Better times for techies?

Unemployment drops, optimism rises for computer professionals. Is it because the unhappy ones leave the field?

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By Ed Frauenheim
Staff Writer, CNET

Unemployment is down and optimism is up for some tech professionals, according to federal statistics and a recent independent survey. But the numbers may be hiding ongoing troubles for U.S. techies.

Just ask computer programmer Mark Roth, who got a pink slip this week from his employer, a small telecommunications company in Florida. Roth worked there for about four months after nearly three years without a job. The company may call him back if business improves, but he's anxious about his job prospects and the overall economy. "I'm not sanguine in any way, shape or form," he said.

The unemployment rate for computer and mathematical occupations--a category that includes computer programmers, computer software engineers and computer scientists and systems analysts--fell from 5.7 percent in the first half of 2003 to 5 percent in the first half of this year, according to the Labor Department. Unemployment dropped even more dramatically for electrical and electronic engineers--from 6.7 percent in the first half of 2003 to 3.1 percent in the first half of 2004.

But unemployment levels alone don't tell the whole story for workers still . For example, the average number of people employed in computer and math jobs dropped by 72,000 from the first half of 2003 to the first half of this year, to 3,038,000. A similar trend occurred among electrical and electronic engineers over the same period. Their average employment fell by 39,000, to 339,000.

In other words, if employment and the jobless rate are both dropping, it may not mean better times in these tech-related fields. It may just mean that unemployed tech workers are giving up fruitless job searches.

"This implies that some workers in these occupations may have dropped out of the labor force possibly because they are discouraged and have given up looking for work," said Labor Department economist Steve Hipple. "This would lead to a decline in their unemployment rate because fewer are actively seeking a job."

Halcyon days of the dot-com
Even with the lower unemployment statistics, technology professionals enjoyed a better job market in the years the Internet began to take off. The unemployment level for computer-related occupations--a class of jobs similar to the Labor Department's current category of computer and math occupations--remained below 2 percent from 1994 to 2000.

"There's no question there's been an increase in demand for our services."
--Kevin Knaul of staffing firm Hudson

Still, there are sound reasons for growing optimism among tech professionals, said Kevin Knaul, executive vice president for the information technology and technology practice at staffing firm Hudson. The number of Hudson tech consultants on contract with North American clients jumped 19 percent from May to July, to a total of 980. Most of those tech professionals were given assignments in the United States, Knaul said.

In addition, Hudson's revenue for permanently placing technology talent more than doubled from the first quarter of the year to the second quarter. "There's no question there's been an increase in demand for our services," he said.

The company uses its research to create an index of confidence in the employment market, and the numbers have risen in recent months for IT workers. The measure , up 4 points from June and 11 points from May. According to Hudson, IT workers were more upbeat about the job situation than U.S. workers overall--Hudson's national index for July was 108.4.

Knaul argued that techies have calmed down about , the practice of sending technology jobs and other sorts of work to lower-cost countries. Although defenders of offshoring say it benefits the United States as a whole, a number of technology worker advocates have worried that the trend threatens jobs and even the country's long-term leadership in the field. "We've seen that some of that is certainly hype, and some of that is blown out of proportion," Knaul said.

John McCarthy, analyst with Forrester Research, said his oft-quoted projection that 3.3 million services jobs would shift overseas by 2015 to paint a more alarmist picture. Even so, in an update to the research this year, of near-term lost jobs by some 240,000. By 2005, an estimated 830,000 positions will have moved offshore, according to Forrester.

Is everybody happy?
While the Hudson employment confidence measure found tech workers slightly more optimistic than the general work force, it also found them slightly less satisfied with their current jobs. When asked, "generally speaking, are you happy with your current job," 70 percent of workers overall said yes compared with 67.7 percent of IT workers.

And those in the tech field seem more nervous about getting axed. Asked "are you worried about losing your job anytime soon," 26.1 percent of IT workers said yes, compared with 18.4 percent of workers overall.

Electrical and electronic engineers are leaving the field for lack of work, and the shift of work overseas is a serious problem, said Richard Tax, vice president of the American Engineering Association professional group. "The situation right now is not good," he said.

Tax, who also is involved with the Institute of Electrical and Electronics Engineers, said a recent IEEE meeting in New Jersey offers a snapshot of the bleak job situation. Of 25 people in attendance, most of whom were electrical or electronics engineers, the majority were unemployed, Tax said.

The IEEE's U.S. wing has for contributing to high unemployment among U.S. techies, and warned that the trend threatens the country's technological leadership. John Steadman, president of IEEE-USA and dean of engineering at the University of Southern Alabama, said offshoring is one of several reasons engineers are changing careers. Other factors pushing engineers out of the field are the importation of foreign workers through the H-1B visa program, the general economic downturn and a lack of positions that entail actual engineering work, he said.

"It tends to be that they leave engineering because they can't find the right kind of engineering job that pays a true engineering salary and involves engineering challenges," Steadman said.

Jobs will be available, but will workers?
Others are more hopeful about the future of computer careers in the United States, even in an era of offshoring. Some observers suggest jobs will exist for people who , such as business savvy or management skill.

Nonetheless, students from computer science programs at a number of prominent U.S. universities. The National Science Board, an independent body that advises Congress and oversees the National Science Foundation, recently warned of a "troubling decline" in the number of U.S. citizens studying to become scientists and engineers, even as the number of jobs requiring science and engineering training grows.

Not everyone shares that assessment, though. A recent report from the Rand think tank found no evidence of shortages of scientific, technical, engineering and mathematics personnel in the U.S. work force since at least 1990. The report also said it did not find evidence that such shortages are on the horizon.

For Mark Roth, the tech job market concerns him both as a worker and as a father. His daughter recently graduated from college with a computer science degree, but for months has been unable to find a job in the computer field. She's working now at a Borders book store.

"The market is just really, really that bad," Roth said.