If Tech is So Important, Why are IT Wages Flat?
Despite information technology's ever increasing role in the economy, IT wages remain persistently flat. This may be tech's inconvenient truth.
Wed, December 05, 2012
Computerworld — WASHINGTON - Despite information technology's ever increasing role in the economy, IT wages remain persistently flat. This may be tech's inconvenient truth.
A still sluggish U.S. economy gets most of the blame for this wage stagnation, but outsourcing and automation all have a role, say analysts.
"IT salaries have not really kept pace with inflation," said Victor Janulaitis, the CEO of Janco Associates, which reports on IT wage compensation.
In 2000, the average hourly wage was $37.27 in computer and math occupations for workers with at least a bachelor's degree. In 2011, it was $39.24, adjusted for inflation, according to a new report by the Economic Policy Institute.
That translates to an average wage increase of less than a half percent a year. In real terms, IT wages overall have gone up by $1.97 an hour in just over 10 years, according to the EPI. It gathered data from the Current Population Survey, a monthly survey of households conducted by the Census Bureau for the Bureau of Labor Statistics.
But here's another data point. Yoh Services, a professional staffing firm for skilled IT workers, keeps a running index of hourly technology wages. In its latest measure for week 12 of 2012, the hourly wages were $31.45 and in 2010, for the same week, at $31.78.
The worker who earned $31.78 in 2010 would need to make $33.71 today to stay even with inflation, according to the government's Consumer Price Index Inflation Calculator. Yoh has data going back over 10 years, and in most years hourly wages have run in the $30 to $32 dollar range.
Joel Capperella, vice president of marketing for Yoh, said companies are making more use of contracted labor, allowing organizations to source during periods of high demand, "and run virtual just-in-time talent supply chains."
Capperella said there is a correlation between temporary professional wages and salaried wage workers "because historically temporary demand increases have preceded an increase in permanent employee demand," he said.
"However this recovery period has been so sluggish that the industry has not seen the correlation between an increase in contracted labor indicating that an increase in permanent jobs is imminent," said Capperella.
Analysts say high-demand skills will have rising wages. Capperella, for instance, said the supply of IT pros that also know the agile development methodology is very low compared to the demand, and those workers will "command a very high hourly and salary rate."