US tech jobs increase, but growth slowing

The most significant growth occurred in engineering and tech services, which added 50,000 jobs, a 3.1% rise, according to data from the AeA.
By Suzanne Deffree, Managing Editor, News -- Electronic News, 10/15/2008
The United States tech industry continued to add jobs in the first seven months of the year, but at a slower rate than the same period in 2007.

According to a report released today from the AeA based on US Bureau of Labor Statistics data, the US high-tech industry added 78,300 jobs between January and July of 2008, a 1.3% rise, for a total of 5.92 million jobs.

However, the job growth is less than the 111,400 tech jobs added during the same period in 2007. AeA, a Washington DC-based technology trade association, further noted that the 1.3% increase was also below the 2% job growth increase the US private sector enjoyed during the seven month period.

"This is the fourth straight year that the US tech industry is adding jobs," said Christopher W Hansen, AeA’s president and CEO, in a statement this morning. "But the pace of growth is slowing, and given the economic downturn and current disruption in the financial markets, future job growth will be – at best – uncertain.”

The AeA report found that high-tech manufacturing employment in the US was down in the first seven months, continuing the downward trend of the last 19 months. Technology manufacturers lost 2,500 net jobs in the US from January to July for a total of 1.28 million jobs and a 0.2% decrease.

Meanwhile, high-tech services employment in the US was up, with the AeA reporting 80,800 net jobs were added in the first seven months of the year for a 1.8% rise.

Within tech services, the most significant growth occurred in engineering and tech services, which added 50,000 jobs, a 3.1% rise, the report found. Software services added 42,300 jobs, a 2.6% rise, and communications services decreased by 11,500 jobs, or 0.9%, from January to July of 2008.

“AeA believes strongly that for the high-tech industry to continue to create high paying American jobs, investment in scientific research and education is crucial,” Hansen said. “AeA was proud to have been instrumental in promoting legislation that would do just that – the America COMPETES Act, which was signed into law in August 2007. The catch is that this bipartisan legislation was never fully funded."

For more on the 2008 elections and the policies impacting the tech sector, see Electronic Business' special technology policy issue. The lack of fiscal support for the America COMPETES Act has become a hot topic among tech industry pundits this election season. Both Intel Chairman Craig Barrett and SIA President George Scalise have commented on the negative effects the lack of funding to the act will have on the US' tech growth and future prosperity in recent weeks.
"The high-tech industry recognizes that budget shortfalls, exacerbated by the current financial crisis and rescue package, will require the federal government to make difficult funding choices; but these are not investments that can be scaled back or postponed without inflicting long-term damage to American competitiveness,” Hansen said.

Further impacting the US tech employment market are H-1B visas. A recent investigation by the US Citizenship and Immigration Services into the controversial program has found it riddled with fraud and a more than 20% violation rate.