Feds report tech job losses in Mass. between '01 and '09

Despite employment drop, average tech salaries rose 30%

A snapshot of high-tech development in Massachusetts by the federal government found that tech employment in the state declined 15%, or 47,000 jobs, between 2001 and 2009.

That decline sounds dramatic, but underlying it is a shift away from manufacturing to services and scientific jobs that require highly educated workers, according to a recently released U.S. Bureau of Labor Statistics (BLS) report.

Computer equipment manufacturing jobs, for instance, fell 40%; communications equipment manufacturing jobs declined 78%; and even software publishers, a labor category that includes developers, declined by 10% over this period. Massachusetts wasn't alone. The IT industry shrank nationally as an employer over the last decade.

Meanwhile jobs in scientific research, in particular, increased by more than 32%, accounting for 44,000 of the state's 272,700 tech jobs counted in 2009. One out every five dollars paid in wages in that state is attributed to tech.

That increase is the result of the state's bio-tech industries, with most of the beneficiaries being the highly educated, said Frank Conte, editor of the Beacon Hill Institute's economic indicators project. The Institute is the research arm of the economics department at Suffolk University in Boston.

Even as the overall number of jobs declined, tech wages overall increased nearly 30%, according to the BLS.

For instance, software publishers -- the BLS counted 22,000 such jobs in 2009 -- saw their average wages increase 25.5% to $119,300.

The rising wages, coupled with the decline of workers in some areas, means "the industry is getting more productivity out of fewer workers," said Conte, which may also point to increasing outsourcing of lower-value work.

For those involved in scientific research, wages grew 45% during this period, reaching $110,000.

Christopher Anderson, the president of the Massachusetts High Technology Council, an industry group, said there are fewer large technology companies in the state and in New England, "but there has been an explosion of small, younger technology companies."

Anderson said the council is working with others in New England to increase the visibility of these firms.

But citing the state's unemployment rate, which has been just above 7%, lower than the national average, Anderson said "I don't see a negative trend here."

The BLS study cuts itself off at a time when tech unemployment was rising. But the Federal Reserve Board is reporting growth in revenue and wages in New England tech firms.

In its latest Beige Book released Wednesday, the Fed said that its New England software and IT contacts are reporting year-over-year revenue increases from mid-single digits to 20%.

These firms, as well, are increasing headcounts, many by more than 5%, according to the Beige Book, which is a collection of anecdotal reports of economic activity from unidentified sources around the U.S.

Many firms also report "continued difficulty in attracting and retaining qualified software engineers, programmers, and sales personnel," the Beige Book reported. Annual wage increases for most employees were reported between 3% and 5%, "with one firm increasing the wages of software engineers by more."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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