Fortune Magazine's Bedecarre and Olster Fumble "Fastest Growing Jobs" Story

Variants of September 3, 2010 Fortune magazine article,  Fastest growing jobs in America by John Bedecarre and Scott Olster, are circulating all over the internet. It's being uncritically cited to show that IT job prospects are rosy. They aren't.

Bedecarre and Olster based their article on a study by the Bureau of Labor Statistics (BLS): Occupations with the largest job growth. Two of the six job categories mentioned are IT occupations:  "Software engineers" and "Network Systems and data analysts".

But closer examination of the numbers reveals that those two job categories are far from hot – especially when immigration is factored into the equation.

Bedecarre and Olster say of software engineers:

"BLS expects the cadre of software engineers and application developers to swell to 689,900 by 2018 (up from 514,800 in 2008). Whether they are building business software, constructing an operating system, developing games, or designing mobile apps, software engineers have a wide array of career avenues to consider."

So the software engineering labor market will grow by 175,100 jobs over the next decade. That may sound like a big number. But a simple analysis of its yearly impact on job growth yields a depressing result for IT students and unemployed engineers who are looking for a job in their chosen field.

Averaged out, only 17,400 of these engineering jobs will be added annually—to a U.S. workforce of 155 million. Put another way, the annual increases in software engineering represents a minuscule 0.01% of the workforce.

The second IT job category touted by Fortune's Bedecarre and Olster: "Network systems and data Analysts". They write:

"This occupation's full title is 'network systems and data communication analysts.' And while it's a mouthful, it is worth remembering as it's the second-fastest growing occupation in the U.S., according to the Bureau of Labor Statistics. BLS's latest employment outlook report estimates that the profession will grow by 53.4% to almost 448,000 workers between 2008 and 2018."

According to the BLS projection, this occupation will grow from 292,000 jobs by 53.4% to almost 448,000 workers between 2008 and 2018. That works out to 155,800 jobs over the next decade, or just 15,580 a year.

Combined, these IT categories will increase the workforce by a mere 329,800 jobs in a decade, or 32,980 jobs per year.

But many factors suggest that these BLS projections are not credible. Its track record of predicting shortages or surpluses in the labor market is not very good and there is no reason to believe its latest projections are any better.

So much for the demand for IT labor. Now let's look at supply—something Fortune did not do.

Note that the BLS's terms "software engineer" and "Network systems and data Analysts" could cover just about anything to do with computers. There is no industry standard for those job titles.  In the real world of high-tech, there is a large crossover of workers from other occupations who can take these jobs—mathematicians, businessmen, scientists, even philosophers and liberal arts types. It's not unusual for computer/IT jobs to be taken by people with nothing more than a high school degree. All could be regarded as "software engineers" and "Network systems and data analysts"

But let's accept the BLS assumption that a software engineer is someone who graduated with a software engineering degree and fill either category of job. Even so, the IT job outlook is bleak for new graduates.

The number of associate degrees earned in software engineering has fluctuated between 20,000 and 25,000 a year for the last decade, according to the National Science Foundation.  And U.S. schools award about 10,000 software bachelor's degrees every year. Combining these two numbers, the educational system graduates at least 30,000 students per year eligible for software engineering jobs.

You can gauge how tight the market is simply by subtracting the number of jobs created from the number of college graduates qualified for those jobs. 

 32,900       number of software engineering analysts jobs created

-30,000       number of degrees issued

----------

2,900          surplus of jobs

So software engineering is being touted as a hot career option—yet there are barely enough jobs for newly-graduated students.

And this is before immigration is factored in.

Nevertheless, despite evidence to the contrary, the BLS regularly asserts that there is a labor force "slowdown"—which in its world means there is an impending shortage of workers that can only be resolved by importing more foreign immigrants! This it states happily:

"Sharply increased immigration to the United States is expected to mitigate the projected labor force slowdown caused by the preceding factors, but also will continue to change the racial and ethnic composition of the labor force. Hispanics, accounting for 14.3 percent of the labor force in 2008, are expected to increase their share to 17.6 percent by 2018. Other minority groups—including Blacks and Asians—also will increase their share of the labor force, while White non-Hispanics become an increasingly smaller segment. "

The employment projections for 2008–18, Monthly Labor Review, BLS, 2009. Table 2: Civilian labor force, by age, sex, race, and ethnicity, 1988, 1998, 2008, and projected 2018

But in high tech, at least, BLS numbers conclusively show that immigration will create an even larger surplus of workers. Since American workers won't disappear as the foreigners arrive, the future job market will continue to show accelerating unemployment of high-tech workers as American workers are replaced with the cheap "young blood" of foreign labor.

Of course, the BLS projections are based on the dubious assumption that the past will be the same as the future. Using the BLS assumption that the next ten years will be like the last, I recently calculated the number of employment-based visas that will be issued:

Visa Type     Average Per Year

-------------    ----------------------

EB-1                    30,000

EB-2                    30,000

EB-3                    40,000

H-1B                    100,000

L-1                       80,000

TN                       4,000

                            ----------------

Total                    280,000 per year, or 2.8 million over the next decade

[The Most Generous Nation in the World... at Giving Jobs Away, by Rob Sanchez, The Social Contract, Winter 2009-2010.]

Typically about 45%-50% of the employment based visas in the categories above are used for computer/IT jobs. (Estimates early in the H-1B program pinned the share at 28%, but in recent years the share of computer/IT has risen). At 45% the number of visas issued for computer/IT is 126,000 and at 28% the number is 78,400. Using either number will show that, at present levels, high-tech immigration will cause a huge surplus of workers in the U.S. and that means continued joblessness, stagnating salaries, and reduced opportunities.

(Fortune magazine also listed the following jobs as "fastest growing": nurses—the #1 category—biomedical engineers, accountants, auditors, and veterinarians. These professions are also heavily affected by employment-based visas, so they could be analyzed the same deflating way I've done for high-tech.)

BLS data is also available that projects the 2008-2018 outlook for the entire computer/IT profession instead of just a few job categories. ("Occupational Employment Projections to 2018", November 2009 Monthly Labor Review, Table 1.2.) It suggests that the current IT workforce of 3.42 million will be increased to 4.187 million  in a decade—1.063million  total new jobs created, or 106,000 average jobs per year.

But so far the BLS projections are getting off to a bad start because they have failed to predict short term employment. This table shows just how wrong they can be:

Year

 Total IT employees

 # Jobs Changed

 Percentage Numerical Change

 

2007

3,191,360

N/A

 

N/A

2008

3,308,260

116900

 

3.6%

2009

3,303,690

 -4570

-1.0%

 

So the BLS projected that in 2009 the U.S. should have had 106,000 new computer/IT jobs—but instead there was a net loss of 4570! (The data for 2010 hasn't been made available yet but it's doubtful that enough jobs will be created to make up for the losses of 2009.)

Under normal circumstances, this broader category of computer/IT jobs would be filled by a broader category of science-educated Americans, even apart from those philosophy graduates. But comparing the average annual number of computer/IT jobs that are projected to be created versus the number of visas to be issued for foreign workers shows that an excess of visas will be issued:

126,000 computer/IT related visas

106,000 new jobs created

----------

- 20,000 surplus foreign workers.

So, to restate what will happen over the next decade: there will be 20,000 per year more foreigners who will enter the U.S. computer/IT labor market than there are jobs being created—and that is assuming the BLS predictions of job growth is not overly optimistic.

The IT labor market is being swamped by immigration. Further massive displacement of American workers is inevitable.

On present trends, Americans will see no improvement in the job market in the foreseeable future even if the rosy projections of the BLS accurately predict the future, and even if current immigration levels are kept the same.

Of course, the recent push for the DREAM act showed that the Treason Lobby is still determined to expand the number of visas.

If it succeeds, the American IT workforce will face far more despair.

Rob Sanchez (email him) is a Senior Writing Fellow for Californians for Population Stabilization and author of the "Job Destruction Newsletter" (sign up for it here) at www.JobDestruction.com. To make a tax-deductible donation to Rob Sanchez, click here.