9 Articles Worth Reading
9 Articles Worth Reading
Date: Sunday, August 07, 2005 10:00 PM
JOB DESTRUCTION NEWSLETTER
by Rob Sanchez
August 07, 2005 No. 1308
COMMENT FROM ROB: Be sure to go to the documents Techsunite talks about in article #8. The link is:
washtech.org/news/documents/secrets/
Article 1:
http://itmanagement.earthweb.com/career/article.php/3524011
Demise of Programming Greatly Exaggerated
To steal a line from Mark Twain... The rumors of programmers' demise have been greatly exaggerated.
For the past year or so, there has been a lot of talk about offshoring sounding the death knell for low-level IT jobs here in the U.S. Programmers were most often mentioned as the profession that would be the first to die out thanks to cheaper labor in countries like India and China. If you are a programmer, analysts were quick to warn you to run, not walk, to go back to school and learn a new skill. But the numbers tell a different story.
Article 2:
http://www.todaysengineer.org/2005/Aug/deferred.asp
The Technology Dream Deferred
The nations increasing reliance on "temporary" guest-worker programs coupled with offshore outsourcing have further reduced job opportunities for African-American technology workers. Kevin Hinkston, a Howard University graduate and a former Hewlett Packard engineer who grew up in Oakland, reports that high-tech employers are no longer recruiting graduates from historically black colleges and universities the way they used to. Today, Hinkston is a real estate developer. Natasha Humphries, a Stanford University software engineering graduate who worked for 10 years in quality assurance before her job was outsourced to India, is currently employed in media sales.
Article 3:
http://www.sitnews.us/CagleColumns/072905_john_rohe.html
Jobs Americans Will Not Do - On the Veranda with Sen. John C. Calhoun
Vicente Fox has been scolded for declaring that Mexicans do jobs that "even blacks won't do." Curiously, nary a whimper is heard when President Bush insults all citizens by referring to "Jobs Americans Won't Do."
Article 4:
http://www.indiadaily.com/editorial/3951.asp
Massive US recruitment of Indian nurses - the new wave
It is a new trend that will miniscule all other trends seen before.
Article 5:
http://www.denverpost.com/business/ci_2918729
Legal industry sees more work sent offshore
Lawyers and legal assistants across the world are doing routine legal work that once was taken care of in the U.S. So far this year, 20,000 legal jobs have been shipped overseas, and market research firm Forrester Research predicts that number will grow to 79,988 by 2015.
Article 6:
http://www.azcentral.com/business/articles/0804jobcuts04.html
Job cuts in July surge 48% from 2004
The number of job cuts announced by U.S. employers in July jumped to 102,971, 48 percent higher than the same month last year, led by reductions at consumer-product and computer makers and financial-service companies, a private survey showed.
Article 7:
http://www.charlotte.com/mld/charlotte/business/12267959.htm
How will Americans compete?
As low-wage nations win more jobs, U.S. workers wonder where they fit in
U.S. workers have lost hundreds of thousands of jobs to countries with cheaper wages as technological change makes it easier for corporations to manage a multinational work force. Americans must learn to compete in a global labor market, economists warn.But what does that really mean?
How can citizens of a country with an average household income of $43,000 wrest jobs from Chinese factory workers and Indian programmers who can live well on a fraction of that?
Article 8:
http://www.techsunite.org/news/050801_deepthroat.cfm
Deep Throat Move Over: Disgruntled IT Employees Expose All
Another day, another set of corporate slides arrives in the WashTech/CWA Local 37083 office in Seattle. "We dont go looking for these slides," said Marcus Courtney, President of WashTech. "But disgruntled employees continue to send evidence of their companies offshoring plans to us through anonymous phone calls, faxes, emails and even brown paper envelopes." "Every company seems to have the same strategy: offshore jobs, increase work hours, provide fewer benefits."
Article 9:
http://www.techsunite.org/news/050801_beyondindia.cfm
Offshore Update: Beyond Indian Borders
32 new companies were added onto the TechsUnite Offshore Tracker this month, contributing to an additional 12,179 jobs laid off and 22,390 jobs offshored. One of the major contributors to this months tracker numbers is ABN AMRO, with an additional 2,300 jobs offshored and a current 3,500 U.S. jobs laid off. A second contributor is Delta Airlines, with an additional 1,600 U.S. lay-offs and 300 jobs offshore. Ford Motor Company is cutting 1,700 of its white-collar jobs in North America, along with the bonuses it provides to managers and 401K plans of salaried employees.
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http://itmanagement.earthweb.com/career/article.php/3524011
Demise of Programming Greatly Exaggerated
By Sharon Gaudin
July 29, 2005
To steal a line from Mark Twain... The rumors of programmers' demise have been greatly exaggerated.
For the past year or so, there has been a lot of talk about offshoring sounding the death knell for low-level IT jobs here in the U.S. Programmers were most often mentioned as the profession that would be the first to die out thanks to cheaper labor in countries like India and China. If you are a programmer, analysts were quick to warn you to run, not walk, to go back to school and learn a new skill.
But the numbers tell a different story.
According to Scott Melland, president and CEO of New York-based Dice Inc., an online recruiting service for IT professionals, computer programmers are the most sought after IT professional right now.
In case that needs to be clarified... no other IT job is as hot right now as programming. That's a far cry from being a skill that's on its death bed.
''It flies in the face of what we've been hearing,'' says Melland. ''There are a number of tech positions that are being offshored... but the demand has been greater than the offshore effect.
That's just not what the tech industry has been hearing.
Industry analyst giant IDC has predicting that by 2007 nearly one out of every four (23 percent) IT jobs in America will have been moved offshore and performed by non-US personnel. Last year that figure was at 5 percent.
And analysts widely proclaimed that programmers and other so-called low-level jobs would be the first to go. And they would go because programmers in some other countries would do the job much, much cheaper. According to E5 Systems, Inc., an IT outsourcing company based in Waltham, Mass., computer programming is generally calculated to cost $80 per hour here in the U.S. In India, that figure drops to $22 per hour, and in China it falls to $15 an hour.
''Those programmers have to grow up... If you code for a living, you need to reinvent yourself,'' said Gordon Brooks, president and CEO of E5 Systems, in a previous interview. ''There will be fewer of those jobs, and companies will pay less for it. Does that sound like a good long-term job?''
But so far, programming still is a good long-term job.
''I think if you're a developer, you should feel pretty good about the opportunities out there,'' says Melland. ''And if you're a developer with experience in VB, .Net, ASP and SAP, you're seeing a lot more demand for your skills than you were a few years ago.''
He means a lot more demand.
From July, 2003 to July, 2005, the number of high-tech jobs advertised on Dice's Web site has grown by 180 percent. But programming jobs -- five of them in particular -- have grown much more dramatically.
There has been a 348 percent increase in the call for Visual Basic programmers, along with a 275 percent increase in the call for .Net programmers. But they're not alone. Melland reports a 224 percent increase in advertisements for ASP programmers; a 220% increase for SAP programmers, and a 201 percent increase for XML programmers.
''Overall, I guess what we've seen from the jobs on our site is a nice steady, healthy increase for developers and application programmers with these particular five skills growing very fast,'' says Melland, who adds that he doesn't see this healthy trend changing any time soon. ''Today, there is a nice job market for developers.''
John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based outplacement company, says the death of the programmer was way overestimated.
''The death of the U.S. programmer is a myth. Absolutely,'' says Challenger. ''Much of the programming that's done today is highly complex and requires an immense amount of discussion with a lot of people. They're part of a development team. They have to deal with operations to customize the programming. There's a lot of in-person, on-site understanding that would really get lost if the work was shipped out to someone who is anonymous overseas... There is so much demand for programming -- people who can take technology and adapt it to a situation.''
Challenger says part of the confusion was that people started to mistakenly consider programmers to be semi-skilled or low-level jobs.
''Somehow we got mixed up with the idea that programmers are low- or semi-skilled workers,'' he adds. ''They're not even in the same ball park. Certainly, programmers should be seeking to upgrade their skills and keeping abreast of developing technology. But to suggest that they ought to find a new line of work, is just not right.''
Both Melland and Dice say there are several reasons why programmers are in such hot demand right now.
First off, they note, while some programming jobs are being offshored, many are not. And with both the overall U.S. economy and the tech industry itself slowly turning around, companies are starting to hire again. They're also starting to add new technology to their legacy systems. They're making new plans, and upgrading their systems. That all means they'll need programmers.
And there's another twist. Since some programming jobs are being outsourced, those outsourcing companies will need programmers to do the work. And many of them are right here in the U.S.
''Certainly, it's not a situation that's black and white,'' says Bob Cohen, a senior vice president with the Information Technology Association of America (ITAA), a trade association with 400 members. ''When you look at the situation, there are going to be companies that are not going to want their work done offshore. There are too many applications that don't conform. There are going to be companies with blended models, with some working onshore and some working offshore.
''There's going to be programming in America for the foreseeable future,'' adds Cohen. ''I think the reports of its demise are way overblown.''
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http://www.todaysengineer.org/2005/Aug/deferred.asp
The Technology Dream Deferred
by John William Templeton
Imagine going into low-income neighborhoods across the nation and creating one million new high-tech jobs for people who had never even seen computers before. The widely respected Hudson Institute called for just such an ambitious jobs creation initiative in its Workforce 2000 report, published in 1987.
Nearly 20 years later, much of the nation is mired in a prolonged jobless recovery. Many of the new jobs that are being created are located in India, China and other lower cost, overseas locations. For far too many Americans, the dream of economic prosperity that comes with growing numbers of high-skilled, high-wage jobs has been postponed or abandoned. The African-American community has been particularly hard hit. New business opportunities for people like John Henry Thompson, the Harlem native who created Lingo, the scripting language that powered the Internet in the 1980s, and Philip Emeagwali, a 1989 IEEE Gordon Bell Prize winner, seem few and far between.
The nations increasing reliance on "temporary" guest-worker programs coupled with offshore outsourcing have further reduced job opportunities for African-American technology workers. Kevin Hinkston, a Howard University graduate and a former Hewlett Packard engineer who grew up in Oakland, reports that high-tech employers are no longer recruiting graduates from historically black colleges and universities the way they used to. Today, Hinkston is a real estate developer.
Natasha Humphries, a Stanford University software engineering graduate who worked for 10 years in quality assurance before her job was outsourced to India, is currently employed in media sales.
Reliable statistics suggest that blacks continue to be significantly under- represented in high-tech fields. A recent analysis of Bureau of Labor Statistics (BLS) data, for example, indicates that only 211,000 (5.5 percent) of the 3.8 million Americans who work for high-tech employers are African-Americans. Among the 12 major industry sectors surveyed by the BLS, the high-tech sector ranks tenth in terms of the percentage of African Americans it employs, ahead of only mining and agriculture.
The percentage of blacks employed in other information-based, technology driven industries belies the prejudicial notion that African-Americans are simply not qualified for jobs in the high-tech sector. Blacks make up 15.4 percent of all workers employed in the radio/television/cable media cluster and 13.9 percent of all telecommunications workers.
In the high-tech sector itself, the highest percentage of African-Americans work in computer systems design, where 115,000 blacks account for seven percent of the 1.6 million member workforce. In science and technology management and consulting occupations, 58,000 blacks account for 5.6 percent of the 1.03 million member workforce.
Although there are more black high-tech workers in information technology departments at IT-using companies than at IT-producing companies, the escalating rate at which business processing jobs in accounting, finance, information and health care are being exported to other countries poses a growing threat to indigenous African-American employment at those companies as well.
In an effort to uncover possible bias and prejudicial behavior in high-tech company hiring practices, the Coalition for Fair Employment in Silicon (CFESV) initiated a series of innovative research projects in the San Francisco Bay Area beginning in 1998. In its first annual Silicon Ceiling report, published in 1999, CFESV confirmed earlier findings by the San Francisco Chronicle that blacks accounted for only 3.7 percent of all employees at Bay Area high-tech companies. At the time of the report, African-American employment at high-tech companies nationally stood at 7.1 percent.
Two years later, CFESV targeted Bay Area employers who claimed that they had been unable to find qualified Americans to fill vacant high-tech positions. Using H-1B visa application data submitted to the U.S. Department of Labor to identify employers with job vacancies, CFESV sent the resumes of qualified African-American candidates to local companies that had petitioned for authorization to hire foreign workers. None of the companies even acknowledged having received the resumes.
In Silicon Ceiling III, CFESV reported that employment among African-American engineers and computer specialists in Pacific and Southwestern states had declined by 20 percent in 2001 - the year after Congress raised the annual cap on H-1B visas from 115,000 to 195,000.
The only bright spot for African-American techies in recent years has been the growth of black-owned high-technology companies, which numbered 2,300 in 2003. These firms employ more than 15,000 workers and report average revenues that are six times higher than revenues earned by African-American businesses in general.
Economic globalization, and with it the growing dependence of many U.S. employers on part-time and temporary workers - including temporary foreign workers - and attendant increases in the transfer of high-wage, high-technology jobs to lower cost offshore locations, is having an adverse impact on the employment and economic security of too many Americans. African Americans, especially those in central cities and rural communities, have been particularly hard hit. Flat or declining employment opportunities invariably result in flat or declining income and business tax receipts, and flat or declining investments in essential infrastructure, including public education, health care, social services and transportation.
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http://www.sitnews.us/CagleColumns/072905_john_rohe.html
Jobs Americans Will Not Do - On the Veranda with Sen. John C. Calhoun
By John F. Rohe
July 29, 2005
Vicente Fox has been scolded for declaring that Mexicans do jobs that "even blacks won't do." Curiously, nary a whimper is heard when President Bush insults all citizens by referring to "Jobs Americans Won't Do."
Before the Civil War, John C. Calhoun's views on the equality of human beings were nurtured with a mint julep on the veranda of a southern plantation. This leading South Carolina Senator, and Presidential hopeful, had a splendid panoramic view of the jobs that Americans wouldn't do. In spirited debates, Senator Calhoun became a voice for the South in perpetuating slavery.
By 1860, however, Hinton Helper's best selling book, The Impending Crisis, demonstrated that slavery benefited neither whites nor blacks. By spurning jobs that Americans won't do, Southern whites became dependent upon others. In the South, Hinton Helper observed: "We want Bibles, brooms, buckets and books, and we go to the North; . . . we want toys, primers, school books, fashionable apparel, machinery, medicines, tombstones, and a thousand other things, and we go to the North for them all."
When cotton was king, the South believed it could rise above the "jobs Americans won't do." The image was supported by an illusion.
The slogan, "Jobs Americans won't do," has now emerged as the Presidential slogan for importing more foreign labor. The leader of the free world offers an assurance that Americans have graduated to a better life.
Who, actually, is unwilling to do "the jobs Americans won't do"? Has picking up after ourselves fallen beneath our dignity? Has caring for others lost appeal? Are our sons and daughters no longer willing to work their way through college? Harry Truman once professed that no one should have to wash anyone else's socks and underwear. Truman washed his own.
Who is claiming that we won't do these jobs? Do they have contempt for calloused hands? Is the unemployed American refusing to do these jobs? Or is this a disguised corporate quest for cheap labor?
The illiterate slave driver's view of inferior beings became a sad disillusion. Yet, this view is inherent in the President's new slogan.
What is the President's mental image of "jobs Americans won't do"? He's not claiming the jobs are unnecessary. Rather, he is pointing out that we need not perform them. Then who will? People looking different than us? Has the President been sipping mint juleps with Sen. Calhoun?
What are the jobs that Americans won't do? Laundry? Making beds? Milking cows? Picking up garbage? If this is a job that only immigrants will do, then Los Angeles should be spotless, and trash should be gathering on the streets of low-immigrant communities.
In fact, Americans do these jobs. Americans do these jobs with pride. Americans have thrived on these jobs over the centuries. The Americans doing these jobs don't look any different. They do not shrink from work. Americans just resist enslaved wages and indecent working conditions. The soul of America is still found in our commitment to a work ethic.
To restore dignity to labor we must honor it with a living wage. Flooding the job market with cheap labor forces a debate over the minimum wage. Congress has not repealed the law of supply and demand.
The "jobs Americans won't do" adage seems harmless, but it carries a hefty price tag. We become the enslaved, much like the disillusioned illiterate white Southerner of 1850.
The President's slogan is an invitation to join him on Sen. Calhoun's veranda. Mint julep anyone?
John F. Rohe is a member of the Board of Directors of the Federation for American Immigration Reform. E-mail him at: john@rohemail.com
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http://www.indiadaily.com/editorial/3951.asp
Massive US recruitment of Indian nurses - the new wave
Babu Ghanta
Aug. 5, 2005
It is a new trend that will miniscule all other trends seen before.
The overseas placement agencies claim that there is an estimated shortage of nearly 2.5 lakh nurses in hospitals across the US and hence they are now wooing qualified Indian nurses to relocate to the land of the greenback.
The nurses can make $5000 per month and up. There are companies that bring in Indian nurses with green card.
The aging baby boomers of America provide the bonanza of jobs for the Indian nurse. According to sources this is just the tip of the iceberg. The actual wave in 2010 will be so big that no one really can imagine the same now.
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http://www.denverpost.com/business/ci_2918729
Article Last Updated: 8/06/2005 11:55 PM
Legal industry sees more work sent offshore
By Tom McGhee
Denver Post Staff Writer
DenverPost.com
Lawyers and legal assistants across the world are doing routine legal work that once was taken care of in the U.S.
"There are no more boundaries," said John Tredennick, chief executive and founder of Denver-based CaseShare Systems. "That doesn't mean walking into the courtroom, but beyond that there isn't anything that can't be done with the Internet."
Among other things, Tredennick's company manages electronic documents for the legal industry and partners with others to outsource work formerly done in America by paralegals and junior attorneys.
Legal firms sending their work to India, New Zealand, Australia, South Korea and other countries are motivated by the same drive for lower costs that has sent manufacturing and customer service jobs out of the country. Foreign workers can perform the tasks for up to 80 percent less than their American counterparts, Tredennick said.
The trend is relatively new and may have limited impact on American jobs. U.S. regulations bar lawyers who aren't licensed in this country from giving legal advice on American law.
But its impact on the legal industry is growing. So far this year, 20,000 legal jobs have been shipped overseas, and market research firm Forrester Research predicts that number will grow to 79,988 by 2015.
About 1 million trained attorneys are now registered in the U.S., according to the American Bar Association. The association doesn't track paralegal and support-staff positions.
Chicago-based Mindcrest Inc., a 3-year-old firm with 26 lawyers in Bombay, India, does legal work for American companies and law firms. By the end of the year, the company expects to add another 25 jobs, said Ganesh Natarajan, Mindcrest chief executive.
Two of the company's clients are large Denver corporations, Natarajan said, declining to identify them.
Mindcrest's Indian employees don't practice law. Instead they perform document searches, draft research memos and survey the laws of different jurisdictions for American companies.
Corporate counsels who are seeking to cut costs are driving the trend, he said. "Law firms are their vendors, and they are saying, 'Is there anything you can do to streamline yourselves and assure us better value?"'
Microsoft is among the companies that have moved legal work offshore. It does some patent work in India. Indian attorneys also draft outsourcing agreements and confidentiality contracts for General Electric.
Patent lawyer Carl Oppedahl of Dillon said an Indian company approached him about drafting the drawings his firm must submit to the U.S. Patent and Trademark Office.
"It probably would have been cheaper than doing the drafting here," Oppedahl said. He didn't follow up on the inquiry because people who hire patent lawyers already are concerned that their idea will be stolen. "Think about it from the inventors' point of view. They are concerned that if they disclose their idea to somebody, the company could run off with it."
Oppedahl said he is aware that some large companies are sending patent work to foreign shores, and he sees nothing wrong with doing legal work overseas as long as the client has agreed to it.
"It's not an easy decision to make," he said. "Here in the U.S., if someone was to violate the confidentiality of a client they would risk being debarred. In foreign countries, that might be different. That is a concern."
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http://www.azcentral.com/business/articles/0804jobcuts04.html
Job cuts in July surge 48% from 2004
Bloomberg News
Aug. 4, 2005 12:00 AM
CHICAGO - The number of job cuts announced by U.S. employers in July jumped to 102,971, 48 percent higher than the same month last year, led by reductions at consumer-product and computer makers and financial-service companies, a private survey showed.
The job cuts announced last month compare with 69,572 planned in July 2004 and represent a 7.2 percent decrease from June's 110,996, the outplacement firm Challenger, Gray & Christmas Inc. said Wednesday. The firm's data aren't adjusted for seasonal variations.
July was the fifth month this year in which employers announced more reductions than they did in the same month in 2004. The surge in announcements doesn't necessarily suggest the economy is slowing because companies such as Kimberly-Clark Corp. are using reductions to boost productivity, said John A. Challenger, chief executive of the Chicago-based recruiting firm.
"Some of the cuts we see are of a strategic nature and not necessarily a sign of a weakening economy," Challenger said in a statement. In the case of Kimberly-Clark, "the job cuts are a proactive measure to ensure continued success," he said.
Consumer-product makers last month announced plans to eliminate 19,255 jobs, followed by 17,485 at computer makers and 12,998 at financial-service firms, Challenger said.
A total of 641,245 job cuts have been announced so far this year, up 18 percent from the same period in 2004. Concern about the health of the economy will increase if this pace continues for the rest of the year, Challenger said.
"It should set off some relatively loud alarm bells about the state of the job market and the economy," he said.
The increase in the number of announced job cuts contrasts with a drop in the number of Americans filing first-time applications for jobless benefits. The average number of applications for the first three weeks of July averaged 317,000 per week compared with an average 323,000 in June.
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http://www.charlotte.com/mld/charlotte/business/12267959.htm
Posted on Sun, Jul. 31, 2005
How will Americans compete?
As low-wage nations win more jobs, U.S. workers wonder where they fit in
KATHERINE REYNOLDS LEWIS
Newhouse News Service
U.S. workers have lost hundreds of thousands of jobs to countries with cheaper wages as technological change makes it easier for corporations to manage a multinational work force.
Americans must learn to compete in a global labor market, economists warn.
But what does that really mean?
How can citizens of a country with an average household income of $43,000 wrest jobs from Chinese factory workers and Indian programmers who can live well on a fraction of that?
"I think the economists are just ducking that question," said Ron Hira, co-author of "Outsourcing America" and a professor at the Rochester Institute of Technology in Rochester, N.Y.
"Companies are competing foreign workers and U.S. workers head to head, which for a lot of U.S. workers is a disadvantage."
The "offshoring" trend began in the manufacturing sector and has spread to service positions like customer support and accounting. By some estimates, 11 percent of American white-collar jobs, affecting 14 million people, are vulnerable. Forrester Research says 540,000 service jobs moved offshore through 2004 and predicts a loss of 3.4 million positions by 2015.
A huge disparity in labor costs drives much of the offshoring decision.
Invacare Corp. pays line workers in China 50 cents an hour, compared with $3 in Mexico, $13 in Florida, $15 in Ohio and $30 in Germany, said Mal Mixon, chairman and chief executive officer of the Elyria, Ohio-based medical products maker.
"As a red-blooded American, it concerns me that I'm having to do this. On the other hand, it's survival," Mixon said, noting that Invacare's competitors are also using Chinese factories.
Instead of trying to win back rote and poorly paid work, Americans should try to differentiate themselves in the global work force, said Catherine Mann, senior fellow at the Institute for International Economics. They should focus on work requiring local knowledge and face-to-face interaction, to reduce the chances of outsourcing.
For instance, while straightforward computer programming may move overseas, more Americans are being hired to perform high-level analysis and work closely with customers, Mann said.
That's not much consolation to Joseph Huppman, who was laid off as an assembler when Carrier Corp. closed manufacturing operations in Syracuse, N.Y., in favor of Asia. He studied to be a nurse and now makes $30,000 a year instead of $50,000 -- albeit with a 40-hour workweek instead of the roughly 52-hour weeks he put in at Carrier, which makes air conditioning and heating systems.
"I took a dramatic pay cut," said Huppman, 50. "It's really a shame that we allowed our companies to do this. We've got to find a way to close the floodgates."
But he's happy with his decision to pursue a health-related career. "Everybody gets sick and they can't outsource that to China," he said.
Unfortunately, said Rochester's Hira, most careers of the future are an unknown, making it hard to decide what training to pursue. And economic arguments about displaced workers ignore the difficulty people have finding a new job at the same salary -- even with retraining.
From 2001 to 2003, Labor Department statistics show, 5.3 million Americans were displaced from jobs they had held for at least three years. As of January 2004, only 65 percent were re-employed, and 57 percent of those were earning less than in their previous positions.
"There's no guarantee of a job, and that's the reality of life," said John Silvia, chief economist for Wachovia in Charlotte. "There's a guarantee that they won't have a job if they don't do any retraining."
One way U.S. workers could become more competitive is if salaries rose in other countries. But this is unlikely to happen quickly enough to matter. Moreover, economists say, there are offsetting forces.
While wages in China have started to rise, productivity is climbing as well, enabling Chinese manufacturers to put out more goods and services per employee. This keeps them competitive in many sectors, said Albert Keidel, senior associate at the Carnegie Endowment for International Peace, a Washington-based think tank.
And the sheer numbers of low-wage workers in the worldwide labor market mean Americans are unlikely to win out on price alone.
"The enormous glut of labor we see in China's market today is not going to dissipate for decades," said Alan Tonelson, research fellow at the U.S. Business and Industry Council, which represents small- and medium-sized manufacturers. "On China's heels in terms of worker availability, you've got Indonesia, Vietnam and even India. ... Throughout the Third World, you see enormous unemployment and also underemployment."
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http://www.techsunite.org/news/050801_deepthroat.cfm
August 01, 2005
Deep Throat Move Over: Disgruntled IT Employees Expose All
"Fair Globalization" May Be the Answer to Offshoring
By Roberta L. Wilson
Another day, another set of corporate slides arrives in the WashTech/CWA Local 37083 office in Seattle. "We dont go looking for these slides," said Marcus Courtney, President of WashTech. "But disgruntled employees continue to send evidence of their companies offshoring plans to us through anonymous phone calls, faxes, emails and even brown paper envelopes."
Indeed, in 2001, an employee at Microsoft broke silence and sent WashTech evidence from Brian Valentines PowerPoint presentation in which the corporate vice president clearly articulated corporate plans: "Pick something to move offshore today." Although Microsoft denied that U.S. employees would lose jobs at the time, Microsoft has gone on to make major investments in both call center and software research and development infrastructure in India, China and elsewhere.
Then came the Honeywell International slides in 2004, which also clearly outlined the companys global development strategy. Those slides showed the plan to move 5,000 aerospace division jobs offshore over the next five years.
"The most recent batch of slides comes," said Courtney, "from Merck & Company (pharmaceuticals). The Merck slides are, well, murky. The 43 slides are difficult to decipher, but one intent is evident-"to offshore almost all its IT jobs. The anonymous employee who provided these slides noted that while Merck fought U.S. customers ability to buy cheaper Canadian drugs, they have been planning to send U.S. jobs offshore. Merck, the second-biggest U.S. drug maker, recently shut off sales to Canadian pharmacies exporting drugs to American patients. The often-cited argument-"that free-trade globalization will benefit U.S. customers-"does not seem to.
Another recent slide faxed to WashTech offices comes from IBM. It shows IBMs recent offshoring numbers from 2002 to 2005, confirming our August 2003 story about IBMs plans to accelerate offshoring. Total headcount in India in 2002 was 6,070. In 2005 it grew to 38,196. At the same time, thousands of IBM workers are losing their jobs in the U.S. and U.K.
These batches of slides, along with other evidence of offshoring-"for example, the many e-mails WashTech receives to update our Offshore Tracker-"point to continued and accelerated offshoring of jobs in many job categories. As Courtney says, "Every company seems to have the same strategy: offshore jobs, increase work hours, provide fewer benefits."
Meanwhile, according to a June 3, 2005, Reuters story, the Indian government, in service to their free marketers, has noted the continued backlash against free-trade globalization (fromWashTech, IBM Alliance and other organizations). They are petitioning the World Trade Organization (WTO) to prevent the U.S. and other countries from taking steps to ban companies from outsourcing jobs. See this link for more.
We wonder if the Indian government and corporate free traders will meet with much opposition, given that both Republican and Democratic parties in the U.S. have promoted free-trade globalization to the detriment of their own citizens and residents working in both the manufacturing and the services industries. Although there are bills that have passed in a few state legislatures to curtail offshoring of government jobs, little has been done by either party to address outsource offshoring in the private sector. Nor has there been much movement to protect workers from the effects of these tax-subsidized, government-supported trade policies.
What is clearly missing is a broad debate in the U.S. and elsewhere about free-trade globalization and its pros and cons. We believe the reason this broad debate has not taken place is that the few potential winners in free-trade globalization want to make sure that the large numbers of losers dont know what hit them. The losers will be workers everywhere, who will be pitted against one another in a race to the bottom.
In reaction to free-trade problems, many groups are calling for "fair trade." Fair trade is a useful, now-voluntary approach to help indigenous communities compete in the world market. Fair trade favors labor and the environment by organizing workers in locally owned cooperatives to raise coffee and other crops with sustainable methods. However, fair trade ideas do not address the realities of billions of urban workers, including our own high-tech sector.
What urban workers need is good-paying, environmentally responsible jobs that sustain their families and communities. A powerful and comprehensive UN report titled A Fair Globalization puts job creation and economic security at the center of economic planning. According to the report, outsourcing would not be a problem if there were enough decent jobs. However, a global jobs deficit allows companies to move work wherever labor is cheapest-"and where governments are most desperate, therefore providing the highest subsidies with the lowest environmental and social protections.
The task is to address the jobs deficit with strategies to create enough decent jobs for everyone. You can read more about this report in a paper located at FairJobs.org: http://www.fairjobs.org/fairjobs/reports/ See "Outsource This? American Workers, the Jobs Deficit and Fair Globalization." Meanwhile, were depending on our deep throat contacts in the high-tech sector to keep us reporting on the facts and consequences of free-trade globalization.
See the documents WashTech has obtained: http://washtech.org/news/documents/secrets/
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http://www.techsunite.org/news/050801_beyondindia.cfm
Offshore Update: Beyond Indian Borders
August 01, 2005
By Marjan Foruzani
32 new companies were added onto the TechsUnite Offshore Tracker this month, contributing to an additional 12,179 jobs laid off and 22,390 jobs offshored. One of the major contributors to this months tracker numbers is ABN AMRO, with an additional 2,300 jobs offshored and a current 3,500 U.S. jobs laid off. A second contributor is Delta Airlines, with an additional 1,600 U.S. lay-offs and 300 jobs offshore. Ford Motor Company is cutting 1,700 of its white-collar jobs in North America, along with the bonuses it provides to managers and 401K plans of salaried employees.
ABN AMRO spokesman Sierk Nawijn confirmed that the bank is negotiating with several firms for multiple outsourcing contracts that insiders expect will result in a reduction of its IT workforce to about 1,200 from a current 3,500. Coincidentally, in light of IBMs offshore expansions, the bank is no longer negotiating with both Hewlitt-Packard Company and IBM about outsourcing its IT infrastructure, but is now solely talking to IBM. Nawijn has also reported to Computerworld that the bank is in negotiations with Accenture Ltd., Infosys Technologies Ltd., Patni Computer Systems and Tata Consultancy Services Ltd. (TCS) to outsource its application maintenance operations. Accenture has a current offshore presence of 10,000 employees, many of which are located in India, while Infosys, Patni Computer Systems, and TCS are all Indian companies. Nawijn reports that the companys outsourcing plans are expected to become effective around September and are driven by a rationale of "cost-effectiveness, operational efficiency, and flexibility."
Concur Technologies and Disha Technologies represent two new local companies added onto the Tracker this month. Concur is located in Redmond, Washington and Disha is headquartered in Bellevue. Both companies employ testers in Hyderabad and Pune, India, with Dishas employment in India reaching more than 300 workers. Microsoft contributes 1,000 jobs offshore to the July Tracker update with a call center in Egypt. Tom Friedman, a New York Times columnist comments that Microsofts call center in Egypt is "a call center that would have gone to Bangalore five years ago; now its in Cairo. So the low end is going to migrate." It appears, however, that low-end functions are not the only type of jobs migrating from India as many other countries are working to expand their mid to high-end capabilities also.
East Africa and the Middle East appear to be highly possible destinations. The New York Times Company itself employs computer software service providers in Pakistan. Egypt is attempting to create an appeal through its "Smart Village." In November 2003, this 300-acre technology park was established in order to house various IT and telecommunications companies. Following Egypts lead, Lebanon is in the process of developing the Beirut Emerging Technology Zone (BETZ), a technology research and development zone scheduled to open around April 2006. This zone will offer hi-tech facilities to local start-ups and global manufacturers in electronics, IT, telecom, biotechnology, internet, and media sectors. Intel, Microsoft, Cisco, and Oracle are just several multinationals already eying the business zone.
Egypt and Lebanon, however, have undoubtedly been inspired by the United Arab Emirates Dubai Internet City, a free trade zone established in October 2000. This technology hub has attracted more than 600 of the worlds Information and Communications Technology (ICT) companies, including Microsoft, Dell, EDS, Sony Ericsson, Siemens, Sun Microsystems, Oracle, Cisco, Canon, HP, and IBM. Located within the City is the Dubai Outsource Zone (DOZ), the first free trade zone in the world dedicated to outsourcing.
The DOZ provides mid to high-end IT and business process outsourcing (BPO) services and is directed toward such key sectors as finance, accounting, IT, payroll processing, healthcare, engineering, biotech, multimedia, R&D, and design. The surrounding Internet City itself is home to companies in software development, web and e-commerce, consultancy, education and training, sales and marketing and back-office operations. Moreover, the City is geographically positioned to offer easy access to workers from India, Egypt, Jordan, the Philippines, Lebanon, Sri Lanka, and Iran. If these aspects of the DOZ arent enough to lure companies away from India and other popular offshore locations, the DOZ also offers such business incentives as 100 percent exemption from taxes, 100 percent business ownership, 100 percent repatriation of capital and profits and no currency restrictions. Its support services even include a 24-hour visa service in order to allow companies to hire offshore staff more quickly.
In most recent news, however, the major job shift is seen to be heading towards China. According to Chicago-based management consulting firm DiamondCluster Internationals 2005 Global IT Outsourcing Study, about 40 percent of the companies surveyed plan to send technology jobs to China within the next three to five years. Tom Weakland, an outsourcing advisor from the firm insists, "China is starting to look like India did 10 years ago." The Houston Chronicle even reports that its labor cost ranges anywhere from 20 to 50 percent below Indias. About a fourth of the companies on this months Tracker update have overseas operations in China, indicating that U.S. companies are not wasting any time shifting their offshore labor. BearingPoint, for example, contributes an additional 1,300 jobs offshore through its IT and BPO operations in China, following a move already made by such major tech companies as IBM and HP.
Some contend that China still maintains major disadvantages, citing the lack of proficiency in English as a major weakness. However, there is still a significant amount of work that can be done using non-English speaking IT engineers. For many project development models, the English language knowledge is only critical in the top two levels of each model. As China continues to expand its IT and BPO capabilities, major pharmaceutical companies are eying the country for its clinical research as well. According to this months Tracker update, Roche employs a chemistry center in China while Aztrazeneca and Novo Nordisk both conduct their clinical trials there.
As evident by this months update, offshore outsourcing continues to grow in both its reach and depth. Its advocates continue to insist that its growth is beneficial to the U.S. economy, promising greater job creation as a result. However, unemployment numbers, stagnating wages, and falling employee benefits packages provide evidence to American workers that the results are more detrimental than beneficial.
Offshore outsourcing is not a political issue American workers share this challenge together. As with any other issue, offshore outsourcing must first be realized before it can be resolved. WashTech/TechsUnite hopes that with the growth of our offshore tracker follows a subsequent growth of awareness among tech workers nationwide.
Help build the Tracker by submitting an event form when you hear of American jobs moving offshore. Any media source, with the date of the article, or the URL, is greatly appreciated and helps us speed the verifying process.
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