Unemployment is Low, But Tech Pro Challenges Remain

The U.S. unemployment rate recently hit 3.6 percent—the lowest in half a century. Meanwhile, the unemployment rate for those in the “computer and mathematical occupations” (one of the categories used by the U.S. Bureau of Labor Statistics to trace jobs in tech) stands at 2.4 percent.

That 2.4 percent isn’t historically low for tech, but much better than ten years ago, when it fluttered around 5.6 percent in the wake of the Great Recession. In fact, in April 2018, the unemployment rate stood at 1.7 percent, so even by the standards of the “red hot” tech moment, things are pretty good.

Meanwhile, the number of employees involved in sub-industries such as computer systems design and related services has climbed incrementally over the past year, although many of these jobs fluctuate seasonally. For example, contractors may find their contracts expiring at the end of a calendar or fiscal year, sparking fluctuations in tech-industry unemployment.

But the “official” unemployment rate isn’t a nuanced view of the country’s economic health. For example, the overall labor-force participation rate dipped month-over-month, from 63 percent to 62.8 percent, suggesting that more people aren’t reporting that they’re unemployed and looking for work.

“The drop in the unemployment rate was encouraging, but it was for bad reasons,” Michelle Meyer, head of United States economics at Bank of America Merrill Lynch, told The New York Times.

Indeed, despite a low unemployment rate, the tech industry regularly wrestles with its own share of issues related to pay, benefits, and employment. For instance, companies such as Google and Facebook are using ever-larger numbers of contractors—not only for things like sales or facilities management, but also coding and QA. (In 2017, the University of California—Santa Cruz estimated some 39,000 contractors employed by tech firms in California’s San Mateo and Santa Clara counties.)

Those contractors, in turn, don’t have the same benefits as “regular” employees, and the pay is often lower. But from a corporate perspective, hiring massive amounts of contractors comes with several cost-savings benefits, such as not having to pay out 401(k) matching.

Within tech, workers are also concerned that firms will use the H-1B visa to hire workers from overseas, rather than sourcing labor from within the country. Although the Trump administration has taken some steps (via U.S. Citizenship and Immigration Services) to restrict the use of H-1B, it’s still a contentious issue for many in the industry.

Last (but certainly not least), there’s the unnerving prospect of automation taking over a number of technology jobs, including programming. Analyst firm Forrester predicted, for instance, that automation could kill 10 percent of U.S. jobs in 2019, while creating the equivalent of 3 percent. Analytics, chatbots, and robotics may impact customer-service, warehouse, and a variety of other positions.

In other words, the low unemployment is a good thing. Truly! But when it comes to staying gainfully employed, are a lot of things that could challenge tech pros going forward. 

21 Responses to “Unemployment is Low, But Tech Pro Challenges Remain”

  1. Mike Earnest

    I have over 25 years experience and I have done an outstanding job of keeping my skillset up to date and relevant. But nobody seems to care about that. They only care about getting the cheapest possible labor. Mostly from India. I don’t mind the competition, however, I have seen it happen time and time again, employers hire somebody with little experience to do jobs way over their skill set. The project fails and they are looking to hire another one at the same cheap rate hoping to get lucky eventually. Also, I get at least 2 calls a day from a person overseas wanting me to work at a fraction of what I am worth. What scares me the most are companies are saying jobs are going unfilled because there is nobody to fill them. This is not true. There are plenty of American workers. They just don’t want to pay anywhere near fair market value for our outstanding service and knowledge that we crawled over glass and lemon juice to attain. This is the complaint CEO’s are giving the politicians so they can open up the H-1B Visa program again. They are killing off the american contractor who generally only works 8 months out of the year doing project based work. We cannot provide on demand professional services at rates equivalent to an average full time salary.
    This is what is wrong in America.

    • Julie Wu

      I have 20 years tech experience. I was unemployed for more than a year (had 4 months Consultant job in between) now. During my unemployment, I got at least 4 calls a day from overseas, but had never gotten a face to face interview. I got 5 face to face interviews by America recruiting firms, but still no job offer.

  2. Scott D Hastings Sr

    Honestly, offshore resources just don’t provide adequate results. Much of the time they do not provide an adequate solution. Management “pretends” that it’s working, but my experience is that I spend a lot of time providing them with SOPs (how-tos)

    Even then, the culture is not as comitted to providing an adequate solution

  3. Arrengton

    I have worked in IT for 25 years and worked my way to the position of IT Director. A few years before the great depression of 2008, I was downed sized in 2005 and didn’t get back to work until 5 years later in 2009. Many IT Director roles were eliminated, so I had to re-up my skills as a project manager. Even though PM roles pay is decent, but it’s not on pair for director roles. At best I have been employed on average for 6 months out of the year. The outsourcing of IT jobs are to blame, and it hurts the U.S. economy because many foreign workers send a large portion of their paycheck back to their mother countries to support their families. I have tried to make lateral moves in my career outside of IT, but American IT workers are pigeonholed by none IT recruiters making assertions that IT workers will leave none IT jobs when IT positions come calling. For me, it’s better to work 12 months a year at a lower salary instead of 6 months at a higher salary. Even though I work (or think that I work in the IT industry), it hasn’t been good to me, I feel trapped. I receive great satisfaction from the work that I do as a Project Manager, but I feel that I’m in love with a spouse that doesn’t love me back, and it shows! Please contact me if any readers have idea’s how to escape the Death Star.

    • Mark Dixon

      All of these comments ring so true! As a professional recruiter I see what all of you are saying every day. Companies who don’t value experience telling you (“you’re skills have expired”) even though you can out code the best of them; moving swiftly toward a “contractor only” workforce without telling anyone; IT outsourcing to India has been going on for some time however in the last 5 years millions of Indians have migrated here on H1-Bs to take those contractor jobs here in America (those with authority only hire their own); fake job postings which are mostly posted online that have earnest candidates going in circles following up with “ghost hiring managers”. The truth is we are partly to blame for the mess that has been created by Google, Facebook, Amazon and Apple. These companies are the new “poison purveyors” driving this race to nowhere we all are experiencing. Stop buying their products and you’ll see a change pretty quickly because they control the monopoly of supply and demand for all tech products and services.

  4. Mark Villa

    Mike is exactly right. I have spent months looking for an employer that still values consultants being “all in” that speak English fluently – and I am so sick of babying Indians that I can hardly understand. Where is the value? Further, don’t look now but the US has propped up an entire country by sending all of our jobs to India, further I/T is so out of control – I/T systems are way overpriced and is milking the whole economy. There was a time when India did not even have the power to run the computers, I bet all that has changed. Who pays for all this? We do! Further, the Indians have something we don’t “national teamwork” – they all vouch for each other first and foremost, and you would to if you were stuck in another country trying to get citizenship. There was a time when a couple of regional computer systems ran the whole company – just as big as the company is now. Something will change all this messiness and I hope it is not a major depression. The US worker needs a wake up call. I don’t have the answer – I would post it if I did.

  5. Ageism is a major reason why jobs aren’t being filled. There are many excellent developers and senior leadership people that cannot get roles because the companies are so into the D&I narrative that they are passing over seasoned and well trained professionals just to be PC. Any person with over 25 yrs. experience is being passed over regularly. There are many positions that are paying well so it isn’t because a veteran tech pro is demanding more than the company is willing to pay either. There needs to be emphasis put on this problem to stop the behavior. The D&I push is being disingenuous at best by following in this practice. Where did the “best person for the job” mindset go? The participation rate number is being falsely portrayed due to the large percentage of people not declaring themselves unemployed due to the ageism scenario. Wake up people.

    • Kathy

      I couldn’t agree more. Ageis is very real, whether in IT or any field. I am in HR, and even though I don’t have much experience, as I’ve recently returned to the workforce, due to my age my applications are rejected. Equal pay for equal work and hiring the right person for the right job is what will make this economy work. I’m in 4 transition groups with highly educated and successful professionals of which no one is under age 45!!!

  6. Dan Scott

    The two comments above hit the nail on the head.
    There is definitely:
    (a) age discrimination;
    (b) H-1B abuses fueled by unchecked greed;
    There are law firms that teach companies how NOT to hire Americans, and how to find H-1B workers. I was working at a company in which the majority of workers were H-1B workers from India, and they were all speaking Hindi in the work-place, and their English skills were very poor. Problems cropped-up constantly due to poor communication skills. I asked some of the H-1B workers how much they were being paid, and they were being paid far below fair-market values. As a result, compensation (especially adjusted for inflation) has been falling for many IT/software/application-development professionals. I have also noticed companies laying off older workers, despite those older workers having good skills and performance reviews. Recruitment has also been practically taken-over by people from India, and their English is horrible, and presents many communication problems. This has nothing to do with racism; it has everything to do with age discrimination and H-1B visa abuses rooted in unchecked greed. I’ve decided to retire early.

    • Mike Stewart

      Bottom line its just plain greed on the companies parts. I too am an age victim of IT. No longer able to get back in, even though I know quite a bit. They want foreign and or younger workers who they can pay less money to. They have old documentation left behind by us ‘oldies’ who painstakingly spent hours upon hours gathering it together. One thing these big companies don’t remember, its us ‘oldies’ who are responsible for the nice big buildings you now have.

  7. Stuart

    I agree with all above, and not just in IT, in Engineering, both Quality and Manufacturing, you get a call about a job, where they want a superstar to run the world, “how much” you ask, $35/hr. no expenses paid for traveling 3,000 miles from home.. “Um, No” This gives them the right to hire a foreign worker, “we can’t find any American workers” No, you can’t find any american workers to work for less than they could get a full time job and sleep in their own beds at night. You have recruiters who have no clue, “well he has a degree” Yes, but he’s 24, how do you think he’s a consultant? Has he worked 20+ years and gained knowledge?? they don’t care, they the recruiter is making money, they don’t care if the project is successful or not. Now don’t get me wrong, i don’t dislike Indians, but when they don’t have a clue about the job, or the vocabulary, not speaking, but not knowing what simple terms mean. or they spend all day texting their girlfriend, or they go around hitting on all the old women in the office trying to get laid, and i end up doing their work. To be quite honest, they are LAZY, they can’t multi-task, they only look forward to breakfast and lunch and taking walks around the buildings 5 x per day.

  8. So, finally the whole speech against H1B has been debunked for good. 2.4% of IT unemployment is the best proof.

    H1B does not affect the employment of americans.

    • Stuart

      unemployment is measured by taking a monthly survey of 60,000 households. if there are poeple in those households not looking for work, they are taken out. So that # is not representative of anything. but keep up the good work, luckily, there’s no HB1’s for anti-americans.

  9. Dan Scott

    ===Andy wrote: “So, finally the whole speech against H1B has been debunked for good. 2.4% of IT unemployment is the best proof. H1B does not affect the employment of americans.”===

    Right, the unemployment rate may be low, and that is because of H-1B abuses, rampant greed by corporate CEOs, and because a huge portion of jobs in the U.S.A. have been filled by H-1B workers, or outsourced. When I look around and see over 50% of the people around me speaking Hindi in the work-place, rampant communications problems, then there’s a problem. And this is not meant to be a racist comment, but a lot of these H-1B workers from India also have serious hygiene problems.

  10. The tech sector is so far skewed that it doesn’t even know what it wants/needs. For example, the reason that “regular full time jobs” are taking a fall is because it’s more profitable to us IT pros to take contract work. I can make 3x/hr what I can make locally on a contract. So If I take a 6 month contract I can actually not have to work for a year after.. Not only freeing up resources but allowing me to live my life rather than work 3 jobs for the same pay. And yes, the whole “keep up the skill set is BS” I’ve never hired (or got more salary) because I have certifications. Yet If I don’t keep paying into the stupid system, I can’t find any work at all. Certifications have become the “College” of the IT world. Totally meaningless piece of paper that cost you a small fortune.

  11. BC Shelby

    [“For example, the overall labor-force participation rate dipped month-over-month, from 63 percent to 62.8 percent, suggesting that more people aren’t reporting that they’re unemployed and looking for work”]

    …This is something the U3 rate doesn’t take into account, nor does it take into account those underemployed (part time, temporary/contract, seasonal). It also is primarily based on the number of people filing for UI claims and actively registered as looking for work though state employment agencies. The U6 rate, which is at around 7% – 7.2% takes into account the underemployed however it still does not represent the full picture when it comes to breaking it down further by ethnic background, gender, and age group.

    The last of those three tends to be a serious matter in the tech sector which more than any other occupational segment, practises ageism in hiring and retention. This is discouraging to say the least for many who still have the skills and abilities it takes, but are passed over for younger applicants often for what are little more than flimsy excuses. When I no longer was able to continue in an occupation that had a heavy physical demand due to a disability, I considered tech as I have the aptitude and background (particularly in 3D CG work which I learned on my own as well as designing and building graphics workstations). However, seeing many people I know “put out to pasture” (some in their 40s) and the difficulty they had being rehired in another tech related position, made the thought of investing in a degree at this stage of life a waste of time and money, so I decided to retire instead.

  12. Dan Scott

    Yet, CEOs , companies , and recruiters wonder why so few Americans pursue degrees in Engineering, Math, and Science. What’s the point, IF you’re income is going to continue to fall (especially if adjusted for inflation) year after year, due to massive H-1B abuses and out-sourcing. IT/software/application development salaries started falling around year 2000. After adjusting for inflation, I am making 20% less today than in year 2000 (despite raises and bonuses every year; however, not enough to keep up with inflation).

  13. Diane W.

    I am the long-suffering wife of a tech contractor! I’ve been reading all these comments and I want to offer a few thoughts.

    First, as to the issue of foreign tech workers here on H-1b visas — Don’t let anyone accuse you of being xenophobic. The H-1b visa has nothing to do with immigration and everything to do with corporate greed. As the author, Nick Kolakowski, points out, corporations can avoid paying benefits, sick days, vacations, health insurance and matching 401k’s by hiring contractors. I can’t even count on one hand the number of times my husband — as a contractor — has had to train his younger cheaper H-1b replacement. Why? Because his rate is pretty darn high!

    Second, there is rampant ageism in the tech market. I sort of get it. I was once a 20-something who looked at co-workers in their 40’s and 50’s as “losers” as in, why the heck were they even still working here? Problem is, we need highly skilled people with true expertise and the years of experience necessary to ensure a project is actually running properly. I don’t care if a young 20-something has a Masters — he or she still doesn’t have enough practical experience to really appreciate the nuances and the potential pitfalls that might occur. Only someone with years of experience under their belt can truly add value here.

    Third, as to culture, yes there is in fact a culture gap between many H-1bs from India and Americans. For one, Americans tend to think outside the box and Indians are culturally taught to not make waves, just do what they’re told. Additionally, an Indian manager tends to hire only Indians which is why there are often just a few token Americans on a project. This has been the case many times for my husband, both as a contractor and as an employee within a group at a large corporation. It can be very demoralizing —especially so when like my husband, you have more experience than nearly everyone else in the group combined and you’ve continually ramped up and expanded your skill base way beyond the grasp of most techies who remain at the same corporation for many years.

    Fourth and finally, tech contracting can be very rough on a marriage and on finances. Many times, my husband has had to take a project in another city and we were forced to move at our own expense, only to have to move again a year or two later. Over the past 5 years, we’ve stopped doing this and only my husband has moved and incurred the costs of living remotely in a second city. So we live apart at those times. When taking into account all these additional expenses and the fact that he is rarely working 12 months of any year, we have very little to show for ourselves. Now in our 50s, we have no hope of looking forward to retirement any time soon. And I blame the greed of corporate America for our predicament. My husband would love to be an employee, albeit at a lower salary than his contracting rate, but no companies want to offer him permanent employment. And that’s a shame because I can’t even begin to tell you how bloody expensive health insurance costs for folks over 50 going through the open market. And this is the age where you start needing doctors more and, at least in my case, experiencing actual health problems.

    So yes, I am a long-suffering wife of a tech contractor. And despite doing everything right — like moving to another city to accept a tech contract and saving money so that we can support ourselves between gigs — we still have nothing to show for it. Our American Dream is lost. And if it could happen to us, it can happen to those of you reading this who are still in their 30s and 40s. But I genuinely hope your future will be brighter than ours. Maybe by then enough of us will have forced our politicians to legislate for more equitable work opportunities and environments and to create actual social safety nets so that those of us working as contractors or in a gig economy can have a decent life.

  14. Janet Jenkins

    Diane: YES, your story is repeated a million times in the Tech Industry (what’s left of it) because of all the problems discussed above: ageism, H1Bs, corp. greed, turning backs on the American worker.

    And you’re right, moving from city to city isn’t any bargain – it’s a cost drain actually – because you can’t get ahead and surely sometimes live paycheck to paycheck with nothing in any retirement account, 401K or other investment. How can you when you’re trying to buy food, pay for apartments, utilities, health/car/renters insurance, gas, meds? There is nothing left. Our government doesn’t care either as we all have seen. We’re on our own to find a piece of wood, a float, a raft – something to just hold on and survive. This current life is for the dogs.

  15. h5mind

    These unemployment figures are smoking crack. 105 million Americans of working age are “no longer in the work force”. We’re in the midst of the greatest depression in US history but it’s been papered over with media lies and government subterfuge. Walk through any mall in america and you’ll see how things really are.

  16. stephen jacks

    H1B visas are supposed to be for workers where there is no American that can do the work. However hiring an Indian because the company needs someone with 5 years experience on software released only 2 years ago and only Indians have the “experience” (they lie)? Nearly every Recruiter is Indian, many “senior” IT managers are now Indian (like Satya Nadella), including those in critical US infrastructure positions. Culturally? Entire aisles are devoted to Indian food at supermarkets (like Walmart) in Redmond/Bellevue area.