White Collar Jobs Moving Abroad
csmonitor.com
A spate of new studies points to an exodus of skilled labor,
from high-tech to financial services.
By Stacy A. Teicher | Staff writer of The Christian Science Monitor
For decades, Americans watched as manufacturing plants set up
shop overseas to capitalize on cheap labor. Ross Perot immortalized
the anger many workers felt, vividly terming the potential exodus of
jobs to Mexico that "giant sucking sound."
Now a growing number of US firms are sending coveted high-tech and
service jobs "offshore" in a move that's reviving a debate about the
future of the American workforce.
No longer is it just Disney toys and Nike
shoes made in Haiti and Indonesia. It's
software engineering, accounting, and
product development being "outsourced"
to India, the Philippines, Russia, and
China.
The result is a growing backlash from
unionists, contract workers, and erstwhile
techies with time on their hands. More
broadly, the trend raises a pointed
question in an age of globalization: Is
sending certain jobs offshore - even
high-tech ones - better for the US
economy, or does it just amount to more
pink slips for American workers?
"Manufacturing is a small slice of the economy, and when people
saw globalization creating instability there, a lot said, 'It's not my
problem,' " says Josh Bivens, an economist at Washington's
Economic Policy Institute. "Now white-collar workers are feeling it."
The number of such jobs now outsourced - from information
technology (IT) to architecture - is less than half a percent of the US
workforce. But it may grow fast:
• Half a million IT jobs - roughly 1 in 20 - will go abroad in the next 18
months, according to Gartner, a research firm in Stamford, Conn.
• Nearly 5 percent of human- resources jobs have moved offshore in
the past year, and by 2007 that number will climb to at least 15
percent, says Jay Whitehead, publisher of HRO Today magazine,
which tracks outsourcing.
• By 2015, 3.3 million US high-tech and service-industry jobs will be
overseas, according to Forrester Research in Cambridge, Mass.
That's 2 percent of the entire workforce, and $136 billion in US
wages. Oracle, for instance, already has 2,000 employees in India
and expects to move 2,000 software-development jobs, plus
accounting, payroll, and customer-service positions.
Competition or a zero-sum game?
Granted, projecting to 2015 is risky. And even if these numbers pan
out, some say there's no reason to panic: By staying competitive,
the theory goes, companies will strengthen their positions in the new
global order.
"If you look at history, we create new jobs in new areas to make up
for what is outsourced," says Richard Hundley, lead author of a
recent report by RAND's National Defense Research Institute. North
America will still lead the technology revolution, the report says,
partly because of a willingness to engage in "creative destruction" to
stay on the innovative edge.
But others - particularly those whose jobs are lost - see overseas
outsourcing as a zero-sum game, with US workers sacrificed for
corporate profits. "America's leading companies are sending our
best-paying jobs to cut labor costs.... I don't buy the idea that new
jobs will be created," says Marcus Courtney, organizer of the
Washington Alliance of Technical Workers (WashTech) in Seattle, an
affiliate of the Communications Workers of America.
In the past six months, as his union has led protests against
offshoring plans at Microsoft and elsewhere, its e-mail list has grown
from 2,000 to more than 15,000. Last week, the group publicized a
recording - received from an IBM employee - of IBM senior executives
on a conference call in March, talking of the need to send more jobs
overseas, though acknowledging that it would upset domestic
workers.
India: land of spices and IT jobs
It's unclear how much offshoring contributes to job cuts, despite
anecdotes of techies who now work at Starbucks, pouring lattes with
the precision of an engineer's eye. Mr. Hundley of RAND attributes
job loss to the current economic doldrums, and says it will ebb. But
Gartner's July 15 report estimates that through 2005, fewer than 4 out
of 10 IT workers whose jobs go overseas will be redeployed by their
own companies.
And the potential that some jobs are gone for good raises the
question of how the economy can weather what seems, in turns, a
boon and a blow.
Critics caution that while executives are under extreme pressure to
cut costs, some of them may be too quick to outsource jobs higher
up on the spectrum of creativity and skill. Companies are training
developing nations' workforces to become America's competitors,
says Basheer Janjua, CEO of Integnology Corp in Santa Clara, Calif.,
which offers domestic IT outsourcing.
"What's going to be the incentive for our future generations to get a
degree in electrical engineering?" he asks. "We have to ask if we're
ready to give up our pioneering position in the world."
Even offshoring's proponents agree that its real effects on US jobs
need to be analyzed. WashTech recently persuaded two of the
state's US representatives to call for a study by the General
Accounting Office.
But people shouldn't be concerned about the best jobs leaving the
country, says Mary Jo Morris, president of the Global Transformation
Solutions Group at Computer Sciences Corporation (CSC), an IT
outsourcing firm in Falls Church, Va. Offshoring, she says, is an
irreversible trend, but "roles that create a lot of value will not go
overseas, and more of those will develop as the industry matures."
Globalization's thorn in the side
Corey Goode, for one, has become a self-proclaimed thorn in
Microsoft's side. Since June, when he watched his $40-an-hour
contracting job sail to India and learned that the jobs of permanently
employed colleagues in Las Colinas, Texas, would probably do the
same, he's launched a website to protest offshoring and the use of
skilled foreign labor in the US through special visas. Mr. Goode
insists he's not out to stir up xenophobia. But he wants companies to
see American employees as more than numbers. "Globalization is
here to stay, and we're experiencing the growing pains," he says.
His is just one voice in a chorus gaining strength - and numbers - as
offshoring gains steam. About half a dozen states are considering
laws to make sure state contract work is performed within US
borders. "If you want to enjoy the benefits of an unfettered free
market, you can try to cushion the downside as well," says Mr.
Bivens of the Economic Policy Institute. Goode - and plenty of others
- will clamor for government to do just that. |
