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US loses 500k+ tech jobs in 2002

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The US technology industry lost more than half a million jobs in 2002, taking sector employment levels to six million.

Worst hit was electronics manufacturing, which accounted for more than half of US tech job losses between 2001 and 2002. This suggests a hollowing out of US assembly, as production is outsourced overseas.

It was a tough year too for the software sector which suffered its first jobs decline - 150,000 losses - in the seven years that the tech employment statistics have been compiled by AeA, a US trade association. Undoubtedly, the US tech industry was in the throes of post dotcom slump cost-cutting in 2002. But the fear of many Americans is that these job losses are structural, not cyclical. In other words, the cosy middle class income and employability assumptions of American computer programmers, is being undermined by the emergence of just-as-clever-but-much-cheaper programming talent in India and Russia.

AeA forecasts more tech industry net job losses in 2003 - around 234,000. This is a slower rate of decline than 2004, which may give cause for hope.

And now for a quote from William Archey, AeA president. "These declines have caused us to pause about two important issues. We are aware of current budget constraints, but now is not the time to cut back on education, particularly in math and science. We need a world-class workforce to deal with world-class challenges. Our second concern is the decline in basic research, particularly in technology, by the federal government. We worry that we have eaten the seed corn of federal research of 20 and 30 years ago that is not being replenished."

So there you have the solution: better educated American children combined with a big scoop of the federal pork barrel. ®

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