11 Articles About Job Destruction
11 Articles About Job Destruction
Date: Friday, January 16, 2004 1:34 AM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Article 1
http://www.nytimes.com/2003/12/15/opinion/15HERB.html
Another Battle for Bush
The Bush administration and its corporate allies give the impression
that they would welcome a big surge in employment that would raise the
wages and quality of life for all working Americans and their families.
But their policies tell an entirely different story. A fierce and
bitter war - not bloody like the war in Iraq, but a war just the same -
is being waged against American workers. And so far, at least, the Bush
administration has been on the wrong side. The war is being fought on
several fronts. For example, after years of shipping manufacturing jobs
out of the U.S. to absurdly low-wage venues, we are now also exporting
increasing numbers of technical and professional jobs.
Article 2:
http://www.amconmag.com/1_19_04/buchanan.html
Real Message of The Bush Amnesty
If George Bushs amnesty for between 8 million and 14 million illegal
aliens is enacted, you can kiss the old America goodbye.
Article 3:
http://news.com.com/2010-1028_3-5138791.html?tag=prntfr
Offshoring and the 2004 elections
Union activists are planning to inject the controversial topic of
overseas outsourcing of technology jobs into the 2004 presidential
race. The Democratic presidential contenders already have been trading
barbs over the loss of U.S.-based manufacturing jobs. At debates last
week in Iowa and on National Public Radio, the Democratic hopefuls
sparred over who had the best solutions, with Dennis Kucinich painting
himself as the most radical opponent of free trade, which he believes
is "a disaster for our economy."
Article 4:
http://news.com.com/2100-1028-5137073.html?tag=nl
Group warns of outsourcing backlash
Feeling political pressure from Congress over the loss of U.S. tech
jobs to offshore workers, the Computer Systems Policy Project on
Wednesday released a report stressing the need to keep international
doors open so that domestic companies can remain competitive. In its
report, the organization included preliminary policy recommendations
for Congress to consider. It plans to have its members--which include
chief executives from Intel, Dell and Hewlett-Packard--lobby lawmakers
next month during the organization's semiannual meeting.
Article 5:
http://www.salon.com/tech/feature/2004/01/12/wage_insurance/index.html
No safety net for programmers
When manufacturing jobs go overseas, laid-off workers are eligible for
a host of benefits. But if you're one of the tens of thousands of
software producers whose jobs have been outsourced, you're out of luck.
Article 6:
http://www.iht.com/articles/124505.html
Job growth in the U.S. comes to virtual halt
Only 1,000 positions added in December; 150,000 were forecast
U.S. job growth came to an unexpected halt in December, the Bureau of
Labor Statistics reported Friday, as thousands of people disappeared
from the officially recorded labor force rather than hunt for scarce
work.
Article 7:
http://www.washingtonpost.com/wp-dyn/articles/A14627-2004Jan13.html
Tech Council Backs Foreign Labor Use
Group to Fight Any Bill Denying State Work to Outsourcing Firms
The Northern Virginia Technology Council's board of directors voted
unanimously yesterday to oppose any legislation that would ban
companies that ship jobs overseas from doing business with state
government.
Article 8:
http://www.rediff.com/money/2003/dec/06bpo1.htm
Franklin Templeton plans backoffice in Hyderabad
Franklin Templeton International Services is setting up its business
process outsourcing operations in Hyderabad to take care of the $314
billion group's global backoffice operations.
Article 9:
http://www.sltrib.com/2004/Jan/01052004/opinion/126251.asp
Exporting Geneva Steel
The deal is not final, but a Chinese firm has offered to buy the bulk
of bankrupt Geneva Steel's production equipment and ship it from Utah
County to China. If the sale occurs, it will mark the demise of what
was once a mighty Utah employer. It also will stand as a microcosm of
what is happening to U.S. manufacturing generally.
Article 10:
http://money.cnn.com/2003/12/30/pf/offshorejob/index.htm
Guess which jobs are going abroad
These days it's not just a desire to cut costs that's pushing employers
to hire overseas.
If a tax preparer gets you an unexpected refund this year, you may have
an accountant in India to thank.
Article 11:
http://www.guardian.co.uk/comment/story/0,3604,1067344,00.html
The flight to India
The jobs Britain stole from the Asian subcontinent 200 years ago are
now being returned
If you live in a rich nation in the English-speaking world, and most of
your work involves a computer or a telephone, don't expect to have a
job in five years' time.
http://www.nytimes.com/2003/12/15/opinion/15HERB.html
OP-ED COLUMNIST
Another Battle for Bush
By BOB HERBERT
Published: December 15, 2003
There are two things I hope will emerge from the capture of Saddam.
Like so many others, I hope the effort in Iraq becomes much more widely
shared, internationalized, which would be good not just for Iraq and
the U.S. but for the short- and long-term stability of the entire
planet.
My second hope is that the Bush administration will begin to apply the
kind of focus, energy and resources that it used in Iraq to the
economic difficulties of ordinary working families here in America.
If you just went by recent headlines, you'd have the impression that
the U.S. economy is as bright as the Christmas tree in Rockefeller
Center. The G.D.P. is surging. The stock market, retail sales and
corporate profits are up. So is productivity.
The front-page headline in The Daily News on Thursday said, "Santa
Comes Early to Wall Street." It was accompanied by a photo of Philip
Purcell, the chairman and C.E.O. of Morgan Stanley, who was described
by The News as "the first titan to cash in at the end of a banner
year."
The article cited several executives who were expected to receive
year-end bonuses in the $12 million to $17 million range.
The Bush crowd will tell you that these economic goodies are bound to
trickle down. Jobs will become plentiful. Pay envelopes will fatten.
Nirvana is just around the corner.
The problem with this scenario is that there are no facts to back it
up. The closer you look at employment in this country, the more
convinced you become that the condition of the ordinary worker is
deteriorating, not improving.
The problem is that we are not creating many jobs, and the quality of
those we are creating is, for the most part, not good. Job growth at
the moment is about 80,000 per month, which is not even enough to cover
the new workers entering the job market.
And when the Economic Policy Institute compared the average wage of
industries that are creating jobs with those that are losing jobs,
analysts found a big discrepancy. The jobs lost paid about $17 an hour,
compared with $14.50 an hour for those being created.
The Bush administration and its corporate allies give the impression
that they would welcome a big surge in employment that would raise the
wages and quality of life for all working Americans and their families.
But their policies tell an entirely different story. A fierce and
bitter war - not bloody like the war in Iraq, but a war just the same -
is being waged against American workers. And so far, at least, the Bush
administration has been on the wrong side.
The war is being fought on several fronts. For example, after years of
shipping manufacturing jobs out of the U.S. to absurdly low-wage
venues, we are now also exporting increasing numbers of technical and
professional jobs.
Another example: Despite the loss of more than two million jobs over
the past three years, and the fact that nearly nine million Americans
are officially unemployed, the Bush administration has refused to
support a Christmastime extension of crucial unemployment benefits.
Worse, the administration is trying to implement a regulation that
would deny overtime protection for more than eight million men and
women.
Efforts to get an increase in the pathetic $5.15 minimum wage continue
to fail. The benefits from productivity increases that have resulted
primarily from an incredible squeeze that employers have put on workers
are not being shared with workers. Health and pension benefits are in a
downward spiral.
And so on.
The way to fight these and other abuses is for employees to organize.
But the right of workers to form unions and bargain collectively has
been under assault for years. A thriving specialty of the legal
profession is the advice it gives to corporations about how to
frustrate and intimidate (and fire when necessary) those impudent
workers who want to form unions. That approach has been bolstered by
the full force and power of the federal government, which puts
struggling workers at a hopeless disadvantage.
A front-page headline in The Times on Dec. 6 said, "Employers Balk at
New Hirings, Despite Growth."
That's the reality for workers. The corporations would like to hire as
few people as possible, keep wages as low as possible, provide as few
benefits as possible and work the workers as long and as hard as
possible.
The president of the United States should be allied with working
families in this struggle.
http://www.amconmag.com/1_19_04/buchanan.html
Real Message of The Bush Amnesty
by Pat Buchanan
If George Bushs amnesty for between 8 million and 14 million illegal
aliens is enacted, you can kiss the old America goodbye.
Consider what the president is saying with his amnesty. He is telling
us that he cannot or will not do his constitutional duty to defend the
states from invasion. He is saying that he simply cannot or will not
protect our borders or enforce our immigration laws. He is saying he
will no longer send illegal aliens back.
Not long ago, this would have produced calls for impeachment and cries
that, "If Bush wont enforce our laws, lets elect a president who
will."
By offering amnesty and residency to millions who broke in line, broke
our laws and broke into our country, Bush is not only rewarding
wholesale criminality, he proposes to legalize it.
His amnesty will send this message to the world: the candy store is
open, and the Americans cannot protect it. Now is the time to bust in.
As there must be billions of people willing to come and work for a
fraction of our minimum wage - and exploit our social safety net - the
number who could come under the Bush guest-worker program is almost
infinite.
Imagine a car wash that employs 40 African-American, Latino, and white
working-class folks at $8 an hour each. A new car wash down the street
opens up, offering 40 new jobs at $5.15 an hour. No Americans apply.
Under Bushs proposal, that employer would be free to go to Asia,
Africa, and Latin America, round up workers, and bring them in.
The new car wash with its foreign workers then drives the old car wash
with its American workers out of business. Taxpayers are then forced to
subsidize the newly unemployed - and pay for the medical care, food
stamps, rent supplements, welfare, and schooling of all the new
immigrants and their families, provide legal services when they get in
trouble and pay for more cops to police their neighborhoods.
And every child born of a guest worker would, under our 14th Amendment,
become an American citizen, automatically entitled to all the benefits
of citizenship. Meanwhile, Bushs amnesty will do nothing to halt the
illegal invasion that continues to this hour. If you would know what
Americas social, cultural, and fiscal future will look like, take a
ride through Los Angeles, capital of Mexifornia.
But why did President Bush pick now to propose as explosive an idea as
amnesty, when it seemed he was holding a winning hand on the issues of
taxes, national security, the economy, and gay marriages?
One sees here the cynical ploy of "Boy Genius" Karl Rove. With the
filing deadlines for the Republican primaries having passed and no GOP
opponent, with no Third Party challenger from the Right, and with Dean
the likely Democratic nominee, Rove knows conservatives are boxed in.
In the old clichi, "The conservatives have nowhere else to go."
So Rove is executing an "apertura a sinistra," an opening to the Left,
pandering to Hispanics and Mexican President Vicente Fox, to whom Bush
is to pay a visit.
But Rove may be too clever for the presidents good. For there is no
hard evidence that Hispanics, other than those militants who detest
Republicans, are demanding amnesty. And with Bushs spending on
foreign aid soaring, his deficits rising, and the White House refusing
to veto a single spending bill, Rove & Co. may have stretched
conservative loyalty to the breaking point.
For some conservatives, this amnesty will snap it. They may just get on
their hind legs and fight, for huge majorities have repeatedly
registered opposition to any amnesty for illegal aliens. How is the
president helped by a bloody battle with his political base in an
election year?
Half a century ago, Dwight Eisenhower, informed there were a million
illegals in the United States, most of them from Mexico, ordered them
sent back. The project was called "Operation Wetback."
Ike was a strong president. But in George W. Bush, we have a leader
unwilling to pay the political price of doing his duty and enforcing
the immigration laws of his country because he fears the reaction from
the media elite and Mexican-Americans.
When it comes to standing up to truly powerful ethnic lobbies - the
Hispanic Lobby, the Cuban-American Lobby, the Israeli Lobby - Bush
wilts and folds every time. Nor is it a healthy sign for the future of
our republic when its president offers an amnesty to law-breakers,
rather than doing his painful duty to protect his country from what has
now become an unstoppable foreign invasion.
The real threats to Americas survival do not come from the Sunni
Triangle. They come from within, and unfortunately we have a president
who either does not undersill not look ttand them or whem in the face.
"Not a one of these candidates has been willing to take the position
that I've taken in saying that my first act in office will be to cancel
NAFTA (North American Free Trade Agreement) and the WTO (World Trade
Organization)," Kucinich said, referring to agreements intended to
increase overseas trade. "We've lost over 3 million manufacturing jobs
in this country. The president has that authority."
In sounding protectionist themes, Dick Gephardt came a close second,
saying: "I don't think we can beat George Bush if we maintain a
position on trade like George Bush. And I think Howard and John and Joe
frankly have shared the same position that George Bush has--on NAFTA,
on China. I was against those treaties. I think it's the wrong way to
go."
Howard Dean scrambled toward the middle ground, saying it was possible
to be sort-of protectionist while sort-of embracing free trade.
"There's no reason we can't do both," Dean said.
So far, the Democratic presidential debates and the candidates
themselves have focused on manufacturing jobs. They haven't spent While
the Democrats may differ on details, nearly all share the same
perspective.
much time talking about what happens as white collar jobs such as
engineering and software design flow offshore. IBM will move as many as
4,730 U.S. programming jobs to India, China and elsewhere, The Wall
Street Journal reported last month, which would be just a small part of
what Forrester Research has described as an exodus of 3.3 million U.S.
service industry jobs over the next 15 years.
"At this point, the presidential candidates seem only to be grasping
that jobs in the manufacturing sector are going overseas," said Marcus
Courtney, a union organizer with the Washington Alliance of Technology
Workers, part of the Communications Workers of America. "They don't
seem to grasp that the economy has changed and that service jobs at
every level, including highly paid engineering jobs, are going overseas
just like the manufacturing jobs did."
In 6 to 7 weeks, after the bruising first round of elections thins the
ranks of candidates, the Washington Alliance of Technology Workers
plans to join with other labor and left-wing activists to bring IT
outsourcing into the election. "After both the Iowa caucuses and the
New Hampshire primary, the field of presidential candidates is going to
be shortened," Courtney said. "It's going to be much easier for us to
target messages to those candidates when the field likely will be cut
in half."
Courtney acknowledges it's no easy task. "Trying to make an issue in a
national election is difficult to do. I think this issue has all of the
elements that should be a national issue. We're going to do everything
in our power to make it happen overnight. We're going to start out
focusing on the primary. That's going to give us steam by the time it
comes to November. We'll have 9 months or 8 months to gain the momentum
necessary to make it a significant issue."
A review of the Democratic candidates' positions showed that while all
of them complained about free trade resulting in manufacturing job
loss, only John Kerry talked about IT offshoring. "In the U.S. alone,
the value of IT services provided by offshore labor will double to $16
billion next year and triple again to $46 billion by 2007," Kerry's
campaign Web site says. Kerry also introduced legislation in November
that would require employees of offshore call centers to identify their
locations.
Elizabeth Drake, an international policy analyst at the Washington,
D.C., headquarters of the AFL-CIO, said of overseas IT outsourcing: "It
definitely could become an issue. There's definitely a lot more media
coverage of the trend in outsourcing. We're hearing more from our own
members, especially in California and the upper northwest where there
are more technology jobs. I'm sure that's going to bubble up as the
campaigns go forward."
Election endgame
One thing that both Courtney and Drake left unsaid is that the topic of
IT outsourcing won't do much to divide the Democrats: While they may
differ on details, nearly all share the same perspective. (Joe
Lieberman was the only contender to remind his audience that
protectionist policies would lead to reduced exports and hurt American
farmers. "You break NAFTA, you're going to cut out tens of thousands of
jobs here in Iowa," Lieberman noted.)
If IT outsourcing becomes a political issue at all in 2004--which
depends on everything from the economy to the occupation of Iraq--look
for it to happen in the months leading up to the November general
election.
That would present a challenge for President George W. Bush, who
generally hews closely to the Republican Party's position on free
trade. Bush's most significant departure, imposing steel tariffs in an
effort to curry favor for votes in Pennsylvania and West Virginia, was
rescinded last month.
The Bush administration has signaled that it is more interested in
creating an economic climate that creates jobs.
When discussing outsourcing last fall, the Bush administration signaled
that it was more interested in creating an economic climate that
creates jobs rather than imposing protectionist measures to slow
overseas job migration. Commerce Department officials have, properly,
shied away from saying that such protectionist steps would be wise.
It is a sign of where the Bush crowd has stood in the past that Bruce
Mehlman, who until November was defending free trade as an assistant
Commerce secretary in the Bush administration, is now running the
Computer Systems Policy Project, a collection of chief executives from
companies including Intel, Hewlett-Packard, IBM and Dell. Last week,
Mehlman's group published an impassioned defense of outsourcing, saying
that U.S. companies need "workers here and in distant places to
survive, innovate and grow in a fiercely competitive global
marketplace." The paper warned that attempts to "protect specific
sectors and markets and limit international trade and
collaboration...often backfire. Countries that resort to protectionism
end up hampering innovation and crippling their industries."
If that sounds a little defensive, there's good reason. Don Boudreaux,
chairman of the economics department at George Mason University, said
"there's more open hostility toward free trade now than at any time
than I remember in my adult life. Part of this may be because Web sites
make public displays of ignorance a lot cheaper than in the past. But I
sense that there's a slight shift in public sentiment toward more
skepticism of free trade. I think the reason is that white-collar
workers are more at risk from international competition than in the
past."
If the Democratic candidates get their way, IT workers would still lose
out eventually, Boudreaux said. "The productivity and the output and
the profits and growth of the IT industry would shrink, maybe not
immediately. The immediate impact is that you protect the jobs of
certain workers. But when firms are hindered by such policies and are
not able to improve efficiencies, there will be less investment. (You'd
have) lower tax rates from industry, lower job growth in industry. You
do not make a country more prosperous by protecting workers in that
country or firms in that country from competition. Competition is key
to economic growth and vitality."
That's a classic argument, and I happen to believe it's correct. But if
2004 yields an economic recovery with fewer jobs than expected, it may
be a hard one for Bush to make on the campaign trail this fall.
http://news.com.com/2100-1028-5137073.html?tag=nl
Group warns of outsourcing backlash
By Dawn Kawamoto
Staff Writer, CNET News.com
http://news.com.com/2100-1028-5137073.html
Story last modified January 7, 2004, 4:53 PM PST
Feeling political pressure from Congress over the loss of U.S. tech
jobs to offshore workers, the Computer Systems Policy Project on
Wednesday released a report stressing the need to keep international
doors open so that domestic companies can remain competitive.
In its report, the organization included preliminary policy
recommendations for Congress to consider. It plans to have its
members--which include chief executives from Intel, Dell and
Hewlett-Packard--lobby lawmakers next month during the organization's
semiannual meeting.
"Economic downturns and security issues spur impulses to protect
specific sectors and markets and limit international trade and
collaboration," the report stated. "Yet these measures often backfire.
Countries that resort to protectionism end up hampering innovation and
crippling their industries, which leads to lower economic growth and,
ultimately, higher unemployment."
Congress has held several hearings about the outsourcing of IT jobs,
and a group of lawmakers is urging India to create jobs for U.S.
workers.
Concern has grown, as an increasing number of tech companies lay off
domestic workers and move the work to countries such as India.
Employees in call center support, manufacturing and software
programming have been hit particularly hard.
While helping to cut costs, however, outsourcing is not without
problems. Some customers are complaining about the quality and lack of
service they receive from overseas call centers, and international
operations can also be strained by misunderstandings due to culture and
communications, as well as differing time zones.
"I would caution people from becoming too overly excited about offshore
sourcing and do things that they may later regret," said Amit
Maheshwari, chief executive of i-Vantage, an outsourcing consultancy
firm. "I have seen some companies close a full shop in the U.S. and
move it offshore, only to find it does not work for their particular
situation."
And where the backlash can be particularly painful is when it hurts the
quality of a company's product or service, said Maheshwari, noting that
Dell recently moved some of its technical call center support for its
corporate accounts back to the United States.
Still, the trend shows no sign of reversing, and the IT trade group
cautioned politicians against interfering.
"Any trade barriers created by the United States in an attempt to avoid
global competition could lead to retaliation from our trading partners
and even an all-out trade war--resulting in a drag on the global
economy and reduced employment here at home," the report stated.
The group also noted that under the current economic climate, customers
of U.S. tech companies are pressuring vendors to reduce costs, offer
more products and reduce the time it takes to get products to the
market.
"U.S. companies operate abroad to be close to global customers, both
geographically and culturally, and to meet round-the-clock expectations
for customer service," the report noted.
In its policy proposals, CSPP asked Congress not only to promote the IT
industry's "innovation pipeline" but also to improve education and
training for U.S. workers.
"A growing number of workers in these foreign countries and companies
are highly educated, skilled and talented--a competitive challenge in
their own right," the report said. "Americans who think that foreign
workers are no match for U.S. workers in knowledge, skills and
creativity are mistaken."
http://www.salon.com/tech/feature/2004/01/12/wage_insurance/index.html
No safety net for programmers
When manufacturing jobs go overseas, laid-off workers are eligible for
a host of benefits. But if you're one of the tens of thousands of
software producers whose jobs have been outsourced, you're out of luck.
By Katharine Mieszkowski
Jan. 12, 2004 | Jim Fusco worked at AT&T for 13 years as a mainframe
programmer, before his job was outsourced to IBM in 1999.
"One Friday, we walked out as AT&T employees, and the following Monday
we walked back in as IBM employees, doing the same work, at the same
desks, with different-colored paychecks," he says. Three years later,
in May 2002, Fusco's job was outsourced again, and this time he wasn't
so lucky. IBM's Global Services Division moved his job to Canada, and
he was
laid off.
"In the beginning, employees did have the opportunity to transfer
elsewhere within IBM to other projects. But as more and more projects
went offshore, they started letting people go involuntarily," he says.
While on unemployment, Fusco, now 50, who lives in East Brunswick,
N.J., applied for additional government support for workers whose jobs
have been casualties of free trade and globalization.
Under the Trade Adjustment Assistance Reform Act of 2002, workers whose
jobs have moved overseas can be eligible for a battery of extra
assistance, including income support, job training, tax credits for
health insurance, and job search and relocation allowances. Some older
workers can even receive a temporary income subsidy, a form of "wage
insurance," which helps cushion the financial blow when a new job pays
much less than the old one. For instance, if you go from writing code
for computers at $50 an hour to selling them retail at a computer
superstore for $10 an hour.
But Fusco and his fellow IBM employees who petitioned for the benefits
were repeatedly denied. The U.S. Department of Labor's Employment and
Training Administration determined that programmers like Fusco do not
qualify, because of the nature of what they'd produced on their old
jobs: software. The government cited commerce and trade rules that
classify software
as a "service" and "not a tangible commodity," rather than an "article"
as the trade act stipulates.
In other words, code doesn't count.
Fusco's lawyer doesn't buy it. "When stuff is offshored, it's done over
there, and then it's imported through the communication lines back to
America," says attorney Michael G. Smith, who is now bringing a
class-action lawsuit against the Department of Labor and the Department
of Justice, on behalf of Fusco and other tech workers like him. "When
the work
is offshored, we think that all programmers should be eligible for
benefits."
Since 1974, more than 4 million workers have been certified eligible to
receive trade-related job-loss benefits. According to the Department of
Labor, that number is just a fraction of those who could have applied.
Now, say some economists, it's time for white-collar workers to get the
same breaks. After all, Forrester Research predicts that 3.3 million
jobs are likely to be lost to outsourcing in the U.S. by 2015 -- and
the total number of white-collar jobs that are potentially vulnerable
may be much higher than that: 14 million by one estimate.
"In principle, there's no reason for this program to be manufacturing
only. There is no political or theoretical justification for excluding
workers simply based on their occuption or their industry. These people
bear costs of increasing foreign competition, just like manufacturing
workers, so they should be eligible too," says Lori G. Kletzer, an
economics
professor at the University of California at Santa Cruz.
Now that the jobs of American white-collar workers -- like computer
programmers, data-entry clerks and call-center operators -- are
increasingly becoming the casualties of globalization, do the old laws
that covered manufacturing job losses overseas apply to them? The
question of who will be deemed worthy of a federal helping hand is just
beginning to be sorted out, and the programmers are suing the
Department of Labor to force the issue. But some economists think that
the way to ease the burden of job losses caused by outsourcing is to
find new ways to insure the wages of all workers. It's a point of view
that may not find much support in a Republican-controlled White House
and Congress at a time when the country is running up
huge deficits, and trying to cut discretionary domestic spending, but
as U.S. workers become increasingly alarmed by the impact of
globalization, the idea of comprehensive wage insurance may gain a
steadily higher profile.
Lisa Pineau, a 46-year-old unemployed mainframe programmer in Plano,
Texas, is another plaintiff in the lawsuit. She would like to use the
TAA benefits to retrain in another field, such as nursing. "Everyone I
know has gone from making $30 or $40 an hour to making $10 an hour, and
it's impossible for our economy to survive that kind of loss," she
says. "In Plano, the
foreclosure rate is one of the highest in the nation in the last year,
because there are so many people who have been laid off."
In the initial complaint, filed in the United States Court of
International Trade on Friday, Jan. 2, 2004, plaintiff's attorney Smith
makes his case for why software is in fact legally a so-called article.
But he also makes a larger point: "In the current economic environment
of large 'structural changes' to the U.S. economy in which possibly
millions of software workers will lose their work to foreign
competition, providing determinations of eligibility to software
workers for
TRA [trade readjustment allowance] benefits will clearly satisfy
Congress's intent to 'improve the economy, and assist workers.'"
Fusco, who is now reemployed as a systems analyst at a substantial pay
cut, sees the case in those terms, too: "I believe that tech workers
are entitled to the same protections of the trade act as any other
workers," he says. "If they've lost their jobs due to competition with
foreign countries, then they should be entitled to the same benefits as
anybody else." A
spokesperson for the Department of Justice had no comment.
When it comes to computer programmers, the Department of Labor has
already proven itself inconsistent. Smith knows of more than 40 cases
where programmers have been ruled ineligible to receive TAA assistance,
and at least five where they have been deemed eligible. He says he's
received no explanation for the difference in status.
As the public debate about the costs and benefits of offshoring jobs
heats up, some economists believe that domestic workers could benefit
from insurance, so that their standard of living doesn't immediately
plummet if a job loss forces them to take new jobs that pay less.
"There are many reasons why jobs are becoming less secure," says Robert
Reich, former U.S. secretary of labor under the Clinton administration.
"If we don't want to simply protect the old jobs through legislation
that bans outsourcing or erect tariffs and quotas that prevents
technology from advancing, we've got to get serious about some ways to
cushion people
from the difficulty that they face because of job insecurity. Wage
insurance is one way."
The TAA already has limited wage insurance built into it to benefit
workers over 50 who qualify. Kletzer, the California economics
professor, explains the concept this way: "Think of it as the mirror
image of unemployment insurance. Wage insurance doesn't start until
you've found the new job. If the new job pays less than your old job,
wage insurance will partially close the gap."
While the data isn't in yet for technology workers, Kletzer says when
manufacturing workers lose their jobs, about half take a pay cut with
their new position. "It's not that hard for workers to find a new job.
It's the wages of the new job that are the cost," says Kletzer. "The
cost is really not the time it takes to find a new job. It's not really
that new jobs are difficult to find. It's that workers tend to find
jobs that pay less."
As it is currently conceived under TAA, wage insurance only applies to
workers over the age of 50, since they're most likely to take the
greatest hit if they are forced to go into a new field so close to
retirement.
The idea is that even though the government cannot afford to
permanently subsidize the wages of a worker whose earnings have plunged
from $40 an hour to $10 an hour, it can afford to ease the blow,
temporarily.
The key question is how to pay for extended benefits. Reich suggests
that changes in the current payroll tax structure could cover the costs
of such a program, not just for workers who lose their jobs to foreign
competition, but for all workers. But he concedes no such program is
likely to be enacted under the current Congress.
Labor activists are far from united on the issue of wage insurance,
however. Marcus Courtney, an organizer for the Washington Alliance of
Technology Workers, thinks focusing too much on ameliorating the
fallout from outsourcing is not the answer: "We have got to start
changing the policies in place that let companies export the jobs we
have, instead of saying
we're going to provide wage insurance and retraining for everyone."
Still, Pineau, the programmer in Plano, sounds like someone who might
benefit from such wage insurance, were she in fact eligible for it. She
says that since her $32-an-hour job was offshored to Canada for half
that wage, she and many other former tech workers she knows in Plano
are now applying for "McJobs" that pay $10 an hour.
"Maybe we should be happy to make $10 an hour, but when you have a
mortgage and kids, and your expenses are already at $40, it's hard to
immediately go from $40 to $10."
http://www.iht.com/articles/124505.html
Job growth in the U.S. comes to virtual halt
Louis Uchitelle/NYT NYT
Saturday, January 10, 2004
Only 1,000 positions added in December; 150,000 were forecast
NEW YORK U.S. job growth came to an unexpected halt in December, the
Bureau of Labor Statistics reported Friday, as thousands of people
disappeared from the officially recorded labor force rather than hunt
for scarce work.
Most forecasters thought that December would be a breakthrough month
for job creation, given the strengthening economy. But instead of the
150,000 new jobs they had on average expected, there were only 1,000.
The unemployment rate dropped to 5.7 percent from 5.9 percent in
November, but that was mainly because so many people chose not to look
for work, a requirement to be counted as unemployed.
We thought we were finally moving out of the jobless recovery,
that the work force was really growing at last, said Nigel Gault,
chief domestic economist for Global Insight, a research and forecasting
firm. And now, this report is telling us, we are still stuck in a
jobless recovery.
U.S. stocks and the dollar declined after the report. (Page 9)
The Bush administration called attention to the few positives in the
bleak report the decline in the unemployment rate, for example, and
job growth in construction, education and health care.
We think we have the policies in place to produce job growth
going forward, N. Gregory Mankiw, chairman of the Presidents
Council of Economic Advisers, said in an interview, referring
specifically to what he described as the stimulus from the Bush tax
cuts.
For the Democrats, the employment numbers were an opportunity to heap
criticism on the administration.
Despite the huge jobs deficit, the President and the
Republican-controlled Congress callously allowed temporary federal
unemployment benefits to expire at Christmas, Representative Pete
Stark of California, the senior Democrat on the Joint Economic
Committee, said in a statement.
The government lowered by more than a third its estimate of the number
of jobs created in November and October. Instead of an increase of
143,000 jobs in those months, the revised figure was 94,000.
That shaved the total job creation to 278,000 in the five months that
the economy has been adding jobs. Most economists maintain that job
growth must proceed at a pace of 150,000 a month, on average, to absorb
everyone who wants to work, so the economy remains well behind that
rate.
Citing the weak labor market, Ben Bernanke, an influential governor of
the Federal Reserve, declared in a speech last Sunday that the central
bank would keep interest rates down to encourage borrowing and spending
that would keep the recovery from dying out.
The employment report Friday only reinforced the prospect that rates
would stay low, and in response, bond prices rose, as they often do on
bad news.
The best news in the report was the drop in the unemployment rate of
two-tenths of a percentage point. Unemployment has declined from a peak
of 6.3 percent in June, when the many months of weak economic growth in
the aftermath of the 2001 recession finally began to give way to a much
more visible upturn.
Normally, a falling jobless rate means that the unemployed are seeking
and finding jobs.
But in December, 309,000 working-age men and women who would normally
be job-hunting either left the labor force or did not bother to enter
it in search of work, the labor bureau reported.
If they had not either dropped out or found jobs, then the unemployment
rate would have remained at 5.9 percent. Of all the parts of the
December employment report that I think are specious, it is the decline
in the unemployment rate, which is likely to be reversed next
month, said William Dudley, director of domestic economic
research at Goldman Sachs.
The number of people dropping out of the work force has been a
characteristic of the recovery since June, reflecting the struggles of
the unemployed amid companies reluctance to add workers. As a
result, the percentage of the working age population participating in
the labor force that is, employed or seeking employment fell to
66 percent in December from 66.5 percent in June, a withdrawal of
roughly 1.1 million people.
The unemployment rate would still be 6.3 percent, as it was in June, if
they had stayed in the labor force and had not landed jobs.
The New York Times
http://www.washingtonpost.com/wp-dyn/articles/A14627-2004Jan13.html
Tech Council Backs Foreign Labor Use
Group to Fight Any Bill Denying State Work to Outsourcing Firms
By Ellen McCarthy
Washington Post Staff Writer
Wednesday, January 14, 2004; Page E05
The Northern Virginia Technology Council's board of directors voted
unanimously yesterday to oppose any legislation that would ban
companies that ship jobs overseas from doing business with state
government.
The group called for ongoing education of Virginia's technology
professionals about the effects of shipping technology jobs to cheaper
countries, but says that blanket polices against such offshore
outsourcing would ultimately harm the state's companies by limiting
their ability to compete globally and to sell cheaper goods and
services.
The NVTC took up the issue in response to growing fear of job losses by
tech professionals, such as software developers, who have been losing
jobs to cheaper developers in Eastern Europe and Asia. Some labor
groups have also called for restricting the practice among firms that
have government contracts. NVTC is the region's largest technology
company trade group and one of the largest such regional groups in the
country.
Virginia's Secretary of Technology George Newstrom has said he expects
the issue to be debated in the state legislature. Newstrom said in
December he would oppose such legislation, though no specific bill has
been introduced.
Lawmakers from Michigan, New Jersey and Indiana have already submitted
legislation that would limit or ban the use of overseas workers on
state contracts.
"Companies should be free to decide what is in their own best economic
interest. This is a global economy," said Sudhakar Shenoy, NVTC
chairman and chief executive of Information Management Consultants
Inc., a McLean software development firm that uses offshore
outsourcing.
Debate among the NVTC's 67 board members was thorough and "animated"
during three general and executive board meetings that touched on the
issue, said Bobbie Kilberg, the organization's president. Kilberg said
"the fear and concern about overseas outsourcing is overwrought" in
part because of rhetoric that is "running wild and amok."
Donna Morea, a vice president at American Management Systems and member
of the organization's board, said she initially opposed the stance
because she thought the organization "shouldn't be promoting offshore
outsourcing as a panacea that was appropriate for all situations."
Morea said her position changed as the statement was revised to reflect
the complexity of the matter. Her company, a government contractor,
outsources some of its work overseas and plans to expand its software
development outsourcing this year.
Leaders of the Institute of Electrical and Electronics Engineers USA
Inc., a professional organization, have said overseas outsourcing puts
American technology professionals out of work. Others, like the
executives of the Information Technology Association of America (ITAA),
have said that giving technology companies all available means to
produce better products more cheaply will help the economy.
The NVTC will continue to investigate and discuss the implications
outsourcing could have on intellectual property protection, security
and privacy. The organization said that workforce training and
continuing education are key to maintaining technology jobs in the
state.
http://www.rediff.com/money/2003/dec/06bpo1.htm
Franklin Templeton plans backoffice in Hyderabad
P V Vasanta Kumar in Hyderabad | December 06, 2003 | 10:54 IST
Franklin Templeton International Services is setting up its business
process outsourcing operations in Hyderabad to take care of the $314
billion group's global backoffice operations.
According to sources, the company has already taken on lease two
premises in Banjara Hills wherein it plans to set up about a backoffice
with a 1,000-seat capacity.
Outsourcing and India: Complete Coverage
They have also informed that the company has already started its
international operations on a limited scale.
Immediately after acquiring the Pioneer ITI's mutual fund business in
May 2002, Franklin Templeton announced that they were planning to set
up their BPO centre in India.
The US-based group, which has $314 billion assets under its management,
assigned the mandate of building up its technology infrastructure for
the BPO centre to the US-based Innova Solutions on build-own-transfer
basis.
Innova has an offshore development centre in Hyderabad, which focuses
primarily on financial services vertical and currently employs about
325 people.
Prior to the current assignment, it had a long-term relationship with
Franklin Templeton Technologies, which is the technology arm that
develops software applications for the group.
"We are still in the planning stage and our infrastructure is getting
ready for the proposed launch. There are still lot of uncertainties at
this stage about issues such as what percentage of our global back
office work would be shifted to India, whether Hyderabad will be the
only centre or we will have more centres in the country," Swaminathan,
president of Franklin Templeton Services, said.
Swaminathan was relocated to Hyderabad from Mumbai, where he was
overseeing the group's Indian backoffice operations.
http://www.sltrib.com/2004/Jan/01052004/opinion/126251.asp
MONDAY January 05, 2004
Exporting Geneva Steel
The deal is not final, but a Chinese firm has offered to buy the
bulk of bankrupt Geneva Steel's production equipment and ship it from
Utah County to China. If the sale occurs, it will mark the demise of
what was once a mighty Utah employer. It also will stand as a microcosm
of what is happening to U.S. manufacturing generally.
That the guts of Geneva's mill could go to Qingdao Iron & Steel may
be the most potent symbol in Utah of China's rise as an industrial
power.
The Chinese government got religion in the late 20th century, and
that religion is capitalism. The transformation of the world's most
populous nation from a Maoist nightmare to an entrepreneurial and
industrial powerhouse is one of the most important stories of the early
21st century.
That transformation is being fed by Western capital, as
manufacturers from the United States and other developed nations rush
to relocate their factories to China, where they can exploit cheap
labor with the complicity of the government. One could not write a more
ironic ending to the history of China's 50-year experiment with
communism.
But while U.S.-based corporations reap profits from this
arrangement, American workers are losing manufacturing jobs to the
Chinese. In fact, the downward pressure on wages is so intense that
many American-owned manufacturing firms are compelled to move their
operations to China or face extinction.
This phenomenon is contributing to a two-tiered U.S. economy, in
which those who own capital prosper and those who do not do not.
Low-wage service jobs cannot lift workers into the middle class, as
unionized manufacturing jobs once did.
In the meantime, economists argue about whether the United States
can sustain its economy over the long term as more manufacturing
capacity moves overseas and the annual U.S. trade deficit with China
climbs beyond $120 billion.
The international market for steel adds an interesting subplot to
this larger story. Today's China is not a large exporter of steel; in
fact, it is a net importer. But its capacity to produce iron and steel
is growing rapidly, and the sale of the Geneva mill's machinery to
Qingdao would contribute to that growth.
Meanwhile, U.S. steel producers are losing the battle of the
international marketplace to foreign competitors, including those from
South Korea and Japan. Imports accounted for about 28 percent of the
steel in the U.S. market in 2002, and about 20 percent in 2003. Geneva
is among several U.S. steelmakers in bankruptcy. Utah's Nucor mini-mill
near Tremonton is holding its own, however.
President Bush imposed tariffs to protect domestic steel in March
2002, but lifted them last month in the face of a World Trade
Organization ruling that they were illegal and threats of a looming
trade war with other nations.
So American steelmakers are on their own. And part of Utah's
capacity probably will go to China.
http://money.cnn.com/2003/12/30/pf/offshorejob/index.htm
Guess which jobs are going abroad
These days it's not just a desire to cut costs that's pushing employers
to hire overseas.
January 5, 2004: 11:13 AM EST
By Leslie Haggin Geary, CNN/Money staff writer
New York (CNN/Money) - If a tax preparer gets you an unexpected refund
this year, you may have an accountant in India to thank.
That's because accounting firms are joining the outsourcing trend
established years ago by cost-conscious American manufacturers.
In fact, companies in a number of unexpected industries are now sending
work overseas. From scientific lab analysis to medical billing, the
service-sector workforce has gone global.
CPA firms are just one example. In the 2002 tax year, accounting firms
sent some 25,000 tax returns to be completed by accountants in India.
This year, that number is expected to quadruple.
The reason lies in the numbers; accountants in the United States
typically earn $4,000 a month. In places like India it's closer to
$400, says David Wyle, CEO and founder of SurePrep, a tax-outsourcing
firm based in southern California that's employed more than 200
accountants in Bombay and Ahmedabad, India.
"We've estimated firms will save between $40,000 to $50,000 for every
100 returns that are outsourced," adds Wyle, whose firm expects to do
35,000 returns in the coming year. That's up from 7,000 last year.
Xiptax, of Braintree, Mass., is another tax firm that's moved much work
overseas for "a whole number of reasons," besides money, says CEO Mark
Albrecht.
"Most CPAs do between 45 to 50 percent of their work in two months out
of the year. It makes for an extremely stressful time," says Albrecht,
who adds that accounting firms must then "strain" to find qualified
staffers to help fill in during the crunch.
By hiring full-time staff in India, CPA firms like SurePrep and Xiptax
don't have to worry about finding staff here.
Instead, they simply send tax information to a permanent team of
qualified accountants in India. American accountants then review the
returns before signing off on them.
"The real important part of returns isn't taking a number off a W-2
form and putting it in Box No. 1," notes Albrecht. "The real value is
what's retained within the CPA firm -- the tax planning and the
review."
Fighting cancer from afar
Cancer patients who seek treatment may soon find that when their tests
are "sent to the lab" their medical work is scrutinized by pathologists
who aren't just down the hall, but who are in a different country.
Since the mid-1980s, pathologists have been using robotic microscopes
from offsite locations to peer at biopsy samples. But now, pathologists
are using the newest generation of technology to enhance "telemedicine"
opportunities.
Specifically, pathologists are accessing computer servers to look at
digital images of lab slides, says Ronald Weinstein, director of the
Arizona telemedicine project at University of Arizona College of
Medicine.
The benefit isn't cost-cutting or accelerating how fast jobs are done,
says Weinstein, but the power it has to bring the best and brightest
medical minds together.
"Telemedicine will enable international group practices to form," he
says. "You'll have a conference where three world experts can look at
the slide at the same time."
To test potential uses for offshoring medicine, Weinstein's group at
University of Arizona has teamed with the University of Panama School
of Medicine in Panama City to work together on cancer cases.
"We're looking to have pathologists in different time zones to speed up
the rate at which patients pass through clinics," he says. "Currently
we're limited by time zones, not just by access to people but to a full
range of expertise."
Data entry in New Delhi
Pathology isn't the only area in medicine that's looking abroad.
Increasingly, medical billing is being done by clerical staff in India,
too.
That's the case at Alpha Thought International, a Chicago-based medical
billing firm that has workers both in the U.S. and opened a billing
office two years ago in New Delhi where staff do data entry work needed
to process insurance and other medical billing claims.
"The reason that came about is because it's difficult to find workers
in different parts of the country who want to do data entry," says
Alpha Thought COO Dave Jakielo. When staffers in the United States
quit, the company replaces them with India-based workers.
Alpha Thought cuts costs by 25 percent, because Indian workers are paid
less than the average $10 an hour an American makes. The company also
taps into a better-educated workforce.
"To work in an office over there you must have a college degree," says
Jakielo. "The office workers we hire here are usually high school
graduates."
Even so, even offshoring has its limits.
Jakielo envisions a day when medical billing will be totally automated.
When that happens, even workers in New Delhi will have to find another
gig.
http://www.guardian.co.uk/comment/story/0,3604,1067344,00.html
The flight to India
The jobs Britain stole from the Asian subcontinent 200 years ago are
now being returned
George Monbiot
Tuesday October 21, 2003
The Guardian
If you live in a rich nation in the English-speaking world, and most of
your work involves a computer or a telephone, don't expect to have a
job in five years' time. Almost every large company which relies upon
remote transactions is starting to dump its workers and hire a cheaper
labour force overseas. All those concerned about economic justice and
the distribution of wealth at home should despair. All those concerned
about global justice and the distribution of wealth around the world
should rejoice. As we are, by and large, the same people, we have a
problem.
Britain's industrialisation was secured by destroying the manufacturing
capacity of India. In 1699, the British government banned the import of
woollen cloth from Ireland, and in 1700 the import of cotton cloth (or
calico) from India. Both products were forbidden because they were
superior to our own. As the industrial revolution was built on the
textiles industry, we could not have achieved our global economic
dominance if we had let them in. Throughout the late 18th and 19th
centuries, India was forced to supply raw materials to Britain's
manufacturers, but forbidden to produce competing finished products. We
are rich because the Indians are poor.
Now the jobs we stole 200 years ago are returning to India. Last week
the Guardian revealed that the National Rail Enquiries service is
likely to move to Bangalore, in south-west India. Two days later, the
HSBC bank announced that it was cutting 4,000 customer service jobs in
Britain and shifting them to Asia. BT, British Airways, Lloyds TSB,
Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey
National and Powergen have already begun to move their call centres to
India. The British workers at the end of the line are approaching the
end of the line.
There is a profound historical irony here. Indian workers can
outcompete British workers today because Britain smashed their ability
to compete in the past. Having destroyed India's own industries, the
East India Company and the colonial authorities obliged its people to
speak our language, adopt our working practices and surrender their
labour to multinational corporations. Workers in call centres in
Germany and Holland are less vulnerable than ours, as Germany and
Holland were less successful colonists, with the result that fewer
people in the poor world now speak their languages.
The impact on British workers will be devastating. Service jobs of the
kind now being exported were supposed to make up for the loss of
employment in the manufacturing industries which disappeared overseas
in the 1980s and 1990s. The government handed out grants for
cybersweatshops in places whose industrial workforce had been crushed
by the closure of mines, shipyards and steelworks. But the companies
running the call centres appear to have been testing their systems at
government expense before exporting them somewhere cheaper.
It is not hard to see why most of them have chosen India. The wages of
workers in the service and technology industries there are roughly one
tenth of those of workers in the same sectors over here. Standards of
education are high, and almost all educated Indians speak English.
While British workers will take call-centre jobs only when they have no
choice, Indian workers see them as glamorous. One technical support
company in Bangalore recently advertised 800 jobs. It received 87,000
applications. British call centres moving to India can choose the most
charming, patient, biddable, intelligent workers the labour market has
to offer.
There is nothing new about multinational corporations forcing workers
in distant parts of the world to undercut each other. What is new is
the extent to which the labour forces of the poor nations are also
beginning to threaten the security of our middle classes. In August,
the Evening Standard came across some leaked consultancy documents
suggesting that at least 30,000 executive positions in Britain's
finance and insurance industries are likely to be transferred to India
over the next five years. In the same month, the American consultants
Forrester Research predicted that the US will lose 3.3 million
white-collar jobs between now and 2015. Most of them will go to India.
Just over half of these are menial "back office" jobs, such as taking
calls and typing up data. The rest belong to managers, accountants,
underwriters, computer programmers, IT consultants, biotechnicians,
architects, designers and corporate lawyers. For the first time in
history, the professional classes of Britain and America find
themselves in direct competition with the professional classes of
another nation. Over the next few years, we can expect to encounter a
lot less enthusiasm for free trade and globalisation in the parties and
the newspapers which represent them. Free trade is fine, as long as it
affects someone else's job.
So a historical restitution appears to be taking place, as hundreds of
thousands of jobs, many of them good ones, flee to the economy we
ruined. Low as the wages for these positions are by comparison to our
own, they are generally much higher than those offered by domestic
employers. A new middle class is developing in cities previously
dominated by caste. Its spending will stimulate the economy, which in
turn may lead to higher wages and improved conditions of employment.
The corporations, of course, will then flee to a cheaper country, but
not before they have left some of their money behind. According to the
consultants Nasscom and McKinsey, India - which is always short of
foreign exchange - will be earning some $17bn a year from outsourced
jobs by 2008.
On the other hand, the most vulnerable communities in Britain are
losing the jobs which were supposed to have rescued them. Almost
two-thirds of call-centre workers are women, so the disadvantaged sex
will slip still further behind. As jobs become less secure,
multinational corporations will be able to demand ever harsher
conditions of employment in an industry which is already one of the
most exploitative in Britain. At the same time, extending the practices
of their colonial predecessors, they will oblige their Indian workers
to mimic not only our working methods, but also our accents, our tastes
and our enthusiasms, in order to persuade customers in Britain that
they are talking to someone down the road. The most marketable skill in
India today is the ability to abandon your identity and slip into
someone else's.
So is the flight to India a good thing or a bad thing? The only
reasonable answer is both. The benefits do not cancel out the harm.
They exist, and have to exist, side by side. This is the reality of the
world order Britain established, and which is sustained by the heirs to
the East India Company, the multinational corporations. The
corporations operate only in their own interests. Sometimes these
interests will coincide with those of a disadvantaged group, but only
by disadvantaging another.
For centuries, we have permitted ourselves to ignore the extent to
which our welfare is dependent on the denial of other people's. We
begin to understand the implications of the system we have created only
when it turns against ourselves.
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