Seattle: Hi-tech Bridge to the 21st Century or Nowhere?

Seattle, Washington and current globalization policies have long seemed made for each other. Not only is the city a Pacific port facing the gargantuan populations and (often) rapid growth economies of East Asia. It´s been the headquarters of the U.S. commercial aerospace industry, whose Boeing jetliners carry so much of globalization´s human and commercial traffic. And of course it´s a real and symbolic center of the information economy, hosting software titan Microsoft and revolutionary e-tailer Amazon.com.

Seattle´s population seems well-suited for globalization, too. According to a recent report by the Pacific Council on International Policy, whereas only 25.6 percent of all Americans boasted a four-year college education or better in 2000, nearly 44 percent of the residents of King County, Washington (center of the Seattle region) and more than 36 percent of the Puget Sound metro area´s population had earned such credentials.

Just as important, Seattle has done wonders for the image of current globalization policies. Whenever critics would seek to portray sweatshops in China or American rustbelt factories as the true faces of globalization, supporters could point to Seattle, with its scenic beauty, its rock music, and its coffee bar culture to argue that globalization is not only lucrative, but progressive and even cool.

But as a recent trip to Seattle made clear to me, the area is having big second thoughts about this brand of globalization, and they spring from more than the bursting of the tech bubble or the collapse of many of America´s Asian markets – or even Boeing´s stunning March 2001 decision to relocate its headquarters and about 500 jobs to Chicago. Many Seattle-area residents who have been globalization´s winners are wondering whether they´ll soon become losers. And if these success stories are feeling insecure, what does that tell the rest of America´s workers?

I went to Seattle to speak to a meeting of the Society of Professional Engineering Employees in Aerospace (SPEEA). This union represents the Boeing workers who do the company´s research and development, engineering, and design. SPEEA members, in other words, have done everything that globalization cheerleaders have advised American workers to do to ensure success in the new global economy. And of many of these engineers and technicians once considered themselves immune to the outsourcing wave that swamped so many of their blue-collar counterparts.

No longer. Today, the engineers worry that their jobs, too, will be sent abroad -- both to high-wage countries like Japan, which demand aerospace production work for their people as the price of awarding contracts, and to low-wage countries like China, India, and Russia, with huge numbers of highly educated scientists and technicians who will work for peanuts.

These concerns are well-founded. Boeing Chairman and CEO Phil Condit in 2002 announced his intention to turn the firm from “a U.S. company selling to the world” into a global operation “doing business in many different countries.” (NB: Condit still wants Boeing to be seen as a U.S. company when it goes after U.S. military contracts.)

In the last two years alone, Boeing has decided to build wings for its super-jumbo 747X in Japan and wing parts for the 777-300ER in South Korea. SPEEA members fear that their white-collar jobs will ultimately follow the manufacturing overseas, and have been especially alarmed by the company´s decision to open a design center in Moscow that employs 500 engineers. Indeed, in March, Boeing won a contract to design in Russia a new regional passenger jet for the Russian market, in a team-up with Sukhoi, Ilyushin, and Yakovlev. And just this week, the company announced that the writing of its customer service technical manuals will be sent from the United States to Chile. Say “adios” to 400 U.S. jobs, according to SPEEA.

Nor is Seattle-area outsourcing limited to “old economy” manufacturing companies like Boeing. Microsoft has unnerved the entire region´s tech labor force by setting up a product development center in Hyderabad, India, and a research facility in Beijing, China., and by deciding last year to boost its use of contractors in India to lower costs and create 18-hour daily work cycles.

When jobs in Seattle and the rest of the country were abundant, many tech workers could tell themselves that foreign workers could complement, not replace them. Today, after the tech bubble has burst, they´re more skeptical of Microsoft´s claims, “We are not replacing U.S. jobs or laying off workers.” Thus after quotes appeared recently in the Indian press suggesting his support for technology industry outsourcing, local Democratic Congressman Jay Inslee got an earful from SPEEA and the Washington Alliance of Technology Workers. (Inslee claims he was misquoted.)

Some of Seattle´s misgivings about globalization reflect the costs of success. Growth has spurred crowding and congestion, and many long-time residents miss their city´s quieter, more charming youth. But the broader concern clearly is that globalization-spawned success might be fleeting.

The Pacific Council report – written by Washington Governor Gary Locke´s science and technology advisor – urges the city to demonstrate “increased sensitivity to the needs of its leading companies” and “upgrade assets that underpin its core business clusters, including the strength of its research institutions, the skills of its workforce, the quality of its education system, and the adequacy of its physical infrastructure.”

The trouble with such advice is that, with the exception of the latter, Seattle and its people have done a great job on all these fronts. In fact, the Washington state legislature has just finished a session that has showered Boeing and the rest of the business community with tax breaks and other favors. And Seattle´s tech workers have unquestionably gained the knowledge and skills that Bill Clinton and so many others promised would be their “bridge to the 21st century.” Now that bridge is starting to look like a dead end.

Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).

I dunno. This article isn't quite accurate or complete. For example, true or not, there is a local opinion that Boeing engineers are not a particularly hard-working lot, and with the high cost of living here now (which wasn't the case 20 years ago), they become an expensive liability.

Outsourcing work. Sure, it happens -- I know a small Boston company whose developers live mostly near Moscow. But that doesn't mean high tech is ended in the area. 20 years ago there were few "high tech" firms here. And though the number is somewhat reduced of late, when the economy picks up there will be lots more spinoffs going.

Growth has spurred crowding and congestion

This tells only part of the story. 20 years ago the region decided the time for road-building was well-nigh ended; they'd rely on public transit to move people around. Guess what? People didn't want transit. So the roads just got ever-more choked. I think the number was that in the past ten years only 41 miles of roadway were built... in the state. This is one reason Boeing moved "500 jobs" (compnay HQ, to tell the truch) to Chicago. That and the predatory socialist policies of local government.

Engin. Unions? Check

High level of taxation on businesses and indivduals? Check

Hostile attitude towards corporations and "capitalists?" Check

Sorry. Seattle deserves whatever damage it recieves.

Fact is Willie, Washington is the most business-unfriendly state in the nation. Unemployment taxes were 4 times the national average. Dropping them by half and calling it a "tax break for Boeing" is a real joke.

The 7E7 will be built in Texas for that reason, no matter what last minute concessions the state offers Boeing to stay. This article is one-sided in the extreme.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.