stock options and/or equity stakes that represent deferred compensation are an increasing part of worker compensation packages in IT, as suggested above, wages alone become a poorer measure of total compensation as time goes on. Thus, the omission of stock options and equity stakes is problematic in comparing wage trends in IT versus those in other sectors.

The federal IT workforce presents special problems. Many government functions depend on IT, but government's ability to respond as the market would respond is limited, especially with respect to the compensation packages it can offer.

The time horizons of the current tightness in the labor market are hard to predict. In the long term (measured in decades), continued growth in the IT sector and in the use of IT by IT-intensive firms is highly likely. On the other hand, all sectors—as well as the economy at large—experience periods of greater and lesser growth (or even contraction). When they occur, downturns in the IT sector and in the IT-intensive industries may reduce the amount of IT work that they can supply, increase the number of workers who are available to do (or are trainable for) IT work, and reduce the value of capital available (e.g., stock options) for compensation of IT workers. Such downturns are also likely to result in reduced demand for IT workers, with a consequent decline in the need for foreign temporary nonimmigrant IT workers and a slack labor market.

Current projections for job growth for Category 1 IT workers, which do not take into account the possibility of such downturns, indicate strong growth for the next decade, about 7 percent per year. Historically, such projections have understated actual growth rates by as much as a factor of 2.

Analytically, there are only a few ways of dealing with tightness in a labor market—to increase the productivity of individual workers so that a smaller number of workers can do the same work that a larger number of workers can do in the absence of productivity measures, and to increase the number of qualified workers. (Reducing demand for IT products and services, and hence the need for IT workers, is a third logical possibility, but one that contradicts the premise of continued growth in the use of IT.)

Productivity can in principle be increased through the use of tools (e.g., integrated programming environments) and/or the use of different organizational or managerial strategies (e.g., structuring projects with more “up-front” design effort to reduce “downstream” personnel needs). Over the past 40 years productivity gains have been achieved through new management paradigms and technology. Similar gains are likely in the future, although they are not likely to play a decisive role in reducing the current tightness in the IT labor market.

Approaches to increasing the supply of workers and making more effective use of the existing workforce are discussed in Chapter 6 and 7.



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