Dismissing industry claims to the contrary, a study released on June 14 asserts that the technology market is actually in a “jobless recovery.”
The study was released by the CUED (Center for Urban Economic Development) at the University of Illinois, Chicago on behalf of the WashTech/CWA (Washington Alliance of Technology Workers, an affiliate union of the Communications Workers of America).
The study argues that recent hiring in the IT industry reflects cyclical recovery in IT labor markets and not sustained secular growth, finding that just 76,300 new IT jobs have been added since April 2003.
The number adds up to less than one-quarter of those lost during the recession, despite the fact that the recovery began five years ago.
According to the report, the IT industry eliminated approximately 402,800 jobs between March 2001 and March 2004, despite the fact that the nation began officially experiencing an economic recovery in November 2001. Half of the job eliminations took place when the United States was on this upswing.
“Technology job growth is weak at best in most major markets across the country,” said WashTech/CWA president Marcus Courtney in a statement.
“Tens of thousands of highly-skilled American IT workers remain unemployed or underemployed, while at the same time, more and more technology jobs are being shipped out of the country.”
The news isnt all gloom and doom, however. The report finds “bright spots” such as Seattle, Washington, D.C. and San Francisco showing even growth.
Modest recovery is also seen in Boston, Chicago, Dallas and San Jose, while employment levels in Los Angeles continue to fall.
“It is far too soon to celebrate this as a strong recovery,” said Nik Theodore, who co-authored the study and is a professor at the University of Illinois Chicago, in a statement. “Moreover, the jobs impact of offshoring is considerable.”
The study discovery of greatest alarm is the transfer to foreign markets of jobs and services once performed by U.S. workers.
The outsourcing of coding, software design, data processing, claims processing and customer service is called out in the report as contributing to the overall weakness of the IT labor market.
Though the unemployment rate in the IT sector remains above the 2001 rate of 3.6 percent, the study says that it is likely that due to the scattering of IT workers into other sectors of the economy as a result of the recession.