Recession hit IT wages across U.S.

The downturn's impact varied sharply by region; Silicon Valley pay fell 10%

WASHINGTON -- The 2008-09 recession reduced wages in Silicon Valley last year by about 10%. But even with that drop in pay, tech employees in the Valley remain, by far, the best paid in the U.S.

The average salary of a Silicon Valley tech worker was $132,500 in 2009, down about $15,000 from 2008, according to TechAmerica's annual Cybercities report, which examines employment and wage trends in 60 tech centers in the U.S.

Josh James, vice president of research and industry analysis at TechAmerica, said he could only speculate on the reasons behind the decline in Silicon Valley wages, but he said he suspects the drop reflects a loss of bonuses and other incentives that took place as companies adapted to the downturn.

"I can't imagine that it's a long-term trend," said James. "I don't think Silicon Valley is in any jeopardy of losing its status as the high-tech hub in the United States."

Silicon Valley saw the steepest drop in wages among the 60 cities and metro areas examined in the Cybercities study.

According to TechAmerica, 53 of the top 60 cities for high-tech employment lost jobs last year. The report's findings aren't surprising, since an earlier analysis by the industry group found that the U.S. tech industry had lost about 250,000 jobs last year. That represents about 4% of the 5.9 million-strong tech workforce.

The impact of the recession on wages varied by region. Nationally, wages for all tech workers fell an average 0.8% last year. But many workers saw an increase in wages.

Tech workers in Florida's Tampa-St. Petersburg metro area saw the largest percentage gain; the average IT salary there rose $3,922 to $71,143, an increase of 5.8%.

The largest tech workforce is in New York, where 316,971 people work in IT. Washington has 292,969 tech workers, while San Jose/Silicon Valley has 225,575, Boston has 219,798, and Dallas-Fort Worth has 174,848, according to the report.

After Silicon Valley, the best tech paychecks are in San Francisco, where pay averaged $123,479 last year, a 1.9% decline from 2008. Next was Boston, where average pay was $102,230, down 4.2% from 2008, followed by Washington, where average pay rose 1.5% from the prior year to $100,488, and North Carolina's Research Triangle Park area, where average pay last year fell 7.6% to $100,402.

The only large cities to add jobs in 2009 were San Diego and Denver; each saw a 0.4% increase in employment. San Diego has 111,000 people working in tech jobs, and Denver has 88,900.

The cities that saw the largest percentage gains in employment were in the smaller markets. In Huntsville, Ala., for example, tech employment grew 2.4% last year, as 900 jobs were added to bring the total to 36,000.

Tech wages in Huntsville increased, too, rising 4% last year. That brought average tech salaries there to $74,747.

Kent Smith, director of research and information service for the Chamber of Commerce in Huntsville, which is in Madison County, attributed a major share of the employment increase to government spending. "Federal spending is about half of our local economy," said Smith, who noted that the Army has expanded in the area as well. The region has numerous defense contractors, as well as commercial technology development in life sciences, he said.

Huntsville is also home to the Cummings Research Park, which Smith said is the second largest research park in the U.S. with some 25,000 employees. The largest is Research Triangle Park between Raleigh, Durham and Chapel Hill, N.C.; about 42,000 people work there.

Another area that did well in the Cybercities ranking was Oklahoma City, where the addition of about 900 jobs in 2009 increased tech employment 5.4% to 18,300 jobs.

Oklahoma City's average tech salary was $51,803, which represented a decrease of 2.4%. That was one of the lowest average salaries identified in the report.

Roy Williams, president and CEO of the Greater Oklahoma City Chamber, said the area has low unemployment thanks to the energy, biosciences and aviation industries, which all employ IT professionals. Boeing recently announced plans to relocate some operations from Long Beach, Calif., to Oklahoma City -- a move that will add about 500 jobs.

Williams said that Oklahoma City and the state of Oklahoma generally suffered a "depression" in the late 1980s that changed the business culture and helped the area avoid speculation in real estate and commercial properties. "We didn't get ourselves in the position of having too much inventory of everything," he said.

Patrick Thibodeau covers SaaS 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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