Study: IT job market continues to be stagnant

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September 16, 2004 (Computerworld) -- Times remain tough for IT workers looking for jobs across the U.S., according to a new employment study of the IT marketplace.
The study, conducted by the Center for Urban Economic Development at the University of Illinois in Chicago, found that the IT job market remains tight, with more workers than available jobs in many parts of the U.S.
Nik Theodore, director of the center and co-author of the study (download PDF), cited several reasons for the continuing lull in IT employment.
He said many employers remain skeptical about the nation's economic recovery from the last recession and noted that some of the job losses in the U.S. are due to offshore outsourcing. The study also found that there has been a move by companies to use off-the-shelf packaged software rather than hiring staff programmers to design and build needed business applications, he said.
"It's important to recognize that even though the economy has been recovering, in IT the job losses are continuing," Theodore said.
The study was done for the Washington Alliance of Technology Workers, Communications Workers of America Local 37083, AFL-CIO, with funding from the Ford Foundation. It looked only at IT workers in traditional IT companies and not at IT workers who are employed by non-IT businesses such as retail, banking and insurance companies.
The study was conducted using U.S. government Current Employment Statistics data and data from the U.S. Current Population Survey for 2001 to 2004. It also focused only on workers in three IT employment classifications: software publishers; Internet service providers, Web search portals and data processing; and computer systems design and related services.
Nationally, IT employment in those categories totaled 2.1 million in March 2001. That number had dropped to 1.7 million by April 2004, according to the study. About 200,300 of those 403,300 lost jobs came after the nation's last recession was declared over in November 2001 by the Business Cycle Dating Committee of the National Bureau of Economic Research. The agency is charged with tracking U.S. business cycles.
The worst-hit area for IT job seekers was the San Francisco region, which suffered a 49% IT job loss between March 2001 and April 2004, according to the study.
"It's important for the general public and the IT workforce to understand" the numbers, Theodore said, because long-term job losses accentuate the need for a continuation of unemployment benefits for affected workers. "It means we need to relook at unemployment compensation rules so people don't run out of benefits while jobs are still not there," he said.
The University of Illinois study comes on the heels of an IT employment report released last week bythe Arlington, Va.-based vendor group, the Information Technology Association of America (see story). The ITAA report concurred that while there was a slight (2%) increase in IT employment early this year, IT job growth is expect to slow for the remainder of 2004.

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