Tech Sector Growth Lags Behind Economy
DATE: 27-SEP-2007
By Deborah Perelman
Job growth remains constrained by the limited number of available, able bodies, said the AeA jobs report.The tech sector bulked up in the first half of 2007, with all four of its sub-sectors—high-tech manufacturing, communications services, software services and engineering and tech services—adding jobs. Still, its growth lagged behind the U.S. private sector, experiencing 2 percent growth compared to 3.3 percent.
These were among the findings of the Washington-based AeA's (formerly the American Electronics Association) employment study based on government data from the U.S. Bureau of Labor Statistics, released Sept. 26.
"This is the third straight year that the U.S. tech industry is adding jobs," said William T. Archey, AeA's president and CEO. "It is also the first year since the bursting of the high-tech bubble that all four tech sectors are experiencing job growth. This benefits the U.S. economy greatly because tech industry wages pay 86 percent more than the average private sector wage and support numerous other jobs."
The U.S. high-tech industry added 118,500 jobs between January and June of 2007, a 2 percent rise, for a total of 5.94 million jobs. This is slightly less than the 143,000 tech jobs added in the first half of 2006.
"It's good news but it's not great news," said Josh James, senior manager, Research and Industry Analysis for AeA.
"The main issue that we're seeing from all of our companies is that they're hiring, but they're not able to hire as much as they'd like to. They're not finding enough people to fill open positions. It's a work-force issue," said James.
The AeA argues that technology employment might be growing faster than that of the private sector but with an inadequate labor pool, they are unable.
"It's partly that U.S. kids aren't graduating with computer science and engineering degrees and partly that these companies cannot access the foreign talent that they want. Foreign nationals can get math, science and engineering degrees here, but the companies can't get the green cards that will allow them to stay. The H-1B visas are cropped far below what we feel the market is asking for," said James.
"If big companies can't do it here, they'll do it elsewhere. But for smaller companies, it's not as easy."
High-tech manufacturing employment grew only slightly in the first half of 2007, adding 1,800 net jobs, or increasing by 0.1 percent. The communications services sub-sector similarly increased only slightly, by 1 percent, adding 12,900 net jobs.
"High-tech manufacturing has been running in place for some time, at least as far as employment is concerned. But before this, they had been shuttering jobs. Communications is another one with very modest growth, but this is after several years of shedding jobs. Within communications, there are telecom services and Internet communications. Internet is doing well, but telecom is still suffering. By far, what's driving growth is the other two sub-sectors," said James.
High-tech services employment in the United States was up more noticeably in the first half of 2007, adding 116,600 net jobs, a 2.6 percent rise. But the most significant growth occurred in engineering and tech services, which added 52,600 jobs, a 3.3-percent increase.
"Some would argue that these are the highest-end jobs and the highest paying," James said.
Despite these mostly positive reports, the confidence of IT professionals in the job market is still tentative, and many technology professionals don't feel that the field is a safe bet for their children to go into.
"A lot of people in the industry are still jilted by the 2001 recession. There is a lot of this jaded outlook, and I don't think that there is actually as much offshoring of these high-end jobs as is being perceived. There has been job growth in the tech industry going on three years. They're not getting the same salaries, but those salaries were over-inflated in the late 1990s. It wasn't realistic. But people are hiring today."
Find thousands of Bilingual jobs at LatPro.com.
By Deborah Perelman
Job growth remains constrained by the limited number of available, able bodies, said the AeA jobs report.The tech sector bulked up in the first half of 2007, with all four of its sub-sectors—high-tech manufacturing, communications services, software services and engineering and tech services—adding jobs. Still, its growth lagged behind the U.S. private sector, experiencing 2 percent growth compared to 3.3 percent.
These were among the findings of the Washington-based AeA's (formerly the American Electronics Association) employment study based on government data from the U.S. Bureau of Labor Statistics, released Sept. 26.
"This is the third straight year that the U.S. tech industry is adding jobs," said William T. Archey, AeA's president and CEO. "It is also the first year since the bursting of the high-tech bubble that all four tech sectors are experiencing job growth. This benefits the U.S. economy greatly because tech industry wages pay 86 percent more than the average private sector wage and support numerous other jobs."
The U.S. high-tech industry added 118,500 jobs between January and June of 2007, a 2 percent rise, for a total of 5.94 million jobs. This is slightly less than the 143,000 tech jobs added in the first half of 2006.
"It's good news but it's not great news," said Josh James, senior manager, Research and Industry Analysis for AeA.
"The main issue that we're seeing from all of our companies is that they're hiring, but they're not able to hire as much as they'd like to. They're not finding enough people to fill open positions. It's a work-force issue," said James.
The AeA argues that technology employment might be growing faster than that of the private sector but with an inadequate labor pool, they are unable.
"It's partly that U.S. kids aren't graduating with computer science and engineering degrees and partly that these companies cannot access the foreign talent that they want. Foreign nationals can get math, science and engineering degrees here, but the companies can't get the green cards that will allow them to stay. The H-1B visas are cropped far below what we feel the market is asking for," said James.
"If big companies can't do it here, they'll do it elsewhere. But for smaller companies, it's not as easy."
High-tech manufacturing employment grew only slightly in the first half of 2007, adding 1,800 net jobs, or increasing by 0.1 percent. The communications services sub-sector similarly increased only slightly, by 1 percent, adding 12,900 net jobs.
"High-tech manufacturing has been running in place for some time, at least as far as employment is concerned. But before this, they had been shuttering jobs. Communications is another one with very modest growth, but this is after several years of shedding jobs. Within communications, there are telecom services and Internet communications. Internet is doing well, but telecom is still suffering. By far, what's driving growth is the other two sub-sectors," said James.
High-tech services employment in the United States was up more noticeably in the first half of 2007, adding 116,600 net jobs, a 2.6 percent rise. But the most significant growth occurred in engineering and tech services, which added 52,600 jobs, a 3.3-percent increase.
"Some would argue that these are the highest-end jobs and the highest paying," James said.
Despite these mostly positive reports, the confidence of IT professionals in the job market is still tentative, and many technology professionals don't feel that the field is a safe bet for their children to go into.
"A lot of people in the industry are still jilted by the 2001 recession. There is a lot of this jaded outlook, and I don't think that there is actually as much offshoring of these high-end jobs as is being perceived. There has been job growth in the tech industry going on three years. They're not getting the same salaries, but those salaries were over-inflated in the late 1990s. It wasn't realistic. But people are hiring today."
Find thousands of Bilingual jobs at LatPro.com.
Labels: employment, technology jobs, US
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