Skip to comments.U.S. tech workers feeling pinch of new world economy
Posted on 06/10/2003 10:48:40 AM PDT by Rodsomnia
U.S. tech workers feeling pinch of new world economy Phyllis Schlafly (archive)
June 10, 2003 | Print | Send
The Boston Globe revealed why tens of thousands of information technology jobs have been outsourced overseas in the past couple of years, and why major U.S. banks, brokerage houses and insurance companies plan to ship 500,000 more jobs abroad in the next five years.
A graduate of the Indian Institutes of Technology with a master's in business administration can be hired for $12,000. Compare that to the average starting salary or $102,338 for a Harvard Business School graduate.
The figure of a half-million jobs was reported by business consulting firm A.T. Kearney Inc., which surveyed 100 major companies. It is all a matter of money; the big banks are following the trail to Asia blazed by Microsoft Corp. and IBM.
A study by Forrester Research of Cambridge, Mass., estimates that the rush to export U.S. jobs will accelerate, and that U.S. corporations will send 3.3 million jobs overseas by 2015. India is expected to get 70 percent because many Indians speak English.
The future is now. U.S. companies already employ Indians to do research and development, prepare tax returns, evaluate health insurance claims, transcribe doctors' medical notes, analyze financial data, dun for overdue bills, read CAT scans, create presentations for investment banks, and more.
J.P. Morgan Chase & Co. is planning to set up an equity research department in Bombay, India, and build up its Technopolis, India, office to 1,100 employees by the end of this year. Delta Air Lines has contracted with two Indian companies to handle some reservations.
Morgan Stanley plans to experiment with hiring stock analysts in India, and Goldman Sachs Group Inc. and Citigroup are studying the benefits of shipping research jobs to India. Industry observers say that every bank on Wall Street will soon reap the cost benefits of the inexhaustible supply of business graduates in India eager to work for as little as 10 percent of the market rate in New York or London.
General Electric Co. shifted software development and back-office jobs to India under Chief Executive Officer Jack Welch. Today, GE's Indian engineers are contracted for tasks as sophisticated as analyzing the materials for and the design of engines for new jet airplanes.
Not only U.S. steelworkers and blue-collar manufacturing workers are getting shafted by the global economy. So are smart college graduates. As one executive, who has no shame about replacing U.S. citizens with foreigners, said, "If it can be done by sitting at a desk in front of a computer, then it can be done abroad."
Some U.S. companies, such as American Express Co., are using Indians to service U.S. customers by telephone. The Indians adopt Western names (Sanjeep becomes Sam, Radhika turns into Ruth), learn how to avoid British colloquialisms and take speech therapy so that they sound like American.
Many U.S. companies subcontract with Indian software-serving companies, especially with the three largest: The Tata Group of Companies, Infosys Technologies Ltd. and Wipro Technologies. These companies transfer their employees to the United States on L-1 visas, which are supposed to be issued only to key employees.
Business Week reported that L-1 visas were the ticket of entry to take a U.S. job for half of Tata's 5,000 workers, for one-third of Infosys' 3,000 U.S.-based workers, and for 32 percent of Wipro's U.S. employees. L-1 visas enable Indian workers to replace U.S. workers. Many of these Indian workers bring their spouses and children to the United States on L-2 visas.
New Jersey residents were shocked to learn that state officials had hired contractors who in turn arranged for operators working in Bombay to handle calls from the state's welfare recipients. New Mexico residents were shocked when KOAT-TV reported that the state hired aliens as computer programmers in the Taxation and Revenue Department and paid private attorneys to process their work visas.
The large amount of taxpayer-paid computer work performed by non-citizens for at least 12 state governments and nine federal agencies is a scandal crying out for investigation.
Age discrimination is a significant factor in the layoffs of U.S. citizens. The termination rate for those over age 40 is generally 10 times higher than for those under 40, and even those as young as 35 are at risk.
Sun Microsystems Inc. is defending itself against a lawsuit alleging that it laid off 2,500 older U.S. workers and replaced them with young, lower-paid workers from India. The lawsuit alleges that Sun discriminated on race, national origin and age, and that Sun manifested an "institutional bias" in favor of Indian workers because they are "more compliant" and "less willing to make waves."
Not only is the claim made by many tech companies that the United States suffers a shortage of computer programmers and engineers a fraud, but so is the claim that the aliens they import have specialized knowledge that is needed to retain the tech industry's competitive edge. In fact, most foreigners coming in on H-1B or L-1 visas are ordinary workers making ordinary salaries.
©2003 Copley News Service
Once enough of them (government workers) are unemployed we might get some immigrtation and tax relief.
Fear of the private sector is a powerful motivator.
Hard to see how they could do any worse than the domestic ones...
There are some reports that 'cause L1's can be paid by the country their from, they pay ZERO US taxes.
But then again, there are many who call themselves conservatives and turn right around and raise taxes (tariffs), and bloat federal power to force me to buy from their cronies.
These so-called "America-firster's" slander US workers when they say that we can't compete with those elsewhere. The facts are that Americans are the best educated and most productive in the world. Schlafly may think that her talents could be easily replaced by those of a journalist grad from say, the University of Havana, but the rest of us have a lot more confidence in the market value of our abilities.
Lawyers, Judges, Politicians, and fast food restaurant workers...
Why read her column, then? Almost all this content came from other sources, anyway.
Who says an American can't get by on $12k per year?
If the process continues for longer this claim might become true as the expertise will shift to the foreigners.
No, I do not say the US worker can not compete in a free market but I do say the current market is a rigged game with the American taxpayer hit on to subsidize shipping jobs offshore. reference article for above quote is at Here.
You are quite correct in this and everyone should remember our military IT was built on a broad base of Civilian IT. China is becoming a major player in IT outsourcing because they are cheaper than India. china has realized the critical military nature of IT and is devoted to catching up in that field before even worrying about things like ships and palnes and tanks. they analyzed teh US performance in the Iraq war and have reached the conclusion that greatest US edge our military has is out IT so needless to say government polices of teh Clinton Administration are designed to destroy the infrastructure suport for our American advantage.
Something doesn't ring true in this comparison. If the Indian MBA is doing the same work as the Harvard grad then how can the Harvard grad ask for the $102K and who would be foolish enough to pay it? Doesn't the law of supply and demand apply to the MBAs or could it be they don't think it applies to them and that they are "entitled" to such high starting salaries? Seems as though they have a union mentality!
Which is exactly why I'm getting the h*ll out of IT after 15 years. My income will suffer but at least I'll be working.
That's because it isn't true. Every few months the Economist magazine runs a new article about some professor who 'discovers' once again that American workers are more productive than those of other countries. The Japanese may work longer hours, but the Americans work a lot smarter. When you go to the third world the problems are even more sever.
Those that are hiring have found out that the American Harvard MBA simply does ten times as much work as the Indian. I've hired construction workers internationally for three decades and have always found that the guys I've hired for $7 per day were worth every penny of it.
It can certainly be done anywhere but if you need a giovernment handout to make it economically feasable to do it abroad then it is time to stop the government handouts that are harming America. Clearly anyone can do anything but this shipping jobs offshore is dependent upon government financing to get the job done and we had best stop before it is no longer dependant upon the government dole and it comes back to destroy us.