Toll of Tech Bust in California Has Been Severe, Survey Shows

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dewayne Hendricks <dewayne () warpspeed com>
Date: October 9, 2004 4:40:43 AM EDT
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] Toll of Tech Bust in California Has Been Severe, 
Survey Shows
Reply-To: dewayne () warpspeed com

Toll of Tech Bust in California Has Been Severe, Survey Shows

By SCOTT THURM
Staff Reporter of THE WALL STREET JOURNAL
October 8, 2004; Page B4


More than half of the people working at technology companies in 
California in early 2000 had left the technology field or the state by 
the end of 2003, and more than 40% experienced declining incomes over 
that period, according to a study on the impact of the tech bust.

The study, by the Sphere Institute, a nonprofit, nonpartisan 
Burlingame, Calif., think tank, found that the fate of tech workers 
during the bust depended largely on whether they stayed employed at a 
tech firm. Those that did enjoyed rising incomes -- up 11% after 
accounting for inflation. But workers who left tech for other 
industries saw their wages stagnate or decline. Those who shifted from 
semiconductor makers to health care, for example, made 31% less in the 
fourth quarter of 2003, compared with the first quarter of 2000, after 
accounting for inflation.

By tracking the quarterly payroll records of nearly one million 
California workers over nine years, the study found a huge influx of 
people into tech firms in the state -- especially the San Francisco 
region that includes Silicon Valley -- followed by an exodus after the 
tech bubble burst in 2000. Nearly one-third of the tech workers in 
California in early 2000 weren't even working in the state in 1995, and 
an additional quarter were working at nontech firms. Those who weren't 
in tech in 1995 were more likely to leave the industry, or the state, 
after 2000, the study found.

"A lot of people came in from outside the state and nontech industries, 
participated in the boom, and then went back whence they came," said 
Michael Dardia, Sphere's vice president and primary author of the 
study, which will be released today.

Mr. Dardia said the findings echoed a similar study he did a decade 
ago, tracking the fate of Southern California aerospace workers 
following post-Cold War defense cutbacks. That study found that more 
than two-thirds of aerospace workers left or lost their jobs at some 
point between 1989 and 1994, with those who left the industry suffering 
declining incomes.

Mr. Dardia said both studies highlight shortcomings in the nation's 
system for helping workers adapt to structural economic shifts. 
Social-welfare policies such as unemployment insurance are aimed at 
cushioning workers from short-term economic fluctuations, and 
retraining programs traditionally have been aimed at low-skill, rather 
than high-skill workers.

Mike Curran, director of the NOVA retraining program in Sunnyvale, 
Calif., agreed. Mr. Curran said his organization, in the heart of 
Silicon Valley, retrained roughly 1,000 people a year for the past four 
years -- only about one-fourth of those who sought help. "We talk about 
wanting to have the most qualified work force, but that takes skills, 
and there are less and less places for people to go to upgrade skills," 
said Mr. Curran, whose organization helped fund the study.

Write to Scott Thurm at scott.thurm () wsj com

 URL for this article:
http://online.wsj.com/article/0,,SB109719097984039889,00.html


Archives at: <http://Wireless.Com/Dewayne-Net>
Weblog at: <http://weblog.warpspeed.com>

-------------------------------------
You are subscribed as interesting-people () lists elistx com
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/