Job migration is draining Silicon Valley

Date: Thursday, December 05, 2002 8:42 AM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Accrington makes a good case that decreasing H-1B will just make more
companies outsource. He just seems to accept the fact that this is an
inevitable part of globalization. Our government can control how many H-1Bs
come to this country, and it also controls how and where outsourcing can
occur. American workers should demand that neither choice is acceptable.

http://www.twincities.com/mld/siliconvalley/business/columnists/guest_commentary/4310498.htm

Posted on Thu, Oct. 17, 2002

Job migration is draining Silicon Valley

By Stanley Accrington

My phone rang a couple of weeks ago. I was home to answer it because I have
been laid off from my job as a software quality assurance manager. The call
was from a polite lady who offered me the chance to have my home repainted
by a San Ramon company. The very slight pops and hisses on the line
suggested that the junk call was actually coming from overseas, and from
curiosity I pressed the lady to tell me where. She eventually informed me
she was in New Delhi, India!

The hourly pay rate for phone solicitors in the United States isn't much.
But it's so much lower still in India that it more than offsets the
increased phone costs. So some phone solicitation jobs have moved overseas.

These are not the only jobs that used to be done in America but are now done
in India, Russia or Ireland.

I mentioned above that I was laid off from my job as a software QA manager.
My job, and the jobs of the nine people in my team are now being done in
Bangalore, India. Ten jobs that until last month were done in Sunnyvale have
been transferred out of the country. That's 10 families with a breadwinner
here in California who is now on the breadline.

It has literally taken $1 million out of the Silicon Valley economy and
injected perhaps half that amount into India's economy.

My job with that company and all the other jobs are permanently gone. Even
when we get through this recession, and companies start hiring again, they
won't be hiring here for those positions -- ever again. This isn't an
isolated case. All the big computer companies like Sun Microsystems,
Hewlett-Packard and Intel are patriotically waving the flag in public and
asking for new government contracts, but privately moving as much
information technology development work as possible out of the United
States.

Now the trend has caught on with smaller companies too, like my former
employer. The Mercury News even carries ads for jobs based in India, such as
the one on Oct. 6 placed by Network Associates. These ads are clearly aimed
at luring back talent from Silicon Valley to manage all those jobs that have
been shipped out to India.

The export of IT jobs from America to English-speaking Third World countries
is a worrying new trend. First predicted more than a decade ago in Ed
Yourdon's book ``The Decline and Fall of the American Programmer,'', Yourdon
went on to suggest that American programmers could avoid unemployment by
becoming more productive with the help of software tools. His identification
of the trend was correct, but his solution was wrong.

The first reaction of many people is to suggest we change the law so that
temporary work visas (like the H-1B) are restricted or cut off altogether.
Some suggest requiring companies to lay off H-1B staff before American
citizens. None of these measures will work.

If you make it inconvenient for companies to use H-1B staff, all you are
doing is making it correspondingly more attractive for them to ship the
entire job abroad. There is nothing we can do about this in the long term,
any more than the manufacturing people could do anything when their jobs
went first to Taiwan and then to China. It is the economically rational
thing to do.

A Web site can be built and administered from anywhere in the world, so why
not do it in the cheapest place?

The problem isn't ``foreigners taking our jobs,'' it's ``American companies
can get IT work done more cheaply overseas.''

Perhaps those lucrative federal contracts need some qualifying clauses about
the percentage of headcount here compared with the percentage of revenue
generated here.

The export of IT jobs has a permanent vicious cycle effect. As the jobs
migrate, there are more and more unemployed people chasing fewer
opportunities here. The general unemployment rate in Santa Clara county is
7-8 percent, but among information technology staff it could be 15 percent.
The recession worsens an already bad situation, but when the recession ends,
the situation will still be bad.

Realistic choices for dislocated IT staff are to retrain, to go back to
school, or to consider careers in other fields such as social work, legal
work, the police, retail sales, nursing and teaching. We may also rethink
our priorities to emphasize family over finances, and civic service ahead of
careers.

One thing that would improve matters in the United States is the arrival of
``the next big thing.'' This would be a must-have technological gadget that
allows plenty of third-party value-added content. It would have to be
something of enormous impact, of the scale of the PC or the Internet
revolution.

In short, we either need to reinvent ourselves individually or we need a new
New Economy. And I don't see that new new economy on the horizon.

Stanley Accrington lives in Los Altos.

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