October 5, 2011 By Brian Heaton
High-tech jobs are down for the second consecutive year in the United States, losing 115,800 net positions in 2010, according to a new report on employment and wage trends in the technology industry.
Cyberstates 2011: The Definitive State-by-State Analysis of the U.S. High-Tech Industry revealed that the area of communications services lost 72,100 positions in 2010, followed by 53,600 jobs in tech manufacturing. The engineering and tech services sector also lost 12,900 positions. Only the software services sector increased, adding 22,800 jobs in 2010 for a 1 percent increase.
There are a total of 5.75 million workers in the U.S. high-tech industry.
The losses are less severe than in 2009, when an approximate total of 249,500 tech jobs were lost — but the downward trend is continuing. The report’s data is collected from U.S. Bureau of Labor Statistics data.
Michigan was the biggest surprise in the study given the state’s economic struggles, said Matthew Kazmierczak, senior vice president of the TechAmerica Foundation, the nonprofit technology industry research organization that published the study. The Wolverine State was the fastest growing state in regard to net high-tech jobs, adding 2,700 in 2010 — the most gained by any state from 2009 to 2010.
“At first I thought it was a data error or something we got wrong, but after we dug into it, it was indeed true,” Kazmierczak recalled. “It was a clear indication of the deepness of the recession that happened in Michigan, specifically Detroit around auto companies. They laid off a whole bunch of staff that they were able to rehire once they turned around their financing and other issues and came roaring back.”
Michigan’s upturn might be surprising, added Ed Longanecker, executive director and regional vice president of TechAmerica Midwest, in a statement, “but job gains in key sectors like software and research and development have helped the state recover from hard economic times.”
Most of the 2010 results weren’t as rosy.
Kansas’ tech industry, for instance, lost 6,100 jobs in 2010. Approximately 5,700 of the positions were in the Internet and telecommunications services arena.
Kazmierczak wasn’t surprised. He said the communications services sector has been challenged in recent years, particularly when it comes to land line and wired telecommunications services.
“The challenge is many people have ditched their hard line and only have cell phones,” Kazmierczak explained. “There has been shrinkage of hard line usage [so] ... you don’t need as many employees.”
Good News Ahead?
While the overall trend in high-tech jobs seems negative, early indications have the industry showing signs of employment growth in 2011.
The TechAmerica Foundation also released a midyear jobs report for 2011 this week, based on a different data set from the Bureau of Labor Statistics. Between January and June 2011, the tech industry was up by 115,000 net jobs according to that report.
Kazmierczak felt the increase was primarily due to renewed hope that the U.S. economy would rebound in early 2011. He said businesses and agencies were buying that the recession was almost over and started to plan accordingly.
“There was an increased belief that the economy was beginning to grow and inventories were increasing,” Kazmierczak said, adding that high-tech jobs were up across every sector.
“The one that was still somewhat anemic was the communications services sector, which added [jobs] at a 0.3 percent growth rate,” he continued, regarding the 2011 midyear update. “It was growing, but not as fast as software services, which is at 2 percent, or engineering and tech services, which are at 3 percent.”
The software services area is experiencing consistent growth, a fact Kazmierczak attributed to the overall change in the technology industry. He said the hot areas of technology are presently centered on the cloud, the application market and social networking.
So as sectors such as communications services and tech manufacturing show steep declines, down by roughly 5.5 percent and 4.2 percent in 2010, respectively, he anticipated software services would continue to flourish.
“The community that is building up around those things are software driven,” Kazmierczak said, regarding the cloud, apps and social networking. “[It’s] really becoming the new growth area for things. I think that’s why you see software holding up even during the downturn. There is still a lot of innovation happening that is taking advantage of those types of skills.”
One of the key discoveries in the report that Kazmierczak said may go unnoticed is wages in the tech industry. He said it was interesting that wages went up 3 percent last year, calling it “surprising” given the condition of the national wages overall.
Unemployment was another statistic of note. Although the U.S. unemployment rate remains high at about 9 percent, the rate for computer programmers is at about 6 percent, better than the country’s overall average.
“It’s not great by historical standards — as normally the tech industry is at 2, 3 or 4 percent, with four being on the high end — but it’s not as bad as other areas,” Kazmierczak said.
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