Shelley Powers' Burningbird essay The State of Geek: Part 1 -- Temp Job, No Health says the IT labor market sucks and ain't gonna improve much. But says it better. She closes saying she wouldn't encourage kids to go into IT. My take... 

Temps first. I used to be vp for strategy and technology of the world's largest staffing company. You're right about employers using temps/contractors to minimize risk at the early stages of an economic recovery. Watch quarterly reports from Manpower and Kelly for upticks in temp hiring. btw, contractors and temps are the first to go too.

Barriers to entry. In tough times it is very common for employers to raise barriers to entry since they can do so and still meet their staffing needs. Project management certification books are flying off the shelves at Amazon. And employers aren't just looking for code warriors when they can get someone with a masters or PhD in compsci for the same price. The low barrier to entry that permitted millions of "accidental" programmers to enter the workforce has let millions more continue to enter around the world. At the same time, the enterprise need for code-level customization fell through the floor.

After the offshorin'. So you're already in IT. What should you be studying now? In this economic model, what's left for US IT are jobs that require:

• "high touch", like requirements professionals;
• cultural sensitivity, like localization and UX pros;
• proximity to systems, like the overnight sysadmin who has to physically touch a box, but with skills not much more than a cable installer;
• world class niche specialists, being the world's best in corrosion algorithms, or the only people who understand documentation of military control systems in a Czech, Russian, and Spanish blend;
• content creatives that use IT for artistic and aesthetic expression that resonate with world markets;
• teams that use proprietary tools to achieve 10-fold leaps in productivity over developers using off-the-shelf and open source tools;
• work allotted via nepotism, pork, graft;
• legacy system specialists, caring for dinosaurs until the business need for them evaporates;
• coordinators that can rapidly assemble the talent needed for a project and provision them with the tools to work together; and
• managers that plan and deliver outsourced projects.

It shouldn't surprise you that most of these roles have steel industry counterparts.

If I had kids in school, I'd be telling them:

1. The future lies in molecular manufacturing (chem, physics, materials science), pharma and cognitive sciences (neurochem) all informed by IT.
2. Assume you need postdoc work for job security.
3. Learn Mandarin, Spanish, and Hindi. Along with English you'll be able to speak with more than half the world.
4. And start your professional networking early (Can you leave your Ryze friends list to your kids?).

[a klog apart]