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]

Plumbers, electricians, cabinetmakers are earning as much as many computer programmers.

But such work is beneath many of our white-collar workers even if it pays as much as or more than what they're getting now.

[P.O.E.]

At the risk of seeming repetitive, I'll, well, I'll just repeat what I've said elsewhere on the topic.

Part of the competitive edge other countries enjoy is a lower tax & regulatory burden (and fewer trial lawyers). Lower that burden here in the US.

[RockyMtnMan]

The market dictates wage value, no one is entitled to a particular wage. When labor is dumped on the market at below prevailing value, wages are reduced.

Dumping is considered a trade violation because it's intent is to drive away all competition. The government’s responsibility is to ensure unfair trade practices do not affect the balance of the market by reducing competition.

Competition is the driving force of our economy. When talking about labor our skills are the widgets not our wages. Competition drives innovation and innovation drives prosperity. The mantra is skill to skill not wage to slave wage.

[Dane]

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

You above quote is very Hillaryish, IMO.

But what the hey when you don't want to dicuss, you and your fellow neo-Luddites(neo-ludds) use Hillalry tactics.

Just say that I am not surprised.

[harpseal]

So we're entitled to the job we want at the wages we demand?No nor is any employer entitled to have the job he wants performed done at the wages he wants to pay. A free market provides the best distribution of labor, goods and services. You are the one arguing for currency controls and the current trade envirornment which is anything but a free market. What happened to the Free market is that it was sacrificed on an internationalist globalism altar.

And why was it that we rebuked labor unions when they demanded it?

Labor unions should be rebuked when they demand excessive wages and a right that does not exist under a free market system.

Why exactly was it that we opposed the minimum wage? I guess it wasn't a problem when it happened to someone else.

We are not talking about a minimum wage issue here as with a free market within the USA and approporiate tariffs in place very very few will be merely making minimum wage in a booming economy that actually produces goods and services. Do you not understand there is a differtence between "Free Trade" especiually if that nomenclature is used to describe the current trade enviurornment and a Free Market.

[Dog Gone]

My paycheck is now processed in Bangalore, India. I'm not too happy about that, because it also means my social security number and tax information is in Bangalore.

How easy would it be for some underpaid Indian to sell my identity to an overseas crook?

How soon will I be seeing overseas charges on a credit card in my name?

[RockyMtnMan]

You are 100% correct. The problem is we cannot eliminate those burdens in the short term.

I would propose tariffs until we can address the root cause driving our lack of wage competitiveness.

[RockyMtnMan]

You should also ask how soon will your taxes rise to subsidize the cost of fraud.

[EnDinNJ]

"Do you two think this practice should be abolished?"

You didnt ask me but I have to throw my 2 cents in anyway. There's a difference between technological replacement which has always existed in the US and sending our jobs overseas in the interest of short term corproate profits.

You cant justify everything by smacking a "free market" or "capitalisim" label on it. The fed is in the position to do something about this and their first responsibility is to the US citizens, not US corporations. They need to lower taxes and regulations on business domestically and impose tarrifs on outsourcing or at the very least outsourcing that is returned to the US.

[RLK]

Well, dane, I see it's another one of your days for negative attention-seeking.

[harpseal]

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?

How about hanging some of those responsible for getting the USA iunto the mess.

[Lazamataz]

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.

I applaud your honesty, but I think your assessment is mistaken. We will need to have alternatives in 5 to 10 years, and we have no idea in which UNIVERSE those alternatives will be. It is akin to going on a trip with no idea as to the destination or even planning the mode of travel.

So, unfortunately, I believe your answer is a platitude, and that we are instead heading to an Argentinian economy wherein there is a tiny minority of capital-rich people and a vast majority of hopeless poor.

[Final Authority]

The industries that are price stable are those that are largely subsidized by Government programs such as the medical industry, pharmaceuticals, and at least in the past, aviation. If Government didn't require auto insurance wouldn't there be a price war too, like in NH where auto insurance isn't mandatory yet? I was thinking the other day, how many more years will it be when the average public school teacher is the highest paid professional class with a masters or BEd degree. I say, considering the layoffs in the private sector, quite soon.

Not too coherent, but just some thoughts for the mill of discussion.

[Dane]

Well, dane, I see it's another one of your days for negative attention-seeking

Negative attention seeking??? All I was doing very nicely was discussing the topic and you are the one in reply #51 who decidedly to go knne jerk Hillary and call me a "sadist".

[Lazamataz]

President Bush said all you technical people need to is retrain yourself. I don't know anything about computers, but I do trust Mr. Bush!

I assume you are being sarcastic, because it is clear Messr. Bush also knows nothing about computers. Systems Analysts and programmers are in a constant state of retraining. I never stop learning new languages.

[EnDinNJ]

"BTW, if you were the owner of the company, wouldn't you try to cut the costs of your company, such as many people try to get the most bang out there buck, when they comparison shop."

I don't think that business owner would have any other choice as they would need to remain competitive with companies who are outsourcing. That is why government involvement is necessary (I know that sounds wrong coming from a conservative). I firmly believe that the fed has been overregulating us here but not giving 2 bits about what happens under the guise of "free market global trade."

[RLK]

You cant justify everything by smacking a "free market" or "capitalisim" label on it.

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

Oh, you object to magical thinking? Shame on you.

[harpseal]

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.

How about tarring and feathering those who are seeking to destroy the Uniyted States of America in favor of their Internationalist idealogy. Julius and Ethel Roseberg got the electric chair for taking actions in support of internationalist idealogy if you want precedent. It may not make one rich but it does confer satisfaction.

[RockyMtnMan]

What's interesting about those industries is they tend to be the most regulated and targets of trial lawyers. We created that mess internally and then turn around and subsidize the mess. We can thank our politicians for that boondoggle.

[VadeRetro]

I think Bush will "get it" now.

Stop worrying about Bush II being the next Bush I. Start worrying about him being the next Herbert Hoover.