Recession Hit IT Wages Across U.S.

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 suspects the drop reflects a loss of bonuses and other incentives 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 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 top 60 cities for high-tech employment lost jobs last year. The report's findings are not surprising considering an earlier analysis by the industry group, which 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, tech wages for all workers fell an average 0.8% last year. Many workers saw an increase in wages.

Tampa-St. Petersburg tech workers, for example, saw the largest percentage gain, with pay up 5.8%, an increase of $3,922 to salaries that now average $71,143.

The largest tech workforce is in New York, with 316,971 employees in the industry; Washington, had 292,969; San Jose/Silicon Valley, 225,575; Boston, 219,798; and Dallas-Fort Worth, 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; Boston, where average pay of $102,230 represented a 4.2% decline from 2008; Washington, where average pay of $100,488 actually represented a 1.5% increase from the prior year; and the Research Triangle Park area in North Carolina, where average pay last year was off 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. San Diego employs 111,000 people in tech, Denver, 88,900.

The cities that saw the largest percentage gains in employment were in the smaller markets. Huntsville, Ala. saw tech employment grow 2.4% last year to 36,000. That was an increase of about 900 jobs.

Tech wages in Huntsville increased, too, up 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 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 the Research Triangle Park between raleigh, Durham and Chapel Hill, N.C., which employs about 42,000.

Another area that did well in the Cybercities ranking was Oklahoma City, which saw tech employment rise by 5.4% in 2009 to 18,300, an addition of about 900 jobs.

Oklahoma City tech wages were $51,803, a decrease of 2.4%. Those wages were among the lowest identified in the report.

Roy Williams, president and CEO of Greater Oklahoma City Chamber, said the area has a low unemployment thanks to the energy business, bioscience, and aviation, with tech hiring across all industries. Boeing recently announced plans to relocate some operations from Long Beach, Calif. to Oklahoma City, which will add about 500 jobs.

Williams said that Oklahoma City and the state 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."

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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