[Vision2020] Job Exports Imperil U.S. Programmers

[Tim Lohrmann]

Visionaries,
     Even more on the wonders of what Corporate types
call "free"(as opposed to fair)trade. 
     TL


Job Exports Imperil U.S. Programmers
> Sun Jul 13, 2:16 PM ET

> By RACHEL KONRAD, AP Business Writer

> SAN JOSE, Calif. - Peter Kerrigan encouraged friends
> to move to Silicon Valley throughout the 1980s and
> '90s, wooing them with tales of lucrative jobs in a
> burgeoning industry.
>               
> 
>  But he lost his network engineering job at a major
> telecommunications company in August 2001 and
> remains unemployed. Now 43, the veteran programmer
is urging his 18-year-old nephew to stay in suburban
Chicago and is discouraging him from pursuing degrees
in computer science or engineering. 
>    
>  "I told him, 'Unless you're planning to do this as
> a path to technical sales, don't do it,'" said
> Kerrigan, who lives in Oakland. "He won't be able to
have a career designing and building stuff because all
those jobs have moved to India." 
>    
>  Like many unemployed programmers, Kerrigan blames
> the sour labor market on offshore outsourcing; the
> migration of tech jobs to relatively low-paid
> contractors or locally hired employees in India,
> China, Russia and other developing countries. 
>    
>  The hemorrhaging of tens of thousands of technology
> jobs in recent years to cheaper workers abroad is
> already a fact of life; as inevitable, U.S.
> executives say, as the 1980s migration of Rust Belt
> manufacturing jobs to Southeast Asia and Latin
> America. 
>    
>  But a new wave of technology outsourcing;
> involving tasks that involve greater skills;
> could be cutting to the industry's bone, threatening
> to prolong the three-year U.S. economic downturn. 
>    
>  Some who oppose the trend, which such industry
> stalwarts as Hewlett-Packard, IBM, Dell and
> Microsoft are embracing, believe it could even usher
in the end of American domination in technology. 
>    
>  "We're giving countries like China and India the
> support they need to build up their technology
> industries, and the result could disadvantage us in
> the long run," said Phil Friedman, an electrical
> engineer and chief executive of New York-based
> Computer Generated Solutions, a 1,200-employee
> software company that targets the apparel industry. 
>    
>  "We outsourced electronics manufacturing. We're
> closing steel mills. Every week, 400,000 people file
> for new unemployment claims," said Friedman, a
> 54-year-old Ukrainian native who immigrated in 1976.
> "At the same time, we're shipping tech jobs
offshore; it's a shortsighted approach and cheats the
> American work force." 
>    
>  Cost-conscious executives have been shifting
> lower-level tech jobs in data entry and systems
> support abroad to cheaper labor markets for more
> than a decade. But now they are exporting highly
paid, highly skilled positions in software
development; jobs that have been considered intrinsic
to Silicon Valley and tech hubs such as Seattle;
Boston; and Austin, Texas. 
>    
>  Critics say it's the equivalent of exporting not
> just the automobile industry's assembly line jobs;
> but the core engineering and car design jobs, too. 
>    
>  Roughly 27,000 technology jobs moved overseas in
> 2000, according to a November study by Forrester
> Research. It predicts that number will mushroom to
> 472,000 by 2015 if companies continue to farm out
> computer work at today's frenzied pace. 
>    
>  According to Forrester, companies in the United
> States and Europe will spend 28 percent of their
> information technology budgets on overseas work in
> the next two years. 
>    
>  Boeing, Dell and Motorola have opened software
> development centers in Russia. Intel employs 400
> full-time Russian software research engineers and
> nearly 200 others in marketing and sales, wireless
> Internet access and modem projects. 
>    
>  Santa Clara-based Intel entered the Russian market
> with a small contract project three years ago. But
> within months, the world's largest chip maker hired
> all the programmers who write compiler software to
> optimize the microprocessors' performance, and
> opened the Russia Software Development Center in
Nizhny Novgorod. 
>    
>  "We intend to invest in the fastest-growing
> markets, and those are India, Russia and China;
that's the long-term plan," Intel spokesman Chuck
Mulloy said. 
>    
>  Microsoft is adding software development jobs at
> its India Development Center in Hyderabad, opened in
>1999 to create versions of Windows for giant
corporate computers. Bill Gates said late
> last year that the expansion was part of an
> estimated 400 million in corporate investments in
the subcontinent.
>  >     
>  On its corporate Web site, Microsoft lists dozens
of Hyderabad openings, many requiring five years of
> experience, fluency in multiple computer languages,
> and college degrees in computer science #151; far
> from the hourly telemarketer jobs that financial
services and insurance companies exported to the
Philippines and elsewhere in the early '90s.
> 
Some say sending those jobs abroad may cause
American tech workers' wages to stagnate.
> According to the nonpartisan Economic Policy
> Institute, non-inflation-adjusted wages for tech
> workers grew 1.7 percent between the fourth quarter
> of 2001 and the fourth quarter of 2002; not enough
> to keep up with the period's inflation rate of 2.2
> percent.
> The average computer programmer in India costs
>20 per hour in wages and benefits, compared to #36;65
>per hour for an American with a comparable degree and
> experience, according to consulting firm Cap Gemini
> Ernst & Young.
> 
But executives say outsourcing offers advantages
> beyond wage differences.
> Jean-Marc Hauducoeur, a senior vice president at
> Cincinnati-based human resources consulting firm
> Convergys, said his 47,000-employee company will
> employ 6,000 customer service representatives and
> network engineers in India by year's end.
> 
Convergys' average technical employee in India stays
> on the job for nearly three years; more than
> double the U.S. average, saving tens of thousands of
> dollars in recruitment and training per employee per
> year, he said.
> "People in India are very ambitious and very
> well-educated, but they're also ready to invest in a
> company, and they have less of a tendency to move
> out of the company," Hauducoeur said.
> 
Many U.S. corporate executives say they simply can't
> afford to overlook foreign computer workers;
> especially in India, which produces roughly 350,000
> college engineering graduates annually.
> Others say the genius of American enterprise is its
leaders' knack for envisioning the next big thing and
workers' ability to redefine job roles and retrain.
Americans pioneering developments in nanotechnology
and biotech will have far more job security than
simple programmers, they argue.
>
 Bob Pryor, who heads the outsourcing practice of Cap
> Gemini Ernst & Young, said it's "naive" to think
> outsourcing software jobs could ruin America's tech
> dominance.
> "The reality is that we live in a global economy and
> we compete against global players. We need to look
> at where we have strategic advantage; whether it's
> resources or skills," Pryor said. "It frees up
> people and dollars to do much more value-added
strategic things for clients."
> 
Marcus Courtney, a former contract worker for
> Microsoft and Adobe Systems and president of the
> Washington Alliance of Technology Workers, said many
> tech workers understand and even endorse free trade
> and globalization.
> They even enjoy living on the cutting edge
> taking courses in advanced computer languages,
> getting experience in a variety of business
disciplines, and endorsing a philosophy of continuous
improvement, he said.
> 
But many find it tough to reconcile their
> macro-economic outlook with their own unemployment.
> "We need to move beyond the idea that individuals
> can simply cope and retrain," said Courtney, whose
> 275-member union is asking Congress to study and
> possibly regulate offshore outsourcing. "Workers
> need a voice over their economic future and a voice
> against the executives making these unilateral
economic decisions."
> ___
> Rachel Konrad can be reached at rkonrad@ap.org 


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