Upper echelon fears job hits:U.S. companies using more offshore workers, imported specialists

Milwaukee Journal-Sentinel ^ | January 31, 2004 | JOEL DRESANG

[sarcasm]

The blurring of borders through globalization has brought international competition to what once were local jobs.

And though factory jobs lost to China and Mexico have garnered much of the attention, global competition also strikes at white-collar workers.

"People on the upper end have been pummeled by layoffs and unemployment," said Jeffrey Hynes, a Milwaukee lawyer who's president of the Wisconsin Employment Lawyers Association.

The most recent visa data show that nearly 1 million foreign workers were in the United States as temporary workers and in-company transfers in fiscal 2002, more than quadruple the number in 1990.

Specialty workers receiving H1-B visas rose to 370,000, and L-1 visas - for intra-company transfers of managers and specialized employees - were up nearly fivefold to 314,000.

Along with use of offshore employers, the importing of workers is a hot-button issue - especially in an election year and especially with private sector employment dropping by 2.4 million jobs since the end of 2000. Among the responses:

• A group calling itself the Organization for the Rights of American Workers picketed a New York City hotel Jan. 22 to protest a business conference there on offshore outsourcing.

• Congress let the annual cap on H1-B visas for specialty workers drop to 65,000 this fall from its previous limit of 195,000.

• Proposals pending in Congress would, among other things, limit the number of L-1 visas to 35,000 a year and deny requests from companies that lay off U.S. employees within six months before or after applying for such a visa.

  At the heart of the matter is the expanding mobility of the labor force, Federal Reserve Chairman Alan Greenspan told a conference in London last week.

  "The increased flexibility of our labor market is now judged an important contributor to economic resilience and growth," Greenspan said. "American workers, to a large extent, see this connection and, despite the evident trade-off between flexibility and job security, have not opposed innovation."

  Job migration

  Randy Mehl, managing director of the human capital services team at Milwaukee's Robert W. Baird & Co., agreed with Greenspan's view over the long haul.

  "Anything that improves the productivity and the profitability of companies in the U.S. is good for the economy, as long as it doesn't take a big bite out of the job pool," Mehl said. So far, the bite from imported workers is minimal, Mehl said, although the exporting of work could become a bigger threat.

  A 2002 report by Forrester Research in Cambridge, Mass., predicted that by 2015, some 3.3 million service jobs - mostly in information technology - would migrate from the United States to lower-wage operations in India, Russia, China and the Philippines.

  Project work drives a lot of information technology work at Milwaukee's Northwestern Mutual Life Insurance Co., and temporary workers - including some offshore - play a role in leveling out peaks in staffing demands, said Barbara Piehler, the company's chief information officer.

  "Projects fluctuate a lot from year to year, and so I like to have the flexibility of when I need some extra help I can get it, and when I don't, it doesn't affect my internal work force," Piehler said. "We use outside vendors - and we've done that for a long time - to keep our home office staff level stable or growing."

  Not only does Northwestern Mutual have a long history without layoffs, but its Milwaukee home office staff has grown 22% in the last five years to more than 4,500 by the end of 2003. Piehler said her group alone has added about 100 workers a year the last couple of years.

  Competition at the upper end

  Most other companies haven't been as fortunate. And there's a cyclical uprising against sending jobs offshore and bringing workers in from abroad. When U.S. jobs are scarce, pressure builds to restrict visas; when workers are in short supply, limits ease again.

  Of concern these days is the L-1 program, which has grown faster in recent years and has more generous provisions than the better-known H1-B visa. For instance, there is no limit to the number of L-1 visas that can be issued; companies don't have to demonstrate that an L-1 position can't be filled by a U.S. worker; and employers aren't required to pay the prevailing wage to the foreign worker.

  "These visas are in a sense the hallmark of a global economy," said Hynes, the Milwaukee employment lawyer. Fifteen years ago, 90% of Hynes' clients were union and hourly workers. Now, he says, 90% of his business is from executives.

  "Years ago, there wasn't this competition globally at the upper end," Hynes said. "If you view the economy as either a shrinking or constant pie, then certainly the advent of L-1 visas is going to have a measurable effect on upper echelon workers."

  Dennis Sullivan, a Milwaukee lawyer who specializes in immigration issues for employers, cites the American Immigration Lawyers Association, which generally opposes changes in the L-1 program, aside from a Senate bill to clarify that L-1 workers do not displace workers in the United States.

  "There's always a big push on the part of labor to control immigration to the United States for the benefit of U.S. workers who are here. And that's a good thing," Sullivan said. "But I think some of the measures are a little bit overboard and don't look at the big picture."

  Limiting visas to protect American jobs might backfire, Sullivan said.

  "The more you put a stranglehold on American business, the more you're going to see offshore development," he said.

[sarcasm]

[sarcasm]

ping

[optimistically_conservative]

ping

[Vaduz]

Call Dell tech line and you end up in India.

[BillM]

Note that foreign workers don't require employers to pay FICA, health, or other benefits. They also can't sue for carpal tunnel syndrome, too hot coffee, asbestos in the carpets etc.

If a foreign worker doesn't perform, he/she is replaced. There is no wrongful dismissal litigation, threats, or legal blackmail.

If you were running a company with your life savings, how would you do it?

[dredhawk]

hewlett-packard tech line = India

[WilliamofCarmichael]

"Anything that improves the productivity and the profitability of companies in the U.S. is good for the economy

The more things change the more they stay the same.

At Senate hearings in 1955, "Engine" Charlie Wilson, the chairman of General Motors, summed up G.M.'s philosophy: "What's good for General Motors is good for the rest of America."

But making cars better and more affordable is not the same as handing over technology to the enemy for dollars. Bowing for dollars?

[Dallas59]

I kept wondering when it would hit Upper management.
$180,000 a year compared with $50,000 or $70,000 for a foriegner. Why go 6-8 years to College now?

[highimpact]

I own an executive recruiting company based out of Florida, so I deal with employment supply and demand on a daily basis (most of my clients are national with offshore operations).

To most companies, employees are just like any other asset. You purchase your assets based upon price and potential ROI over time. If you have money to invest in human capital, you're going to invest in assets that give you the most "bang for your buck."

Business owners are not in business to do what's best for America. They're in business to turn a profit. Is profit the root of all evil? I think not. America has the most powerful economy on the planet because of capitalism and greed.

A lot of business owners take steps to keep money in their local economy (purchasing from local vendors), but the bottom line will always be the same: to maximize profits while maintaining certain ethical standards. Some employers have very low ethical standards, but they generally don't last for more than one economic cycle (reference Enron, Global Crossing, WorldCom, etc.).

To shift the employment supply and demand in the American worker's favor, the American worker needs to compete with global talent in terms of price, knowledge, work ethic, and loyalty. The simple fact is that a lot of Americana refuse to work for less money (they use words like "underemployed), are not as knowledgeable in their field (compare the education systems in India, Japan, and Singapore against America's public education system), are not willing to work as hard as many foreign workers (white or blue collar), and are not as loyal as many foreign workers.

Most companies don't have any evil intent by hiring overseas. They are simply following the almighty dollar. Until American workers are able to compete with foreign workers, American businesses will continue to make hiring decisions based upon what employees can do for them in return for their investment.

[gcruse]

If you were running a company with your life savings, how would you do it?

If you were running a country overwhelmed by illegal immigration, unable to create jobs fast enough to keep unemployment down, would you import labor?

[BillM]

It appears that Americans have chosen to hire millions of illegals (8 to 14 million as a guess). That is what they did.

By the way, are those illegal immigrants included in the job statistics?

If not, then clearly many more millions of jobs have been created than the Dems are telling us about.

[Oatka]

To shift the employment supply and demand in the American worker's favor, the American worker needs to compete with global talent in terms of price,[work for 1/3rd the wage], knowledge, [use foreign MAs for programming that can just as easily be done by American BAs], work ethic [put the foreigners on salary, work them 60 hours a week and pay them for 40. If they complain, get those who won't.], and loyalty[expect Americans to stay until they have retrained a cheaper foreign replacement].

All these employers are doing is laying off each others' customers. How much of YOUR product is selling in China or India?

[LibertyAndJusticeForAll]

Welfare Stats by Percentages

You will need to adjust your 8 - 12 million illegals with jobs by these percentages on welfare.

[Indie]

But but but but/...people here keep saying migrants and outsourced workers only take jobs Americans don't want!! This can't be true!! /sar

[BillM]

I believe that these statistics are all or almost all Legal workers.

[oceanview]

explain to me how Carly Fiorina is running HP "with her life savings"?

[oceanview]

catch the Sunday CNBC Tim Russert show, Pat Buchanan nails it when he talks about this issue. He says if Kerry can figure out how to craft a message on it, he's in. Believe me, in the companies where these practices are taking place, its all workers are talking about. And Bush is talking about steroids.

[highimpact]

All these employers are doing is laying off each others' customers. How much of YOUR product is selling in China or India?

I compete against foreign companies all the time. Sometimes I win, and sometimes I lose. In the cases where I win, it's because I'm able to do the job better, cheaper, and faster than the competion. In the cases where I lose, it's usually because I fail to do it better, cheaper, and/or faster. Such is the nature of free enterprise in a global economy.

Your wish for preferential hiring status for American workers in a global economy is nothing but a pipe dream. You can't have the highest paid employees in the world AND sell your product in a global economy. The only solution would be to close our borders to foreign trade (a move that would destroy a huge number of American businesses while creating massive job losses). The talent scales for certain skills have tipped in favor of the nations that invested in eduction in those sectors over the past several years.

If you are unhappy with your station in life as an underpaid, overworked, underappreciated employee, and if you believe that the bourgeoisie reaps all of the profits from the labors of the proletariat, then I encourage you to start your own business and live the American dream. If you are successful, then you can hire whomever you wish in order to satisfy your desires for an all-American organization.

I don't have any foreign employees, and that's a decision I made for myself based upon what's important to me, but I'm ultimately driven by the bottom line. My business helps contribute toward a growing economy by creating jobs. I put food on the table for me and my employees. I created my own supply and demand for my product. What would be the economic benefit if my business folds due to overpriced labor, and how will I be helping the economy if competition drives me under? As a business owner, I have to stay flexible and adapt to changes in whatever market forces impact my ability to survive. There may come a day when I'm forced to hire a foreign worker in order to stay competitive, but that need hasn't surfaced yet (and I hope it never does).

Most Americans avoid taking risks (starting ventures) because they are constantly reminded of the failures of others (8 out of 10 businesses fail within the first year!). What they don't understand is that most failures among the these ventures come from naive people who are hoping to make an easy killing, such as overnight success in a trendy new business. They don't appreciate or fully understand the challenges, and they aren't willing to listen to or seek out sound advice. Most successful people have the clarity and conviction to push through the inevitable challenges. They foresee the need for a new product or service or the viability of a new technology or investment. They become experts in their field and they strive to do "it" better, cheaper, and faster.

[LibertyAndJusticeForAll]

Possibly, but documentation is sold on the street corners of any barrio. They have a very successful network that begins on the other side of the border and continues all the way to the food stamp line.
Certainly, most illegals (and legals for that matter) work very hard for very little. Crooked American businesses find such compliant servitude very economical.
Mexico finds it a great way to unload some of their economic problems so they can continue with their corrupt banana republic.
Regarding our own unemployment stats, the BLS does not keep track of the so-called 'discouraged' workers who have given up looking or the 'under-employed' workers. If they did, the unemployment numbers would actually be even worse.

And, neither the Commerce department nor the BLS keeps track of how many Americans have lost their jobs to offshoring/outsourcing. Lou Dobbs found this very disturbing and telling. Afterall, we keep track of every other statistic under the sun.

[A. Pole]

The simple fact is that a lot of Americana refuse to work for less money (they use words like "underemployed),

Rather theyr are not able - the costs of living in America are much higher. So in order to "compete" they either have to be subsidized by the government help or they have to "wait" until market will bring cost of living down to the Chinese/Indian level (or raise costs in the over there). Political system will fail before this wait is over.

are not as knowledgeable in their field (compare the education systems in India, Japan, and Singapore against America's public education system),

Why American workers need to train their "better educated" replacement? How much of new technology was invented in India or China?

are not willing to work as hard as many foreign workers (white or blue collar)

Again the key issue is cost of living, unless you consider as "hard work" the harsh conditions in which peasant workers in Third World countries have to work and live.

and are not as loyal as many foreign workers.

Loyal enough to fight and die in defence of America (including defence of the American corporations). Loyal enough to care and sacrifice for the well being of the American nation.

Most companies don't have any evil intent by hiring overseas. They are simply following the almighty dollar. Until American workers are able to compete with foreign workers, American businesses will continue to make hiring decisions based upon what employees can do for them in return for their investment.

Maybe. So the choice is either wait for the "free" market correction (which would take too long and is not feasible politically and would live American nation impoverished), or to restore what Founing Fathers implemented - the properly calibrated tariffs.