Study: IT worker unemployment at 'unprecedented' levels

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.

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."

The "handing out" of a visa is the removal of specific government prohibitions against travel, not a gift.

I don't expect you will ever understand my perspective on this subject matter as I will most likely never understand yours. For certain I will never understand the logic you have employed to come to the conclusion that the visa's are not a "gift" or helping hand to corporate America.

As far as me being burned by this I would have to say that I have been extremely lucky so far, but I know that eventually my luck may run out and I may find myself unemployed again. Also, I have a lot of empathy for my fellow citizens who have not been as lucky as I have been and who are struggling to survive. Maybe I am just old fashioned but in my humble opinion I think our government should not be handing out work visa to foreigners when our own citizens are unemployed.

Taking your words at face value it appears that what you are saying is that America should be wide open with no limits on immigration. I take it you think that any limits on immigration is an anomaly and the H-1B, L-1 and other work visa's are a much needed correction. With logic like that I can see why you do not think the government is "helping" corporate America by handing out work visas. If we take your words literally and carry them out to there ultimate conclusion the entire world population would be at our doorsteps. There would be thousands of job applicants for every job available. The unemployment rate would skyrocket as there is a finite number of jobs for an infinite labor pool. The end result is that we would have a country not much different from China or India. Once you have a wide open immigration policy with no limits I contend you no longer are a sovereign nation and you most certainly can not have a large middle class. Even the governments of India and China know better than to do what we are doing. They know the effects of massive unemployment. While they are trying their hardest to protect the jobs for "their" citizens we in America are doing just the opposite mainly because the corporations in America desire it to be that way. And yes our government is "allowing" it to occur by being an able and willing partner in the free-for-all immigration policies currently in effect.

I think I can address that entire paragraph with one sentence: supporting limited government does not, by itself, constitute advocacy of anarchy. In other words, my point was that allowing any person, for better or worse, into the country is a removal of government intervention, not the application of intervention, as you had tried to argue. It was a point of distinction in definition, not a statement of political or ideological belief. That's all...nothing more.

I don't expect you will ever understand my perspective on this subject matter as I will most likely never understand yours.

Here, here!, but I respect your opinion in any case. I'm glad to know that you did not get burned and good luck in your future endeavors!

implication that foreign workers don't pay taxes, and that they stiff U.S. citizens with the bill was, at best, misleading.

What I said is that the American taxpayer is subsidizing them via the taxes we pay for schools, roads ect. Have they paid the taxes that build the schools and the roads? Do they pay state taxes? Do they own property? Do they pay property taxes? Do they retire here and spend their money in America or do they take all their savings back to their home land? I do not think I ever said that they do not pay any taxes. My contention is that they use more of our tax paying dollars than they contribute. This is especially true of the L-1 visa's.

In other words, my point was that allowing any person, for better or worse, into the country is a removal of government intervention, not the application of intervention, as you had tried to argue.

The same can be said for allowing killers to roam the streets. The line you have drawn for what is government intervention and what is not depends on what your definition of a government role should be. In the case of immigration the line is a subjective one, in the case of letting murderers walk the streets I would expect you would agree the line to be much clearer.

Here, here!, but I respect your opinion in any case.

And I yours.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.