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The Sky is Falling, and So Are Tech Wages

by
Elaine Rigoli
May 27, 2008, 8:22 am ET

If you need parallels between our softening economic conditions and the job market as a whole, consider this depressing fact: after hitting all-time highs in 2007, hourly wages for highly skilled technology professionals dropped year-over-year during the first quarter of 2008.

Yep, tech professionals. There is no denying the market’s sluggishness after you skim the Yoh Index of Technology Wages. Tech professionals’ salaries are falling, with wages dropping 2.7% in the first-quarter, when compared to the same period in 2007.

Jim Lanzalotto, vice president of strategy and marketing for Yoh, points out that “this drop in wages this quarter, coupled with April’s negative Bureau of Labor Statistics report on employment, paints a very lackluster picture of the economy.”

“However, this continues to be a skill-driven market and we’re still seeing pockets of strength in the tech sector, such as SAP, Oracle, security, and product development, and software and hardware engineers,” says Lanzalotto.

If the strength found in these sectors permeates the weaker sectors of the market, there is a chance that it could ultimately produce stronger wage growth for the second half of 2008.

The Yoh quarterly report also identifies the top job titles in highest demand. Based on conversations with more than 9,000 hiring managers in over 15 major metropolitan areas, Yoh says the following roles have appeared most frequently nationwide:

  • Biostatistician
  • Civil Engineer
  • Clinical Research Associate
  • Firmware/Embedded Engineer
  • Java Developer
  • Mechanical Engineer
  • .Net Developer
  • Oracle DBA
  • Project Manager
  • SAP® Consultant (Functional/Technical)

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Don Cihelka

    Not so in Canada, IT professionals, Network and Programmer types are still scarce and demand top dollars.

  2. Brandon Ebeling

    Low or falling wages in the U.S. are a self-inflicted wound? According to the DOL wages of U.S. citizens are suppressed nominally by 30% and as much as 45% via myriad visa and outsourcing options available in the U.S.

    For detailed discussion on the impact of H-IB visas see the hot off the press article “H-1B Visa Numbers: No Relationship to Economic Need” http://cis.org/node/222 by Center for Immigration Studies (CIS) Fellow John Miano, an author and expert on the software industry.

    Key Findings:
    o There is no cause and effect relationship between H-1B visas and job creation. Adding H-1B visas does not create additional jobs for U.S. workers.
    o Since 1999, the United States has approved enough H-1B visas for computer workers to fill 87 percent of net computer job growth over that period.
    o Since 1999, the United States has had a net loss of 76,000 engineering jobs. Over the same time period, the United States has approved an average of 16,000 new H-1B visas each year for engineers.
    o If current employment trends continue and the H-1B quota remains unchanged, the United States will approve enough H-1B visas for computer workers to fill about 79 percent of the computer jobs it creates each year.
    o Pending legislation would increase the number of H-1B visas for computer workers to above the number of computer jobs created each year.
    o The data suggest that a large percentage of those who legally enter United States on H-1B visas go into the illegal alien pool.

    For additional context also read Miano’s Dec. 2005 missive “The Bottom of the Pay Scale Wages for H-1B Computer Programmers” http://www.cis.org/articles/2005/back1305.html

    Key Findings:
    o In spite of the requirement that H-1B workers be paid the prevailing wage, H-1B workers earn significantly less than their American counterparts. On average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation and state.
    o Wages for H-1B workers in computer programming occupations are overwhelmingly concentrated at the bottom of the U.S. pay scale. Wages on LCAs for 85 percent of H-1B workers were for less than the median U.S. wage in the same occupations and state.
    o Applications for 47 percent of H-1B computer programming workers were for wages below even the prevailing wage claimed by their employers.
    o Very few H-1B workers earned high wages by U.S. standards. Applications for only 4 percent of H-1B workers were among the top 25 percent of wages for U.S. workers in the same state and occupation.
    o Many employers use their own salary surveys and wage surveys for entry-level workers, rather than more relevant and objective data sources, to make prevailing-wage claims when hiring H-1B workers.
    o Employers of large numbers of H-1B workers tend to pay those workers less than those who hire a few. Employers making applications for more than 100 H-1B workers had wages averaging $9,000 less than employers of one to 10 H-1B workers.
    o The problem of low wages for H-1B workers could be addressed with a few relatively simple changes to the law.

    UC Davis Prof. Norman Matloff, a computer scientist has for yeas written extensively about the H-1B FRAUD being perpetrated against U.S. native born workers in computer programming and software engineering. Examples include:
    “Should the U.S. increase its H-1B visa program? CON: Wages belie claims of a labor shortage” http://www.sfgate.com/cgibin/article.cgi?f=/c/a/2006/12/07/EDGOULJ5BC1.DTL
    http://www.cs.ucdavis.edu/~matloff/Archive/HireH1BsOnly.txt

    Other reports like “America’s High Tech Bust” discusses employment in IT with implications about why wages might be less than they might otherwise be:
    http://www.washtech.org/reports/AmericasHighTechBust/AmericasHighTechBust.pdf
    http://www.washtech.org/reports/ITLaborMarketsStudyL.pdf

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