Bloomberg News

Technology Employment Fell 2% in 2010 With 115,800 Jobs Lost

October 05, 2011

(Updates with 2011 figures from separate report starting in fourth paragraph.)

Oct. 5 (Bloomberg) -- The U.S. high-technology industry lost 115,800 jobs in 2010, a 2 percent decline that marked the industry’s second consecutive year of falling employment.

The job losses were less than half the 249,500 positions eliminated in 2009, according to a report released today by the TechAmerica Foundation, a non-profit, non-partisan affiliate of the Washington-based trade group TechAmerica.

Three of the industry’s four sectors -- communications services, technology manufacturing and engineering and technology services -- lost jobs in 2010, according to the report, which was based on data from the U.S. Bureau of Labor Statistics. Software services, which includes Microsoft Corp. and Google Inc., was the only sector to add jobs, expanding by 22,800 positions for an increase of 1 percent.

The industry has shown signs of recovery this year, adding 115,000 jobs through June, according to a separate report from the foundation today. Technology companies employed 5.89 million workers as of June, according to the mid-year report, which was also based on BLS data. All four sectors added jobs in the first half of 2011, led by engineering and technology services.

President Barack Obama has touted the technology industry as a vehicle for creating jobs to lower the nation’s 9.1 percent unemployment rate. As part of his $447 billion jobs proposal, Obama is pushing policies supported by the technology industry that include science and math education reforms and the authorization of trade agreements with South Korea, Columbia and Panama.

Job Growth

“To restore job growth in the U.S. tech industry, the Unites States needs to focus on” fostering “a technically skilled workforce by educating American youth in math, science and engineering, and by welcoming -- not shunning -- highly skilled talent from across the globe,” Robert Bennett, chairman of the foundation, and Matthew Kazmierczak, senior vice president of the foundation, wrote in the 2010 report.

Technology industry positions paid a 93 percent higher wage than the typical private-sector job last year, with the average high-tech worker earning $86,800 in 2010, according to the annual report. The best paid technology workers in 2010 were computer and peripheral equipment manufacturers, who brought in a $125,600 annual wage.

“Innovation has created entirely new industries and is largely responsible for the dramatic increases in productivity that help raise American wages and living standards and create high-paying jobs,” said Bennett and Kazmierczak in the report.

Software Services Dominated

High-tech jobs comprised 10.5 percent of the total private- sector payroll in the U.S. in 2010. The increase in software services employment occurred as the area “dominated” growth in the number of high-tech establishments by adding 5,800 businesses, according to the annual report.

In the first half of 2011, the engineering and technology services sector added 56,800 positions -- the most jobs added by sector, according to the mid-year report.

On average, every new technology job supports three jobs in other areas of the economy, according to Ed Lazowska, former chairman of the Computer Science Department at the University of Washington. The multiplier for information-technology jobs is nearly 5 to 1 because those jobs pay, on average, nearly double the state average in wages and benefits, according to Lazowska.

Employment in the technology industry in 2010 surpassed the finance and insurance industry, which employed 5.48 million people in 2010. Unemployment in the four high-tech sectors included in the report averaged 5.5 percent.

Virginia led the nation with the highest concentration of technology workers for the sixth consecutive year. Ninety-eight of every 1,000 private-sector workers in the state are employed in high-tech jobs. Eight states added technology jobs in 2010, including Michigan, West Virginia and Utah, along with the District of Columbia.

--Editors: Michael Shepard, Allan Holmes

To contact the reporter on this story: Juliann Francis in Washington at jfrancis31@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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