As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies. Learn more about membership...
Offshore Outsourcing Hurts IT Labor Markets
Despite industry claims to the contrary, the recovery of the U.S. information technology (IT) sector has not created enough new jobs for IT workers, according to a new report from the Washington Alliance of Technology Workers. Information Technology Labor Markets: Rebounding, but Slowly reveals that the recent increase in IT spending has not led to a full recovery in the labor market.
The Alliance worked with the University of Illinois at Chicago's Center for Urban Economic Development (CUED) to prepare the report. CUED finds that only 76,300 IT jobs have been created in the U.S. since April 2003. This represents less than a quarter of the 383,100 jobs lost during the 2001-2003 recession. IT employment growth remains sluggish and well below pre-recession levels.
The report cites the rise in global IT outsourcing as a factor in the protracted recovery. A growing number of processes and services associated with the industry "have been outsourced to providers in low-wage countries," leaving U.S. IT workers un- or under-employed. Offshore outsourcing is expected to increase over the next few years and, according to the CUED study, will continue to stifle domestic IT job growth.
Several metropolitan areas have enjoyed a more substantial recovery. Seattle and Washington, D.C., have surpassed 2001 employment levels, driven largely by in-house IT spending. Many large-scale IT projects were delayed during the recession, but are now being conducted within the internal IT divisions of firms. As a result, many displaced workers have found IT employment within non-IT companies.
The Information Technology Association of America and other industry groups have been more optimistic about IT employment trends and the overall effect of outsourcing on the U.S. economy. The CUED study suggests that policymakers might want to take steps to curtail the migration of IT jobs and develop workforce education efforts that combine IT training with targeted business skills.
Read the report at: http://www.washtech.org/reports/ITLaborMarketsStudyL.pdf