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In My Opinion: Bush and Democrats: Night and Day Views on Offshoring
Have faith my friends, offshore outsourcing is "a good thing," according to President Bush's chief economic advisor Gregory Mankiw. It's "just a new way of doing international trade."
Traditional economic theory says that in the long-term - never mind the right-now reality for 15 million unemployed or underemployed Americans - cheaper production of goods and services overseas leads to increased investment and, eventually, to new jobs to replace the ones that have gone to India and China and Mexico and the Philippines.
As millions of manufacturing jobs disappeared over the last two decades, we had faith - despite a net loss of jobs 10 years after NAFTA - that the emerging Information Age would spur new job creation to take their place.
Now "faith" really has become the watchword as we see those information-based jobs of the future leaving the U.S. by the hundreds of thousands, and soon by the millions.
If the most highly skilled high-tech and white-collar jobs - computer programmers and engineers, accountants, medical diagnosticians, paralegals - are being exported, what are the new job categories that the miracle of globalization will bring us?
"Can't name examples. They don't exist yet," said Marc Andreessen of Opsware Inc., part of the new industry that helps companies set up offshore operations, in an interview with Business Week. But he assures us, "This is where people get tripped up. It requires a leap of faith. In 500 years of Western history, there has always been something new."
Let's see, Amazon.com, Google and Travelocity are shining stars of the newest new thing, the Internet economy. But all three are outsourcing technical and customer support jobs, joining other high-tech luminaries such as IBM, Oracle, Dell, Hewlett-Packard and the telecoms AT&T, Nortel, Sprint, Avaya and others in the offshore exodus.
In light of today's "jobless recovery," some economists are starting to doubt the orthodoxy of free-trade-is-always-good. Washington Post business columnist Steven Pearlstein recently wrote: "If you peel back the arguments in favor of offshoring, what you finally end up with is an article of faith" - that word again - "faith that history will repeat itself and the U.S. economy will quickly generate enough new jobs in higher-paying industries to compensate for the ones lost to trade. What I've yet to see, however, is even an educated guess as to what those jobs might be."
Even some of the most ardent practitioners of offshoring wonder the same thing. CEO Rosen Sharma of Solidcore, a computer security startup, hires Indian engineers for a quarter the salary of U.S. workers. Asked by Time magazine what that means for his 2-year-old daughter, he said: "As a father, my reaction is different than my reaction as a CEO… if you're graduating from college today, where are the entry-level jobs?"
Where, indeed. It seems that today, America's greatest innovative talent lies in finding new ways to do more and more sophisticated job functions in lower wage countries.
Manufacturing is still the biggest field of job loss. Since January 2001, 2.8 million factory jobs vanished, largely going offshore. Those workers were supposed to be able to retrain and find opportunity in computer and information service areas. What happened?
First, communications technology made it possible to send tens of thousands of call center and data processing jobs overseas, including those of many CWA members at companies such as AT&T.
This trend didn't draw much media attention until it became evident that highly skilled, high-salary technical jobs also were being outsourced in huge numbers - at least 800,000 over the past three years, with millions more now in the pipeline as the pace accelerates.
In fact, potentially 14 million jobs - 11 percent of the workforce - are at risk of being outsourced, according to the University of California-Berkeley. With jobs in the medical and legal professions on the block - even those of Wall Street financial workers and journalists at Reuters - the issue is now getting headlines.
There are other issues too, including the social costs to our communities from job losses, the export of not just jobs, but our high-tech knowledge base, and the specter of cyber crime and privacy violations from processing financial and medical data in countries with lax protective laws.
In response, bills have been introduced in Congress and in several states to ban use of taxpayer money for outsourcing, eliminate tax breaks for moving jobs abroad, give consumers a right-to-know when they are dealing with overseas call centers, and require advance notice of outsourcing.
Above all, we need leadership in Washington that sets a different tone when it comes to corporate accountability and responsibility to our nation.
We know what the Bush administration believes - offshoring is "a good thing."
And we know that CWA's choice for president, Senator John Kerry, believes otherwise, and has blasted "Benedict Arnold CEOs" for abandoning America.
It seems that today, America's greatest innovative talent lies in finding new ways to do more and more sophisticated job functions in lower wage countries.
Traditional economic theory says that in the long-term - never mind the right-now reality for 15 million unemployed or underemployed Americans - cheaper production of goods and services overseas leads to increased investment and, eventually, to new jobs to replace the ones that have gone to India and China and Mexico and the Philippines.
As millions of manufacturing jobs disappeared over the last two decades, we had faith - despite a net loss of jobs 10 years after NAFTA - that the emerging Information Age would spur new job creation to take their place.
Now "faith" really has become the watchword as we see those information-based jobs of the future leaving the U.S. by the hundreds of thousands, and soon by the millions.
If the most highly skilled high-tech and white-collar jobs - computer programmers and engineers, accountants, medical diagnosticians, paralegals - are being exported, what are the new job categories that the miracle of globalization will bring us?
"Can't name examples. They don't exist yet," said Marc Andreessen of Opsware Inc., part of the new industry that helps companies set up offshore operations, in an interview with Business Week. But he assures us, "This is where people get tripped up. It requires a leap of faith. In 500 years of Western history, there has always been something new."
Let's see, Amazon.com, Google and Travelocity are shining stars of the newest new thing, the Internet economy. But all three are outsourcing technical and customer support jobs, joining other high-tech luminaries such as IBM, Oracle, Dell, Hewlett-Packard and the telecoms AT&T, Nortel, Sprint, Avaya and others in the offshore exodus.
In light of today's "jobless recovery," some economists are starting to doubt the orthodoxy of free-trade-is-always-good. Washington Post business columnist Steven Pearlstein recently wrote: "If you peel back the arguments in favor of offshoring, what you finally end up with is an article of faith" - that word again - "faith that history will repeat itself and the U.S. economy will quickly generate enough new jobs in higher-paying industries to compensate for the ones lost to trade. What I've yet to see, however, is even an educated guess as to what those jobs might be."
Even some of the most ardent practitioners of offshoring wonder the same thing. CEO Rosen Sharma of Solidcore, a computer security startup, hires Indian engineers for a quarter the salary of U.S. workers. Asked by Time magazine what that means for his 2-year-old daughter, he said: "As a father, my reaction is different than my reaction as a CEO… if you're graduating from college today, where are the entry-level jobs?"
Where, indeed. It seems that today, America's greatest innovative talent lies in finding new ways to do more and more sophisticated job functions in lower wage countries.
Manufacturing is still the biggest field of job loss. Since January 2001, 2.8 million factory jobs vanished, largely going offshore. Those workers were supposed to be able to retrain and find opportunity in computer and information service areas. What happened?
First, communications technology made it possible to send tens of thousands of call center and data processing jobs overseas, including those of many CWA members at companies such as AT&T.
This trend didn't draw much media attention until it became evident that highly skilled, high-salary technical jobs also were being outsourced in huge numbers - at least 800,000 over the past three years, with millions more now in the pipeline as the pace accelerates.
In fact, potentially 14 million jobs - 11 percent of the workforce - are at risk of being outsourced, according to the University of California-Berkeley. With jobs in the medical and legal professions on the block - even those of Wall Street financial workers and journalists at Reuters - the issue is now getting headlines.
There are other issues too, including the social costs to our communities from job losses, the export of not just jobs, but our high-tech knowledge base, and the specter of cyber crime and privacy violations from processing financial and medical data in countries with lax protective laws.
In response, bills have been introduced in Congress and in several states to ban use of taxpayer money for outsourcing, eliminate tax breaks for moving jobs abroad, give consumers a right-to-know when they are dealing with overseas call centers, and require advance notice of outsourcing.
Above all, we need leadership in Washington that sets a different tone when it comes to corporate accountability and responsibility to our nation.
We know what the Bush administration believes - offshoring is "a good thing."
And we know that CWA's choice for president, Senator John Kerry, believes otherwise, and has blasted "Benedict Arnold CEOs" for abandoning America.
It seems that today, America's greatest innovative talent lies in finding new ways to do more and more sophisticated job functions in lower wage countries.