Employment in Idaho’s high-paying computer software industry has begun growing again after stalling during and after the 2001 national recession.
An analysis by the Idaho Department of Labor finds that after jobs more than quadrupled to 3,000 through the 1990s, computer software businesses shed 200 jobs between 2000 and 2002 before beginning a slow recovery. Software jobs – publishers, applications engineers, systems software engineers and other specialists – totaled nearly 3,300 in 2007.
State Labor Economist Janell Hyer found that while post-recession software employment growth was only 8 percent, the number of software businesses grew by 50 percent to 638, primarily in the engineering end of an industry restructuring after the dot.com bubble burst in 2000.
Companies with work forces of 20 to 99 declined by a quarter both in number and in jobs provided while those with fewer than 20 employees increased by nearly 50 percent with a 34 percent increase in jobs.
By the end of 2007, 606 of the 638 software businesses in Idaho, 95 percent, employed fewer than 20 each.
The software industry is only a small contributor to Idaho’s overall economy – about a half percent of employment and over eight-tenths of a percent of wages. It accounts for 5.7 percent of Idaho’s high-tech employment and 4.9 percent of that sector’s wages.
But while small, software industry employment is forecast to grow 50 percent faster than the economy overall through 2016, and the jobs it provides are considered “Hot” because they are high-paying and people with those skills are in high demand, most commonly in manufacturing, retail trade and professional, scientific and technical services.
Only 11 percent of the software jobs in Idaho are in publishing, but they paid an average of $84,000 in 2007 while the bulk of the jobs in the engineering end of the industry averaged over $52,000. Both provided paychecks significantly above the statewide average wage of $33,500.
Clearly, the heyday of the software industry and Idaho’s entire high-tech sector was during the 1990s. Over the final five years before the 2001 recession, software outgrew high-tech by three to one, and high-tech grew twice as fast as the economy overall.
But during the expansion that took hold after the recession, one of Idaho’s most productive periods ever, the general economy performed as well as or better than either software or its parent high-tech.
And while Idaho’s software wages are high compared to the general economy, they fall short of the regional average. For software publishers and engineers, Idaho ranked fifth in wages behind California, Oregon, Washington and Colorado and last in wages for other software specialists. The other states were Nevada, Utah, Montana and Wyoming. Wyoming had so few other software specialist jobs that the wage information could not be disclosed.
But compared to the software industry performance in those other states, Idaho’s has been more stable in both jobs and wages since the national recession of 2001.
Wages and jobs followed essentially the same pattern nationally and in all the other selected states — slipping as the recession took hold and then slowly recovering, though not to pre-recession levels by 2007. Idaho by contrast saw employment move higher in 2003, 2004 and 2005. Software wages as a percentage of total wages also increased in Idaho following the recession, peaking in 2004 before returning to the 2001 level in 2007.
The full report can be downloaded from department’s Labor Market Information Web site at lmi.idaho.gov.