Posted on 04/16/2003 1:44:48 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
When Ken DeJesus landed a computer help-desk job that paid $15 an hour in 2001, he thought he had found his place in Connecticut´s new high-tech economy.
But DeJesus stepped into the state´s New Economy just as it stepped offshore.
CSC, an information technology company, laid him off before he had been at its Norwich call center a full year.
Since 2000, CSC has laid off hundreds of workers at its call centers throughout the United States, while hiring more than a thousand workers in India.
"It´s not just IT desks moving overseas, it´s jobs moving out of Connecticut. I find this happening in every field," said DeJesus, who lives in Berlin.
DeJesus finally landed a job earlier this month, after nearly a year of looking. He´s working at U.S. Food Services in South Windsor as a network administrator, for about the same salary he made at CSC.
In India, the amount of software and back-office services performed for companies outside India is exploding: The market is expected to reach $54 billion by 2008, said Sangeeta Gupta, vice president of NASSCOM, a software technology trade association in India.
By comparison, the domestic Indian market for the same services is expected to reach just $15 billion that year, she said.
"The entire software and (information technology) services industry … is a high foreign-exchange earner for the economy. Exports accounted for over half the industry´s revenues" last year, she said.
That represents many new jobs in India and fewer in the United States, but the numbers are hard to track.
Since most of CSC´s workers were temporary contractors rather than employees, they were not counted among the ranks of the laid off.
But many, like DeJesus, have trouble finding work in their field, because many of those jobs have left the state for good.
Offshore outsourcing can offer companies savings of 25 percent to 50 percent, since workers in less-developed companies earn far less than U.S. employees.
Banding together: Accustomed to a $120,000 annual salary, John A. Bauman of Meriden now waits for his last unemployment check while rallying fellow laid-off workers to join The Organization for the Rights of American Workers, a group that he formed in December, along with James R. Pace Jr. of Bethany.
The Meriden-based organization immediately drew the attention of the Indian media.
"When we first kicked off our Web site, it was flooded with viruses from India," Bauman said, speculating that some Indian groups were upset because the site calls for legislators to limit the number of work visas issued.
Bauman´s group´s newsletter has more than 2,000 subscribers.
Bauman said American companies are using offshore outsourcing to replace American workers with cheap foreign labor.
"Down the road, American citizens will be unemployed and forced down to lower levels," he said. "The (stockholders) aren´t benefiting, it´s only the executives."
A recent report by Foote Partners LLC in New Canaan said up to 45 percent of information-technology workers in the United States and Canada will be replaced by contractors, consultants, offshore technicians and part-time workers by 2005.
Bauman said his organization has been flooded with e-mails from Connecticut employees who are being laid off but are first having to train their replacements from India.
"Some of the insurance companies have exported work overseas," Bauman said. "These people are being forced to sign waivers not to talk, and to train their foreign replacements."
A Cigna spokesman said that is not happening. "We haven´t been doing a lot of offshore outsourcing; we just dipped our toe in it," said Anthony Branco. "I don´t believe there have been any layoffs because of it."
The company has made an effort to replace its consultants with foreign information-technology workers, but consultants are not employees, Branco pointed out.
"It´s like changing your telephone service to Sprint. They are vendors, not employees," he said.
However, the Foote study pointed out that in many cases, consultants previously replaced employees.
No turning back: The offshore dispersal of American jobs will be permanent, consultants say.
"If the economy recovers, not all those jobs will be coming back. Once they go offshore, they stay offshore," said Steven Lane, vice president of research at The Aberdeen Group, a Boston consulting company.
It´s hard to tell how many American workers have been replaced so far, for several reasons, Bauman said.
Some companies order their employees to keep quiet or lose their severance pay, he said.
Also, many companies now lay off employees in small groups more frequently, rather than in large groups, say employment agencies, recruiters and consultants.
These small-scale layoffs fly beneath the radar of the news media and, more importantly, of the state Department of Labor.
The Labor Department also misses layoffs of consultants and contractors, the kind of jobs now common in information technology.
Accustomed to a $120,000 annual salary, John A. Bauman of Meriden now waits for his last unemployment check while rallying fellow laid-off workers to join The Organization for the Rights of American Workers...
Those days are gone, Johnny...get over it.
Unfortunately (not so much in Meriden), you do have to earn quite a bit to live in this state, which recently ranked #1 in the nation for taxes.
The times, they are a changin..
WRONG. Economic ignorance is a bliss...
At the same time, illegal immigrants are taking many of the jobs still left for Americans to do. Illegal Mexicans live 20 to a house and sleep on the floor and work for half or less than do Americans. The only way Americans can compete is to live 20 to a house and sleep on the floor.
The Meriden-based organization immediately drew the attention of the Indian media.
"When we first kicked off our Web site, it was flooded with viruses from India," Bauman said, speculating that some Indian groups were upset because the site calls for legislators to limit the number of work visas issued.
Ping
Actually, he has been proved right time and time again in the real world. Of course, those who prefer textbook pure economic models pretend the real world doesn't exist if it contradicts their pet thesis.
Which is why it is good to be a shareholder.
WRONG. Economic ignorance is a bliss...
Please explain how the statement you criticized reflects ignorance.
The stockholders are not benefitting when eight trillion dollars is missing from the economy, as reflected by the devaluation of market equity. Five trillion of that lost money can be accounted for by the absence of the five million lost high tech and engineering jobs at an average of $100,000 salary with a multiplier effect of x10.
Since 70% of our economy is driven by consumer spending, this current depression can be directly attributed to this drop in consumer income since 2000.
The executives have benefitted because they operate on a hit-and-run principle. They contract for specific terms, make short-term decisions which rewards them at the long-term expense of their company and the overall economy, then they exit with their loot.
If economic ignorance is bliss, it will only be so temporarily. Repeating those tired cliches from a Danny Devito 'B' movie does not make for sound economic policy.
Rule #2: Second effects count.
The economic fantacy is the global "the old rules no longer apply" line of Barbara Streisand we have heard since the beginning of the Clinton crime spree.
The Democrats may promise something of the sort, but this is a problem created BY Democrat policy. Their solution will be to relocate the disenfranchised to government housing and continue selling out the US citizens to the UN and Third World, until America is a faded memory.
The Republicans can't address it (other than talk about piddly targeted tax cuts) because if the American populace were to catch on to how badly they have been sold out, the people would rise up and exterminate the liberals and neo-cons like the insects they are.
So instead, we will have to settle for a managed redistribution of wealth by the lawyers of both sides, and hope the people remain calm and continue tilling the soil.
Don't expect either of them to address it. Republicans want the cheap labor that offshoring affords them for their corporate constituency.
Democrats get a built-in constituency of oppressed third-world peoples of color that translate into voters.
In the process, the American working class gets reduced to the level of some third-world shanty all the time buying into the rhetoric of both the left and the right.
The only way this blows up in their faces is when nobody can buy the homes, cars, and gadgets that these companies will be producing with their slave labor. And don't think a handful of super-wealthy corporate executives will be able to support the entire American economy. Furthermore, don't believe for a minute American goods will have a market overseas. American money, yes. American commerce, no.
Of course, by then it will be too late.
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