Lost Your Job Yet?

Computerworld ^ | April 12, 2004 | John Pardon

[Mini-14]

Frank Hayes' fears about techies bailing out of a declining American IT workforce are already being realized ["ITAA's Job Dream"].

I've done it. I concluded that IT is largely a dead-end career for Americans and opted out so that my wife could pursue advanced degrees in education and move up in a field that can't be so readily outsourced or filled by guest workers. I rebelled at my former employer's "wage compression," outsourcing and use of H-1B and L-1 visa holders.

One year ago, I resigned my IT job at NCR Corp., a Fortune 500 company based in Dayton, Ohio, because I was too disgusted and demoralized to continue working in a profession I enjoyed after my employer made it evident that American workers are disposable and replaceable no matter how loyal, productive, competent or well educated. I concluded there was no future for me at NCR or in IT. Like many other corporations, NCR was indifferent to its employees and American society. And, like many other companies, it has thoroughly embraced the policy of outsourcing.

NCR's outsourcing partners are HCL Technology and Saytam, which provide an IT workforce in India. NCR also has a contract with Accenture, and it has an Indian subsidiary that is also hiring a non-American workforce and isn't subject to American taxes or workplace laws.

Unlike Frank Hayes, I don't believe that it's widely possible to dodge the offshoring bullet by building up business skills and increasing face time with users. This sounds good, but techies are very busy with responsibilities. And I've noticed that IT writers seem a bit uncertain about how techies should remain competitive. Not long ago, we were being urged to gain new technical skills. How certain is anyone that broader business skills are now the answer to job retention? The truth is there really isn't much certainty regarding the actions to take or the skills to acquire to prevent outsourcing job loss. After all, many of us in the IT workforce have learned the indisputable truth that outsourcing and use of IT guest workers is really all about slashing labor costs, not increasing the quality of products and services.

I came to these conclusions long before the most recent ITAA study, which was the subject of Hayes' article. The public statements and actions of people like Harris Miller of the ITAA, Carly Fiorina of Hewlett-Packard, Sam Palmisano of IBM, and Lars Nyberg and Mark Hurd of NCR made it abundantly clear that there were declining opportunities for American IT employment. Many of us in the IT workforce saw the writing on the wall. I'm just more fortunate than most in that I was able to walk away altogether.

Though people like Miller and Fiorina deny it, America's displaced IT workers don't lack for skills or education. There is no urgent need for guest workers and no internal shortage of technically trained workers. Technology hasn't made American IT workers outmoded. Access to cheaper, more submissive and more manageable non-American labor has just made American IT workers undesirable and frequently unemployable.

I am not a person who expects others to manage my career or provide me lifetime employment. But on the other hand, I don't expect my government or powerful multinational corporations to conspire to undermine my employment opportunities and, more broadly, eliminate job opportunities for Americans. As I told Bob Herbert of The New York Times ["Dark Side of Free Trade," Feb. 22, 2004], I'm a moderate conservative now alienated from the Republican Party and the Bush administration because of free trade, outsourcing and the H-1B/L-1 visa programs championed by free-trade ideologues. People such as me are often disparagingly referred to as "disgruntled IT workers" by both politicians and many in the news media. Our arguments are dismissed as sour grapes and we are told to face reality. In other words, shut up and get another job because outsourcing will continue and it's part of doing business today.

The Visa Problem

Offshoring isn't the only way that American jobs are being eliminated. Many companies are also insourcing, importing low-wage, nonimmigrant H-1B or L-1 visa workers into the U.S. These visa programs are championed by people like Harris Miller and the member companies of the ITAA and are used by hundreds of multinational corporations intent upon cutting labor costs.

As with outsourcing, many in the media and politics make inaccurate statements regarding the H-1B and L-1 visa guest worker programs. These misrepresentations provoke frustration and anger similar to that evoked by the latest ITAA study. For example, The Washington Post's editorial "Cap on Hiring" states, "It isn't possible to argue that the holders of these visas bring down American wages. No one doubts that they do jobs for which there are clear, well-defined shortages of Americans." This is complete nonsense. Such statements are totally at odds with the reality of how these programs are used to replace American IT workers all over the U.S.

Some in Congress do believe there is a problem of job loss related to the H-1B and L-1 guest worker programs. On Feb. 4, 2004, the House International Relations Committee held a hearing called "L Visas: Losing Jobs Through Laissez-Faire Policies?" The testimony of Michael Emmons, Sona Shah and Patricia Fluno provided firsthand evidence of how L-1 visa programs are used by corporations to systematically replace Americans (and those who hold green cards) while abusing the imported visa workers. (A video webcast of the hearing is available.)

The H-1B visa program has long been used as a tool to facilitate outsourcing and circumvent the labor costs of American IT workers. Norman Matloff, professor of computer science at the University of California, Davis, has written extensively on this subject and testified before Congress about how the H-1B program has injured American IT workers. He is clear that the H-1B program is premised on misrepresentations and false studies. He has a new article on the subject in the University of Michigan Journal of Law Reform.

I have direct knowledge of these issues through my experience with outsourcing and guest worker replacement programs at NCR. I watched non-American (Indian) workers enter NCR facilities in the U.S. and receive "knowledge transfers" from American IT workers. Then the Indian replacement workers usually returned to India to do the work previously performed by the Americans who had trained them. On other occasions, the replacement workers remained in the U.S. on H-1B or L-1 visas and continued to perform necessary IT work in the same buildings in which the Americans had formerly worked.

This is not an urban legend; I watched it happen. It has occurred all over the U.S. Understandably, Americans who remain in IT jobs often work in fear of job loss since employers now have ready access to low-wage guest workers and have displayed a ruthless lack of concern for the American workforce. Most of us who have gone through this experience have finally realized that we are competing with a Third World wage scale while our employers continue to charge U.S. prices. It's not fair and it's not just, but thanks to the actions of the U.S. Congress and successive presidents, it is completely legal.

The Retraining Fallacy

Free-trade and outsourcing proponents publicly hold out the option of retraining into other professions, but these other professions are mostly unidentified. The reality, as I told Bob Herbert, is that there aren't any new middle-class postindustrial jobs for displaced Information Age workers. There are no opportunities to leverage our experience into higher-value-added jobs. Instead, there are persistent credible accounts of software engineers taking low-wage unskilled jobs just to survive.

Health care is often cited by outsourcing and free-trade proponents as an area in which new jobs are available. Free traders don't care to mention that many white-collar workers would see dramatic decreases in their earnings (wage compression) even if they could afford to undergo the time-consuming and costly retraining necessary to enter the health care profession. In any case, software engineers changing bedpans and giving injections would be a waste of resources and educational capital. What a loss of skills and knowledge to our economy! What a costly betrayal of workers!

There is no employment rebound for IT workers. Recent college grads or new entrants into IT can't even get jobs on help desks, which are now increasingly moving offshore. The reports from companies such as Challenger, Forrester and Gartner all point to increased IT outsourcing and use of IT guest workers. "Global competitiveness" sounds good in corporate boardrooms and political speeches, but the reality is that increasing numbers of American IT workers are suffering and losing confidence in our political and business leaders. We are locked in a merciless, unrestricted competition with low-wage workers of the developing world. This is ultimately an unwinnable competition. American IT workers, like many in the middle class, are learning that education, skill and hard work are no longer indicators of success. It's all about cheap labor -- a fact not lost on Harris Miller, Carly Fiorina, Mark Hurd and Sam Palmisano.

Global free trade is ultimately an emperor with no clothes. As Paul Craig Roberts has discussed in "Clarifications on the Case for Free Trade" and "The Harsh Truth About Outsourcing", the premise for free trade to be beneficial to all parties is that some comparative advantage must exist for all parties. This is not possible with the full worldwide mobility of labor and capital. The U.S., its workers generally and American IT workers in particular have no comparative advantage in the world today. Nations such as China and India command an "absolute advantage" over the U.S. This situation is more than just the result of what Frank Hayes calls the "ITAA's fumbled efforts to hype the benefits of offshoring," and if it leads to an IT staffing nightmare for American corporate HR departments, my response is, "You reap what you sow."

John Pardon is a former technical writer, software engineer and database administrator who has worked for a number of software development and IT corporations. Since his departure from NCR in early 2003, he has written on the topics of outsourcing and the H-1B and L-1 visa programs, inspired by his own experiences and those of other U.S. IT workers, notably Scott Kirwin, founder of the Information Technology Professionals Association of America, and Michael Emmons. Emmons' story was told in Computerworld's sister publication, CIO magazine [ "The Radicalization of Mike Emmons"]. Pardon can be contacted at jpardon@worldnet.att.net.

[1rudeboy]

[B]ecause agricultural products are #2 behind aircraft. so if aircraft fell, food exports would move to #1. its quite simple really.

If it's that "simple," then one of you should be able to cite a source for this claim? The annualized data I posted for 2003 makes this "simple" assertion fairly squishy, if not outright ridiculous.

[1rudeboy]

As far as your list of platitudes, can you add "our largest exports are agricultural and other natural resources?" Thanks in advance.

[guitfiddlist]

"The most important single 3-digit SIC code for U.S. exports in 2002 was not aircraft, as you might have guessed, but code 776, "thermionic, cold cathode and photo cathode valves" with $47.6 billion of exports. Presumably these are not being used for radio equipment, as would have been the case in 1925, but for medical imaging equipment. A good business, but probably not one capable of growing exponentially (exports from the 77 sector as a whole grew by only 5 percent in the five years 1997-2002.)

Second is indeed code 792 -- aircraft and associated equipment, at $44.9 billion. The passenger aircraft business is close to a world duopoly, between Boeing and Airbus. Boeing could normally be expected to gain market share as the dollar declined, making its costs more competitive against Airbus. However, the company has spent too little on innovation in the last 30 years, and is now losing world market share rapidly to the newer product range of Airbus. Exports in this sector are likely to decline going forward, and imports to increase."

Source:

http://www.google.com/search?q=cache:rbxlY9UQ0HsJ:www.upi.com/view.cfm%3FStoryID%3D20040102-032245-7065r+Aircraft+as+percentage+of+exports&hl=en&ie=UTF-8

[1rudeboy]

Nothing kills a thread faster than economic data.

[neutrino]

I don't see that in your #128. Did I simply miss it? If so, where?

It's right there in #128.

For your reading pleasure:

Keep in mind that this is about much more than programmers. It is about the very nature of our economy. Do we wish to export value added goods, or not? Presently, most of our exports are agricultural products and various natural resources. We are net importers of every technological product except aircraft and aircraft parts.

[wku man]

You and me both. I heeded the Labor Dept's clarion call back in 2000, the one for Americans to get more high tech skills. You remember that one? The one that promised millions of new IT jobs over the next decade? Well, I made the jump from radio (which pays nothing anymore...thanks, Cheap Channel) into telecom, paid thousands of dollars to get several BICSI certs, an A+ cert, and finally a CCNA. My current job delivering pizzas for Domino's pays more than any of the few help desk jobs available here in Florida.

So now they're telling us to retrain into the health care industry, eh? Well, my sister-in-law does Human Resources for a major healthcare corporation, and they've been sending her to the Philippines, Thailand, etc. to recruit nurses. Evidently, there aren't enough qualified American nurses to fill all the vacancies, so they have to rely on foreigners until enough Americans get retrained...or so they say, at any rate. Sound familiar? Heck, I could name that tune in two notes. They're feeding us the same BS they did back in 2000, only this time for healthcare jobs. These government clarion calls are merely smoke screens for Congress to increase H-1Bs and L-1s.

Job skills of the future? I dunno...maybe marksmanship.

Scouts Out! Cavalry Ho!

[oceanview]

you have to dig around, and the groupings make it hard to tally.

http://www.census.gov/foreign-trade/Press-Release/2003pr/12/exh7.txt

But, for 2003, all agricultural products ('food, feeds and beverages') came in at 55,079 million. other categories are higher (like autos), but it depends on how sub-categories you group into it.

the original "source" for this was a trade article written by Pat Buchanan, where he cited how agricultural products are a heavy component of US exports.

[neutrino]

You want a source? Fine.

Paul Craig Roberts addresses the question. Read it here

Don't like that? Try this (You'll need Adobe's PDF reader).

Not enough? Very well. Try the paper on the US current account, A sectoral Assessment of Performance and prospects here. It's only 271 pages long, so it should provide an evenings light reading. I encourage you to pay particular attention to Table 3.17, page 54.

Perhaps you'd like to read this, from page 59:

This is what happened to the United States in the 1980s and what happened again in the mounting deficits of the late 1990s. The $146.8 billion 1981-87 deterioration in manufactures trade performance was equivalent to 87.9 percent of the deterioration in the current account balance overall, and to about 3.3 percent of 1987 US GNP. Similarly, the $263.3 billion increase in the manufactures deficit from 1991 to 1999 was equivalent to 85.0 percent of the decline in the goods balance and about 75 percent of the $343 billion current account deficit expansion over the same period. Expansion of the oil deficit was equivalent to 6.8 percent of the 1991-99 current account deficit expansion and decline in the agricultural surplus to 1.6 percent.

Or read this from page 60:

Clearly the US manufacturing sector in the long run must be large enough to avoid large, consistently growing current account deficits relative to GDP and the adverse long-term effects on US living standards of continued borrowing abroad. But changes ultimately implemented solely by the workings of international economic forces could be untimely and particularly painful. Anticipating and preparing for these changes may mitigate the difficulties. In a world economy that is now more integrated and more competitive than ever before, US economic policy making -- fiscal, monetary, tax, regulatory, and other policies -- must consider the vulnerability of the manufacturing sector to foreign competition and to policies that influence the size and direction of net international capital flows.

Not enough? Still not enough? Try this, from page 67:

United States (Tables 4.7A, 4.7B, 4.7C)

· The United States consistently runs relatively modest agricultural goods surpluses but huge

deficits in fuels and manufactured goods.

· The manufactures share of total goods trade continues to grow reaching 82.0 percent of 1998

exports, 80.2 percent of imports.

· Asia, Western Europe, and North America (Canada) each take about one-fourth of US

manufactures exports; just one-fifth (20.9 percent) goes to Latin America, about half of that

to Mexico.

· US clothing imports are huge, $55.7 billion in 1998, 7.4 percent of the manufactures total.

· Mexico outranks Japan as a market for US manufactures.

· Nearly half (45.3 percent) of manufactures imports are from Asia, including 15.9 percent

from Japan; over one-fifth, 22.4 percent, are from Europe, with another one-sixth, 16.3

percent, from Canada.

Still not enough? Want more? Try reading table 4.7.B on page 76.

More? You want more? Great! See table 5.1 on page 115!

You know perfectly well that the numbers show the US is having her throat cut by the free traitors. And it's no good denying that they are wielding the knife while screaming for cheap garbage from Great Wall Mart.

[Lael]

People on FR need to stop thin[k]ing that this is some sort of electioneering issue thought up by the Democrats. It is not. This is a real issues and it will just get worse.

AMEN!!!

I was carefully watching the Democrats pre-primaries.

Kerry thought that he could solve it by making "call centers" identify where they were...as though I.T. was JUST help desks, and we weren't astute to the sound of foreign accents!

Dean thought 'outsourcing' meant sending Whirlpool manufacturing to Mexico, and his solution was to NOT treat the now Mexican manufactured washing machines as "Mexican Manufactured Machines" under NAFTA!

Watching these guys [C. Mosley Braun didn't even try to "grapple" with it], and you realized that, on this suddenly and perhaps DECISIVE political issue, the Demos were just as CLUELESS, if not complicit on this issue

But, AT LEAST they had the good sense to not PRAISE and APPLAUD these trends!

I'm convinced that is the only reason an obvious loser like Kerry is getting a serious "look see" from perhaps a "Plurality" of American voters!

[InABunkerUnderSF]

Doom and gloom talk. Most of my customers who I visit and sell to in the Midwest are increasing IT staff. Now, a lot of the low-level/helpdesk jobs that involve basic troubleshooting are outsourced to India...

So, if we outsource all of the "low-level/helpdesk jobs", how do we bring new people into the field? These are the entry level jobs. I used to poach all my good guys for network management from the Helpdesk and Desktop groups. They had better trouble shooting skills and better work ethic than people we hired in from outside.

At the company I worked at they "insourced" everything to Indians on L-1 visas - Helpdesk went first, followed by software development, then desktop, server admin. and network management, which included security. Those of us who held those jobs originally had the choice of "providing knowledge transfer" or leaving then without benefits, cobra, etc. We stayed.

I really don't think you understand the situation. I hope you don't get the opportunity to see it first hand.

[1rudeboy]

You know perfectly well that the numbers show the US is having her throat cut by the free traitors.

Better to have your throat cut by someone who understands economics, rather than be bludgeoned to death by someone who cannot tell the difference between total exports and net trade deficits.

[neutrino]

It appears that you didn't bother to read the references I gave you.

There are none so blind as those who will not see.

[1rudeboy]

Given your propensity for posting reams of irrelevant data, like you did in your #138, your "suggestion" that I go and look-through another one of your document-dumps to gather that single nugget of data that you yourself cannot provide is simply BS.

I am interested to see if you can support your bald, and simple, assertion that ". . . most of our exports are agricultural products and various natural resources." Note that you made no mention of imports, import deficits, or sunspots. Nor do you need to cite to the full-text version of the Magna Carta and invite me to look. Simply cut & paste a few lines (like I do--chortle), and include a hyperlink for the rest so that I can check your work. Let's see if you can do it . . . I know you can.

[CyberCowboy777]

I am not trying to be original, and I have never argued this outside of family and friends so you'll have to forgive me if I do not meet your new argument standard.

As for grading - I have been steadily working and growing throughout this "sluggish economy", so I'll based my performance on that.

[CyberCowboy777]

There is no doubt that we hit a rough patch (as a nation, not just I.T.) and 500,000 jobs is real people.

But these things must be taken in context, if you get an attitude you put yourself on the road to defeatism.

We are on the way up and those with a go get'em attitude will be there first and prosper the most.

[CyberCowboy777]

I'll have to take your word for it, it is just lower than I have seen. Good for the Russian though!

But I'll pass on swallowing this bilge - All employment is essentially a form of enslavement.

LOL! Enslavement is NOT voluntary.

[Dominic Harr]

I am telling you, thats what we are paying our guys, that is all. We dont quote these prices on our website.

The cheapest we've found people for is $30 hr, total cost. And that's a fresh-out-of-college newbie. You could get the same here, for the same price. And when you complain that you need more 'experienced' support, they quote us $65 an hour! Are you kidding me!?

And in my experience, the quality of service flat-out stinks. CSC used Satyam, a CMM Level 5 shop. Had to let them go, they burned the entire budget on one app just making a design doc, no kidding.

They need a 'War-And-Peace' sized design doc before they'll even start. Good local developers using an Iterative dev methodology were able to build, test and deploy the entire app in less than the time it took Satyam to get a design doc approved.

Then CSC switched opened an Indian Division, and those fellas are causing more bugs than they fix. Last week one Director barred CSC India from putting any more code into one production Lotus sysem, the problems became so bad. But their cost sure looks good on the manager's budget! The manager get's many kudos for the low labor costs, possibly even promoted. Of course, total cost goes up, and the clients are complaining . . . contracts are being lost . . . but hey, you can't have everything now, can you!?

It's just a matter of methodologies -- you can't work closely together on an aggresive iteration schedule with people on the other side of the world. The only way to make it work even a little is to sell out to the 'waterfall' methodology, and then you get killed in the market by XP-style shops.

[neutrino]

I've got a better idea. Go read the report. You were given lots of references from a variety of reports - you just don't want to look at them. I even gave you page numbers.

As I said earler - there are none so blind as those who will not see.

[LearnsFromMistakes]

All hail CMM. I hope all those off-shore companies become CMM compliant. That should kill any profits...

[TXBSAFH]

I hear you, keep your powder dry.