Study Reveals 'Jobless Recovery' in Technology Labor Market Despite Industry Claims to the Contrary

For More Information: Candice Johnson, CWA Communications, 202-434-1168, cjohnson@cwa-union.org and David Brotherton, Brotherton Strategies, 206-324-0403, david@brothertonstrategies.com

Just 76,300 new Information Technology jobs added since April 2003; New jobs total fewer than one-quarter of those lost earlier in the decade

SEATTLE, WA -- Job growth in America's information technology sector has been significantly less robust than industry leaders have claimed, and fewer than one-quarter of the IT jobs lost during the early part of the decade have been recovered over the past three years, according to a new study released today by the nation's leading union of high-tech workers.  With limited exceptions, the so-called "recovery" of the IT sector has been a jobless one, the study found, even though an economic recovery began more than five years ago. 

The report entitled "Information Technology Labor Markets: Recovering, But Slowly"  was prepared by the Center for Urban Economic Development (CUED) at the University of Illinois, Chicago for the Washington Alliance of Technology Workers an affiliate of the Communications Workers of America (WashTech/CWA). See full study here.

The study examined the state of the IT industry through February 2006 (the most recent month for which data are available), assessing employment trends nationally and in eight key metropolitan labor markets.  It is a follow-up report to "America's High-Tech Bust" released by WashTech and CUED in September 2004. 

"Technology job growth is weak at best in most major markets across the country," said WashTech/CWA president Marcus Courtney. "Tens of thousands of highly-skilled American IT workers remain unemployed or under-employed, while at the same time, more and more technology jobs are being shipped out of the country."

Among the report's key findings:

Between March 2001 and March 2004, the IT industry eliminated approximately 402,800 jobs, more than half of which were shed during a time when the nation was officially experiencing an economic recovery, which started in November 2001.

Overall the high-tech industry experienced extreme employment volatility between April 2003 and February 2006, a period during which only 76,300 jobs were added nationwide. All told, the sector has recouped less than one-quarter of the IT jobs lost earlier in the decade.

While the unemployment rate in the IT sector remains above the 2001 rate of 3.6 percent, it is also likely that large numbers of IT workers have sought employment in other sectors of the economy.

The transfer to foreign markets of jobs and services once performed by American workers is a significant factor in the continued weakness of the IT labor market. Since the mid-1990s a growing array of processes and services formerly conducted in the U.S. – including code writing, software design, data processing, claims processing and customer service – have been outsourced to providers in low-wage countries.

"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. "Moreover, the jobs impact of offshoring is considerable."

Employment growth in the technology sector has been uneven across regional labor markets and over time, the report found. The notable bright spots included Seattle, Washington, DC and, to a lesser extent, San Francisco. Metropolitan areas such as Boston, Chicago, Dallas and San Jose have seen only modest recovery, while employment levels in Los Angeles have continued to fall significantly.

The CUED analysis contradicts recent reports from some technology trade groups claiming there are more IT jobs today than at the height of the dot-com boom.

About WashTech/CWA

WashTech/CWA is the nation's leading union for high-tech workers. WashTech was formed in 1998 by Microsoft contract employees in Redmond, Washington and quickly affiliated with the 700,000-member strong Communication Workers of America (CWA). WashTech/CWA works to ensure that the voices of America's high-tech workers heard and their needs are met. Find out more at www.washtech.org. 

About The UIC Center for Urban Economic Development: The mission of the Center for Urban Economic Development at the University of Illinois at Chicago (UIC-CUED) is to analyze disparities in the urban economy and their implications for low- income and minority communities. UIC-CUED works in partnership with low-income and minority urban communities to devise strategies for job-centered development.