Business News: IT Unemployment Hits 6%

"The unemployment rate for information-technology workers rose to 6% in August, from 5.6% the prior month, as the boom in artificial intelligence continued to drastically alter the tech landscape.

In August, there were 148,000 unemployed IT workers, and more than the 145,000 in July, according to consulting firm Janco Associates, which based its findings on data from the U.S. Department of Labor.

The IT unemployment rate has been above the national jobless rate for seven of the past eight months, Janco found. On Friday, the Bureau of Labor Statistics said the national jobless rate ticked down to 4.2% in August as the economy added 142,000 jobs.

Joblessness for IT workers is at its worst since the dot-com bubble burst in the early 2000s, said Victor Janulaitis, Janco's chief executive. This time the culprit is AI, he said, which is causing "seismic change" comparable to that seen when personal computers came into wide use.

Job reductions in IT remain concentrated in traditional technology roles like managing back-end corporate systems, Janulaitis said, while AI and cybersecurity are providing pockets of growth.

"The roles that are most in demand right now are roles where candidates have expertise in security, AI and the cloud," said Steve Watt, chief information officer of Hyland Software.

Within AI, businesses are looking for workers who can help them prepare company data for use with AI models, as well as design tools to actually use AI, said Vikram Nafde, CIO of Webster Bank.

Companies in IT services added 3,400 new workers last month, down from 4,000 in July, according to the trade group CompTIA. The August gains, however, were offset by a loss of 2,500 workers in tech manufacturing -- part of a larger nationwide reduction in factory jobs, CompTIA said. Tech manufacturing jobs are especially important because chip fabs require a large, specialized workforce.

Part of the difficulty recently laid-off IT workers now face is a disconnect between the skills they have and how much they expect to be paid. Big pandemic-era paychecks and IT jobs no longer exist, experts say.

For software development and IT support, job postings are about 30% fewer than they were before the pandemic, said Nick Bunker, an economist at jobs site Indeed. High-income sectors like technology also are experiencing slower pay growth, Indeed's wage data shows.

"If you're someone looking for a job in that space, there are fewer opportunities than there were pre-Covid, and definitely far fewer opportunities than there were in late 2021 when that labor market was red-hot," Bunker said." [1]

1. Business News: IT Unemployment Hits 6%. Lin, Belle.  Wall Street Journal, Eastern edition; New York, N.Y.. 09 Sep 2024: B.3.