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by
Ralph Nader
July
17, 2003
In
the past four decades, many millions of manufacturing jobs in this country have
been shipped overseas or to South America. This transfer was supposed to be
part of the "win-win" process of free trade. But 27 straight years of
growing trade deficits with the rest of the world makes one wonder: who's
winning?
Conventional
economists and their Republican and Democratic converts try to cushion this job
export machine by saying that the large majority of jobs in this country are
white collar not blue collar. The implication is that white collar jobs are not
as easy to export.
Well,
welcome to the computerization age. U.S. companies are rushing headlong to
export computer programming work to countries like India and Malaysia and now
China where English-language proficiency and cheap labor cut costs by more than
two-thirds. Payroll processing, airline passenger billings, insurance computer
applications, new software designs are only some of the labor that is done in
foreign countries for U.S. companies.
Last
week's Computerworld magazine calls "Offshore's Rise" relentless. By
next year the article reports "Forty percent [of U.S. companies] will have
completed some kind of pilot program or will be using nearshore or offshore
services. IBM and Accenture Ltd were named as firms pushing what the research
firm, IDC, says is the dominant trend in the Information Technology services
industry. IDC adds that forty two percent of the application management
contracts now contain some offshore component.
It
is difficult to find any estimates regarding the total number of American jobs
displaced in this sector. But Gartner Inc. uses the jargon "human
resources outsourcing services" and puts a $46 billion price tag on them
for this year.
Moreover
U.S. firms are opening subsidiaries in countries like India to compete with
Indian firms for outsourcing business. Accenture CEO Joe W. Forehand is
reported by Computerworld as comparing the trend to the previous exodus from
the U.S. of many manufacturing operations. "The way we look at it, the
industrialization of IT [information technology] is a reality and we have to
embrace that," he said.
IT
has been in a bit of a slump, not to mention the rest of the computer industry.
So, when outsourcing is combined with massive layoffs in this country and the
continuing inflow of lower wage computer technology workers under H-1B and L-1
work visas, it is not surprising to see the gloom besetting American technology
workers.
Unlike
H-1B visas which are supposed to receive prevailing wages (but often do not),
the L-1 does not oblige employers to pay workers prevailing wages and there is
no cap on the number of these visas that can be awarded foreign workers.
With
over 500,000 workers in this country on "temporary" H-1B visas,
supposedly meeting a domestic dearth of skills, the L-1 visa workers are
supposed to be just transfers between subsidiaries and parent companies. In
fact, reports the New York Times, "They are now routinely used by
companies based in India and elsewhere to bring their workers into the United
States and then contract them out to American companies -- in many instances to
be replacement for American workers." The number of workers replaced is
unknown, according to the Times.
All
this upsets the Organization of the Rights of American Workers, a nonprofit
group based in Meriden, Connecticut. Its president, John Bauman, believes that
a recovery in this industry will not bring back the American jobs due to both
outsourcing and these special visa programs so strongly desiredby Silicon
Valley companies.
When
these concerns are raised to international economists, one of their replies is
"Don't you know what an extraordinary job machine is the U.S.
economy?" Well, it has lost 2.6 million jobs since February 2001. More
important is that at least one third of our economy's full time -- nearly 50
million workers -- do not earn a living wage! The federal minimum wage,
adjusted for inflation since 1968 would be around $8 an hour. Instead, it has
remained at $5.15 an hour, exerting a downward pull on lower income wages
generally.
Someday
the pollyanna belief that the U.S. economy always replaces the jobs it loses
overseas with new jobs here, as we keep racing ahead of other countries with
modern technology and new or redundant services, may run into a contrary riptide
that no set of spurious statistics can obscure.
Ralph Nader is America’s
leading consumer advocate. He is the founder of numerous public interest groups
including Public Citizen, and has twice
run for President as a Green Party candidate. His
latest book is Crashing the Party: How to Tell the Truth and Still Run for
President (St. Martin’s Press, 2002)