Projections for The IT Industry in the United States

The information technology (IT) industry, according to the U.S. Department of Labor, is the fastest growing industry in the U.S. economy. The IT Industry workforce currently totals 2.5 million and needs to grow by 7-10% annually. The Bureau of Labor Statistics forecasts that employment in the IT service segment of the industry will nearly double by 2005, from its current figure of 1.1 million.

According to the Bureau of Labor Statistics, the following are the ten fastest growing occupations, 1998-2008.

The Information Technology Association of the United States has indicated that "the industry is facing a national labor shortage of historic proportions and cannot find enough workers with the requisite skills."

Some of the approaches being proposed or supported by them include:

• Special state and federal funding for technology training to offset the decline in students graduating with the skills critical to technology careers.
• Tax credits and substantial tax deductions for college tuition.
• A widespread educational awareness campaign.
• Development of a High Tech Resource Center for information on workforce issues.
• Legislative and public policy initiatives to provide incentives for companies to invest in technology training.
• Incentives to individuals seeking IT training
• Investments in training partnerships.
• Efforts to increase the capacity of IT training providers.
• Increases in the H-1B cap number allowed under the American Competitiveness and Workforce Improvement Act including exemptions for those with education at the masters level or higher making more than $60,000.
• Introduction of a new "Tech" visa class.

While there is a variety of legislative initiatives underway, one thing is certain. A diverse group is coming together to address the need by American companies. One approach to be used will be the attraction of skilled foreign workers or students to increase the inflow of skilled labor from other countries.

Differences in Tax Treatment between Canada and the United States.

Did you know that in the United States Section 127 of the Internal Revenue Code (Exclusion for Employer Provided Education Assistance) allows an employee to receive from their employer up to $5250 per year in tax free educational assistance. This is applicable whether or not the education is related to an employee's job or not.

In Canada, Revenue Canada has taken a contrary view for non-job related development such as the costs of MBA or Executive MBA costs and has issued an interpretation to the effect that such payments are a taxable benefit. While the resulting deduction can be subject to a tax deduction the effect is not the same. The recent budget did nothing to address this issue.

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