A suicidal country

Date: Thursday, February 27, 2003 9:46 AM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

http://www.townhall.com/columnists/paulcraigroberts/

Paul Craig Roberts (back to story)

February 26, 2003

A suicidal country

Do you remember those Information Technology (IT) jobs that were going
to take the place in the "new economy" of those outsourced
manufacturing jobs? Don't bother to retrain. The IT jobs are leaving,
too.

Knowledge work can be done anywhere there are educated people. These
days, that's just about everywhere: the Philippines, India, China,
Russia, Eastern Europe, Costa Rica and South Africa. Outsourcing of
"new economy" jobs is exploding.

A recent article in the Feb. 3 Business Week describes "dazzling new
technology parks" on the outskirts of India's major cities, where U.S.
companies such as Bank of America, Texas Instruments, pharmaceutical
companies, Intel, Lehman Brothers, Bear Stearns, Hewlett Packard,
American Express, Dell Computer, Eastman Kodak, IBM, GE, Microsoft,
Procter & Gamble, Fluor Corp., Electronic Data Services, Citibank,
Boeing, mortgage lenders, Massachusetts General Hospital and even
architectural firms hire Indians to do knowledge jobs that Americans
did three years ago.

In Bangalore, Indian radiologists interpret CT scans for Massachusetts
General Hospital and Indian engineers design third-generation
mobile-phone chips for Texas Instruments. Other Indians process claims
for major U.S. insurance companies and home loans for U.S. mortgage
companies. Indian molecular biologists conduct research for
pharmaceutical companies. Indians analyze financial data for Wall
Street, conduct R&D for U.S. high-tech companies and design software
for Microsoft.

The competition for U.S. knowledge workers is tough. India has 520,000
IT engineers and starting salaries are $5,000. Five years from now,
Indian service exports will add $57 billion annually to the U.S. and
European trade deficits, and 4 million IT jobs will have been moved to
India.

The same thing is happening in China, a country with which the United
States is expected to have a $125 billion trade deficit this year due
largely to outsourcing. Microsoft alone is spending $1,150,000,000 for
R&D and outsourcing in India and China over the next three years. In
Microsoft's Beijing research facility, one-third of the Chinese
programmers have Ph.D.s from U.S. universities at U.S. taxpayers'
expense.

Filipinos prepare Proctor & Gamble's tax returns and crunch numbers for
audits conducted by U.S. accounting firms. Architectural work ranging
from home design to multibillion dollar petrochemical plants is
outsourced to Hungary, India and the Philippines.

The United States gave away its agricultural knowledge, its education,
its technology and its manufacturing jobs and is now giving away its IT
jobs. The displaced manufacturing workers did not move to the promised
greener pastures. What reason is there to believe that the displaced
engineers, Wall Street analysts, accountants, scientists and other
knowledge workers will do any better when their careers are outsourced?

Business Week asked Harvard University globalist advocate Robert
Lawrence what happens if America loses its knowledge jobs on top of its
manufacturing jobs. His answer was not reassuring. He has no evidence
-- just faith -- that globalization will make us better off.

What is going on when American policymakers and elites gamble with the
livelihoods of tens of millions of Americans on faith? Business Week is
correct when it says "economists haven't begun to fathom the
implications" for America of globalization. But it is already obvious
who the winners and losers are.

The winners are the foreigners with IT educations who live in countries
where both the standard and cost of living are very low. The losers are
IT employees in the United States, where both the standard and cost of
living is very high. Filipino engineers working for American firms at
salaries of $3,000 annually, and Chinese and Indians working for $5,000
to $10,000 annually are unbeatable competition. For American university
students struggling to prepare for high-tech careers, the good times
are over before they begin.

While jobs leave America and incomes fall, the eligibility of illegal
aliens for U.S. Social Security and Medicaid benefits is a powerful
magnet pulling in poor foreigners by the droves. The 1996 Welfare
Reform Act did not end benefits for PRUCOL aliens, those who entered
illegally and "permanently reside under color of law." People collect
benefits who have never paid in. And it is American citizens, downsized
and outsourced, who are saddled with the burden.

As most everyone knows, Social Security is in dire straits. But its
funding problem has not deterred the Bush administration from drafting
a treaty with Mexico that will give the Mexican government $345 billion
in Social Security payments for Mexicans who have worked legally and
illegally in the United States.

Let's hope that the Bush administration is correct and that we are not
starting a 30-year war in the Middle East by invading Iraq. Otherwise,
the combination of war, job and income loss, unprecedented trade
deficits, and the creation of Social Security entitlements for foreign
nationals will break the United States long before another generation
passes.

Before the United States can reconstruct the world, it must cease
deconstructing itself. For that task, the country will need a champion.

)2003 Creators Syndicate, Inc.

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