Exporting Jobs

Every tax is a pay cut. Every tax cut is a pay raise.
Citizens for Limited Taxation

Jobs, the latest high tech export Sunday, August 3, 2003

Rick Holmes Metrowest Daily News

The tone was sincere, straightforward and thoroughly corporate. It was a conference call, and IBM's top employee relations managers calmly discussed the challenges facing the company.
It was the content of the executives' comments that has had technology professionals steaming since a recording of the conference call was downloaded off a corporate Web site and made public.
IBM is moving jobs overseas, the executives explained in matter-of-fact terms, and they weren't talking about manufacturing and assembly jobs. They listed the types of jobs that may be exported: engineering, software development, chip engineering, software support, accounting, call centers.
Sound familiar? Those are the jobs that thousands of well-educated, well-paid neighbors of ours here in MetroWest do. Unfortunately, those are also jobs that well-educated people can do in India, China, Israel and a dozen other countries.
Big Blue is trailing the pack. As lots of laid-off information technology workers in MetroWest can attest, local jobs are already being moved offshore. Intel makes chips in Hudson, but it also has 400 software engineers at work in Russia, along with 200 Russians working in marketing and sales.
That trend is just beginning. Researchers at the Gartner Group project that by 2005, 10 percent of all IT jobs will be outsourced, putting some 500,000 American workers out of work.
Years ago, we watched the textile industry leave New England and said, OK, we'll manufacture more complicated things, like cars and ships and computers. Then the well-paid union assembly line jobs headed south, but the white-collar folks figured their college degrees would keep them safe. Now it seems that only the highest-level execs and the leading-edge researchers are secure.
"Increased global trade was supposed to lead to better jobs and higher standards of living," Rep. Donald A. Manzullo, the Illinois Republican who chairs the House Small Business Committee, told a conference in June. "The assumption was that while lower-skilled jobs would be done elsewhere, it would allow Americans to focus on higher-skilled, higher-paying opportunities. But what do you tell the Ph.D., or professional engineer, or architect, or accountant, or computer scientist to do next? Where do you tell them to go?"
The fledgling Seattle-based high tech workers union that publicized the IBM memo responds to the threat with familiar rhetoric about forcing the government to save American jobs, but I have a hard time imagining engineers and software developers walking a picket line. For one thing, too many of them understand and even sympathize with management's need to stay globally competitive by controlling costs.
Imposing old-style protectionism on globalized industries is hard to justify. Bose, for instance, was founded by a native Indian, Amar Bose, who has recruited the best audio engineers from around the world to work in Framingham. Do we tell him only Americans can design Bose speakers? EMC sells data storage equipment and software all over the world. How do we tell them their most educated workers have to commute on Rte. 495?
The IBM memo warns that displaced workers will put pressure on politicians to stop jobs from being moved offshore, but Washington's options are limited. There could be some changes in the H-1B visa program, which a few short years ago was dramatically expanded to allow educated foreign workers to cover what corporate lobbyists painted as a growing shortage of high tech workers here. Now there are complaints the program is being abused, that foreigners are brought here on H-1B visas to be trained so they can set up shops back in their native countries that take work away from Americans.
One local IT worker suggests the tax code be modified to provide incentives for companies whose products are 100 percent made in the USA. It's an idea unlikely to be embraced by the Bush Administration, which listens to CEOs, not workers.
Globalization has always been good for high tech and its workers, but economic forces are now hitting home. The IBM executives warned their HR colleagues about the awkwardness and hostility created when an American manager is asked to train a foreign worker who is taking his department to China, India or Pakistan.
It's a scene already playing out in offices and labs from Rte. 128 to Silicon Valley, and the worst is yet to come.

Jobs, the latest high tech export	Sunday, August 3, 2003
Rick Holmes	Metrowest Daily News
The tone was sincere, straightforward and thoroughly corporate. It was a conference call, and IBM's top employee relations managers calmly discussed the challenges facing the company. It was the content of the executives' comments that has had technology professionals steaming since a recording of the conference call was downloaded off a corporate Web site and made public. IBM is moving jobs overseas, the executives explained in matter-of-fact terms, and they weren't talking about manufacturing and assembly jobs. They listed the types of jobs that may be exported: engineering, software development, chip engineering, software support, accounting, call centers. Sound familiar? Those are the jobs that thousands of well-educated, well-paid neighbors of ours here in MetroWest do. Unfortunately, those are also jobs that well-educated people can do in India, China, Israel and a dozen other countries. Big Blue is trailing the pack. As lots of laid-off information technology workers in MetroWest can attest, local jobs are already being moved offshore. Intel makes chips in Hudson, but it also has 400 software engineers at work in Russia, along with 200 Russians working in marketing and sales. That trend is just beginning. Researchers at the Gartner Group project that by 2005, 10 percent of all IT jobs will be outsourced, putting some 500,000 American workers out of work. Years ago, we watched the textile industry leave New England and said, OK, we'll manufacture more complicated things, like cars and ships and computers. Then the well-paid union assembly line jobs headed south, but the white-collar folks figured their college degrees would keep them safe. Now it seems that only the highest-level execs and the leading-edge researchers are secure. "Increased global trade was supposed to lead to better jobs and higher standards of living," Rep. Donald A. Manzullo, the Illinois Republican who chairs the House Small Business Committee, told a conference in June. "The assumption was that while lower-skilled jobs would be done elsewhere, it would allow Americans to focus on higher-skilled, higher-paying opportunities. But what do you tell the Ph.D., or professional engineer, or architect, or accountant, or computer scientist to do next? Where do you tell them to go?" The fledgling Seattle-based high tech workers union that publicized the IBM memo responds to the threat with familiar rhetoric about forcing the government to save American jobs, but I have a hard time imagining engineers and software developers walking a picket line. For one thing, too many of them understand and even sympathize with management's need to stay globally competitive by controlling costs. Imposing old-style protectionism on globalized industries is hard to justify. Bose, for instance, was founded by a native Indian, Amar Bose, who has recruited the best audio engineers from around the world to work in Framingham. Do we tell him only Americans can design Bose speakers? EMC sells data storage equipment and software all over the world. How do we tell them their most educated workers have to commute on Rte. 495? The IBM memo warns that displaced workers will put pressure on politicians to stop jobs from being moved offshore, but Washington's options are limited. There could be some changes in the H-1B visa program, which a few short years ago was dramatically expanded to allow educated foreign workers to cover what corporate lobbyists painted as a growing shortage of high tech workers here. Now there are complaints the program is being abused, that foreigners are brought here on H-1B visas to be trained so they can set up shops back in their native countries that take work away from Americans. One local IT worker suggests the tax code be modified to provide incentives for companies whose products are 100 percent made in the USA. It's an idea unlikely to be embraced by the Bush Administration, which listens to CEOs, not workers. Globalization has always been good for high tech and its workers, but economic forces are now hitting home. The IBM executives warned their HR colleagues about the awkwardness and hostility created when an American manager is asked to train a foreign worker who is taking his department to China, India or Pakistan. It's a scene already playing out in offices and labs from Rte. 128 to Silicon Valley, and the worst is yet to come.

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