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IT salaries down last year
By Grant Gross

U.S. IT and electrotechnology professionals saw a 1.5 percent decrease in their salaries in 2003, the first decrease since the Institute of Electrical and Electronics Engineers-USA (IEEE-USA) began surveying members in 1972, the group announced Wednesday.

The median income of IEEE-USA members surveyed dropped from US $101,000 for a full-time worker in 2002 to $99,500 in 2003. Until now, respondents' salaries increased even during the first years after the 2000 dot-com bust. Median income of survey respondents rose from $82,000 in 1998 to $93,100 in 2000, before topping out at $101,000 in 2002.

The Internet survey is based on actual tax forms, and the IEEE-USA will conduct a 2004 salary survey in 2005. The group conducted the survey every two years until recently.

The drop in income could be due to a variety of factors, including a sluggish U.S. economy, an offshore outsourcing trend among technology companies, and competition from foreign workers using immigrant worker H-1B visas to get U.S. jobs, said IEEE-USA spokesman Chris McManes. Rising health insurance costs and general competition from overseas workers may have contributed to the salary decrease, IEEE-USA officials said.

A dot-com hangover could also be a factor, McManes added. "A lot of people were finding employment (in the late '90s), and there was so much of a frenzy that things were going ballistic," he said. "Maybe salaries were going up so high that the drop now is a righting of the ship."

Bob Cohen, senior vice president at the trade group Information Technology Association of America (ITAA), questioned whether H1-B visas and offshore outsourcing 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 a year in 1999 and 2000, then up to 195,000 after 2000. The cap fell back down to 65,000 in fiscal year 2004.

But H-1B visa rules require employers to pay prevailing wages, Cohen noted. Most technology companies using the visa program hire workers with specific hard-to-find skills, he said.

An ITAA survey released in March estimated 104,000 U.S. software and services jobs were moved overseas in 2003, but that's a small number compared to the estimated 10.5 million [m] IT jobs in the U.S., Cohen said. While saving money on salaries may be part of the reason for offshore outsourcing, most jobs lost are "at the low end" of salaries, he added.

A more realistic cause of the salary decrease could have been a slow U.S. economy, Cohen said. "Companies have been slow to spend on top-line information technology programs and projects," he said.

The Internet-based survey of the IEEE's U.S. membership was conducted in late 2004. It is based on 2003 data from 12,584 respondents, the highest response rate IEEE-USA has recorded. 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 analysts, among others.

Posted December 22, 2004 10:38 PM | TrackBack (0)