Dotcom bust bigger factor than Offshore outsourcing in job losses

Dotcom Bust
Dotcom Bust

Dotcom Bust Biggest Factor

The ITAA has come up with the figures for job losses caused by the dotcom bust and figures for job losses caused by offshore outsourcing and compared them.

The ITAA is the main software association in America which represents the big software companies.

We need to state that they are one of the main pushers of the idea of an IT skills shortage and in favour of offshore outsourcing and the importation of cheap IT labour to the US.

In fact they pretty much came up with the idea of the skills shortage. They have been lobbying hard for their members to be able to have access to cheap IT labour.

Look at Figures for Jobs Lost

That said, it is useful to look at the figures that they come up with which seem to make some sense.

According to ITAA the number of IT jobs lost in the USA during the downturn is 372,000. That’s 10% of the workforce. At least they seem to have some proper figures in the US. In the UK the Government shows IT unemployment at 4.6% – less than the national average.

ITAA say that we lost only 2.8% of the total because of offshore outsourcing. They would seem to suggest that we lost the other 7.2% of the jobs due to the economic downturn and dotcom bust.

Of course, imported workers do many of the jobs remaining in the US. This would make even more US IT workers out of work.

There is also the fact that, as in the UK, they don’t include many contractors in the totals. The downturn hit them even more badly than employees.

Offshore Outsourcing Boom

It was very unfortunate that the start of the offshore outsourcing boom coincided with the dotcom bust.

The hope now is that the economy, and the IT jobs market, can grow more quickly than the rate at which jobs are going overseas.

It looks as if they can over the next few years.

However, each job leaving the US or UK decreases the demand whereas the supply remains the same. Therefore, according to the laws of Supply and Demand, there is bound to be an effect on the price of IT labour.

Therefore, this affects everyone in the country. It’s not just those who have lost their jobs via offshore outsourcing.

The dotcom busthas been the biggest factor causing IT unemployment.