Technology sector is expanding, but Calif. is still king

SAN JOSE, Calif. -- California continues to employ far more technology workers, pay higher wages, and attract more venture capital than any other state. But the US tech sector overall is also growing at a surprisingly brisk clip -- for now.

That's the conclusion of an annual report by AeA, formerly the American Electronics Association, the country's largest technology trade association. Researchers relied on data from the US Bureau of Labor Statistics, mostly from 2006.

According to the 2007 "Cyberstates" report, to be published today, the US tech industry employed 5.8 million people last year -- up 2.6 percent from 2005. The industry gained nearly 147,000 positions in 2006, compared with 87,400 jobs added in 2005.

The strongest subcategory of technology in the 10th annual report was software, which employed more than 1.5 million people and created 88,500 jobs last year.

The average technology worker nationwide earns $75,500. That's short of the $78,691 average income in 2000, the peak of the dot-com boom. But it's 86 percent more than the average private sector wage of $40,500.

The federal data that AeA uses define tech workers broadly, including engineers, computer programmers, technology executives, many scientists, and academics. Also counted are administrative assistants, salespeople, human resources employees, and other nontechnical people who happen to work at tech companies, from Google Inc. to obscure start-ups.

However, researchers do not count contract workers, including janitors and landscapers who work for independent agencies hired by bigger technology companies.

Despite two years of job creation and salary gains, William T. Archey, president and CEO of Washington, D.C.-based AeA, warned that trouble lurks behind the rosy facade.

The unemployment rate for computer scientists last year was 2.5 percent, and for electrical engineers it was 1.9 percent. The low rates signal a dramatic worker shortage that will prompt more US companies to open offices abroad.

"This is called full employment, folks," Archey said. "Our own kids are not going into math and science, and we can't hire foreigners like we did for the 50 years before 2001. This could be a disaster."

Archey and other tech executives are urging Congress to make it easier for US companies to hire highly skilled foreign workers under the so-called H-1B visa system.

Earlier this month, the US Citizenship and Immigration Services reached its 65,000 limit for 2008 H-1B petitions in a single day and would not accept any more, to the dismay of tech companies.

Tech executives are also backing a federal bill moving through the Senate seeking more math and science teachers in poor schools.

A recent federal study found 40 percent of high school seniors failed to perform at the basic level on a national math test. On a national science test, half of 12th-graders didn't show basic skills.

On the positive side, the report concludes that the upswing wasn't limited to any region; tech companies created jobs in 40 states.