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."

[garbanzo]

Why can't American workers work for less money? Why exactly are American workers entitled to pay well above market rates? When the unions did this conservatives were up in arms and complained that the government (especially the Democrats) was damaging American productivity. Now that the white-collars are facing wage erosion and loss of jobs, I guess the government has to step in.

[Dane]

The white-collar types are the ones that start small businesses and employ blue-collar types. The blue-collar folks were told to improve their skills and move into the white-collar class long ago. Now those former blue-collar types are finding themselves in the same situation with their new white-collar brethren.

Huh, your above italicized passage is contradictory. In your first sentence you basically state that blue-collar types can't become white collar types and yet as you go on you are saying that former blue collar types had become white collar types.

You are spinning in circles, IMO.

[harpseal]

It is possible, you know, for a business to completely offshore a particular function, thus taking it completely out of the country.

It is also possible to place a tariff on the function that is moved out of this country.

Competitiveness is the issue here: find lower-priced labor and costs and survive, or leave the function here and risk losing the entire business.

Competitiveness is the issue here no doubt bvut your take on it is that we as a nation should try to compete by lowering our standaqrd of living I state we shoulkd try to compete by improving teh investment climate. your solution results in massive unemployment and the eventual destruction of America. dealing with the issues of foreign currency controls such as the under valued Yuan and Rupee and foreign tariff barriers to american goods anlong with non tariff barriers does not lend itself to teh one line reply. We also have to deal with teh US Government subsidizing offshore investments.

[RockyMtnMan]

I never implied blue-collar workers couldn't start their own businesses. It's called upward mobility, the ability to move to a different skill level and increase personal wealth. No circles here.

This also doesn't preclude white-collar types from becoming blue-collar types if they lose their job and cannot find another. This is called downward mobility.

[Lazamataz]

Nope but it can be a nation of small businessmen and women. People who see opportunities and are willing to work to prosper for themselves.

A small businessperson is a CEO, so the DaneWorld (similar in many ways to the BizarroWorld) is that, Yes, America will be a nation of CEO's. Simply put, this is insanity. Not everyone is mentally able or has the accumen to be a small business owner.

OH BTW, small businesses employ the majority of people in the US.

Not as CEO's they don't.

Looking at your first sentence of the above italicized passage, I would reccommend that you don't enter stand up comedy.

Oh, no, I am serious. You have always struck me as a middle-schooler or high-schooler with your "neener neener boo boo" responses on many occasions.

Second, it is the same mentality of the steel workers who got caught up in the explosive change that went through the US manufacturing sector in the late 70's and early 80's. Some whined incessantly, the vast majority moved on and prospered in other areas.

Well, we have the utterly absurd DaneWorld answer now: We'll all just be CEO's!

[harpseal]

Why can't American workers work for less money?

Why don't you start.

Why exactly are American workers entitled to pay well above market rates?

Actually the history of the past ten years show a series of government interventions to deny them market wages.

When the unions did this conservatives were up in arms and complained that the government (especially the Democrats) was damaging American productivity. Now that the white-collars are facing wage erosion and loss of jobs, I guess the government has to step in.

Actually it is time to realize that some conservatives take their hatred of the Unions to such a degree that they will at times act against the USA simply to spite the unions. it was wrong when manufacturing jobs were leaving for China and it is wrong for technical jobs to be leaving we need both in the USA and a tariff policy that supports sucvh jobs is beneficial to the USA. there are certain strategic induistries that are needed in teh USA if we are to maintain our liberty. Even with the socialist encroachments we have more liberty in the USA than most of the world. certainly more than India or China. So we are to take those supporters of China and India at their word that the further destruction of the US economic base is good for us? Why.

[Lazamataz]

Something else.

Without adopting the absurd "We'll all be CEO's" response from Dane, please tell me what that something else would be.

[Lazamataz]

Why can't American workers work for less money?

Race you to the Third World. On your mark, get set, GO!

[maica]

America used to have 50% of its workforce in agriculture. Now we feed the world, basically, with a very low percentage of the workforce involved in the actual production.

During the twentieth century we moved to a very educated workforce with a college education being the goal for all. Now the rest of the world has found ways to use their educated population to earn money without emigrating to America. This is a net benefit for the world's communities.

The job skills and availability of workers in any jurisdiction are commodities like any other commodities, subject to scarcity and surplus.

I see the pendulum swinging in terms of desirable jobs to those which require knowledge, skill and a personal touch. Plumbers, electricians, cabinetmakers are earning as much as many computer programmers. Nurses and physiotherapists will soon be in this category. (America has to import both at the present time.)

When you need a plumber, you will pay anything to get his service.

[harpseal]

If the job is sent offshore that's one thing... but if a replacement is hired within the US, being paid Indian rates, then that is flagrant abuse of the L-1 visa program; I believe this was the case with Siemens.

Since some individuals must swear under penalty of perjury no L1 visa holder or H1-B visa holder will displace and American worker or be paid less than the prevailing wage for that function it is a felony not just an abuse. i apreciate the thought but lets stop waltzing arround the apoligists for criminals.

[RLK]

Now, I have a question for you, my high-school chum: If almost all the jobs related to manufacturing are nearly wiped-out as a profession in America; and if we are offshoring (and thusly not doing) accounting, engineering, software, call-center work, reading and interpreting medical data, financial planning, and soon enough medical doctor and lawyering work; and if immigrants are doing transportation, agriculture, and the remaining other low-tech work; and if robotics will be completely eliminating 90% of retail sales jobs with RFID technology and self-checkout lanes..... .....what will we be doing?

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

You will be sitting poor and out of work listening to sadist such as Dane and others mocking you.

[RockyMtnMan]

If we work for less money then we will spend less money. Corporations have become accustomed to a market of extreme buying power. Why would we knowingly reduce the buying power of the most powerful buying machine on the planet?

If white-collar America earns less, then fewer taxes are paid. If fewer taxes are paid then everyone else has to make up the difference or government has to trim down (not gonna happen).

[Lazamataz]

You will be sitting poor and out of work listening to sadist such as Dane and others mocking you.

Well, if being an annoying high-schoolish twit will be a viable profession in the future, Dane will certainly be employed. ;^)

[dennisw]

Shoplifters like them a lot too. That is why in these self serve lanes they have to station people to watch you to make sure you ring up your own purchases. So much for cost savings...............

Same here at the Winn Dixie. They always have one cashier taking care of the 3 self check out lanes. The customers always need assistance.

[garbanzo]

If we work for less money then we will spend less money.

So we're entitled to the job we want at the wages we demand? Exactly when did this happen - and what happened to the free-market? And why was it that we rebuked labor unions when they demanded it? Why exactly was it that we opposed the minimum wage? I guess it wasn't a problem when it happened to someone else.

[harpseal]

Nurses and physiotherapists will soon be in this category. (America has to import both at the present time.)

Actually this is another lie. The only reasoning for importing nurses and physiotherapists is we at this time are unwilling to let the market set the wages for these professions. there are many nurses who have left the profession who would be more than happy to get back into it for the right money and working conditions likewise physiotherapists. Thde problem is you are dealing with healthcare where the rates that may be cgharged for services are regulated and therefor paying a market wage is impractical so we import guest workers in this field.

[garbanzo]

please tell me what that something else would be.

If I were capable of predicting the future - I probably be a multimillionare. The "something else" will be something no one expects and will as it always does make a lot of people rich and life better for all.

[Dane]

Speaking of supermarkets, my pet peeve is the baggers.

Exactly. The supermarket I go to has a bag caroussel. I scan and put the product in the plastic bag(I like plastic bags because I can use them as small garbage recepticals later on) and move on. Also I don't have to worry about the cashier running out of 1's or quarters or wait as the cashier tries to open those plastic rolls of quarters. They are much faster.

[Final Authority]

Tell him/her you want the plastic bag (handles) lined with paper (structure) and see the response. I was at a checkout recently, at a store where I worked as a teen, and the bagger reached for a MilkyWay and ate it as he bagged. I asked him if he paid for it and he said, Nah, they can't fire me, they don't have enough help as it is. In my day, I would have been dragged off to the managers perch, my pay docked, and escorted out of the store into the custody of the police on detail. Times have changed.