High-tech job hemorrhage not stanched, but slowing next year

San Francisco Business Times ^ | 12/1/2003 | Kent Hoover

[Willie Green]

For education and discussion only. Not for commercial use.

America's high-tech industry lost 540,000 jobs in 2002, with employment dropping to 6 million, according to a study by AeA, the nation's largest high-tech trade association.

But AeA projects high-tech job losses will slow to 234,000 this year.

Electronics manufacturing accounted for more than half of the high-tech jobs lost last year. But for the first time in the seven years that AeA has prepared its Cyberstates report, the software industry declined instead of grew -- cutting 150,000 jobs last year.

All but three states -- the District of Columbia, Wyoming and Montana -- lost tech jobs last year. California showed the biggest decline -- a loss of 123,000 jobs, followed by Texas at 61,000.

High-tech exports fell 12 percent to $166 billion. The only sector to increase their exports was electromedical equipment manufacturing. High-tech venture capital investments dropped 52 percent to $13 billion.

"These declines have caused us to pause about two important issues," said AeA President and CEO William Archey. "We are aware of current budget restraints, but now is not the time to cut back on education, particularly in math and science. We need a world-class work force to deal with world-class challenges.

85 million lacked coverage

A new analysis by The Commonwealh Fund found that 85 million Americans lacked health insurance at some point between 1996 and 1999 -- more than double the number of uninsured Americans reported in any one of those years by the Census Bureau.

The reason for the higher number is that millions of Americans slipped in and out of coverage, according to the private research foundation.

"Insurance churning disrupts and undermines efforts to provide timely medical care, and likely raises public and private health insurance costs due to frequent cycling on and off coverage," said Commonwealth Fund Vice President Cathy Schoen.

More than half of the families with adults who were fully employed during this four-year period went without health insurance at some point.

The foundation said the study highlights the need for extending eligibility for Medicaid or the Children's Health Insurance Program, new policies that blend public and private coverage for those with unstable sources of private coverage.

Kent Hoover is Washington bureau chief.
Reach him at khoover@bizjournals.com.

[Willie Green]

Bush's Brother Has Contract to Help Chinese Chip Maker
Bush's brother has US$400,000 contract with Chinese firm

[harpseal]

Ping

On or off let me know

[waterstraat]

This is not good(losing high tech jobs to communist china and socialist India). I dont think either country cares about our Bill of Rights, and they will become the worlds superpowers if this continues.

[riri]

A friend of a family member just took a job with a consulting firm that works mainly with aviation and satellite tech. He is not an engineer but works more in the financial end. He said the entire engineering department is made up of muslims (not Indians) here on H1B's or whatever visa they came in on. They are supposedly all named Mohammed and all they do is bit*h about our country.

[KayEyeDoubleDee]

So, when Bush enacts steel tarrifs, he's your hero. But when technology firms in an ostensibly free country do something to lower the costs of their product, it has something to do with his brother? Next we'll find out that Jeb is shorting stock in some Mississippi shrimp company.

[Alouette]

We need a world-class work force to deal with world-class challenges.

And who will work for third-world wages.

[Gunslingr3]

Willie, you are seriously slacking.
The U.S. capitalist economy eliminates 27-35 million jobs every single year. Every. Single. Year.

[Willie Green]

Such a high turnover rate is indicative of an unstable economy.

[Gunslingr3]

Such a high turnover rate is indicative of an unstable economy.

How do you know?

[Gunslingr3]

Such a high turnover rate is indicative of an unstable economy.

P.S. A 'stable' economy is a stagnant economy, I don't think that's what you're looking for either.

[dadokane]

my 17 year old is considering obtaining a college degree in IT (information technology)

will there be a job for him in 4 years?

[Gunslingr3]

my 17 year old is considering obtaining a college degree in IT (information technology) will there be a job for him in 4 years?

Are you asking if others will find a way to put him to work? Sure. Will it be making the same wage people did 6 years ago when their was a different demand for the IT labor relative to supply of IT labor, nope - the world never quits changing.

Increasing the pool of qualified IT labor is the end of the world to some, especially if they can manage to ignore the benefits bestowed upon the millions and millions of people who will in the future be paying less and less for IT goods and services.

[Willie Green]

will there be a job for him in 4 years?

Possibly. But the more serious question is "will it pay enough to have been worth the money invested in his education?"

The Administration is obsessed with making America "more competitive" by crushing Middle Class prosperity into parity with Third World compensation levels. I'd recommend a more stable profession: perhaps mortuary science. There will be an increasing demand for undertakers as Baby Boomers age.

[oust the louse]

Let's not forget we are designing and producing better and more efficiently. Robots (pick and place machines) are doing the work of laborers who once stood in factories 8 hours a day.
I'm also P'Oed at the HR directors who eliminate the qualified American worker for H1B visa status applicants.They have to eventually sponsor the person in which costs money.Are they too lazy to look for good applicants from the states?

[lelio]

The U.S. capitalist economy eliminates 27-35 million jobs every single year. Every. Single. Year.

And it should generate better paying jobs. Right now the growth is in low paying retail ones.

[discostu]

yes, this is a cyclical thing, when the economy is rough companies move expenses out of the country. What the doomers refuse to aknowledge is that outsourcing (the act of having your IT work done outside your own company) takes a lot of infrastructure and most tech based companies can't do it effectively for very long. Outsourcing becomes even more difficult when it is outsourced offshore (don't let people snow you into thinking all outsourcing is offshore, quite a fair bit of outsourcing stays in America, ask Veritest) the challenges increase and the infrastructure needs increase as well. The amusing part is how many companies have been seeing outsourcing as a cure without bothering to crate the infrastructure, they are learning the hard lessons and will be production back in house (assuming they survive the cost of learning those hard lessons).

Really only large well established companies can outsource, most of the tech industry is not made up of these companies. For every IBM there's over a hundred "bob's software" with a couple dozen employees. Bob's Software can't outsource down the street, they don't have the hardware or the business practices, forget sending work to India.

The bursting of the tech bubble is what pushed the economy into a down cycle, coming out of recessions generally follows the rule of first in last out, it's the lagging industry with the biggest hole to climb out of. But climb it will, and is. Just look at the numbers, job losses this year were half of what they were, next year will probably be flat maybe with slight gain while the rest of the country does huge gains. By the time your 17 year-old is out of college the cycle should be back into a nice upswing.

[Gunslingr3]

And it should generate better paying jobs. Right now the growth is in low paying retail ones.

So, should we work in textile mills, or retail stores? Which would you prefer?

[Paul Ross]

Ping. Check this incipient security risk out.

[searchandrecovery]

Ahhhh, the middle-class holocaust continues (if not high-tech jobs, then the back office, or research, or tech-support, or engineering, or manufacturing).

The results are in - NAFTA's a bad joke. Free-Trade means you'll freely trade your neighbor's job for personal financial gain. GREED IS GOOD! Capitalism seems to work best when not given free reign.

[Alamo-Girl]

Thanks for the ping!

[Jeff Head]

Bingo. This is a major concern and one we dare not take lightly or wink at.

It is one of the principle reasons (among several others) I have written a series of novels that depict where it all could lead, The Dragon's Fury Series.

Best Fregards.

Jeff

[Jeff Head]

It's not about true "free trade" or the free market, any more than abortion is about "choice".

Don't get caught up in the "capitalism" game. We are about an open and moral "free market". Today's free trade has no resemblance to that IMHO.

Read: Today's Free Trade is not about the Free Market.

[RogueIsland]

Really only large well established companies can outsource

Not really true anymore, it would seem. A poster here on FR a few months ago talked about how he was able to offshore the handful of IT jobs at his company.

[RogueIsland]

don't let people snow you into thinking all outsourcing is offshore, quite a fair bit of outsourcing stays in America

I work for one of those American outsourcing companies. Guess what. We are offshoring the work outsourced to us at an accelerating rate. Pretty soon, it'll just be a few American suits brokering our outsorcing biz with the Indian firm we've contracted with.

[discostu]

Some of them are. Some aren't. It's a dangerous habit for an outsource company to get into, at some point your customer will figure out that you're hiring somebody else and they'll skip the middle man.

Pretty soon everything will get back to normal, the pendulum is about peaking right now with a few high profile projects crashing and burning because the companies didn't plan their offshoring properly. That's what got things swinging back in the mid-90s too.

[discostu]

Yeah but how big was the entire company? Did they have the resources in place to remote site effectively? Anybody that can remote site effectively can outsource well, then there's companies like where I'm at that have remote sites but co-ordinate horibly outsourcing for us has been a disaster in even limited experimentation (one of the few smart things they did was try a small experiment).

[KayEyeDoubleDee]

It's a dangerous habit for an outsource company to get into,

In point of fact, I am about to spearhead internal development for a relatively small telecom company which is unhappy with the outsourced aspects of its business.

[searchandrecovery]

From your article:
When we use our foreign policy and economic policy to set up shop and trade with countries, societies, organizations or to implement policies that exploit their people's mercilessly, who keep them down without a hope for true liberty or freedom, who trample the moral values our own system was based upon...and when we do it knowingly, without compuction for those very underlying values, then we do not create a free market...no, that free trade has nothing whatsoever to do with, and is in no way similar to the FREE MARKET, rather, it serves to corrupt it.

Nice article. I think you're saying that there's trouble when morality flies out the window (well, with free trade, free markets, capitalism, whatever). Can't argue with that.

And, imho, religious practice has declined markedly in the last 30 years. Which strips away the moral underpinnings.

In your scenario, what would happen if a corporate exec faced the decision of saving bucks having parts made by slave labor in china vs. keeping the neighbors employed? Would he (ideally) decide "Moving jobs to communist china is bad because they're our country's enemy, use slave labor, and I screw my neighbors"? How would this work?

[KayEyeDoubleDee]

I guess the fundamental problem is that I can NOT reconcile the immorality of government control of its people [tarrifs and trade restrictions regulations] with the immorality of government control of its people [socialist or dictatorial trade "partners"]

I find myself wanting to err on the side of letting individuals decide whether they buy Chinese textiles, not some bureaucrat in Washington.

[Jeff Head]

Except that when the buying of those goods in China is 1) In essence trading with the enemy, who is dedicated to destroying us and who is using said capital to work towards that end, and 2) being used for the very antithesis of the free market as respects their own people, you corrupt the free market ultimately to the point of it not being free any more.

I am suggesting that our government recognize these facts in policy, as we did with the Soviet Union and use the laws already on the books to treat nations like Red China in the same way. That is, in essence, what Reagan did that ultimately brought the Soviets down and opened up those nations and people to at least a chance for something more akin to the free market, and lessened dramaticlly the security risks for us. We cand do the same for China, although at this point, it would take longer and be more of an economic impact to us because of how far the other way we have already gone.

If we do not, I believe the cost will turn out to be orders of magnitude higher.

[Jeff Head]

We would, as a nation, treat the Red Chinese the same way we treated the Soviets under Reagan. In that scenario, what we are doing with Red China would not be possible, anymore than it was with the Soviets in the late 70's, and they bankrupted themselves trying to keep up with us...and ultimatley fell.

I believe we should adopt policy that is similar in nature to the Red Chinese until they either substantively change, or fail of their own weight.

Otherwise, I am afraid the scenario that we will face will be something akin to the Dragon's Fury.

[KayEyeDoubleDee]

Except that when the buying of those goods in China is 1) In essence trading with the enemy, who is dedicated to destroying us and who is using said capital to work towards that end, and 2) being used for the very antithesis of the free market as respects their own people, you corrupt the free market ultimately to the point of it not being free any more.

Excuse me, but I did cover these scenarios. You just disagree with my solution.

[Elliott Jackalope]

"My 17 year old is considering obtaining a college degree in IT (information technology). Will there be a job for him in 4 years?"

Sure, if he's willing to work for fifty cents an hour. Oh, but then there's those pesky student loans to pay off. That will be a debt of what, about eighty thousand dollars or so? No problem, they'll be paid in about a hundred years of hard work. Easy as pie.

At this point in time I cannot think of a worse career to get into than IT, or a worse investment than a college degree. You pay a fortune to get your head filled with commie propaganda and a piece of paper that is becoming worth less every day. If you kid wants a future I strongly suggest looking into the trades, like electrician, or plumbing, or something along those lines. Something that can't be shipped overseas and that they don't teach at India Institute of Technology. The market for IT workers is massively oversupplied. Good plumbers will always have work.

Sorry to sound so pessimistic, but that's the way I see it. I used to design deep-submicron mixed-signal integrated circuits for high-speed D/A and A/D systems, like digital camera analog front ends and Ethernet subsystems. I'm now planning on starting a painting company. There's your free market at work in the glorious New World Order. Companies don't want kids who have to pay off expensive student loans when they can get Rajeed on an L1-B for $15k a year, or hire them direct in India for $5k a year. Forget IT. It's last year's way to get ahead. Get into the trades, it's all that's left for native Americans.

[Jeff Head]

Excuse me, but in your post to me (post #29) you only covered the second point in my post (immorality of government control of its people), not the first (trading with the enemy, who is dedicated to destroying us and who is using said capital to work towards that end), which is the more dangerous issue to our own liberty.

And I do disagree, that was the purpose of my post back to you, wherein I went on further to say that,

I am suggesting that our government recognize these facts in policy, as we did with the Soviet Union and use the laws already on the books to treat nations like Red China in the same way. That is, in essence, what Reagan did that ultimately brought the Soviets down and opened up those nations and people to at least a chance for something more akin to the free market, and lessened dramaticlly the security risks for us. We cand do the same for China, although at this point, it would take longer and be more of an economic impact to us because of how far the other way we have already gone.

Hope that helps clarify my response.

Jeff

[Paul Ross]

Not Global, per chance? The guys who actually brag on their ads sponsoring NPR about their outsourcing?

[Euro-American Scum]

America's high-tech industry lost 540,000 jobs in 2002, with employment dropping to 6 million, according to a study by AeA, the nation's largest high-tech trade association. But AeA projects high-tech job losses will slow to 234,000 this year.

Right. 2004 is an election year. It'll pick up again during Dubya's second term, rest assured.

[Euro-American Scum]

He said the entire engineering department is made up of muslims (not Indians) here on H1B's or whatever visa they came in on. They are supposedly all named Mohammed and all they do is bit*h about our country.

Oh, but they work so cheap. And that makes it all worth it. /sarcasm

[Euro-American Scum]

The results are in - NAFTA's a bad joke. Free-Trade means you'll freely trade your neighbor's job for personal financial gain. GREED IS GOOD! Capitalism seems to work best when not given free reign.

It all depends on who throws who on the nearest grenade. Or, as the Chairman of the Alumni Assn. at the Marshall School of Business proclaimed. . .

"You can do the offshoring, or you can be offshored. Take your pick."