More Than 500,000 High Tech Jobs Lost in 2002

stoolpigeon writes: "A study, released today by the AeA, shows that the U.S. high-tech industry lost 540,000 jobs in 2002, dropping from 6.5 million to 6.0 million. However, a preliminary look at data for 2003 shows that the decline in high-tech employment has slowed considerably this year."

Comments

Jobs Lost?

[tarquin_fim_bim]

That seems to give the impression that they were carelessly mislaid, or accidentally cast aside. Far from it, they were purposefully relocated to a more hospitable economic environment. Free market, free trade, free information, free software and free beer, what more could a philanthropist ask for?
OK, free love, but that always comes with a price.

Re:Jobs Lost?

[Brataccas]

Free food, free rent, and free utilities.

Re:Jobs Lost?

[pla]

Free market, free trade, free information, free software and free beer, what more could a philanthropist ask for?

Job security at a liveable wage?

Hey, I personally don't mind sacrificing a small bit of comfort to bring large portions of the world forward into the 19th century. But when a company ships jobs to places where environmental and labor laws allow them to simply replace good workers with people treated little better than slaves, I have a problem with that.

Re:Jobs Lost?

[dpilot]

Someday somebody will figure out that many American execs are super-paid and don't really know their own business. (They know MONEY, not the products their companies make.)

Then since the executives do the outsourcing, they won't outsource themselves, the places they've outsourced to will go into business for themselves, and drive the American companies under.

Re:Jobs Lost?

[D-Cypell]

It is easy to blame outsourcing, and I do admit that this plays a big part.

However, we must also remember that during the late 90's and the early 00's thousands upon thousands of tech jobs just sprung up out of thin air. Any fool with a business plan penciled out on a napkin could get millions in VC. As the remenants of these companies finally disappear in true darwinian fashion, the jobs that were created will obviously be lost.

I would be interested in seeing some stats on how many jobs were created in those few years compared to the losses recently. It sounds like it could be a case of just ending up back where we started from.

Where's the end of this cycle?

[saihung]

First we were farmers.

Then they started building factories, and told us that we could get rich by making things, even though lots of people got hurt or killed, the air and water got fouled, and the pay wasn't really that good after all. Then we got together and fought for better conditions, and the people that had only been consuming what we made got strong enough to build factories of their own, and the factories picked up and left.

Then they told us, "Don't worry about the factories leaving! The future is in services and intellectual property creation!" So they trained two generations of us to use computers and write memos and move paper around (at our great expense) so we could work in their service industries.

But the service industries didn't have any factories or other major infrastructural investments, so when the consumers of our software code and financial products got well-educated enough to do those things themselves, the service industries had an even easier time of it and ran for the hills.

Now they're not telling us where we're supposed to work, and not telling us how we're supposed to put our expensive educations to use, only that it'll get better some day. But what's left? No farms, no factories, empty office buildings, and even the production of the very food we eat and the houses we live in is restricted to illegal immigrants because no one is willing to pay living wages. There are some jobs that can't be moved easily - construction, machining, auto repair, but how are we supposed to support an entire economy with this?

A better set of questions

[PureFiction]

1. How many jobs gained during the "bubble" of the late 90's (that was unsustainable) are factored into that count?

2. How many H1B visas that are unrenewed are part of that count? (Exploitative consulting agencies? They loved to pump up the numbers)

3. How many psuedo-engineers have rightly left the CS/IT job market because they dont have the skills?

I worked with a guy briefly in 2000 that got paid $75/hour, 60 hours a week, for a whole month (before jumping ship to greener pastures in Silicon Valley) to write some horribly broken and incomplete perl CGI code.

Yes, nasty perl CGI that didnt work. It was obvious his skills were at tech college freshman / skilled high schooler level, and yet he was able to pull in an insane wage due to irrational exhuberance.

You hear these stories, and it doesnt really sink in until you see it first hand. Things were severely out of balance.

We are almost out of the hangover. If you are truly skilled, you can find a job with some elbow grease and effort 98% of the time. You may need to relocate, you may need to settle for something less than ideal, but they are out there.

The tech services (specifically programming / engineering) are picking up and we are on course for a return to semi-normality. But against the backdrop of insane compensation and free flowing VC cash, even normalcy appears spartan.

The best thing you can do for a career in IT is to truly love it and find it fascinating. This will keep your skills sharp as you experiment and play with cutting edge technologies on your own, and maybe on your job, and also provide the motivation needed to obtain a deeper understanding of the many details associated with programming, system administration, engineering, etc.

If you are in this field for the money, you wont have the drive to stay afloat.

FACT 1: Your job is not hard.

[Anonymous Coward]

FACT 2: There is a limited demand for your job.
FACT 3: For practical purposes, there is an unlimited supply of people who can learn your job.

Now justify your standard of living.

Note: "I am American, and thus entitled to living better than 90% of the world's population." is not a convincing argument.

Unless you're doing something that only you can do, expect your wage to fall to a level that is attractive only to the poorest people in the world.

Moral: learn to do something remarkable, or accept that you don't deserve more than three meals a day and a warm place to sleep.

Re:FACT 1: Your job is not hard.

[John Courtland]

If you can't provide a livable wage for jobs that need to be done, your economy won't last too long. Certain work HAS to be done, there's no sense in only paying what amounts to barely enough to eat and pay rent for it. It's annoying work too, so in essence it's just as hard. Why do you think we have welfare? (Note that I assume you live in the US, but it's the same in the UK and the Dole Queue) Not because certain people don't work, but because there's no way for a lot of people to make enough to live on. You can beat the education and brainpower drums all you want, it doesn't change the fact that the economic standards of an area GREATLY affect the crime rate, and therefore, YOU. You should WANT everyone to be better off, even just for the sake of you not getting mugged when you go to the Opera or whatever you do.

Not everyone can be "remarkable" you know. Some people just don't have the skill or ability. But there are some that do, who just can't get a break, who you dismiss. C'est la vie, but things have to change, or else once the poor get sick of being poor, they will revolt, and I would not want to be at the top then.

Note that I am just trying to get a point across and am in no way attacking you. I do accept your points as the way things are now, but I'm just pointing out they need to be changed.

Re:FACT 1: Your job is not hard.

[bwt]

Speak for yourself.

If all you do is programming, then I suppose that your job is not hard. But if your job includes analysing your company's business and using information technology to solve business problems that affect the bottom line, then your job is very hard, very valuable, not exportable, and very secure.

There are many good programmers that don't understand business and want to be handed clean coding tasks. These are the people that are whining incessantly because their requirements documents aren't right. They want somebody else to do the hard part. The simple fact is that if you A) understand the business and B) can read the code that drives it, then you are better positioned than most people in the company to actually create revenue enhancing process changes.

Re:FACT 1: Your job is not hard.

[fermion]

The fact is that the work I have done is not so hard, and many people could do it, and the work has not in any absolute sense been worth the money I was paid. That, of course, is only because money really has not worth until it is normalized to the fiction of the people who use it.

That said, the standard of living is justified based on the culture of consumerism. Someone needs to buy those $100 pair of sneakers, or that $200 gaming system, or that $400 mp3 player. And to do that you need cash. You need enough cash so the opportunity costs of such purchases are not so great that you will decide these things are not a good value. If you have a job that brings home $1000 a month, and you need $400 for rent and $200 for food and then clothes and transportation to work and medical care, these other things are not going to seem so important. I mean you might start downloading music over your $300 used computer and your $15 dial-up connection, which are justified by your kids educational needs, instead of paying even $1 for the track.

Of course all these are way overpriced. We pay middle men, ad men, men in suits, and men in trucks to get the product to us. Certainly if we lowered our standards, bought locally, and only what we needed, then prices would fall. We could make $1000 a month and afford all we need and a few extras. Of course without ads, we would not know we may not know we need a new pair of sneakers. If we do not know we will not buy. If there are no ads, there is not TV, radio, internet. If we do not buy, there are no jobs elsewhere, unless wages in those areas go up high enough to support the infrastructure.

of course, we could buy everything used. But someone would have to buy new. So how many people would that take. 10%? 20%? Would 20% of the population have remarkable skills that would justify a high wage. Could they buy enough to support the world economy and give us their hand me downs.

It is a house of cards. No one deserves the standard of living. No one deserves to be told if they do not movies and music at full price they are killing the children of hard working artists. No one deserves to be told that if they do not spend their little expendable income on a dinner at McDonneld's or a new pair of sneakers that are they are depriving their child. Unfortunately, that is what people in the U.S. are told. Unfortunately we are told that we must spend, while the jobs that allow us to spend are shipped off to other countries.

I am not saying this is right or wrong, good or bad, necessary or not. I am just saying that I do not believe it was India or China that made MS or Nike or McDonalds rich. I believe it was citizens of the US that did that. And now that they are done with us, they will continue consuming resources elsewhere. Someone needs to buy the products at the inflated prices. Someone needs to have the wages to afford it. If it is not the US, then it is someone else. And that someone else will have deserve it no more of less than those who had it previously.

Re:FACT 1: Your job is not hard.

[pla]

Note: "I am American, and thus entitled to living better than 90% of the world's population." is not a convincing argument.

I can see you have a poor grasp of sarcasm, so I'll spell it out for you...

We currently live in the 21st century. Not the 19th.

The jobs we ship to people "willing" to work cheaper do not, for the most part, improve the lives of those they go to. We destroy the land the local populace used to at least manage to survive on, make them wage slaves for a pittance far below liveable, and when Nike, or Union Carbide, or Walmart, or whatever company, finally gets bored and moves elsewhere, they leave slums and wastelands.


Now justify your standard of living.

Okay, I will do exactly that.

What does Nike make? Shoes. Expensive shoes. Can a typical sweatshop laboror, whose life you seem to think Nike enhances greatly, buy those shoes? No. I can. You probably can. Most Slashdot readers probably can. We "justify" our standard of living simply by having it (or did some religion's imaginary friend wave the "US propserity and world hegemony" wand to give us our standard of living?).

Had you not decided to karma-whore (as an AC? not very useful...) with the "I feel so sick of whining programmers" card, you might have noticed my point - That we don't "help" third-world countries by forcing the local populace into corporate slavery. We lower our own standard of living without raising theirs.

I fully support raising the world-wide standard of living. Paying someone less than their food costs them (regardless of physical location) does not accomplish that.

Re:FACT 1: Your job is not hard.

[Prof.Phreak]

FACT 1: Your job is not hard.

Hmm... You'd be surprised how many people find it next to impossible. I teach this stuff in college, and I must tell you, that there are those who find 'this stuff' easy (about 1% of the population), about 4% who find it challenging but interesting, and about 95% who will never understand binary numbers.

Now, in a corporate environment, is it also true. Only 1 out of possibly 10 or so developers actually knows what they're doing! (most got into the company because their uncle has a friend in HR).

Notice that most "Jobs Lost" exlamations don't really say "productivity is down"... in fact, I bet that in most companies, you can fire half the developers (worst half), and nobody would even notice that they're gone.

So why shouldn't someone have a high paying job when they can do something a vast percentage of the population cannot? (they may pretend to be able to do it, etc.,)

While it is very sad when a good developer cannot find work (I've been in that boat myself), I find it amusing when someone who only knows HTML/JavaScript (or read one of them Dummies books) is complaining about not being able to find a job (or that their salary is too low).

Hopefully, the "jobs lost" doesn't apply to most true computer geeks - but to those "3 week VB class" (or Lean C++ in 24 Hours) people.

Re:My Experience

[Junta]

So you give an on the spot practical exam, give a hard deadline of 15 minutes for a series of problems, to someone who has enough pressure expecting a typical interview? And whose authority says the problems are together a 15 minute problem? Maybe they would be able to tackle them in under 15 minutes after getting into their groove. Giving a simple pass/fail evaluation of a 15 minute session of problems that are likely ill balanced, i.e. focused in one area. You could end up with a developer who can whip right through those, but turn out not to be well rounded.

What I have seen to be a better selector is strategies where the interviewer puts forth a problem that is technical and high-level in nature, and disallows use of a computer, and ask that the applicant think aloud about the strategy and algorithms they would try to accomplish the task. The interviewer then gets more information. For one, the circumstances are less stressful, so it is a better indication of typical performance.
Also, whether or not they end up at the right solution is less important than if you can see they have a good thought process and good ability to recover from changing circumstances (in the middle of the problem, introduce new requirements).

I do agree that the dot-com crap created a lot of untalented, uninterested people seeking computer jobs simply for 'easy money' rather than a sincere passion, but knowing how very many talented developers I have seen unemployed over the last half a year, I would say either you aren't posting it in any visible spot or that your 15-minute test is a flawed approach.

Detritus from the .com bust

[Anonymous Coward]

Regardless, individual stories of people who got fired/layed off/whatever are barking up the wrong tree in this thread. This has to do with macroeconomic supply, demand, and productivity. And I'm going to argue that things are _better_ with these types of market corrections.

First off, I'm just not buying the 'overseas' argument. I think the people hit hardest are web designers and other low-tech technical people (and some niche high-tech people) - en masse, the jobs just didn't need doing, rather than things that needed doing but are easily farm-out-able. The latter set of jobs seems to me to be rather minimal anyway.

Understand that jobs lost numbers are not 'people who lost their jobs', but 'these jobs no longer exist' - it's not necessarily the case that we 'lost' them to someone else.

Question: of the jobs lost, how many of those didn't need to be done? Answer: all of them (when taken in aggregate). Either the companies died, the work the people did wasn't valuable, or the individuals themselves were not very good and others took up the slack anyway.

Taken not in the individual case, but in general - good people get hired to do something else, and the bottom strata have to find jobs in another industry - arguably, they shouldn't have been here in the first place, but they rode the wave. Sure, there will always be individual cases where this isn't true - usually due to people who are not, for one reason or another, willing to go where the jobs are. (Only these last people are ones for whom a 'move to india' (or wherever new jobs are going) actually makes sense).

What this means is that the salaries for these jobs have either gone into: something not technical but useful, lower prices, stockholder equity, or higher CEO compensation (or any of the other drains on productivity, like lawyers, or increased state taxes, or whatever).

In 3 of the 4 cases, that's a GOOD thing. Note that CEO compensation, and perques in general, haven't been increased due to the bust, and despite SCO, I haven't heard of Lawyers and such hangers-on's incomes being spectacular.

What this means is that if productivity stays high, the total amount of work done has become cheaper. If productivity goes lower, that means that the lost work being done before wasn't valuable - if it was, then it would still be being done (market forces driving production). Finally, in either case, those who _did_ migrate from one job to another are hopefully doing something 'better' (usually are - most of the 'best work' of a job is done in the first year or two, IMO, and someone made a recent decision that this job was worth doing enough to hire someone).

So, all in all, a decline in jobs isn't necessarily a bad thing - it's very possibly a good thing. It's a "correction" of an inherent weakness, and might make us stronger and more productive because of it.

Net or gross

[magarity]

The article does not mention if this is a net loss or a gross loss. This small detail will widely vary the topic's importance.

Darwin was right, and we are surprised?

[Bug-Y2K]

For almost two decades, the IT industry, in the form of corporate IT departments have been telling their masters:
"Invest in technology, and it will pay off in increased productivity and profits."

For the past 10+ years, the IT industry, in the form of software and hardware vendors, have seen their profits soar as a result of this investment, and developed the perfect mechanism for milking it for consistent, quarterly results: The Upgrade.

The Upgrade has killed the golden goose. The consistent, repetitive costly upgrade... while padding the bottom line of IT Vendors, has eroded the bottom line of the Corporate World.

Increased expediture, planned and worse, ENFORCED obsolescence, ever-increasing headcounts, etc etc etc.

The CEO's and CFO's have had enough, and they aren't taking it anymore. From their perspective IT is a money pit. An endless drain on financial and human resources.

Ane we are wondering why the tech sector is stagnant at best right now? Technology is immature, yet we kept on praising it as the solution to all problems! Arrogance of our superiority and ignorance of true business needs were the dominant perceptions of your average IT department over the past decade or so. Now is the time for their revenge.

The holders of the purse strings want to see some of that return on investment before they'll spend like that again.

Our profession needs to learn humility, and nothing does that better than a financial ass-kicking.