Are Tech Jobs Moving Overseas?

The number of U.S. workers employed in four IT-related occupations dropped between the first and second quarters of 2004, according to numbers culled from the U.S. Bureau of Labor Statistics.

The Institute of Electrical and Electronics Engineers-USA blames the drop in employed software engineers, programmers, hardware engineers, computer scientists, and systems analysts on the continuing trend for U.S. companies to send jobs overseas, often called offshore outsourcing. The number of employed workers in those fields also seem to contradict the unemployment numbers that the BLS has released, which show a dip in the unemployment rates in those fields.

But the two sets of numbers are measuring different things, says Gary Steinberg, a spokesperson for BLS. A programmer who is hired in a different field no longer counts in the unemployment rate, even if fewer programmers are employed this quarter, Steinberg notes.

The overall number of people employed in computer-related occupations in the U.S. dropped by about 9000 people from the first to second quarter. The 2.96 million computer-related jobs in the U.S. in the second quarter of 2004 compared to an average of 2.98 million during 2003.

Key Findings

According to numbers released by IEEE-USA this week:

  • The number of employed software engineers in the U.S. dropped from 856,000 in the first quarter of 2004 to 725,000 in the second quarter. Yet, the unemployment rate among software engineers dropped from 3.3 percent to 2.9 percent between the two quarters. In 2003, an average of 758,000 software engineers were employed in the U.S.
  • The number of computer scientists and systems analysts dropped from 672,000 to 621,000 between the two quarters. Unemployment dropped from 6.7 percent to 4 percent. An average of 722,000 computer scientists and systems analysts were employed during 2003.
  • The number of computer programmers dropped from 591,000 to 575,000 between the first and second quarters this year, although the second-quarter numbers are still higher than 2003's average of 563,000 employed U.S. programmers. The unemployment rate among programmers dropped from 9.5 percent in the first quarter to 5.7 percent in the second quarter, according to BLS numbers.
  • The number of employed computer hardware engineers dropped from 86,000 to 83,000 between the two quarters. The 2003 average was 99,000 employed hardware engineers in the U.S.

The employment report contained some apparent good news for electrical and electronics engineers. Their numbers swelled from 327,000 to 351,000 between the first and second quarters, although the 2003 average was 363,000. According to the BLS, the unemployment rate among electrical and electronics engineers dropped from 5.3 percent in the first quarter to 0.8 percent in the second quarter, but IEEE-USA suggested the huge drop in the unemployment number may be due to a sampling error.

Exiting the Field?

The lower unemployment numbers overall don't tell the whole story, the IEEE-USA says. "We think a lot of that would be ... people being discouraged and leaving the field," says Chris McManes, a spokesperson for IEEE-USA. "It's kind of strange that the numbers of employed people fell, as well as the unemployment rates."

IEEE-USA placed much of the employment losses on offshore outsourcing. McManes calls on the U.S. Congress to explore ways to encourage companies to keep jobs in the U.S. While presumptive Democratic presidential candidate John Kerry has called for changes in the U.S. tax code, which now discourages companies from reinvesting money made overseas back in the U.S., the IEEE-USA hasn't taken sides on which of the two major parties has a better plan to deal with outsourcing, McManes says.

Others argue that in the long term, outsourcing makes sense for U.S. companies and U.S. foreign policy. Some residents of nations with few economic opportunities can turn to terrorism or cause other political instability, says Adam Kolawa, chief executive officer of Parasoft, a Monrovia, California, software vendor that uses offshore outsourcing.

But countries with strong economic ties to the U.S. have little reason to target the nation, Kolawa says. "Offshore development is the best way to prevent going to war," he says.

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