U.S. high-tech industry posts second year of job growth in 2006

By Colleen Taylor, Contributing Editor -- 4/26/2007

In a rebound exhibiting signs of increasing momentum, the United States' high-tech industry saw its second straight year of job growth in 2006, according to a report published this week by American Electronics Association (AeA) that cites data from the U.S. Bureau of Labor Statistics (BLS).

The trade association’s report shows that in 2006 the high-tech industry added nearly 150,000 net jobs for a total of 5.8 million jobs in the United States. This growth is faster than the 87,400 jobs added in 2005, the AeA said, and the two years of growth represent an increase of 4 percent.

The BLS data on national employment, unemployment, and venture capital investments used in the report are for 2006. The national and state wage, payroll, and establishment data are for 2005, as well as state rankings and state employment data, as a result of a nine month lag in the reporting of the data from BLS, according to the AeA.

"We are pleased to see the rebounding of the tech industry," William T. Archey, AeA's president and CEO, said in a statement.  "This is the second year in a row that tech industry employment has added jobs."  

High-tech jobs are typically more lucrative than those in other industries, the AeA said. According to the group's report, the average tech industry wage is 86 percent more than the average U.S. private sector wage. In fact, the report says that in 48 U.S. states the average high-tech wage is at least 50 percent more than the average private sector wage, and in 10 of those states the differential is more than 90 percent.

On a sector-by-sector basis, the report said that the high-tech manufacturing industry added 5,100 net jobs in 2006. Software services and engineering and tech services employment were up in 2006 for the third year in a row, increasing by 88,500 jobs and 66,300 jobs, respectively. Meanwhile, the communications services industry lost 13,300 net jobs in 2006.

On a regional basis, the leading states by high-tech employment in 2005 were California with 919,300 jobs; Texas with 445,800 jobs; New York with 299,900 jobs; Florida with 276,400 jobs; and Virginia with 261,000 jobs, according to the report. 2005 data are the most recent available at the state level, the AeA said. Not surprisingly, the state of California also led the nation in net job creation, while Florida saw the second largest gain in 2005.

Despite the growth, the AeA said that the industry still faces significant challenges.

"Companies of all sizes continue to have problems recruiting highly qualified and educated individuals to work for them, whether those individuals are foreign or domestic," Archey continued. "This was reflected in the 2.5 percent unemployment rate for computer scientists and the below 2 percent unemployment rate for engineers in 2006." 

This lingering employment problem, Archey said, is due to the lack of Americans enrolling in and graduating from math, science, and engineering programs and a high-skilled visa system that he characterized as "broken."

The AeA is certainly not the only group to publicly criticize the United States' visa system in recent weeks, in the wake of the latest round of visa acceptances. Earlier this month, the U.S. Citizenship and Immigration Services (USCIS) received enough H-1B petitions to meet the congressionally mandated cap for fiscal year 2008 just one day after starting the receipt of applications. Contrastingly, it took nearly two months for the cap to be reached for fiscal year 2007. Last week, national trade organization Electronics Industries Alliance (EIA) expressed public support for recent proposals of congressional reform of the United States' visa programs that would raise the H-1B cap from 65,000 to 115,000.

For commentary on this story, see "Supply Chain Reaction."

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