"The myth of high-tech outsourcing"

BusinessWeek reports that the tech sector is booming in the U.S. But the magazine forgot to ask a crucial question.


Andrew Leonard
April 25, 2007 8:00PM (UTC)

In a mildly rewritten version of a press release from the American Electronics Association, BusinessWeek tells us today that the "the U.S. technology industry added almost 150,000 jobs in 2006." That's the highest figure since 2001, and comes on top of a job gain of 80,000 in 2005.

BusinessWeek's headline is "The Myth of High-Tech Outsourcing" -- a phrase bound to raise the blood pressure of some of Salon's readers. Everything's hunky-dory, no need to worry about all those low-cost Indian or Romanian programmers taking away good American jobs. Even more jobs would have been created, says BusinessWeek, "'but our companies are having difficulty finding Americans with the background,'" says William Archey, president and chief executive of the AeA."

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Anecdotal reports from people familiar with the tech sector in the San Francisco Bay Area do indicate that the job market is as tight as it's been since the dot-com bust. But there's a crucial statistic missing from the BusinessWeek report and the AeA press release. We get lots of numbers on job growth, but zero information on wage growth. Without both sets of data, we don't really know what's going on.

We're told only that the average tech sector wage was $75,500 in 2005, which looks awfully nice measured against the average private sector wage of $40,500. But what's the trend line? Are tech sector wages rising faster than inflation? Or are they flat, depressed by global competition?

I'm quite prepared to believe that wages are actually in pretty good shape. But when a statistic so critical to a proper understanding of the true health of high-tech employment is left out of a press release, a skeptical reporter can only assume that the news isn't as good as one might hope.

And when a news organization covering the press fails to even ask such an obvious question, that's just bad journalism.

UPDATE: A reader with access to the AeA report provides some figures on wages. In a nutshell: rising since 2001, but still not up to the height reached in 2000.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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