A new salary survey conducted by IEEE-USA and based upon voluntary data provided through actual tax returns shows that the annual full-time salaries of IT workers in the United States dropped by 1.5% in 2003. This is the first documented decrease since 1972.
What's unusual about this survey is that it uses real tax data to document and quantify how IEEE-USA members' careers are being impacted by economic forces. Most salary surveys, by comparison, rely upon data that is anecdotal.
Major Drop in Median Salaries
According to the IEEE, the median income of IEEE-USA members was $101,000 in 2002. (Median income is not to be confused with average income. Median income is the income level at which half of the IEEE-USA members were paid more and half were paid less.) This figure dropped to $99,500 in 2003. The group says that in the past it conducted the survey every two years, but it's now planning to do a new salary survey of 2004 figures soon.
Causes of Salary Drop Still Hot Topic
The IEEE-USA survey fuels the debate about the impact that outsourcing has had upon the IT sector of the economy and the effect that H-1B visas have had upon the salaries of domestic IT employees.
Trade group representatives at the Information Technology Association of America (ITAA) say that they do not believe that H1-B visas and offshore outsourcing have made a large impact on IT salaries. The annual H-1B cap went from 65,000 in the U.S. government's fiscal year 1998 to 115,000 visas granted per year in 1999 and 2000 and then up to 195,000 after 2000. The cap fell back down to 65,000 in fiscal year 2004.
H-1B Visa Pressure Discounted
According to the ITAA, H-1B visa rules require employers to pay prevailing wages. The ITAA claims that most technology companies using the visa program hire workers with specific, hard-to-find skills. Outsourcing--the practice of hiring companies in other countries--grew by nearly 5% in 2003, yet the ITAA does not believe that the 104,000 U.S. software and services jobs that moved overseas had much impact on the total 10.5 million IT jobs in the United States. ITAA spokespersons prefer to blame the soft economy and the loss of momentum in IT job growth after the dot-com collapse in 2000.
Yet IEEE-USA spokesman Chris McManes speculated that rising health insurance costs and general competition from overseas workers may have placed pressure on salary levels during this period, contributing to an overall salary decrease.
IEEE's U.S. membership survey was conducted in late 2004 and was based on 2003 data from 12,584 respondents. The vast majority of respondents (11,182) were full-time workers. Job classifications included electrical and electronics engineers, computer hardware and software engineers, and computer scientists and system engineers.
Discouraging Trend
Regardless of the cause of the downturn, the trend is unmistakable: IT salaries, which had risen so dramatically up until 2000, are now stagnating and falling. Highly specialized skills in particular areas of technology do not insulate workers from this trend within the industry, and while industry trade lobby groups like the ITAA may be placing pressure on the U.S. Congress to open the doors to more job and wage competition in the IT sector, there is no effective lobbying group working to protect the jobs of IT workers in this country.
Thomas M. Stockwell is Editor in Chief of MC Press, LP.
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