Hot Export: Tech Jobs

Date: Monday, January 06, 2003 12:01 PM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

This is an excellent and well balanced article. The one thing I don't
understand is why Levick asked the CEO of a Dutch company if they were being
unpatriotic by shipping jobs out of the United States. She should have asked
CEOs of American companies that are doing the same thing.

http://www.ctnow.com/news/local/hc-indiajobs.artjan06,0,3664445.story?coll=hc

Hot Export: Tech Jobs
Displaced U.S. Employees Frustrated, Angry At Information Technology
Industry
By DIANE LEVICK
Courant Staff Writer

January 6 2003

A wellspring of resentment is gushing among information technology workers
as employers ship more computer jobs overseas - often to India - and bring
foreign workers here.

The job export, a stunning reversal of the late-'90s demand for local IT
employees, is raising questions about the industry's future and sending more
U.S. workers into a downwardly mobile spiral.

Businesses in the Hartford area alone have terminated hundreds of American
IT employees and consultants in the past year, under pressure to boost
profits and please shareholders. And more layoffs are on the way.

Companies such as Aetna, ING Group and CIGNA say that they must find cheaper
IT labor to keep their costs down and compete, and that Indian companies
offer a well-trained and eager pool of talent. The U.S. employers also like
the overnight staffing that stems from the time difference between
countries.

But U.S.-born IT workers accuse American companies of being shortsighted,
greedy and unpatriotic in shipping jobs overseas. They fear the nation will
let its information technology industry slip away, bit by bit, just as
textiles, home electronics and other manufacturing businesses left U.S.
shores.

The job outflow also is fueling resentment of foreign workers and
immigration in general, especially in the wake of the Sept. 11 terrorist
attacks. It has spurred a bitter backlash of protest websites and
job-protection groups around the country, including an effort by Connecticut
IT workers called The Organization for the Rights of American Workers.

"We're not ethnically or culturally prejudiced," says Jim Pace, an IT
consultant and an organizer of the new Connecticut group. "We're a
grass-roots movement to address the rights of the U.S. worker."

The organization demands elimination of the federal "H-1B" visa program,
which brings foreigners in IT and other professions to work here for up to
six years - with extensions possible in certain cases. The group also wants
federal laws tightened to curtail immigration.

"If you don't get off your butts and do something," Pace warned colleagues
at the organization's December meeting in Meriden, "you're not going to have
a job a year from now."

When business lobbyists predicted a labor shortage a few years ago, Congress
raised the annual number of new H-1B visas that could be issued to the
current 195,000 from the 65,000 of a few years ago. H-1Bs at educational
institutions and government agencies don't count toward the cap.

The visa limit will revert to 65,000 for the fiscal year starting Oct. 1,
2003, unless Congress acts again. Lobbyists are watching unemployment
numbers and job needs before deciding whether it's practical to fight for a
higher ceiling.

It's likely that only about 80,000 H-1Bs were issued in the past fiscal year
toward the 195,000 cap, though, "because the economy sucks and unemployment
is high," says Harris Miller, president of the Information Technology
Association of America, a trade group for the IT business.

The U.S. Immigration and Nationalization Service says it doesn't track how
many people are here on H-1Bs at any given time, though it's in the hundreds
of thousands. They come from such places as India, China, the Philippines
and Russia.

Shipping IT Jobs Overseas

Visa workers, however, are only part of the competition for U.S. jobs.
American industries, which tapped offshore workers in the 1990s to help
avert Year 2000 computer glitches, are now "outsourcing" many more IT jobs
abroad.

Forrester Research Inc., based in Cambridge, Mass., forecasts that nearly
473,000 computer-related jobs will move offshore between 2000 and 2015.

India - especially the city of Bangalore - is the epicenter of the trend.
Indian firms such as InfoSys, TCS Tada, Satyam and NIIT Ltd. do IT work for
many U.S. companies, including the insurance and financial services giants
in the Hartford region.

Since 1996, The Phoenix Companies Inc. has had its own IT firm in India -
Phoenix Global Solutions - which now serves other companies too.

While U.S. companies are shifting jobs overseas to save money, they're
continuing to downsize and often hiring fewer U.S. workers as IT
consultants - temporary positions under contract. So not only are more IT
people here losing jobs, but many are finding it harder to land new ones.

In addition, the use of cheaper foreign labor has forced down hourly rates
by 10 percent to 40 percent for the many U.S. consultants, says Sharon Marsh
Roberts, chairman of the government relations committee of the Independent
Computer Consultants Association.

IT workers, often courted with sign-on bonuses in the 1990s' frenzy of
hiring, now search for jobs for many months - even a year or more. Some have
taken sales and other odd jobs at huge pay cuts. And some are studying to
switch careers.

Programming consultant Nancy Waters of Westbrook had to sell her house and
move into a rental with friends last year after a succession of jobs with
declining pay. Unemployed since September, Waters, 35, says she has "lost
hope for the American Dream."

She had never thought of herself as prejudiced. But with the influx of
Indians, she says, "I feel a lot of animosity against them because they're
coming to our country and taking jobs away from us."

Other IT workers say their grudge is solely against corporations, not the
foreign workers. Many, in fact, voice admiration for Indians they've worked
with, saying they're well-educated, hard-working and quick learners.

"I'm not a racist, but I want to make sure we're competing with these people
on a fair basis," says an IT worker at CIGNA in Bloomfield, which expects to
use more Indian labor over time.

Global Pressures

By June, the Indian firm InfoSys already had 165 employees in Aetna's U.S.
offices and 400 more serving the Hartford company from India.

"In order to be competitive, business needs must be met by the best source
at the best price," Aetna spokesman Fred Laberge said. "Using offshore
capabilities when appropriate is an obvious and effective means of reducing
costs for Aetna."

InfoSys handles programming in the older computer language "COBOL" for Aetna
and routine mainframe system maintenance, so Aetna can focus its U.S.
workforce on strategic and development project work to solve business
problems, Laberge said.

Company officials flinch at the suggestion their job export is unpatriotic.

"My dilemma is that I am dealing with a global economy," said Paul R.
Donovan, chief information officer of ING Americas, part of a Dutch company
that includes Aetna's former financial services business. "Competition is
intense and [profit] margins continue to shrink. I have no other option but
to look for the best sourcing model I can."

By being efficient and successful, ING in the long run will be "adding to
the economic environment in this country," Donovan says.

Economic Ripples

But since the unemployed and under-employed must curb their spending, the
job export is hurting the economy - and taking its toll on workers' psyche,
IT workers say.

Donna Cisz, 48, of Meriden, for instance, is economizing and grappling with
worry and wounded pride since her job ended last February.

She has put off dental work and home maintenance and stopped hair salon
visits. She agonizes over unit pricing signs at the supermarket. Her mother
brought her groceries and her twin sister sent her money recently for the
mortgage. But Cisz is afraid she'll lose her home if she doesn't get work
soon.

"I don't think I've ever cried more in my life," Cisz says. "At times I try
to be optimistic and hopeful, but there are other times I'm just
overwhelmed."

Others wounded by the job export include the smaller U.S. firms that place
IT consultants, such as Simsbury-based Micro-Tech Computer Services Inc.

"It may put us out of business," says Micro-Tech's William H. Carey, vice
president of sales and marketing. "If you're sending all your work overseas
and there's nothing for workers to do here, what alternative does that leave
you?"

Miller of the IT industry association says the industry isn't disappearing,
but likely is transforming as America's automakers did under pressure from
foreign competition.

"I don't think it's time to give up," Miller says. "It's a situation where
you can have open competition and not give up our indigenous industry."
Copyright 2003, Hartford Courant

Help to Keep ZaZona.com Online

Donate to the Cause at
http://www.zazona.com/Donations.htm
To Subscribe or Unsubcribe send an email to

Back to archives