Washington’s high-tech sector is giving Silicon Valley a run for its money, but the threat of defense cuts under the sequestration process is undermining the area’s pace and could derail the push altogether.
Silicon Valley is known for being home to popular tech giants, such as Google, Apple and Facebook. That’s why it may come as a surprise that a new survey released this month by a career website for technology professionals finds more high-tech job openings and faster-growing pay scales around the nation’s capital than in the northern California hub.
“Washington is one of the top areas for technology jobs, because of the influence of the defense industry,” said Scot Melland, chairman and CEO of Dice.com. He pointed to companies, such as Northrop Grumman and Raytheon as top contractors with big operations here. “The defense industry, in general, has to be very tech-oriented.”
That’s why even the threat of sequestration looms so ominously. Higher pay and continuous job growth is the key combination.
“Sequestration has slowed down the growth of tech jobs in the Greater D.C. area,” he said. “It’s pretty clear that the number of tech jobs would be higher today if it wasn’t for the threat of lost funding by many of these defense contractors.”
In fact, Dice.com found that job postings were up 7 percent to 10 percent in the beginning of 2012, before sequestration fears cut growth in half for the rest of the year.
“It has dampened the growth in the tech sector in the D.C. area,” Mr. Melland said. “That’s directly related to the uncertainty we’ve seen there.”
The Washington-area already has outpaced the Silicon Valley in the number of available jobs it is offering. According to Dice.com, 8,537 of the job openings on the site come from this area, while only 5,496 come from the Silicon Valley. The New York metropolitan area offers the most high-tech jobs with 8,951 openings posted on the site.
Still, the Silicon Valley remains the highest paying tech hub in the country with professionals making $101,278 a year. It is the only spot where the average tech professional makes six figures, but the gap is closing. Salaries there fell last year nearly 3 percent.
In the Washington-area, which includes Baltimore, technology professionals saw salaries rise nearly 4 percent, or about $3,500 to $97,895 in 2012.
Furthermore, in nearby Virginia, salaries jumped nearly 7 percent, or more than $6,000, to $96,539 in 2012.
“In the salary space, there’s enough pressure there that employers are starting to respond,” Mr. Melland said. “They’re now realizing that they have to raise salaries to keep people in place and keep them happy.”
Demand from employers is growing for tech professionals, but there are not enough workers to fill the open positions, Mr. Melland explained.
The unemployment rate among tech professionals is only 3.8 percent, so there are fewer workers “available on the sidelines that are easily grabbed,” Mr. Melland explained. That means more companies have to turn to steal away workers from other companies. But tech workers are afraid to leave their jobs, he said, because of they are nervous about the economy or have an underwater mortgage.
That is driving up salaries as companies try to compete for a shortage of tech workers. In fact, tech salaries across the country enjoyed their biggest jump in more than a decade, according to Dice.com.
A record number of cities saw double-digit salary increases. Pittsburgh salaries were up 18 percent to $76,207. San Diego and St. Louis both saw salaries rise 13 percent to $97,328 and $81,245, respectively. Phoenix was up 12 percent. Cleveland was up 11 percent. Milwaukee and Orlando were both up 10 percent.
• Tim Devaney can be reached at tdevaney@washingtontimes.com.
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