Technology's Nomads
Slowdown Forces Many to Wander for Work
IT Unemployment Now Exceeds Overall Jobless Rate
By Greg Schneider:Washington Post; November 9, 2004

  YORK, Pa. -- David Packman knocks on the motel room door and his wife lets him in. His 9-year-old son is waiting with sneakers on, hoping for a trip outside after a day of sitting around. Packman's other son, 4, dances gleefully around the room. Dad's home from work.
  This is no holiday getaway; this motel room, for the moment, is where the family lives. Packman, 34, is one month into a four-month contract fixing computers at a local company, and one day closer to the end of the line. It's Monday, and the $50 in Packman's pocket will have to cover food, laundry and incidentals for the coming week.
  Not long ago his family was settled in a rental house in Warren, Ohio, the kids chasing frogs in the yard and wife Sabrina, 30, baking bread in the kitchen. Packman was hiring himself out as a freelance computer expert, troubleshooting systems for any company that needed temporary help. But jobs disappeared, and the Packmans lost the house. So they wound up in a motel in a strange town, and now the $58-a-night bill is draining them dry.
  Packman is among a wave of Americans taking to the highway to preserve a middle-class life. While few people nowadays expect to spend a career rooted to one spot, some information technology workers are having mobility thrust upon them as companies change the way they staff computer-related jobs. Foreign workers are cheaper for some basic programming and technical jobs, and short-term contract workers give companies more flexibility to add and subtract employees as needed.
  Many displaced workers have been able to retrain and find new positions, often switching careers, or making one big cross-country move. But some who are unable to get permanent jobs have to keep roaming to find work, sometimes leaving families behind, sometimes bringing them along in a quest for something better.
  A generation ago, it was blue-collar workers who confronted a grim future of layoffs and factory closures. Many turned to computer work as a way out. Thanks to the 1990s boom in personal computing and the Internet, jobs in information technology -- known as IT, or simply "tech" -- were supposed to spread the prosperity of a "New Economy" based on digital technology instead of on bending metal or stamping plastics.
  But it's not working out the way many had hoped. Unemployment among tech workers, once almost nonexistent, is now higher than the overall jobless rate for the first time in more than 30 years, according to an analysis of federal statistics by Ronil Hira, assistant professor of public policy at the Rochester Institute of Technology.
  Between 1983 and 2000, the field was among the fastest-growing U.S. job markets. Employment in all tech-related jobs peaked at nearly 6.5 million in 2000, according to a survey of government statistics by the Institute of Electrical and Electronics Engineers. Those jobs have declined every year since and slipped by more than 10 percent between 2002 and 2003 alone, the survey found. A recent study by the job placement firm Challenger Gray & Christmas Inc. found that 16 percent of all U.S. jobs cut this year were from high-tech companies.
  Millions of people still make good livings in technology, and many economists think the industry will continue to generate jobs. It's a broad category that includes entrepreneurs such as Jeffrey P. Bezos at Inc., computer system managers making $100,000 a year and technicians averaging about $45,000, according to the Bureau of Labor Statistics. The average wage for all tech occupations last year, according to the engineering group, was $53,728 -- better than the $17-an-hour average (roughly $35,000 annually) for the nation's workforce as a whole.
  But wage prospects for many are shrinking, the group's survey found. The average technology worker got an 8.7 percent pay hike in 2000, but only a 3.3 percent increase in 2002. Wages bounced back in 2003, rising an average of 4.9 percent, but growth was concentrated in higher-end jobs. Workers in some of the broadest categories saw far less; computer programmers, for instance, posted two straight years of 1.3 percent raises -- less than inflation.<>
  "I think for many years, people were able to build careers and have the middle-class lifestyle by working in IT . . . [but] demand for IT workers has dropped significantly," said Bob Cohen of the Information Technology Association of America, which represents companies in the industry.

'Just in Time' Staffing
The slowdown is driven by a number of factors. The Internet and telecommunications booms of the 1990s went bust, causing companies to shut down or cut jobs. Technology has matured, so corporate computer systems need less human support. Companies are finding it cheaper to use foreign tech workers, importing temporary immigrants or "offshoring" jobs to companies in India and elsewhere.Companies also save money with "just-in-time" technology staffing, hiring outsiders for brief projects rather than keeping permanent workers. Many U.S. workers are forced to become independent contractors, like Packman, hiring themselves out for temporary gigs wherever they can find a company with a short-term need.
  Some tech workers prefer the independent life. "Even with paying my own health benefits and having to carry the tax burden for Social Security, I'm still making more money than I made as a salaried employee," said Joan Ozello of Potomac, who has been working as an independent security and capital planning consultant since being laid off from a technology company four years ago. "When people waste my time, and I have to work extra hours to make up for breakdowns, I get paid for it," she said.
  And companies say such staffing practices are essential in a time of increasing global competition. From financial services giants to struggling manufacturers such as Eastman Chemical Co., businesses find flexibility to be their biggest information technology asset.
  "The business is changing rapidly. . . . I can't really afford to have a large staff and have them sitting on the bench when I don't have the work to do," said Jerry Hale, chief information officer for Eastman Chemical, based in Kingsport, Tenn. Hale has shrunk his tech payroll by more than a quarter in the past few years, he said, using a mix of local contractors and offshore workers to augment his in-house staff.
  But many workers feel steamrolled by the trend. "There's been a shift of risk from the employer, who might have carried some of these people during the slow times, to the individual," Hira said. "Economists view this as efficiency -- companies can offload workers when they don't need them. But from the workers' point of view, how do you manage your career now?"
  It's all part of a broader reshaping of the American workplace that has been going on since the late 1970s, said Arne Kalleberg , a sociology professor who studies labor issues at University of North Carolina at Chapel Hill. "We have a hollowing out of the job structure, and so these jobs that were once middle class are now low-skilled or disappear. People are forced to move elsewhere to try to get them," Kalleberg said.
  The challenges facing tech workers vary around the country. Many regions that boomed during the tech bubble -- such as San Francisco, Denver and parts of Utah and Texas -- have lost population as workers flee shrunken job markets, said Marc Perry of the U.S. Census Bureau.
  A study released this summer of people laid off in the Dallas area found that 13 percent had to leave the region to find work. Nearly two-thirds of the 573 survey participants had lost technology-related jobs. Next-biggest was manufacturing, at 8 percent.<>
  Those who stayed in the region sent out an average of 85 applications and waited more than 13 months before getting a new job, according to the study performed by the North Texas Technology Council and the University of Texas at Arlington. More than half of the workers said their new jobs paid less than the ones they left and were in unrelated fields.
  The Washington area, on the other hand, is second-best in the nation for tech job opportunities, according to the Dice Report, a tech jobs clearinghouse. New York ranks first. Job postings in the Washington region are up 60 percent this year, according to Dice.
  Still, more than a third of all positions posted on Dice are contract jobs, not permanent. And the region's high cost of living is unforgiving for anyone trying to piece together short-term work, said Corey Frankel of Falls Church, who has been plying the Washington area tech scene nearly 20 years. He has two young daughters, and while Frankel has bounced from job to job in recent years -- working on both mainframe computers and database management -- he can't bring himself to leave the area.
  "I have children in elementary schools in the finest school system in the country, and I'm not about to give that up because somebody wants to toy with my life," he said.
  Instead, Frankel has roamed among a variety of small contractors on short-term government computer jobs. In between, he has subsisted on everything from unemployment checks to selling cars.
  The current economy "is turning good working people into gypsies. It's making them into migrant workers," he said.
  The nationwide scope of the tech jobs problem is apparent on the Internet, which swarms with Web sites and chat boards dedicated to out-of-work techies. Web sites such as and serve as job search and support groups, as vehicles for calling for political help or as simple outlets for rage.
  At, for instance, someone posted a long ode called "Elegy for a Profession."
  "Hello, Corporate America. Do you know us? Do you remember? . . . We are the men and women who helped you build the 21st century," it begins. Lamenting the loss of jobs, it concludes: "We send out résumés by the ream, month after month, as savings and retirement money slowly dwindle . . . In desperation, we apply everywhere, to do anything, but to no avail. We are overqualified for anything else, and we are unable to work in the field we love."

Jobs Dry Up, Bills Pile Up
Packman's tech career was supposed to be an escape from dead-end jobs. Now, at the motel in York, he talks late into the night with Sabrina about what to do next, quietly so the sleeping boys don't wake up and realize how bad things are.
  Packman's dad was a steelworker, his mother a Greek-immigrant hairdresser. They divorced when he was young, and he lived with his mother, moving a lot as she searched for cheaper rent or better jobs. After high school, Packman worked as a bar bouncer, a landscaper, a steelworker. There was no future in any of it. So he put himself through Kent State University and then computer training. <>
  He and Sabrina married young. They met at a punk rock bar; he wore a mohawk haircut; she said she was a "skinhead for racial equality." In time they realized what they wanted was a family and a stable home. Today Sabrina wears a silver stud in her lower lip and mails tips to Parenting magazine: "I leave cut-up veggies in plastic bags in the fridge to toss into a soup or salad," she wrote last year.
  Son Donovan was born first, then Kaz, and everything seemed on track until 2001. By then the technology boom had collapsed, and Packman lost his $49,000-a-year job designing and fixing computer networks at Trustmark Insurance Co. When a series of health problems hit -- Sabrina needed treatment for a chronic cyst on her pancreas, then gave birth to a baby that died of a kidney disorder -- the Packmans had no medical insurance. They wound up more than $40,000 in debt.
  A friend eventually helped Packman get a new job, troubleshooting computers for the law firm Arter & Hadden LLP. That lasted two years, until the firm went bankrupt from over-expansion.
  This time, Packman simply couldn't find a permanent job. Companies wanted independent contractors for short-term gigs, so he would work anywhere within a reasonable drive from his home near Youngstown, as far as Cleveland, Akron or Pittsburgh. He'd get $15 an hour to $27 an hour, always with no health benefits.
  The work was so inconsistent that medical and other bills began accumulating again. Sometimes the family had to choose between buying groceries or paying the rent. With kids involved, it wasn't much of a choice.
  By the end of August, the Packmans were evicted from their home.
  The Internet proved to be the family's last lifeline. Packman had posted his résumé on several tech job sites, and it drew a hit from a company 300 miles away in York -- a region where Packman would not otherwise have looked, demonstrating the power and promise of the computer age, along with the frustration. He landed a four-month stint troubleshooting networks at a government contracting company, which he asked not to name in this article for fear of jeopardizing his prospects there.
  Using his last $1,000 to rent a moving van, Packman hauled all their belongings to a storage center in York and checked the family into a motel, hoping they might find a place to rent. But with such bad credit history, Packman said, landlords were not willing to take a risk on them. After a few weeks, they moved to a cheaper motel.
  The $30 an hour he's earning disappears quickly. Because of their past problems with medical bills and eviction, the Packmans have to pay a premium to lease their 2002 Chevrolet Malibu, pushing the monthly payment to $320. They also pay more for auto insurance. Banks won't let Packman open a checking account because of his wrecked credit and at least one overdrawn check on his record, he said, so he has to pay fees to a check-cashing company to cash his weekly paycheck. He pays child support to a daughter from a previous relationship. The motel bill adds up to far more than rent would ever be in York.
  Every day, Packman gets home from work around 4:30 p.m. and takes the boys out to a park or school playground. Sabrina might make sandwiches in the room for dinner. On a typical night earlier this month, Packman dropped her off at a coin laundry and took the boys to a nearby Giant grocery store. Donovan has the list in his head: sodas, cereal, corn dogs. The boys want ice cream; Packman lets them buy a candy bar and pack of gum instead.
  Back at the laundry, Donovan and Kaz jump from chair to chair in front of a television set. As Sabrina pulls shirts and jeans from a dryer, Packman idly watches the opening to a Fox "Renovate My Family" show. A woman weeps happily; she's getting a new home.
  "My wife can't watch those shows anymore," Packman says with a wan smile, turning away.
  They endure this routine for three more weeks, then face a hard decision. The stress is aggravating Sabrina's health, and the boys are going stir crazy. They have no way to meet other children; when a co-worker invited Packman to bring Donovan to a birthday party, Donovan spent the whole time with his dad, nervous around the unfamiliar kids.
  Packman's only solution is to load the family in the car and drive them eight hours to a friend's house outside Cincinnati. He plans to leave Sabrina and the boys, to save money, then live out of his car if necessary until the York contract runs out. But he puts off making the move, day after day, because he can't bring himself to separate from them.
  "I just want to see my family happy. I want to see them satisfied. That's all I care about," he says. He has résumés on the Internet. Something else will come along.
  "I always have other feelers out," he said. "There's no such thing as a permanent position anymore."