rose to a record 5.23% in 2002, according to an InformationWeek analysis of U.S. Bureau of Labor Statistics employment data, up from 3.72% in 2001. Still, IT professionals were more employable than their counterparts in most other fields, as overall unemployment last year rose to 5.8%, from 4.7% in 2001.

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In the past decade, IT unemployment bottomed out in 1997, when it sank to 1.61% as companies began hiring technology pros to help fix the year 2000 problem and gear up for what was perceived at the dot-com boom. Overall unemployment that year stood at 4.9%.

Indeed, higher unemployment today can be attributed, in part, to Y2K. Businesses, schools, and others trained tens of thousands of people in Cobol and other legacy languages to help remediate the date problem. When the problem was fixed, their knowledge was no longer needed. "We retrained people for jobs whose skills proved to be irrelevant shortly thereafter," says Ernest Goss, an economics professor who tracks IT trends at Creighton University. "We turned out lots of them in 13-week courses. They made money in '98 and '99, but then demand for their skills dropped off the table."

Other structural changes in technology jobs also account for higher IT unemployment. In the past, before open systems gained popularity within corporate and governmental IT shops, employers were less likely to let go of technologists familiar with proprietary and often arcane but critical systems when the economy weakened and other types of jobs were eliminated. Why? When the economy picked up, employers reasoned, people with those skills would be hard to find. Today, with literally thousands upon thousands of IT workers trained in open systems and standard technologies, when the economy gets soft, employers aren't afraid to lay off IT pros since they believe finding replacements won't be so hard when conditions improve. "Cisco-certified people are becoming less valuable each year as those skills become more widespread," Goss says.

In addition, the use of foreign IT professionals, whether employed here under the H1-B visa program or offshore as part of outsourcing deals, have an impact on rising IT unemployment, the economist says.

Workforce
Younger workers, many with new tech skills, had slightly better employment rates than their older counterparts. Unemployment among IT pros age 40 and younger rose to 5.05% last year, from 3.28% in 2001; among those 41 and older, the jobless rate increased to 5.51%, from 4.47%. It's not that younger people are being laid off at lower rates, but that they're more likely to leave the IT workforce--those employed and the unemployed looking for work as business information technologists--than their older colleagues when they lose their jobs. In addition, older people are less likely than their younger, more-mobile co-workers to take jobs in other fields when they're out of work. That results in older workers remaining in unemployment lines--and in the IT workforce--for longer periods, driving up the IT jobless rate.

The best evidence of that: Nearly all of those abandoning the IT profession are age 40 and under, who the economist says seek jobs outside of IT when their tech positions vanish. Between 2001 and 2002, the IT workforce shrank by nearly 7.5%, or 150,833. Actually, the IT workforce among those 41 and older rose by 6,667, while that of the 40-and-under crowd plummeted by 157,500. Regardless, it was the first decline in six years in the IT workforce, which averaged a 7.1% annual gain over that period. From 1995 to 2001, the IT workforce rose by 858,846 to 2,881.667, a 42.4% increase.


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