Domestic IT Job Losses Continue After Recession

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Although there have been significant gains in gross domestic product (GDP) and employee productivity—and the Dow Jones industrial average has remained stable, hovering around 10,000 points—since the end of the recession, IT jobs continue to disappear, according to a new study conducted by the University of Illinois–Chicago’s Center for Urban Economic Development (UIC-CUED). The study, which was prompted by the Washington (state) Alliance for Technology Workers and funded by the Ford Foundation, was based on figures provided by the U.S. Bureau of Labor Statistics (BLS) for IT employment nationally and in select metropolitan areas.

“The crux of the study was to analyze trends in employment within the IT industry,” said Snigdha Srivastava, the UIC-CUED researcher who composed the report. “Both during the recession and post-recession, we see a continuation of these trends. Economic recovery is still groggy. There’s kind of a gap between the labor market and the rest of the economy, and it’s especially pronounced in IT.”


Between March and November 2001, the most severe phase of the economic downturn, 197,000 IT positions were phased out or sent overseas. However, between November 2001, when the National Bureau of Economic Research (NBER) declared the recession over, and April 2004, the IT industry lost 206,300 jobs. Although the latter period was longer, the increased slump was nonetheless unexpected, because of the considerable improvements in other economic areas.


“What was most surprising to most people was that over half this decline took place after the recession was officially declared over in November of 2001,” said Srivastava, and added that some of the main causes of the unabated job losses were changing business models, outsourcing and new technologies. She also said that because of these factors behind the IT job losses, the issue couldn’t be viewed merely in terms of traditional macroeconomic business cycles (expansion, boom, recession, depression).


“Based on the numbers, it appears that it’s not just a cyclical trend,” Srivastava said. “It appears to be more about economic restructuring more than cyclical factors. Having said that it’s not a cyclical issue, though, if the economy recovers faster and stronger, I would assume that employers would hire more workers.”


Still, because of the relative complexity of the IT industry, it would be difficult to venture a prediction as to whether those numbers will continue to descend or reverse rapidly, she said. “This is a constantly changing industry. It’s very rapidly evolving and we really don’t know what will happen in the future.”

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