Negative Job Creation for Computer-IT workers
Negative Job Creation for Computer-IT workers
Date: Wednesday, June 21, 2006 3:34 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1505 -- 06/21/2006 >>>>>
A new report has been released about the dismal job creation rate for
Computer IT jobs. It's an interesting report but fails to mention, among
other things, that MORE H-1BS HAVE ENTERED THE U.S. THAN THE NUMBER OF JOBS
CREATED!
The report said:
Overall the high-tech industry experienced extreme employment
volatility between April 2003 and February 2006, a period
during which only 76,300 jobs were added nationwide. All told,
the sector has recouped less than one-quarter of the IT jobs
lost earlier in the decade.
What it doesn't mention is that far more than 76,300 H-1B IT workers were
allowed into the U.S. to take those jobs. This is not a "jobless recovery"
as the study claimed - it's a perfect example of negative job creation, or
"Job Destruction"!
<<<<< Permit me to explain why. >>>>>
Various H-1B statistics are released by the USCIS. Some of the most
interesting can be found here:
H-1B: Specialty Occupation Workers Statistical Reports
http://www.uscis.gov/graphics/aboutus/repsstudies/h1b/
The 2003 Fact Sheet has some interesting data, which I tabulate below.
Unfortunately the USCIS has been very negligent when it comes to providing
timely data, but what they have is good enough to see how bad the situation
is for Computer IT workers.
2003 Fact Sheet
http://www.uscis.gov/graphics/publicaffairs/factsheets/H1-BFY2003.pdf
IMPORTANT: Read the notes directly below this table, or you will not
understand what the numbers mean.
Year Cap Total Initial Continuing
Employment Employment
2000 115,000 257,640 136,787 120,853
2001 195,000 331,206 201,079 130,127
2002 195,000 197,537 103,584 93,953
2003 195,000 217,340 105,314 112,026
2004 65,000 ? ? ?
2005 65,000 ? ? ?
2006 85,000 ? ? ?
* Year - The fiscal year.
* Cap - The maximum number of non-exempt visas that can be issued for that
fiscal year.
* Total - The total number of H-1B petitions approved in that fiscal year.
* Initial Employment - The total number of new H-1B petitions approved.
This is a count of new jobs that were taken by H-1Bs. Most of these are
called "non-exempt" because they are subject to the Cap. To confuse
matters, some of the "initial employment" petitions can be exempt from the
Cap. If you want to find out more about exempt categories go to this page:
http://www.zazona.com/ShameH1B/H1BFAQs.htm#AreH-1BsExempted
The initial employment number should be lower than the Cap, but sometimes
there are exceptions. An example is the year 2001 where you would expect no
more than 195,000 visas to be issued but a total of 331,206 were approved
in addition to 201,079 non-exempts. This happened because some visas were
carried over from 2000.
* Continuing Employment - The total number of H-1B petitions that were
renewed. As an example, if an H-1B has worked for ACME Inc for three years,
that company can extend the visa for another three years. Extensions are
exempt which means they aren't subject to the Cap. Only new H-1B petitions
count towards the Cap.
As you can see, in every single year that the USCIS provides data there
were far more H-1B petitions granted than the Cap. The analysis that
follows would be at least twice as bad if L-1 and TN visas were included.
For this analysis I will be insanely conservative by only using the H-1B
Cap totals.
This is the total number of H-1Bs for the 2003-2006 time period using the
Caps:
Year Cap
2003 195,000
2004 65,000
2005 65,000
2006 85,000
Total 410,000
It's very important to keep in mind that the 410,000 number is actually far
lower than the total number of H-1B petitions that were issued because it's
based on the Cap, not the actual number of petitions. Remember, I'm being
insanely conservative!
Demographically, about 50% of the H-1Bs that enter the U.S. are Computer IT
(some would argue the percentage is quite higher) so it's very safe to say
that during the years 2003-2006 at least 205,000 of those jobs were taken
by H-1Bs.
But remember, only 76,300 IT jobs were created. Hmmmmmmmmm!
All of this begs the question: Where did the other 128,700 H-1Bs go to? The
logical conclusion is that the small number of jobs created were gobbled up
by H-1Bs while at the same time at least 128,700 American IT workers were
replaced by H-1Bs.
The report also said the following:
Between March 2001 and March 2004, the IT industry eliminated
approximately 402,800 jobs, more than half of which were shed
during a time when the nation was officially experiencing an
economic recovery, which started in November 2001.
This is the total number of H-1Bs for that time period using the Caps:
2001 195,000
2002 195,000
2003 195,000
2004 65,000
Total 650,000
Notice that the total number of H-1B visas for IT workers issued is greater
than the total IT jobs eliminated. If we subtract the total from the jobs
eliminated we get 247,200 which is darn close to my original estimate of
205,000 Americans that were replaced by H-1Bs. Isn't it amazing how often
the 200,000+ number appears by using different calculations?
Keep in mind that the Americans that were replaced are only one part of the
picture. Many others were never given a chance to get one of the scarce
jobs.
OK, one more thing because I can't resist. The study says:
While the unemployment rate in the IT sector remains above the
2001 rate of 3.6 percent, it is also likely that large numbers
of IT workers have sought employment in other sectors of the
economy.
I recently published a newsletter titled "Infoweek explains Why We Need
H-1B" where I showed that if H-1B was eliminated the unemployment rate for
techies would be 0%. Surprisingly I didn't get a single comment on that
newsletter. The lack of interest was almost as shocking as the conclusion.
Guys and gals - it's summer and you are probably too busy sunning on the
beach to read these newsletters, but you only get paid-vacation-time if you
have a job! Don't count on the gravy train lasting forever if you don't
study what is happening.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://biz.yahoo.com/prnews/060614/dcw005.html?.v=56
Study Reveals 'Jobless Recovery' in Technology Labor Market, Despite
Industry Claims to the Contrary
Wednesday June 14, 6:00 am ET
Just 76,300 New Information Technology Jobs Added Since April 2003; New
Jobs Total Fewer Than One-Quarter of Those Lost Earlier in the Decade
SEATTLE, June 14 /PRNewswire/ -- Job growth in America's information
technology sector has been significantly less robust than industry leaders
have claimed, and fewer than one-quarter of the IT jobs lost during the
early part of the decade have been recovered over the past three years,
according to a new study released today by the nation's leading union of
high-tech workers. With limited exceptions, the so-called "recovery" of the
IT sector has been a jobless one, the study found, even though an economic
recovery began more than five years ago.
The report entitled "Information Technology Labor Markets: Recovering, But
Slowly" was prepared by the Center for Urban Economic Development (CUED) at
the University of Illinois, Chicago for the Washington Alliance of
Technology Workers an affiliate of the Communications Workers of America
(WashTech/CWA).
The study examined the state of the IT industry through February 2006 (the
most recent month for which data are available), assessing employment
trends nationally and in eight key metropolitan labor markets. It is a
follow-up report to "America's High-Tech Bust" released by WashTech and
CUED in September 2004.
"Technology job growth is weak at best in most major markets across the
country," said WashTech/CWA president Marcus Courtney. "Tens of thousands
of highly-skilled American IT workers remain unemployed or under-employed,
while at the same time, more and more technology jobs are being shipped out
of the country."
Among the report's key findings:
* Between March 2001 and March 2004, the IT industry eliminated
approximately 402,800 jobs, more than half of which were shed during
a
time when the nation was officially experiencing an economic
recovery,
which started in November 2001.
* Overall the high-tech industry experienced extreme employment
volatility
between April 2003 and February 2006, a period during which only
76,300
jobs were added nationwide. All told, the sector has recouped less
than
one-quarter of the IT jobs lost earlier in the decade.
* While the unemployment rate in the IT sector remains above the 2001
rate
of 3.6 percent, it is also likely that large numbers of IT workers
have
sought employment in other sectors of the economy.
The transfer to foreign markets of jobs and services once performed by
American workers is a significant factor in the continued weakness of the
IT labor market. Since the mid-1990s a growing array of processes and
services formerly conducted in the U.S. -- including code writing, software
design, data processing, claims processing and customer service -- have
been outsourced to providers in low-wage countries.
"It is far too soon to celebrate this as a strong recovery," said Nik
Theodore, who co-authored the study and is a professor at the University of
Illinois Chicago. "Moreover, the jobs impact of offshoring is
considerable."
Employment growth in the technology sector has been uneven across regional
labor markets and over time, the report found. The notable bright spots
included Seattle, Washington, DC and, to a lesser extent, San Francisco.
Metropolitan areas such as Boston, Chicago, Dallas and San Jose have seen
only modest recovery, while employment levels in Los Angeles have continued
to fall significantly.
The CUED analysis contradicts recent reports from some technology trade
groups claiming there are more IT jobs today than at the height of the
dot-com boom.
About WashTech/CWA
http://www.washtech.org/news/inthenews/display.php?ID_Content=5058
WashTech/CWA is the nation's leading union for high-tech workers. WashTech
was formed in 1998 by Microsoft contract employees in Redmond, Washington
and quickly affiliated with the 700,000-member strong Communication Workers
of America (CWA). WashTech/CWA works to ensure that the voices of America's
high-tech workers heard and their needs are met. Find out more at
http://www.washtech.org.
About The UIC Center for Urban Economic Development
The mission of the Center for Urban Economic Development at the University
of Illinois at Chicago (UIC-CUED) is to analyze disparities in the urban
economy and their implications for low- income and minority communities.
UIC- CUED works in partnership with low-income and minority urban
communities to devise strategies for job-centered development.
SOURCE Washington Alliance of Technology Workers; Communications Workers of
America
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