Study: IT worker unemployment at 'unprecedented' levels

Computer World ^ | SEPTEMBER 17, 2003 | Patrick Thibodeau

[Mini-14]

About 150,000 IT positions were lost in 2001 and 2002

SEPTEMBER 17, 2003 ( ) - DALLAS -- Unemployment for IT workers reached 6% this year, an "unprecedented" level for a profession that was once a sure path to a well-paying job, according to a new study that also found that foreign-born workers now account for a fifth of all IT employees in the U.S. The report also found that the percentage of laid-off foreign-born IT workers is slightly higher than for U.S.-born workers.

The study, which was presented at a congressional forum today by the Washington-based nonprofit group Commission on Professionals in Science and Technology (CPST), affirms what IT managers have seen in response to help-wanted ads. "I'm sure the number is 6% or higher," said Michael Russo, a data center manager at Wyeth, a Madison, N.J.-based pharmaceuticals giant.

A recent third-shift job in the company's operational data center drew 168 applicants. "There are a lot of people who are out of work," Russo said.

Randy Rosenthal, manager of computer operations at Southwest Securities Group Inc. in Dallas, has seen the same trend: highly qualified people with multiple degrees applying for jobs IT managers once had trouble filling. "That tells me that 6% has hit the IT area pretty hard," he said.

About 150,000 IT positions were lost in 2001 and 2002, about two-thirds of them in programming, the report said.

Two years ago, Phoenix-based water and electric utility Salt River Project had an open position for an operations analyst and received about 15 applications; last year, it posted a similar position and had 50 applicants. This year the 800,000-customer utility has a hiring freeze, said operations manager Dewayne Nelsen.

There was a sense of grim resignation about the latest report among some IT managers at a conference held here by AFCOM, an Orange, Calif.-based data center managers user group.

Several IT managers, some requesting that their names not be used, told of data center consolidations that led to layoffs or offshore plans. For the future, automation improvements and the development of "self-healing" applications will also hurt some IT career paths. The career advice from one IT manager was to avoid the technical aspects of the profession and focus more on IT management training.

IT unemployment rates were as low as 1.2% in 1997, shooting up to 4.3% in 2002.

But the overall number of IT jobs has seen remarkable growth, tripling in the past 20 years, according to the CPST, which conducts labor force and educational research for a range of scientific organizations and companies. The IT labor force grew from 719,000 jobs in 1983 to 2.5 million at its peak in 2000.

With the growth of IT came an increasing reliance upon foreign workers. This increase was facilitated by legislation expanding the use of H-1B visas, which allow skilled foreign workers to take jobs in the U.S. for up to six years. A cap of 195,000 on the number of visas that can be issued has been in place for each of the past three years, but the cap will drop to 65,000 on Oct. 1. L-1 visas, which allow companies to transfer foreign employees into the U.S., have tripled in use.

The report, sponsored by the Alfred P. Sloan Foundation in New York and the United Engineering Foundation, an umbrella organization for engineering groups, draws no firm conclusion on the offshore outsourcing trend. But it recognizes predictions made by analyst firms, including Gartner Inc., which in July estimated that 10% of all U.S. professional jobs in IT services companies would be transferred overseas, along with 5% of IT positions in other businesses.

Long term, the report says more research is needed on the effects of offshore outsourcing and the workforce issues raised by it: "Can the U.S. continue to be a prime market for the rest of the world if it is a stronghold for neither manufacturing nor technical services?" the report asks. "What are the long-run implications of these trends for American standards of living?"

The CPST report concludes that while the job market for IT professionals has weakened, it remains sizable.

"For the near run, normal turnover alone will generate opportunities for people who are determined to work in the field," the report said. "The long-run outlook is more problematic. The United States does not lack, either now or in the foreseeable future, sufficient numbers of capable people who would like to work in IT. But those people may not be willing to conclude that long-run demands for their services will be good enough to support IT as a sensible career choice."

[Glenn]

That's your defense? I've had the same person deep-six my posts more than once for reasons that are nothing more than vandetta. That's just not right. You jump too quick to the aid of those who have no argument.

Do some research, will you?

[ChemistCat]

I looked up 'vandetta' and unless that's your sister's name, it's not a real word.

[ChemistCat]

I looked up 'vandetta' and unless that's your sister's name, it's not a real word.

[blueriver]

My daughter is a " headhunter " for computer people. She has more jobs, going unfilled, than you can imagine.

Where does she post her jobs? Where are the jobs located and what are the job requirements?

[txhurl]

No, sillies, I mean which programming language.

[ChemistCat]

I did figure that out...right after I hit post. :-)

Too many threads on too many topics going at the same time, I guess.

Though I do think technical people need to learn the languages of our enemies. At this point, only liberals who want to Kumbaya are doing so.

[zip]

Great answer. thx

[Jim Cane]

did you ever know anyone who got laid off who all of a sudden decides to stop looking for a job?

No, it took months and months of frustration before they stopped looking and figured that it was easier to live like the boatloads of illegal immigrants in section 8 housing than it was to sleep on a sidewalk.

[Jim Cane]

There is no such thing as "corporate welfare."

Sure there is. When my money is robbed from to to help my competition import cheap labor, my government is practicing corporate welfare. They are taking my money and using it it to pay U.S. bureaucrats to bring in techslaves for companies too cheap to pay the prevailing market wages, yet wealthy enough to donate cash to those reps willing to pass laws that coerce money from me for redistribution to cheapskate CEOs. A little campaign cash for a free trip to the slave trough - not a bad investment, in a purely Randian sense, but as you probably don't know, Conservatism and Rand's Objectivism are two different animals, and you don't even make old Ayn's cut, since you depend on government meddling in the labor market.

This is an invention of the leftists,

You're right about that. RINOs and Dems created H1-B and L1 and OPIC. Government interference in the market place. That's what you favour, you commie. (Waaaa waaa don't take away my government handout of techslaves, waaaa waaa...I'm too cheap to purchase American services, boo hooo, I wan't Uncle Sam to give me cheap labor.) You corporate commie pencilnecks make me want to puke.

and you should be ashamed of yourself for (i) letting it infiltrate your mind and (ii)

At least I have a mind of my own, which is more than I can say of you, my dancing, orange mantled Hari Bushna friend.

promulgatig[sic] it on a conservative board.

When a commie like you types the word "conservative", do your fingers burn same way vampyrs burst into flames when they come into contact with holy water?

[Jim Cane]

Yea dude, but still. What if it were 20%? That means you would only have to out-shine 20% of the real and potential work force. You only have to beat out the bottom two deciles. That should be encouraging, shouldn't it?

I know some brilliant people, hard working, and industrious, who have lost everything - locked out because they are over 50. There seems to be a race to the bare minimal functionality in the hiring of new employees. Everyone over 30 is overqualified. A mech engineer I know leaves his JD and MBA degrees off his resume, since he gets more interviews as a mere BS in ME.

[null and void]

'Fraid so. You don't have to be better - you just have to be perceived as being cheaper.

In other words, if you've ever gotten a high salary, they perceive that you won't work for less, and even if you accepted a lower position, that you'd leave the instant the economy turned around.

Why bother wasting their time interviewing a highly qualified - expensive - candidate when you quite literally have HUNDREDS of resumes from their younger, less qualified - cheaper - candidates?

It makes good business sense, most postions don't really require the cream of the crop to do, just a middling level competent person.

Why buy a Ferrari just to grocery shop?

[blueriver]

You're confusing government hand-outs with the freedom to choose. Just because the government allows corporations to do smart things doesn't make it a government hand-out. There's a difference.

The part that is a government hand-out is that the government allow corporations to import foreign workers into America at the expense of the taxpayer. Ask yourself the question - who benefits from importing foreign workers? Is it the tax paying citizen or the corporate executives? If you think that foreign workers are not using your tax dollars you are sadly mistaken, not to mention the fact that they are displacing American workers.

[ableChair]

I know some brilliant people, hard working, and industrious, who have lost everything - locked out because they are over 50. There seems to be a race to the bare minimal functionality in the hiring of new employees. Everyone over 30 is overqualified. A mech engineer I know leaves his JD and MBA degrees off his resume, since he gets more interviews as a mere BS in ME.
You may be right. As for the degrees, I have some insight into that. To make a long story short, there is a correlation between people who stay in academia too long and job performance. If I were the mech engineer I would definitely do the same thing and leave all 'advanced' degrees off my resume. I'll leave it at that.

[ableChair]

The part that is a government hand-out is that the government allow corporations to import foreign workers into America at the expense of the taxpayer.

Right. Which is not a hand-out. With all due respect, the above statement is, by definition, internally inconsistent. The government hasn't handed anything to anyone. All that has happened is that the government hasn't intervened as you would like them to. By definition, there's no handout here. The government, by it's inaction, is leaving the decisions to the market place. I have no problem with that.

Ask yourself the question - who benefits from importing foreign workers? Is it the tax paying citizen or the corporate executives?

Probably the executives, but who cares? What's wrong with the executives benefiting? The way I read it, you're just rationalizing why the government should intervene. I see no problem with executives and investors benefiting by using the most efficient means of production available to them.

If you think that foreign workers are not using your tax dollars you are sadly mistaken, not to mention the fact that they are displacing American workers.

You may be right, but the last time I checked into it, foreign workers still pay income taxes, so I don't see how they are getting something for nothing, any more than U.S. citizens do anyway. As for the "displacement" issue, that's just market competition which makes the market a better place for everyone. I see no problem with that either.

[ableChair]

You should see my other posts. I suspected it was something like that. I've had no problem at all getting jobs and I simply don't understand what these people are talking about. The longest job hunt I had was a cross-country, out-of-state job hunt from Atlanta to Denver that took 3 weeks. And that was in the middle of the "dot com crash". Come on, people!

[blueriver]

The government hasn't handed anything to anyone. All that has happened is that the government hasn't intervened as you would like them to. ..The government, by it's inaction, is leaving the decisions to the market place.

What exactly do you call all the visa's that they are handing out? You are looking at this through rose colored glasses - only seeing what it is you want to see. The truth of the matter is that the government has "intervened" in a major way by allowing corporation to import foreigners for jobs in America and in so doing has disrupted the true market place.

You may be right, but the last time I checked into it, foreign workers still pay income taxes,

See: http://www.zazona.com/ShameH1B/H1BFAQs.htm#DoWorkersPayFICA & http://www.zazona.com/ShameH1B/H1BFAQs.htm#WhatAreBodyshops

As for the "displacement" issue, that's just market competition which makes the market a better place for everyone.

It is not "true" market competition because it is dependent on the U.S government doling out the work visa's.

Probably the executives, but who cares? What's wrong with the executives benefiting? The way I read it, you're just rationalizing why the government should intervene. I see no problem with executives and investors benefiting by using the most efficient means of production available to them.

Nothing wrong with executives making money but I do not need my government giving them a helping hand. If they want foreign workers so bad let them leave America - and good riddens to them I say.

[blueriver]

I've had no problem at all getting jobs and I simply don't understand what these people are talking about.

Do a search on dice.com and monster.com for a firmware engineer - dice is currently showing 152 matches nationwide. On monster.com there are 312 matches. Would you say this is a big supply of jobs for the thousands of unemployed software engineers?

[ableChair]

Yea, I've already done that. Still doesn't seem to make much difference. I mean sure, the market has slowed down quite a bit - compared to when they were hiring anyone who could breathe - but this isn't the only place where you can find jobs I assure you. Those aren't the only places you would look for a job...are they?

[ableChair]

What exactly do you call all the visa's that they are handing out? You are looking at this through rose colored glasses - only seeing what it is you want to see. The truth of the matter is that the government has "intervened" in a major way by allowing corporation to import foreigners for jobs in America and in so doing has disrupted the true market place.

Let's look closely at what you wrote. In particular, lets juxtapose the words intervene and allow. If someone 'allows' something to occur, have they intervened? I don't see it, nor does Webster's. The definitions are mutually exclusive in that context. The "handing out" of a visa is the removal of specific government prohibitions against travel, not a gift. Let's look at it this way. If the government 'allows' you to practice your religion, have free speech, or simply to live; is that a hand-out? I don't see it. As for how I see this, I'm looking at this through the glasses of sobered reason, not emotion and hyperbola. Use of terms like "corporate welfare" sound sexy, but sadly have little meaning, IMHO. This isn't to say that I'm right and you're wrong: I'm just not convinced by your arguments.

See: http://www.zazona.com/ShameH1B/H1BFAQs.htm#DoWorkersPayFICA & http://www.zazona.com/ShameH1B/H1BFAQs.htm#WhatAreBodyshops

I'll check 'em out. I could've sworn foreign workers paid taxes, but I'll have a look. You may be right.

It is not "true" market competition because it is dependent on the U.S government doling out the work visa's.

You might get some mileage out of that argument. Let's explore it. You're suggesting that by the preferential issuance of visas that government is interfering in the free market. I could go with that, if that is what you're getting at.

Nothing wrong with executives making money but I do not need my government giving them a helping hand. If they want foreign workers so bad let them leave America - and good riddens to them I say.

I think that's a beaten old, dead horse now, i.e. no such thing as a governmental "helping hand" in this context.

Honestly, from your posts it sounds like you've been burned pretty bad. If true, I'm sorry to hear that and it is most unfortunate, but I'm still not convinced that we can put much blame on external causes. Maybe we can, I'm just not seeing it yet.

[ableChair]

So, having looked at your links and researched them elsewhere, what I found was that your implication that foreign workers don't pay taxes, and that they stiff U.S. citizens with the bill was, at best, misleading. First, the mechanism under which you imply this occurs is called a "Totalization agreement", an international treaty to allow foreign workers to keep their Social Security benefits. It has nothing to do with any other Federal taxation. Not only that, the U.S. only has agreements with some 20 countries and not every foreign worker will qualify for it. But even if they do, the agreement only stipulates that retirement taxes paid in a host country are repatriated to the country of origin so that the employee can use those benefits paid for retirement. This agreement is reciprocal, by the way. In other words, regular federal taxes are withheld in the U.S.. It only stands to reason that foreign workers are allowed to 'repatriate' their retirement taxes, but only their retirement taxes, since they will be retiring elsewhere. H1B Visas for 'specialty occupations' last a max of 6 years. There's nothing untoward going on here.

Anyway, here's a list of the current countries with which we have Totalization agreements:

Italy
Germany
Switzerland
Belgium
Norway
Canada
United Kingdom
Sweden
Spain
France
Portugal
Netherlands
Austria
Finland
Ireland
Luxembourg
Greece
South Korea
Chile
Australia