Lagging wages trouble fast-growing tech firms

Technology executives in Washoe County are bullish giddy, even about the growth they see just over the horizon.

But an old-fashioned issue, the region's relatively low pay scales, casts a hint of a shadow across the bright sunshine in the technology business.

Surveyed by the Economic Development Authority of Western Nevada, executives of 50 technology, information service and health services companies in Washoe County said they foresee big numbers in the next three years. Big numbers such as:

* The construction of 497,183 square feet of new office, laboratory and manufacturing space.

* The investment of more than $262 million in new buildings and equipment.

* Widespread introduction of new products, as 80 percent of the surveyed companies will launch a new product or service within the next few years.

* The creation of 1,648 new jobs. (The companies that participated in the survey currently employ 4,571, meaning they see 36 percent growth in employment.)

It's the potential employment growth, however, that causes some worry in the technology and information services world.

Although EDAWN volunteers also talked with the health sector for the survey released last week, technology and information services accounted for 90 percent - 45 out of 50 of the companies interviewed.

Out of the surveyed companies, 74 said they're having trouble recruiting new employees, and the most common challenge is recruitment of the engineering talent that drives technology companies.

And the biggest recruitment problem? Even though wages in the technology sector average $57,769 in northern Nevada well above the statewide average of about $36,000 a year they still lag technology wages elsewhere in the country.

In fact, EDAWN researchers said the average wage of tech workers in northern Nevada is about 18 percent lower than the national average.

That becomes particularly troubling in combination with the sharp run-up in housing prices that came to a halt only about a year ago.

Donna Crooks, EDAWN's business expansion manager, noted that the comparisons don't take into account the fact that Nevada doesn't levy a state income tax.

"We really need to take that into consideration," she said.

She noted that although unemployment remains low in northern Nevada 4 percent in Washoe County at last count workers continue to move into the area.

That migration taken in combination with the growing investment in training by the companies surveyed by EDAWN more than half are boosting training programs bodes well for the region's economy as well as the marketability of individual workers, Crooks said.

The EDAWN study noted, too, that annual wages in the tech sector in Nevada have been rising more quickly than almost anywhere else in the nation.