Posted on 02/26/2003 7:46:07 AM PST by A2J
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.
If Bush succeeds in doing this, he can kiss my vote goodbye in 2004.
ka-PING!
It's not difficult giving our country away, any liberal can do that, but it's going to be very difficult getting it back!
Yes and no- my girlfriend runs staffing for one of the major US engineering companies, both internal and external. She says that when they bid on jobs in foreign countries, even asian/middle eastern countries will demand the jobs be staffed with American/British engineers.
I think *some* jobs will migrate over seas and stay, other jobs will turn out to require native fluency in English, an American work ethic, and the ability to have face to face contact- not tele/video-conferencing.
Agreed.
What's sad is that Bush appears to be aiding and abetting the further destruction of our nation.
If he would just put the same tenacity into protecting our borders as he is on ridding the world of Saddam, we'd be in pretty good shape.
Good points.
I work with the Chinese everyday and I can tell you that they no likey the "face to face contact" because Americans intimidate them, as many of them have told me.
We haven't even started trying to intimidate the Chinese.
How about we send a few more Dan Daley's over there as our ambassadors.
A software engineer doesn't sell "code," or "programs." He sells encapsulated domain knowledge, expressed in a form a computer can act on. That knowledge is difficult to come by, requires intimacy with the customer, and dictates an ongoing support relationship that few non-American IT firms can sustain. In belated recognition of this, many outsourced IT projects are coming home to these shores. More will follow.
Edward Yourdon, who knows IT better than just about anyone, predicted the same dire fate for American IT in his book The Decline And Fall Of The American Programmer. It took him a decade or so to admit he'd been wrong. when he did, he wrote another book: The Rise And Renewal Of The American Programmer. And I daresay he has learned from his earlier, unrealistically static view of our technology and our world not to shoot from the hip a second time.
Freedom, Wealth, and Peace,
Francis W. Porretto
Visit The Palace Of Reason:
http://palaceofreason.com
It's a shame they can't figure out a way to export the excess lawyers that we have.
But no other country wants them.
I have nothing against the paks/indians- grew up with a bunch of both in Saudi, and they certainly outperformed their american peers in school.Just passing on what I was told- don't have personal experience. FWIW, these comments re "work ethic" were made in the context of civil/mech/petro engineering, domains which, based on my experience as a librarian for a major eng. co. hasve older workers than IT.
Also, it may be that IT has attracted (over the last 8 years or so) "slacker" types "think...they... are owed a six figure paycheck).
I know that. You know that. Many of the politicians and policy wonks know that. But it won't make any difference, in the end. The demagogues will succeed in inflaming public opinion against free trade. Free trade will become the scapegoat for the bad economy and high unemployment. Protectionism will follows as naturally as night follows day.
From Economics 543
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