As Unemployment Grows, Tech Jobs Hang On

As expected, the Department of Labor’s February jobs report Friday was a train wreck. The economy lost 651,000 jobs in February, the unemployment rate ticked up to 8.1 percent and the Bureau of Labor Statistics revised December and January job counts sharply. But the information technology industry’s job picture looks decidedly better in some areas.

It’s hard to find a few bright spots when 651,000, 681,000 and 655,000 jobs were lost in February, January and December, respectively. However, the data indicates that there are more computer systems design and consulting services gigs than a year ago. There are also more communications equipment manufacturing jobs than a year ago.

Other areas in the tech industry lost jobs, but it clearly could have been worse. Here are the Bureau of Labor Statistics’ release and PDF tables. My excerpt of those tables along with my notes are below (click to enlarge).

Comments

[Marcus Aure...:]

Interesting and encouraging.

I am a tech worker with 16 years of pro experience 10 in the tech industry (prior six was in education where I taught math & computer applications). I got "whacked" a month ago, my consulting firm was/is heavily dependent on the Big 3 (even though I am in a different region from Detroit). My last assignment ended the last work day of October '08. At that time 300 people from my firm were let go and I got let go with about 249 others. I saw it coming and started paying serious attention to the job boards (and working them a lot harder).

What I found surprising is there is a fair amount of direct hiring going on in my area and for jobs I know I can do. In the previous big whacking occurring in my company this was not the case the job boards were pretty dry (but since I was billing I did not get whacked and did not pay as close attention as I am now).

I am getting a fairly positive response at least from direct hire firms. I have had multiple phone interviews and two face to faces so far. One is a nutty job (the CFO cut his colleagues down big time and bragged himself up like you wouldn't believe, I am still looking at the position) and another was three hours with 3 different people, unfortunately they are no longer considering myself (IMO an ideal job I would serve as the dept manager's right hand man & work to bring IT best practices to the department).

I think a number of the consulting firms I see out there are just resume harvesting. Around here, companies are showing their contractors the door.

Mar 06 12:27 PM

[Eric Mason:]

How long until this is no longer blamed on George W. Bush? Maybe then the the current administration will realize that they have a hand in the current problems.

Mar 06 06:37 PM

[Marcus Aure...:]

Eric,

I think we can trace the roots of this back to many administrations and many Fed Chairs. I am no fan of President Obama (w/o trying to sound like a seminar caller I do want to establish my bonafides here) the last Dem I voted for was Dukaka (young FM station listening college student that I was back then - WFB shortly after that influenced me in a TV ad campaign to come back home).

Still, administration after administration kept pumping the housing market bubble and W's kept it right up. This situation isn't entirely W's fault nor is it wholey off of himself either.

Mar 06 08:44 PM

[confusioness:]

eric mason - you're a moron. why do people like you insist on turning everything into a political commentary. go away

Mar 07 03:16 AM

[TeresaE:]

How many of the "added" IT jobs went went to American citizens.

When you look at the DOL's info over the past 10 years, we add fewer jobs in IT than we import in H1-B visa workers.

So, how is it there is an American worker shortage when the number of jobs added is LESS than the foreigners we import to drive down wages?

"High tech" jobs are being sold out to the lowest bidder, just like manufacturing.

And, just like health care and teaching already is.

Finally, I firmly believe that every new government job today is going to cost the private economy 2 jobs tomorrow. Just how will the government (state, local and federal) survive when their paychecks are the only ones?

100% tax on government workers wouldn't even cover it.

Demand smaller government now, or realize they will be the only game in town for decades.

Mar 07 09:20 AM

[kalasend:]

I suggest you make friend with someone holding an H1B visa before you say something about them.

I hold H1B visa. I attended college in the US, worked in Silicon Valley for 8 years. My starting salary, in 2001, was $70k which is by no means lower than average. Laws forbid companies from paying lower to foreign worker.

I paid the same tax rate as any other US citizen, without being able to use allowances because my dependents (parents) are not in the States. I am not protected by any social benefits and if I lose my job I will be deported. But my 401k will have to stay otherwise I got taxed on that as well.

And talking about us taking technology jobs away from US citizens? Well, you know what I can say about that, don't you? You don't need myth buster to clear this one out for you.

I know where you're coming from, but you need to learn the difference between the manufacturing and technology sectors.

On Mar 07 09:20 AM TeresaE wrote:

> How many of the "added" IT jobs went went to American citizens.<br/>
>
> When you look at the DOL's info over the past 10 years, we add fewer
> jobs in IT than we import in H1-B visa workers.
>
> So, how is it there is an American worker shortage when the number
> of jobs added is LESS than the foreigners we import to drive down
> wages?
>
> "High tech" jobs are being sold out to the lowest bidder, just like
> manufacturing.
>
> And, just like health care and teaching already is.
>
> Finally, I firmly believe that every new government job today is
> going to cost the private economy 2 jobs tomorrow. Just how will
> the government (state, local and federal) survive when their paychecks
> are the only ones?
>
> 100% tax on government workers wouldn't even cover it.
>
> Demand smaller government now, or realize they will be the only game
> in town for decades.

Mar 07 12:59 PM

[James H. Wang:]

Tech was already hit pretty hard in the last recession, and wasn't as overvalued as most other sectors. Even though it is a growth sector, many "value plays" were even more highly valued in PE ratios and outperformed it.

That's the main reason why it isn't cutting quite as much of the rest of the economy. It was already somewhat low in terms of valuations.

However, this situation will only hold for so long if the economy continues to get worse. Thinking that tech will forever be insulated from the worst of the recessions for some reason would simply be wishful thinking.

Mar 07 01:41 PM

[Tom E.:]

Also business is now more concerned with controlling labor costs. The tide has turned against off-shoring and outsourcing and technology is now the best solution.

This ought to be good for the tech industry. Its reason for being is to reduce labor costs. When labor cost is not the focus, you get frivolous inventions like facebook and twitter that don't pay the bills.

Mar 08 10:17 AM

[bearfund:]

The real bust in tech jobs was in 2000-2002. For tech workers that was the Greater Depression and the current situation is best described as a minor downturn. I can't say enough to describe how dire things looked in 2002 other than to say that you had to be there and if you were then you know what I'm talking about. Excellent, experienced people in the prime of their careers were out of work for years and there were virtually no leads anywhere. Every day several companies went belly-up and cast a few hundred more into the void. It actually went so far that freeway traffic was dramatically lighter. Today it's nothing like that; a few people I know have had their pay cut but I also know people who have been hired, received raises, or successfully changed jobs of their own volition. That was unheard-of in the real bust.

Bottom line: I'm sure things really are bad in Detroit but if you're a tech worker in the bay area you're probably tempted to call this the phony recession, just as you probably didn't think much of the last one if you were, say, a New York banker.

Mar 08 03:44 PM

[Jolly_Rancher:]

Infrastructure tech companies will feel the least pain because the entire world continues to build out high speed and telecommunications networks which is still nascent. Asian economies, which were not coupled as of 2008, will decouple themselves as of 2010 and begin to grow strongly again. US companies, such as infrastructure tech will experience that growth first.

Mar 08 07:22 PM

[Willy Walnuts:]

Thank you! I have no dog in this fight, but I appreciate someone resisting this ignorant protectionist blather.

For those of you who want to turn every article into a political statement while abandoning logic and leaning on AM radio to fill your empty skulls... The reason we have to rely on H1B Visas to fill these jobs is because there aren't enough educated "Americans" to do this work. That is the point of the H1B Visa, it is better to bring the brains here than to send the job over there. It seems most small government right wing conservative "Joe the Plumber" nut jobs are too busy listening to a fat, lazy, loud-mouth who dropped out of school to spew ignorance on the radio tell them what to think. It seems they are too lazy to learn how to think and then actually try to be part of the solution instead of just complaining that other people are taking their jobs and money. Guns and religion anyone? They will solve all your problems.

Does this make you mad? Then go out, get an education and make our country competitive with the rest of the world again. I don't want to have to lean on China for credit, the Middle East for energy, India for IT, and Mexico for labor anymore. There is no excuse, the government will help you, even if you hate them.


On Mar 07 12:59 PM kalasend wrote:

> I suggest you make friend with someone holding an H1B visa before
> you say something about them.
>
> I hold H1B visa. I attended college in the US, worked in Silicon
> Valley for 8 years. My starting salary, in 2001, was $70k which is
> by no means lower than average. Laws forbid companies from paying
> lower to foreign worker.
>
> I paid the same tax rate as any other US citizen, without being able
> to use allowances because my dependents (parents) are not in the
> States. I am not protected by any social benefits and if I lose my
> job I will be deported. But my 401k will have to stay otherwise I
> got taxed on that as well.
>
> And talking about us taking technology jobs away from US citizens?
> Well, you know what I can say about that, don't you? You don't need
> myth buster to clear this one out for you.
>
> I know where you're coming from, but you need to learn the difference
> between the manufacturing and technology sectors.
>
> On Mar 07 09:20 AM TeresaE wrote:

Mar 08 10:59 PM

[Tristan Yates:]

This recession is hitting lower-skilled workers primarily. The unemployment rate for college grads is 4.1%.

Mar 09 12:05 AM

[Moon Kil Woong:]

Tech is the only way productivity can continue to rise. When spending for tech ends then the future economy will be on the hook.

So far many tech companies have cut back by cutting salaries (like HP) or stopping hiring and cutting back on contracting. If this isn't enough it will be a very long 2009.So far tech equipment and consulting have already fallen into hard times. The rest of the tech sector may soon follow.

Mar 09 02:17 AM

[Bob123:]

Silicon Valley has been hit very hard over the past 10-15 years. There is only really one silicon fab left and a huge number of quality scientists and engineers have lost their jobs. Over the past few years these really outstanding people have not been reemployed. These people have fallen off of the statistical radar.

This is important as the same can be said for many areas of the country.

The hard sciences and hard technology careers were effectively forgotten and throw under the bus with offshoring. Such is extremely dangerous.

So in short, I disagree with the author. The hard science Tech jobs have been dying for some time...

Mar 09 02:25 AM

[bricki:]

Hard science tech jobs have been hurt because developing new functional products is a lot more difficult than coming up with a new financial instrument like CDS or MBS. Capital goes where it is easiest to make money.

Now we are finding out that financial smoke and mirrors doesn't add real wealth, all it amounts to is a form of pyramid, only made of cards rather than stone.

Soon regulation will reduce the return on capital in the Ponzi sector and we will have to make money the old fashioned way, with new products.

A venture capitalist once said to me that a recession does not slow the rate of innovation, in fact the necessity of finding ways to make money that work in down times where you are looking at that mortgage payment that is more than your unemployment check has a great stimulative effect on creativity.

So hang on to your hats and keep some dry powder on hand, we will have a new wave of new tech companies in a 2-3 years.

On Mar 09 02:25 AM Bob123 wrote:

> Silicon Valley has been hit very hard over the past 10-15 years.
> There is only really one silicon fab left and a huge number of quality
> scientists and engineers have lost their jobs. Over the past few
> years these really outstanding people have not been reemployed.
> These people have fallen off of the statistical radar.
>
> This is important as the same can be said for many areas of the country.
>
>
> The hard sciences and hard technology careers were effectively forgotten
> and throw under the bus with offshoring. Such is extremely dangerous.
>
>
> So in short, I disagree with the author. The hard science Tech jobs
> have been dying for some time...

Mar 09 02:03 PM

[gregbo:]

Actually, I have seen some dropoff in freeway traffic at certain major arteries. For example, since January, there is much less congestion heading northbound into the 85-101 interchange in Mountain View. I also know some unemployed tech folks, some with degrees and/or many years of experience.


On Mar 08 03:44 PM bearfund wrote:

> The real bust in tech jobs was in 2000-2002. For tech workers that
> was the Greater Depression and the current situation is best described
> as a minor downturn. I can't say enough to describe how dire things
> looked in 2002 other than to say that you had to be there and if
> you were then you know what I'm talking about. Excellent, experienced
> people in the prime of their careers were out of work for years and
> there were virtually no leads anywhere. Every day several companies
> went belly-up and cast a few hundred more into the void. It actually
> went so far that freeway traffic was dramatically lighter. Today
> it's nothing like that; a few people I know have had their pay cut
> but I also know people who have been hired, received raises, or successfully
> changed jobs of their own volition. That was unheard-of in the real
> bust.
>
> Bottom line: I'm sure things really are bad in Detroit but if you're
> a tech worker in the bay area you're probably tempted to call this
> the phony recession, just as you probably didn't think much of the
> last one if you were, say, a New York banker.

Apr 16 08:56 PM

[gregbo:]

Wrong. There is no shortage of qualified Americans to do tech work. There have been many studies that have confirmed this, such as have been done by Norm Matloff of UC Davis and the IEEE. There are, unfortunately, continued assertions about the lack of qualified tech workers, based on the percentage of Americans who major in STEM subjects as undergraduates and graduate students. These assertions do not take into account that it is not necessary to get a degree in a STEM subject to do tech work -- many people do not have such degrees, and are quite capable. But aside from that, we have the situation where sleazy companies abuse the H-1B programs by neglecting to search for qualified Americans, falsifying H-1B candidate CVs to make them look qualified, posting job openings in obscure locations in order to minimize the likelihood that an American would see them, and so forth. There are also situations in which a qualified American is asked to train their H-1B holding replacements when they are laid off.


On Mar 08 10:59 PM Willy Walnuts wrote:

> Thank you! I have no dog in this fight, but I appreciate someone
> resisting this ignorant protectionist blather.
>
> For those of you who want to turn every article into a political
> statement while abandoning logic and leaning on AM radio to fill
> your empty skulls... The reason we have to rely on H1B Visas to fill
> these jobs is because there aren't enough educated "Americans" to
> do this work. That is the point of the H1B Visa, it is better to
> bring the brains here than to send the job over there. It seems most
> small government right wing conservative "Joe the Plumber" nut jobs
> are too busy listening to a fat, lazy, loud-mouth who dropped out
> of school to spew ignorance on the radio tell them what to think.
> It seems they are too lazy to learn how to think and then actually
> try to be part of the solution instead of just complaining that other
> people are taking their jobs and money. Guns and religion anyone?
> They will solve all your problems.
>
> Does this make you mad? Then go out, get an education and make our
> country competitive with the rest of the world again. I don't want
> to have to lean on China for credit, the Middle East for energy,
> India for IT, and Mexico for labor anymore. There is no excuse, the
> government will help you, even if you hate them.

Apr 16 09:08 PM