Unemployment for IT is well below national
rates, but average wages have increased less than a half percent a year
over the past decade
Despite information technology's ever increasing role in the economy,
IT wages remain persistently flat. This may be tech's inconvenient
truth.
A still sluggish U.S. economy gets most of the blame for
this wage stagnation, but outsourcing and automation all have a role,
say analysts.
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"IT
salaries have not really kept pace with inflation," said Victor
Janulaitis, the CEO of Janco Associates, which reports on IT wage
compensation.
In 2000, the average hourly wage was $37.27 in
computer and math occupations for workers with at least a bachelor's
degree. In 2011, it was $39.24, adjusted for inflation, according to a
new report by the Economic Policy Institute.
[See related: In a symbolic shift, IBM's India workforce likely exceeds U.S.]
That
translates to an average wage increase of less than a half percent a
year. In real terms, IT wages overall have gone up by $1.97 an hour in
just over 10 years, according to the EPI. It gathered data from the
Current Population Survey, a monthly survey of households conducted by
the Census Bureau for the Bureau of Labor Statistics.
But here's another data point. Yoh Services, a professional staffing firm for skilled IT workers, keeps a
running index
of hourly technology wages. In its latest measure for week 12 of 2012,
the hourly wages were $31.45 and in 2010, for the same week, at $31.78.
The
worker who earned $31.78 in 2010 would need to make $33.71 today to
stay even with inflation, according to the government's Consumer Price
Index Inflation Calculator. Yoh has data going back over 10 years, and
in most years hourly wages have run in the $30 to $32 dollar range.
Joel
Capperella, vice president of marketing for Yoh, said companies are
making more use of contracted labor, allowing organizations to source
during periods of high demand, "and run virtual just-in-time talent
supply chains."
Capperella said there is a correlation between
temporary professional wages and salaried wage workers "because
historically temporary demand increases have preceded an increase in
permanent employee demand," he said.
"However this recovery
period has been so sluggish that the industry has not seen the
correlation between an increase in contracted labor indicating that an
increase in permanent jobs is imminent," said Capperella.
Analysts
say high-demand skills will have rising wages. Capperella, for
instance, said the supply of IT pros that also know the agile
development methodology is very low compared to the demand, and those
workers will "command a very high hourly and salary rate."
John
Longwell, vice president of research at Computer Economics, said that
"it would be fair to say that the globalization of markets for goods and
services is helping restrain wages across many sectors, including the
IT sector."
But Longwell also cautions against overstating the impact of IT offshoring.