July’s rise in the IT unemployment rate may indicate more about competition for jobs than it does about job losses. In essence, more people are getting into the sector, which drives the rate higher.
The unemployment rate for computer and mathematical occupations grew to 3.8 percent in July, up from 3.1 percent a year ago, according to the Bureau of Labor Statistics. Meanwhile, the overall U.S. unemployment rate for the nation fell to 7.4 percent from 8.2 percent a year ago.
“There is all kinds of good news in this noisy data,” says Jerry Nickelsburg, an economics professor with the UCLA Anderson School of Management. He notes that the computer and mathematical category is a small set of the wider unemployment data. As a result, it’s much more volatile.
The unemployment rate is a ratio between the number of people looking for jobs, divided by the number of people who have a job. The figure can be skewed when an influx of people enter a particular sector, even though the actual number of people employed in the area is rising.
Indeed, the number of people working in tech has been steadily increasing monthly on both a sequential and annual comparison basis. For example, in June the number of technology jobs rose 2.6 percent, to 14.4 million jobs, compared to a year ago. At the time, the BLS said the unemployment rate for computer and mathematical jobs stood at 4.2 percent, which was higher than July. June’s higher rate could possibly be attributed to recent college graduates trying to enter the workforce.
Also in July, women had a higher unemployment rate than men, according to the BLS.
“There are more women who are now getting their computer science degrees, so there will be more of them looking for jobs after graduation,” says Nickelsburg. As a result, the proportion of women in IT who are looking for work may be greater than that of men, since the number of women already in the sector is much smaller. Thus, the ratio of women looking for work compared to the number already employed would be higher.
In either case of men or women, the percentage of those unemployed is extremely small. Although there is not a set figure for a full employment rate, “a 3 to 4 percent unemployment rate is very low and it’s harder to get much lower than that,” Nickelsburg says.