2001 IT Jobless Rate Was Highest Ever2001 IT Jobless Rate Was Highest Ever

The recession that began last spring, coupled with the bursting of the dot-com bubble, pushed IT unemployment to its highest levels ever, averaging 3.6% last year. In 2000, IT joblessness stood at 1.6%. The previous high in IT unemployment, 3.0%, occurred in 1991 and 1992, the years of the last recession, according to an analysis of Bureau of Labor Statistics employment data. But for most of the last decade, from 1994 through 2000, unemployment among IT workers never breached an annual rate of 2.0%, reaching a yearly low of 1.3% in 1997 at the dawn of the dot-com craze.

Last year, monthly IT unemployment rates ranged from 1.9% in April to 5.0% from August through October and then upward to 5.5% in November before settling back to 4.4% in December. Never had unemployment among IT workers stayed at such high levels for such an extended period.

No one is predicting that IT employment will return to the heyday of the mid- to late '90s, when a combination of heavy spending on Y2K remediation, new Internet technologies, and enterprise resource planning and customer relationship management systems drove companies to hire slews of technologists to support their technology investments. Predictions of sustained, high unemployment for IT workers after the current recession ends aren't being made, either.

Traditionally, IT unemployment parallels that of the overall workforce, but at much lower levels. In fact, only this summer, when IT unemployment reached the 5.0% level, did IT joblessness briefly exceed that of the general population, an occurrence that could have been a mere statistical glitch. During the recession of the early 1990s, IT unemployment averaged about 4 percentage points lower than the general jobless rate. This time, IT joblessness is about 2 percentage points lower.

Why the narrowing? IT jobs within corporate America--in fact, worldwide--have become commonplace. "IT is a major mainstream of the American workplace," says David Levy, chairman of Jerome Levy Forecasting Center, an economic consultancy that traces its roots back to his grandfather. Indeed, the size of the IT labor force more than doubled to nearly 3 million workers in the past decade.

But the narrowing of the fissure between IT and overall unemployment could be temporary, some economists suggest, reasoning that the abrupt, upward tick in IT unemployment was a knee-jerk reaction among businesses to quickly slash costs without recognizing the value technology brings to increased productivity. "The gap will widen as the recovery begins," Anderson predicts. "Unemployment will drop faster in the technology sector than the rest of the economy." Most of the employment gains will be felt by IT and component manufacturers but will filter down to user IT organizations as well, albeit at lower levels. "Companies will not want to ramp up staffing levels if they'll have to cut them again in the future," Anderson says. "But, technology skills are here to stay and demand for technology workers always will be there."

The size of the IT workforce and unemployment rate comes from statistics culled by information from household surveys conducted each month by the Bureau of Labor Statistics and reflect three categories of IT-related occupations: computer systems analysts and scientists, computer programmers, and computer operators.

The analysis shows that the IT labor force--those holding or looking for jobs--shrank last year by 269,080 workers between January and December to 2.59 million; it had been 2.98 million at the beginning of the year. In January, 80,404 IT workers were jobless compared with 119,540 last month.