News Analysis

Tech Ekes Out Job Gains in '08


With headlines dominated by news of job losses, it's easy to lose sight of areas of the economy where companies have recently hired workers. Last year, even as U.S. economic growth stalled and corporations slashed their workforces in the face of plummeting demand, the number of jobs in technology-related fields increased, according to a technology trade group.

Tech employers added a net 77,000 jobs in 2008, the fifth straight year of gains, according to TechAmerica, a consortium representing 1,500 companies in electronics, software, and telecommunications. As buoyant as the tech sector was last year, growth was not as robust as in 2007, when the industry added 79,600 jobs, nor in 2006, when tech peaked, adding 139,000 jobs.

In its 12th annual Cyberstates survey of U.S. tech employment, TechAmerica found the greatest growth in the software industry, which added 86,200 new jobs. Engineering-services jobs increased by 26,600. These gains were mitigated by losses in tech manufacturing, which shed 23,100 jobs, and the communications field, which saw 12,700 jobs eliminated, the study found. The gains in engineering and software reflect a long-term shift toward high-end services that require incrementally more specialized skill, says TechAmerica President Phil Bond. "The common denominator is about moving jobs up the value chain as the world gets more competitive, and that's exactly what we should be doing," Bond says.

Georgia: A Standout

The losses in manufacturing and communications are part of a long-term trend that's been under way for about four years, says Josh James, TechAmerica's research director. Data for the study was gathered using figures from the U.S. Bureau of Labor Statistics. Many manufacturing jobs are moving overseas, though some specialized areas of high-end manufacturing are on the rise, Bond adds.

For state-by-state trends in technology employement, the study relied on data from 2007, the most recent year for which the specific figures were available. Some states fared better than others. Georgia, which counts IBM (IBM) and AT&T (T) among its key tech employers, added 13,000 tech jobs in 2007, an improvement of 8%. Georgia went against national trends by adding many communications jobs, James says. "A lot of that has to do with consolidation in the telecom sector," he says. "That's what really drove the growth for Georgia."

Texas, which is home to Dell (DELL) and Texas Instruments (TXN), added 14,700 jobs, a growth rate of 3%, while Utah added 14,000. Kansas, where Sprint Nextel (S) and Garmin (GRMN) are headquartered, added 4,300 jobs. Overall tech job gains were recorded in 39 of the 52 states and territories surveyed, which included the District of Columbia and Puerto Rico.

Rising Wages in Rural Areas

The biggest losses in 2007 came in Washington, D.C., which shed 3,000 positions. Idaho, where Micron Technology (MU) is based and Hewlett-Packard (HPQ) and ON Semiconductor (ONNN) have operations, lost 2,500 jobs. California, where tech firms account for some 942,000 jobs, had modest growth, adding only about 2,000 jobs in 2007.

Three rural states—Nebraska, Wyoming, and New Mexico—had the fastest-rising wages for tech jobs. Technology firms are increasingly choosing rural settings for their operations, James says. "This a big macro trend we're seeing around the country," he says. "Plus it shows that many of these states are competitive in the global economy."

In Virginia, 92 out of every 1,000 private-sector workers are in the technology field, giving the Old Dominion State the highest concentration of tech jobs. California led the nation with the highest average salaries for tech workers, at $107,000 per year. Workers in Washington State, home to Microsoft (MSFT), Amazon.com (AMZN), and RealNetworks (RNWK), had average wages of $95,900, the highest wages when compared with other private-sector workers, who averaged less than $45,000 per year.

See the slide show of best and worst states for tech jobs.

Hesseldahl is a reporter for BusinessWeek.com.


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