TechAmerica Foundation : Job Losses in U.S. High-Tech Industry Decline in 2010


Job Losses in U.S. High-Tech Industry Decline in 2010

Contact:
Stephanie Craig, Director of Communications
202.682.4443 or stephanie.craig@techamericafoundation.org

Josh James, Vice President, Research and Industry Analysis
202.682.4422 or josh.james@techamericafoundation.org

First Half of 2011 Shows Job Growth Across All Tech Sectors

Washington, DC (October 5, 2011) – TechAmerica Foundation today released its 14th annual Cyberstates report detailing national and state trends in high-tech employment, wages, and other key economic factors.  Cyberstates 2011: The Definitive State-by-State Analysis of the U.S. High-Tech Industry covers all 50 states, the District of Columbia, and Puerto Rico.

The U.S. high-tech industry lost 115,800 net jobs in 2010, for a total of 5.75 million workers.  This two percent decline in tech industry employment was less than half of the 249,500 jobs lost in 2009, which followed several years of sustained growth.  Over the longer term of 2007 to 2010 – the span of the economic downturn – the tech industry fared better than the private sector as a whole, with a four percent decline in employment versus a seven percent decline in the private sector.

“Of the four high-tech sectors highlighted in our report, only software services added jobs in 2010 – 22,800, a one percent gain,” said Robert F. Bennett, Chairman of TechAmerica Foundation.  “Of the jobs lost, 72,100 were in communications services, 53,600 were in tech manufacturing, and 12,900 were in engineering and tech services.  Fortunately, the initial numbers for 2011 look more promising in terms of job growth.”

TechAmerica Foundation also today released a midyear jobs report for 2011 based on a different monthly data set from the U.S. Bureau of Labor Statistics.  This report shows that between January and June 2011, the tech industry added a net 115,000 jobs, a two percent gain, not adjusted for seasonality.  During this time period, job growth occurred in all four technology industry sectors, with the fastest growth in engineering and tech services.  A 12 month review of June 2010 in comparison with June 2011 also shows growth in three of the four tech industry sectors, with job losses occurring in communication services.

“Tech jobs were down in 2010, trending with the rest of the economy, but we have fared better than the private sector as a whole over the course of the economic downturn and there are some positive signs for 2011, said Phillip J. Bond, President and CEO of TechAmerica.  “We are poised not only to grow our own industry but to support the growth of the economy as a whole.  The key to growth is to support what we call the Four T’s: technology, talent, tax, and trade.”

“Technology: We need robust federal investment in basic research to create the scientific base that companies can use to produce new products and innovations.

“Talent: We need to invest in STEM education to provide our children with the foundation in math and science that will prepare them for high paying careers while allowing highly skilled foreign nationals educated at our universities to remain in the United States and join American companies instead of returning to their home countries and competing against us.”

“Tax: We need to reform our tax system to make capital welcome.  We are competing against countries that are aggressively implementing tax policies that lower the cost of business.  We need comprehensive tax reform that attracts investments in technology and creates a framework that encourages repatriation of profits made by foreign operations of U.S.-based corporations.

“Trade: We need to open new markets to U.S. products and services by finishing the pending Free Trade Agreements with Panama, Colombia, and South Korea and continue to pursue other opportunities to expand trade.”

The state-by-state data reveal that only eight states added tech jobs in 2010.  The largest gains occurred in Michigan (+2,700), the District of Columbia (+1,400), West Virginia (+400), Utah (+400), and South Carolina (+300).  On a percentage basis, the District of Columbia saw the fastest job growth in 2010 at 4.3 percent, albeit at a small base.

For the sixth straight year, Virginia led the nation with the highest concentration of tech workers – 98 of every 1,000 private sector workers in the state were employed in the tech industry.  Massachusetts and Colorado ranked second and third, respectively.

Cyberstates 2011 relies on data from the U.S. Bureau of Labor Statistics. The report provides 2010 national and state-by-state data on high-tech employment, wages, establishments, payroll, wage differential, and employment concentration. All data are the most recent available at the time of publication.

Cyberstates 2011 may be purchased for $150.  The 2011 midyear report may be freely downloaded. Both reports can be accessed at: www.techamericafoundation.org/cyberstates.

Cyberstates 2011 Key National Findings

  • U.S. high-tech employment totaled 5.75 million in 2010.
  • Tech employment was down in 2010 by 115,800, or by 2.0 percent.
  • High-tech manufacturing employment fell by 4.2 percent, losing 53,600 jobs between 2009 and 2010.
  • All nine tech manufacturing sectors lost jobs between 2009 and 2010.
  • The communications services sector lost 72,100 jobs in 2010, or 5.5 percent.
  • The software services sector added 22,800 jobs in 2010, a 1.4 percent increase.
  • The engineering and tech services sector lost 12,900 jobs in 2010, a 0.8 percent decline.
  • The following key occupation categories: engineering managers, computer hardware engineers, database administrators, and aerospace engineers, all managed to keep unemployment below five percent.
  • The tech industry paid an annual average wage of $86,800 in 2010, 93 percent more than the average private sector wage of $45,000.

U.S. High-Tech Employment

High-Tech Sector

2009

2010

Percent Change

Numeric Change

High-Tech Manufacturing

1,288,200

1,234,700

-4.2%

-53,600

Communications Services

1,309,900

1,237,800

-5.5%

-72,100

Software Services

1,669,300

1,692,100

+1.4%

+22,800

Engineering and Tech Services

1,597,400

1,584,500

-0.8%

-12,900

Total High Tech

5,864,800

5,749,100

-2.0%

-115,800

Cyberstates 2011 Key State Findings

  • The leading states by high-tech employment in 2010 were California (931,000), Texas (456,500), New York (294,700), Virginia (277,600), and Florida (267,500).
  • Michigan led the nation in net tech job creation in 2010, adding 2,700 jobs.  The next largest gains occurred in the District of Columbia (+1,400), West Virginia (+400), Utah (+400), and South Carolina (+300).
  • For the sixth straight year, Virginia led the nation in concentration of high-tech workers in 2010, with 98 high-tech workers per 1,000 private sector workers.
  • Forty-nine cyberstates have annual average high-tech wages that are more than 50 percent higher than the average private sector wage in their respective state, and seven cyberstates have wages that are 100 percent higher.

Source: Cyberstates 2011

Data are for 2010 unless otherwise noted.

Published by TechAmerica Foundation

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About TechAmerica Foundation

TechAmerica Foundation educates industry executives, policy makers and opinion leaders on the promise of technological innovation to advance prosperity, security and the general welfare. Launched in 1981, the Foundation is a 501c(3) non-profit, non-partisan affiliate of TechAmerica, which is the leading voice and resource for the U.S. technology industry. The Foundation disseminates award-winning industry, policy and market research covering topics such as U.S. competitiveness in a global economy, innovation in government, and other areas of national interest. It also organizes conferences and seminars to explore pertinent issues with government and industry representatives and to share the Foundation’s findings.