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Despite recent gains, the best year for tech employment remains 2001

Despite recent gains, the best year for tech employment remains 2001

Tech industry employment reached 6.3 million in the first half of this year, up just 1.9% from a year earlier.

In 2001, the tech industry employed 6.5 million people. Then the bubble burst, and payrolls shrank dramatically.

That year remains the tech industry's employment high-water mark -- and it will take another 200,000 jobs to equal it.

Tech industry employment reached 6.3 million in the first half of this year, a gain of 118,800 jobs, up 1.9% compared to the first half of 2013. That's below the 3.7% growth rate overall for private-sector employers, according to new data from TechAmerica Foundation. The weaker rate of growth is an anomaly for the industry.

"The tech industry often experiences a better employment situation than the private sector," said Todd Thibodeaux, president and CEO of wireless industry trade group CompTIA, which acquired TechAmerica earlier this year. TechAmerica has been reporting on industry employment since well before the days of the dot-com bubble.

In 2011 and 2012, the tech industry outgrew the overall private sector. And in 2009, while the private sector saw employment drop by 5.5%, the employment decline in the tech industry was slightly lower -- 4.5%. In 2008, tech employment rose 2.1% even as overall private-sector employment sagged by 0.2%, according to CompTIA.

Tech companies like Hewlett-Packard, Microsoft and others have been cutting back, and in the first half of this year there were nearly 50,000 tech industry layoffs, according to outplacement firm Challenger and Gray.

The increase in tech jobs this year has been largely in R&D, testing and engineering services, which saw 54,100 new jobs. IT services was next, with a gain of 36,000 jobs.

Changing labor needs in the tech manufacturing sector have contributed to the suppression of IT growth. In 2000, 1.8 million people were employed in tech manufacturing; today, that number is 1.13 million. Manufacturing added 3,900 jobs in the first six months of this year.

"The tech manufacturing sector in the United States isn't weak, but it is going through some efficiencies and productivity changes," said Thibodeaux. "As the manufacturing process becomes more technical, more and more automated systems are being used to produce things, which allows for increased production with the same or fewer staff."

The evidence is in the value of tech manufacturing measured against GDP. For example, in 2004 tech manufacturing represented 1.5% of private-sector GDP. That figure grew to 1.9% to 2010 and dropped to 1.7% in 2011 as overseas demand for products declined, according to CompTIA.

But not every tech manufacturing sector is losing jobs. Computer and peripheral equipment manufacturing saw employment rise from 156,000 jobs in January 2013 to 166,000 in June 2014.

The tech industry is one of the best-paying sectors of the economy. The average annual salary for a tech industry employee is $93,000, compared to and average of $47,400 for the private sector overall.

"Ideally, given that tech industry jobs on average pay more than the [overall] private sector, we would contend that we want to be creating more of these types of high-paying, high-rewarding jobs," said Thibodeaux.

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Tags IT industryMicrosoftTechAmerica FoundationcomptiaIT managementHewlett-Packard

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