Thursday, April 01, 2004

Downtown Zürich, Switzerland 7:29:03 PM    comment []

High-paying software jobs being moved abroad Software jobs, which pay some of the highest wages in America, have fallen sharply since 2000.  These jobs have disappeared despite the fact that software sales to U.S. businesses in 2003 were up 4% over 2000.  Comprehensive data on the number of U.S. software jobs that have moved overseas is hard to come by, but persuasive indirect evidence points towards the significant movement of software jobs to India (the most prominent of many countries to which U.S. software work is being moved). There are two ways to look at software employment: software-producing industries and software occupations. Software-producing industries (software publishing, custom software and computer systems design) employ many people who actually work in non-computer occupations, like sales or accounting. On the other hand, software occupations (e.g., programmers and software engineers) are also found in a range of other industries, such as finance, manufacturing, and professional services. Domestic software-related jobs, however measured, have declined significantly in recent years.  U.S. jobs in software-producing industries declined by 128,000 (10%) between 2000 and 2004, while jobs in software occupations shrank by 154,000 (5%) from 2000 to 2002 (the last year data were available). The story in India is quite different. In February, India's industry association of software and related companies (NASSCOM) published an analysis of recent trends indicating that the professional jobs in India's software export sector rose by 150,000 from 1999 to 2003. Given that 67.7% of its software exports go to the United States, this growth implies that Indian software jobs servicing the U.S. market have increased by roughly 100,000 over the last four years.   The NASSCOM report also indicates that its two largest customers abroad are in the banking, financial services, and insurance industry (39% of exports) and in the manufacturing industry (12%).  Both industries have traditionally employed many people to produce software in-house.  Increased movement of work overseas that had been formerly done in-house at these companies may explain why U.S. jobs fell by 154,000 in software occupations but only 81,000 in software-producing industries between 2000 and 2002. The loss of software jobs lands an especially hard blow to the U.S. labor market because of their high quality.  Software-producing industries and software occupations pay exceptionally high salaries. Annual salaries in all private industries averaged $36,520 in 2002, while salaries averaged $99,425 for workers in the software publishing industry, $76,051 in the custom software industry, and $75,568 in the computer systems design industry. Salaries for software occupations averaged $65,200 in 2002.  Perhaps most disturbing, faster-than-average job declines occurred in the two highest paid software occupations:  computer and information systems managers and computer information scientists. This Snapshot was written by EPI Research Director Lee Price and EPI economist Josh Bivens. 7:22:16 PM    comment []

Gateway Will Close Remaining Retail Stores By a WALL STREET JOURNAL Staff Reporter April 2, 2004 POWAY, Calif. -- In a widely expected move, Gateway Inc. said it will shutter the last of its retail stores, dismiss 2,500 employees, and sell its computers and consumer electronics through other retailers. The personal-computer maker, which acquired home-PC maker eMachines Inc. last month, will embrace eMachines' retailers in a bid to stanch losses that totaled $1.84 billion in the past three years. Gateway declined to comment on any charges to earnings from the moves. As losses mounted, Gateway began closing retail stores, which once numbered 384 stores across the U.S., Europe and Japan. The remaining 188 U.S. stores will close April 9, the company said. Late last year, Gateway began to court electronics retailers, striking sales agreement with Intertan Inc., which operates RadioShack of Canada, Costco Wholesale Corp., and, most recently, Office Depot Inc. Gateway's new chief executive, Wayne R. Inouye, is a former Best Buy Co. merchandising executive who indicated Gateway will seek outlets for its PCs and big-screen TVs at major consumer-electronics retailers. 7:20:07 PM    comment []

Unemployment level of college grads surpasses that of high-school dropouts The recent job market has been particularly tough for those workers with college degrees.  In fact, as Figure 1 reveals, the number of unemployed college graduates surpassed that of high-school dropouts a few months ago (all data are for persons 25 years and older).  From its low point of about 600,000 at the end of 2000, the number of unemployed college grads doubled across the recession of 2001 and the weak jobs recovery that followed.  Unemployment also rose, of course, among those adults with less than a high-school degree, but by a far smaller percentage (about 60%). There are, however, far more college graduates than high-school dropouts in our current labor force.  Last month, for example, there were 12.5 million high-school dropouts in the labor force, compared to 39.9 million college grads.  Thus, as shown in Figure 2, the unemployment rate for those with a college degree—i.e., the number unemployed divided by the number in the labor force—is much lower than the unemployment rate for high-school dropouts.  Nevertheless, even in Figure 2 the sharp and sustained rise in the rate of unemployment among college grads is evident. Such a large and enduring increase in unemployment among those with college degrees is unusual, even in a recession.  One reason for the increase is the lasting impact of the bursting bubble in the information technology and financial services sectors.  This cyclical effect will ultimately fade as demand returns in these industries and absorbs excess capacity built up over the last boom.  But a new structural problem—the offshoring of white-collar jobs in services—may also help explain the fact that unemployment in this recession and weak jobs recovery has crept so far up the education ladder. Source: Author's analysis of Bureau of Labor Statistics data. This Snapshot was written by EPI economist Jared Bernstein with research assistance by Yulia Fungard. Check out the archive for past Economic Snapshots.   Copyright © 2004 by The Economic Policy Institute. All rights reserved. Readers may redistribute this material to other individuals for noncommercial use, provided that the text, data, and all HTML code remain intact and unaltered in any way. This article may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. If you have any questions about permissions, please contact EPI at webmaster@epinet.org. 5:17:21 AM    comment []

Sony Countersues Kodak On Digital-Camera Patents A WALL STREET JOURNAL ONLINE NEWS ROUNDUP April 1, 2004 SAN DIEGO -- Sony Corp. sued Eastman Kodak Co. on Wednesday, alleging patent infringement on digital-camera technology, in a salvo that comes three weeks after Kodak filed a similar suit against Sony. Sony's suit, filed in U.S. District Court in New Jersey, says Kodak violated 10 patents covering digital-camera features from an indicator that displays the number of pictures taken to an electronic shudder with adjustable speeds. A Kodak spokesman, Gerard Meuchner, said he hadn't read the suit and declined comment. In a suit filed March 9 in U.S. District Court in Rochester, N.Y., Kodak claimed the Japanese electronics maker violated 10 patents issued by Kodak between 1987 and 2003 related to image compression, digital storage and other digital camera and video technologies. The lawsuits underscore the increasingly competitive nature of the digital-camera market. Last year, world-wide sales of digital cameras increased to 46 million units from 27 million in the previous year, according to Chris Chute, an analyst with IDC in Framingham, Mass. Kodak, of Rochester, holds about 1,000 patents related to digital cameras and digital photography and long has targeted the field for future growth to replace its flagging chemical-based film business. Kodak, which ranked second with an 18% share, recently introduced six new digital-camera models in an effort to top Sony as the leader of the digital-camera market. 5:10:37 AM    comment []