Tech Sector Has Had 'Jobless Recovery,' Says Report

There are more unemployed IT workers than the government counts, says a report sponsored by a tech union. But it still puts unemployment below 4%.
The IT industry lost nearly a half-million jobs between 2001 and 2004 and has recouped only about a quarter of them since, says a new report commissioned by WashTech/CWA, a tech worker union.

For instance, the WashTech/CWA report refutes recent figures from the U.S. Bureau of Labor Statistics that said U.S. tech employment is near an all-time high of 3.4 million while unemployment is around 3%, near its record low. Unemployment is actually around 3.6%, or about the same level as in 2001, according to the WashTech/CWA report.

At less than 4%, however, either number suggests a healthy tech employment environment.

Between March 2001 and March 2004, the U.S. tech industry eliminated about 402,800 jobs, according to the report, "Information Technology Labor Markets: Recovering, But Slowly," which was prepared by the Center for Urban Economic Development at the University of Illinois, Chicago for the Washington Alliance of Technology Workers an affiliate of the Communications Workers of America (WashTech/CWA).

The U.S. recouped about a fourth of those positions between April 2003 and February 2006, when 76,300 tech jobs were added, bringing the total losses from March 2001 to March 2004 to 395,6000 according to the study.

Offshoring and the hiring of temporary foreign tech workers by U.S. firms are significant reasons for the job losses, according to the report. Modest job hiring, especially since March 2003, are largely due to IT projects that had been on hold but are now moving forward. While tech employment has been slowing rebounding, the WashTech/CWA study contends that the recovery is not as robust as recent reports by the U.S. government and various tech industry groups assert.

"Unemployment is being undercounted," not taking into account tens of thousands of tech professionals who have lost jobs in recent years and stopped looking or are underemployed, says Nik Theodore, a co-author of the report and a professor at University of Illinois, Chicago.

Also, BLS and some trade groups use a broader definition of occupations considered tech jobs than the WashTech/CWA study examined, Theodore says. For instance, some communication occupations defined as tech jobs by other groups were not classified as tech jobs in the WashTech/CWA report. "Employment levels have been volatile and remain so today," he says.

WashTech/CWA is looking for reform, such as tighter policies for foreign workers who come into the U.S. with H-1B visas, as well as the passage of "trade agreements that encourage job creation," says WashTech/CWA president Marcus Courtney.

"This is a jobless recovery," says Courtney, who doubts predictions by some businesses of an impending tech skill shortage.

IT job growth has been uneven across geographical regions in the U.S, says the WashTech/CWA study. For instance, while regions such as Seattle, Washington D.C. and San Francisco have added the most jobs, areas such as Los Angeles continue to lose tech jobs, the report says. Metropolitan areas including Boston, Chicago, Dallas and San Jose have had modest increases.

In contrast to the assessment of a lackluster job market from WashTech/CWA, another new report released by IT staffing firm Robert Half Technology says CIOs expect a modest uptick in tech hiring during the third quarter of 2006. Of 1,400 CIOs surveyed, 13% plan to add IT staff in the next three months while 3% expect cutbacks. The net 10% hiring increase is up 2% from the company's previous quarterly forecast. Robert Half Technology predicts the most robust hiring in the mountain states of the U.S., where 19% of CIO expect to increase hiring and none reported plans to reduce headcount. CIOs in that region are especially looking for .Net and Java 2 application developers, says the report.

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