Just in time for U.S. workers to flee to the shores to celebrate the birth of our great nation with the requisite three-day weekend packed with backyard barbecues and impressively choreographed fireworks displays, we're capping off one of the most depressing weeks for employment reports in the better half of a decade.
The number of employees on private-sector payrolls fell by 79,000 in June, the steepest fall in six years and nearly four times what economists had estimated, according to the ADP National Employment Report released Wednesday. Today the Labor Department announced that 62,000 non-farm jobs were lost last month, bringing the number of jobs shed in 2008 so far up to nearly half a million. Meanwhile, new applications for jobless benefits hurdled to 404,000 last week.
Yet as Larry Dignan noted this morning, tech employment is holding up amid this ugly jobs outlook.
The tech sector and its related functions aren’t growing jobs, but aren’t hemorrhaging them either. And in some spots there’s even growth–management and technology consultants as well as information systems architects are actually adding jobs compared to a year ago.
So why is the tech sector beating the odds? The experts I have spoken to had three salient points:
1. It's not 2001, and this isn't a tech-driven slowdown. Even though the U.S. economy is clearly hovering on the brink of a full-blown recession, the initial culprit has not been overvalued tech stocks, but the subprime mortgage crisis. Any effects tech feels are secondary ripples; this is not to say that no tech jobs will be lost, but that they're not the in eye of the storm.
"Traditionally, tech is much more immune than other sectors because it tends to deliver to people products that over time grow in value," said Stephen Baker, vice president of industry analysis for The NPD Group, a global provider of consumer and retail market research. "If the boat is sinking, we're kind of moving along at the top not bouncing up the way we have been in the past. Clearly things are better here than they are in other categories but not without challenges as well. We're certainly not immune, certainly feeling the effects of the economy that are holding down growth in the hardware business."
2. If you're in the right areas, you're still needed. Whether you're consulting or a salaried employee, if you're in the areas that businesses deem essential--such as cost savings, virtualization and green technologies--this isn't going to change because of some belt-tightening.
"It's a very different job market than it has been in previous economic slowdowns," said Jim Lanzalotto, vice president of services and marketing for Yoh, an IT services and recruitment company. "High-impact skills are showing a really strong demand. For example, there is a gap of 30,000 workers between SAP need and SAP supply. This is just one area where we can't find enough people fast enough."
3. A diminished pipeline is piquing demand. Though the state of technology and engineering education in this country is nothing to cheer about--a study by the Computing Research Association released in March found that there were half as many computer science majors in 2007 as there were in 2000--the shortage of people in the IT pipeline can translate to better job security for those already in the field.
"American students get to college and they're not prepared for science and technology careers and the pipeline for skilled workers is drying up. We don't have enough American kids going into those fields," said Josh James, a senior research analyst with the AeA, a high-tech trade association.