White-Collar Exodus

ABC News ^ | July 29, 2003 | Betsy Stark

[RockyMtnMan]

Michael Emmons thought he knew how to keep a job as a software programmer.

"You have to continue to keep yourself up to speed," he said. "If you don't, you'll get washed out."

Up to speed or not, Emmons wound up being "washed out" anyway. Last summer, he moved his family from California to Florida for the Siemens Co., makers of electronics and equipment for industries. Not long after, Emmons and 19 other programmers were replaced by cheaper foreign workers.

Adding insult to injury, Emmons and the others had to train their replacements.

"It was the most demoralizing thing I've ever been through," he told ABCNEWS. "After spending all this time in this industry and working to keep my skills up-to-date, I had to now teach foreign workers how to do my job so they could lay me off."

Just as millions of American manufacturing jobs were lost in the 1980s and 1990s, today white-collar American jobs are disappearing. Foreign nationals on special work visas are filling some positions but most jobs are simply contracted out overseas.

"The train has left the station, the cows have left the barn, the toothpaste is out of the tube," said John McCarthy, director of research at Forrester Research, who has studied the exodus of white-collar jobs overseas. "However you want to talk about it, you're not going to turn the tide on this in the same way we couldn't turn the tide on the manufacturing shift."

India Calling

Almost 500,000 white-collar American jobs have already found their way offshore, to the Philippines, Malaysia and China. Russia and Eastern Europe are expected to be next. But no country has captured more American jobs than India.

In Bangalore, India, reservation agents are booking flights for Delta; Indian accountants are preparing tax returns for Ernst & Young; and Indian software engineers are developing new products for Oracle.

They are all working at a fraction of the cost these companies would pay American workers.

For example, American computer programmers earn about $60,000, while their Indian counterparts only make $6,000.

"It's about cost savings," said Atul Vashistha, CEO of NeoIT, a California-based consulting company that advises American firms interested in "offshoring" jobs previously held by Americans. "They need to significantly reduce their cost of doing business and that's why they're coming to us right now."

Vivek Pal, an Indian contractor for technology consulting group Wipro, whose clients include Microsoft, GE, JP Morgan Chase, and Best Buy, is hiring 2,000 Indian workers quarterly to keep up with demand. Pal knows American workers resent the "offshoring" trend but says all Americans will benefit in the long run.

"Globalization — whether it's for products or services — may feel like it hurts, but at the end of the day, it creates economic value all around," said Pal.

At the end of the day, Emmons has a different view: "If you sit at a desk, beware," he said. "Your job is going overseas."

[harpseal]

My I only complaint was with the "I know that sounds a bit wrong from a conservative."

[Dane]

Name calling will not alter facts

Please stop the Hillary like victim routine. RLK started the name calling with his reply #51 and you know it and so does anybody who reads the thread.

[RLK]

I doubt it, I think that President Bush has a tin ear.

------------

And a tin brain.

[Mini-14]

This is definately a political land mine and the Republicans had better get their game plan together. This issue has the power to sway public opinion more than any other. This about middle America's pocket book now and the threat of losing a job to offshoring will make everyone question their job security.

I am a Republican who will not be voting for ANY Republican in 2004. My own Congressman Mark Kirk of Illinois sent me a letter claiming that H-1Bs and L-1s are necessary because there is a "shortage" of workers in the U.S.

[maica]

Who is the slave owner and/or driver of these whitecollar workers in the other countries under discussion? I don't understand your premise.

[Mini-14]

Now the supermarket has effectively outsourced three cashier positions to the machines

Your use of the word "outsourced" is incorrect in this statement. You have described technological innovation, not the practice of replacing U.S. workers with foreign workers.

[Petruchio]

Recently a supermarket chain in my area has introduced self-serve checkout counters. Basically there are 4 self-serve machines and an island for one cashier. He/she is there to punch in the produce price and check ID's for alcohol or handle any problems a customer may have using the machine. I like the self-serve machines. They seem to be less time consuming and make the checkout process faster.

They did that here too. I refuse to use them. Do they lower the price if you use self serve checkout? No. So, in effect you are paying the store for you to do the work for them. Part of the price of the goods is the wages of the checkout clerk and the bagger. If you do that work and the cost does not change, that is extra profit for the store that they have not earned.

I ain't that stupid.

[Dane]

I am a Republican who will not be voting for ANY Republican in 2004. My own Congressman Mark Kirk of Illinois sent me a letter claiming that H-1Bs and L-1s are necessary because there is a "shortage" of workers in the U.S

And may I ask, whom will you be voting for?

Don't be afraid to say, we can talk about your choices in a reasonable discussion.

[RLK]

The old southern slave quarters have been moved several thousand miles away to socialist countries to the benefit of the new slavemasters, CEOs and such.

[RockyMtnMan]

Then I would apply the same critique to him. Stop the name calling it just makes people more irrational. As conservatives we should be able to stick to the facts as a debatable topic not each other.

[Doohickey]

Demand can also be influenced from the supply side by manipulating supply or by lowering prices.

Of course, there is the intangible of quality. The discerning consumer would gladly pay more for better quality. The effect of offshoring on quality remains to be seen.

The point is somewhat off topic but should still be considered: When will we reap these economic benefits offshoring is supposed to deliver? I see costs remaining relatively static while costs continue to decline.

[Dane]

They did that here too. I refuse to use them. Do they lower the price if you use self serve checkout?

I guess it never occurred to you that they may reduce the markup on their prices, especially in such a competitive enviroment as food distribution is in the US.

Oh, that's right you probably think that the old Soviet model for food distribution is ideal.

Never mind.

[RockyMtnMan]

I see costs remaining relatively static while costs continue to decline.

That is the danger, the affects of offshoring may hit us all at once. Our time to react may be too late to off-set the effects. We are wading into uncharted territories with the BPO trend.

[maica]

Your answer is not rational. No one is holding telephone answerers in Ireland or India in bondage.

[Doohickey]

I'm still waiting. If I were holding stock in a company that was rushing offshore, I would insist on an accounting of where the cost savings are going. They'd better be going into price cuts (to deliver more business) or research (to potentially deliver more business).

I've always given corporate executives the benefit of the doubt, but my confidence is definately wavering.

[GraniteStateConservative]

We'll be free to write poetry and such like the Ancient Romans.

[Dane]

Then I would apply the same critique to him. Stop the name calling it just makes people more irrational. As conservatives we should be able to stick to the facts as a debatable topic not each other.

That's what I did. I just pointed out something that is happening in supermarkets across the country(self-serve checkout counters) and what do I get?

Reply #51 from RLK calling me a "sadist".

Like I said before, IMO, RLK's reply is basically Hillary knee jerkism at it's best.

[Petruchio]

The most successful will be managing those businesses and be trying to find new and better things from the opprotunities that spring up and not lamenting their so-called salad days of going into work 9-5 at a desk job.

Manufacturing jobs are sent out of the country.

White collar jobs are now being sent out of the country.

Construction jobs are taken over by illegals who send thier paychecks out of country.

The only jobs left here are minimum wage. At minimum wage the people can't afford to purchace the products no longer made here. So the Corps will go out of business. What then?

[RLK]

My analysis has been posted here many times. Go here:

http://members.mountain.net/theanalyticpapers/ch243.htm

[RockyMtnMan]

Ideally those savings would go into new investment in the local economy instead of lowering prices. The net effect would be much more dramatic for the economy at large.

I believe the reinvestment of savings is going right back to India for those new opportunities. This breaks the "trickle down" effect completely.