T. Levette Bagwell / AJC Driven out of the dog-eat-dog corporate world by the recession, Jim Brannon has begun his own company, PuppyLove Fence Co., which sells and installs electric fences in the metro area. Posted on 08/27/2003 6:11:37 PM PDT by Starwind
White-collar jobs go abroad
By DAN CHAPMAN
The Atlanta Journal-Constitution
At the top of his white-collar game, Jim Brannon worried little about his job. He was six-figure successful, an educated man with a jet-setting software job in Norcross.
The vagaries of free trade and globalization couldn't touch him. He was, after all, a vaunted executive at Unisys, the world-spanning information technology behemoth. It was the blue-collar Joe, Brannon believed, who'd wake up one morning and discover his factory job had gone to Mexico or China.
Brannon, though, experienced just such a morning in February 2002. A letter ordered him to clear out his desk by day's end. Gone were the fancy office, expense account, feeling of invincibility, and once-solid belief in the righteousness of Corporate America.
Brannon, now 52, represents one of the hundreds of thousands of American white-collar workers whose jobs have disappeared the last three years. While Unisys' desire to cut costs was partly to blame for Brannon's unemployment, he says a major culprit was offshore outsourcing.
America's middle- and upper-class workers, long immune from globalization's discontents, are under siege this Labor Day. No job, it seems, is safe.
T. Levette Bagwell / AJC Driven out of the dog-eat-dog corporate world by the recession, Jim Brannon has begun his own company, PuppyLove Fence Co., which sells and installs electric fences in the metro area.
It all began two decades ago with the hollowing out of America's manufacturing core and the disappearance of textile, electronic and steel jobs. Low-skilled service workers -- call center employees, credit card processors, computer code writers -- soon followed. Information technology jobs were next.
Now, though, virtually every job is up for grabs to the lowest bidder, who can typically be found in low-wage India. The list is as long as it is scary for America's educated work force: financial analysts; patent researchers; insurance claim processors; architectural drafters; radiologists; and, yes, software executives worried about job prospects for themselves and their teenage children.
"What are they going to do when they get out of college?" asked Brannon, who now installs invisible fences to keep dogs from straying. "Will they seek the proverbial white-collar job? I don't think so. It won't be there."
The Washington-based Economic Policy Institute reports that the number of long-term unemployed white-collar workers has more than tripled during this most recent recession.
Forrester Research expects U.S. companies to ship 3.3 million white-collar jobs overseas, most to India, by 2015. Half of those jobs fall under the heading of "office support." Nearly 290,000 management jobs and 184,000 architectural design jobs also will disappear, Forrester predicts.
"For a long time, you had a group in the United States, white-collar service workers, who could enjoy some of the benefits of free trade -- lower prices for clothing, for example -- but felt themselves immune from the downside. Now they realize that's not always true," said Josh Bivens, an economist with the Economic Policy Institute. "People are now getting animated about this [when they] didn't get animated about steel closings."
Much of that animus, like previous times of economic malaise, is targeted at workers from other countries, Indians in particular, who benefit from high-wage America's misfortune.
A cornucopia of Fortune 500 companies have hired low-wage, English-speaking, well-educated Indians. Got a sick computer? Chances are your Dell Computer answer man lives in Bangalore. American Express screw up your monthly bill? A friendly woman with a slight (they're trained to sound American) Indian accent is on the line.
Hewlett-Packard Co. employs 3,300 software engineers in India. Bank of America recently slashed 5,000 technical and back office jobs with a third reportedly shipped to the South Asian nation.
The world's top 100 financial institutions plan to move 1 million back office and technical-related jobs to India by 2008, according to Deloitte Research. General Electric already employs 20,000 there.
Atlanta-based Coca-Cola, which doesn't publicize the amount of work it contracts out, is expected to one day employ Indians and workers from other underdeveloped countries to fill up to 70 percent of its outsourced IT work.
"Looking for a new job, I was astounded by how bad the market is," said Charlie Seaman, 54, who lost his IT job at Georgia-Pacific last month. "I really want to be a consultant, but at this point, I'm wondering if I should get a job at McDonald's or something."
'How can I compete?'
Seaman, who has pulled $20,000 from his retirement fund to stay financially afloat, trolls the Web looking for free-lance jobs. It further galls him to discover that Indian contractors bid only $7 an hour for work he's typically paid $45 an hour to do.
"How can I compete with that?" he asked. He can't. Nor, conceivably, can Wall Street analysts who earn maybe $100,000 a year. An Indian MBA graduate makes about $12,000 annually. A U.S. computer programmer is paid at least 10 times his Indian counterpart.
The Indian government pointedly went after U.S. service industry jobs a decade ago. By 2008, IT and other service-related exports will generate $57 billion in revenue -- and employ 4 million people -- according to an Indian business-government task force.
India, of course, doesn't monopolize offshore American business. Accenture employs 5,000 Filipinos who handle accounting, software and other back office work. American Express, Eastman Kodak, Intel, Microsoft and others have established 45 call centers across the Philippines employing 10,000.
With 380,000 college graduates each year, the Philippines -- low-wage and English-speaking friendly -- will remain prime hunting ground for cost-cutting U.S. companies.
Even China, which graduates 70,000 mechanical engineers each year, twice as many as in the United States, hones in on America's propensity to offshore jobs.
Economic giants in Europe and Asia also ride the cost-cutting outsourcing wave. Banks in Britain increasingly turn to India, a former colonial subject, for back office work. The French are partial to French-speaking Mauritius for telephone service work. German companies look east to Russia, the Baltics and Eastern Europe. Dutch electronics giant Philips has shifted most of its television and cellphone research and development work to Shanghai.
From India to Russia
Nor are underdeveloped countries immune from outsourcing. Seaman, angered by so many white-collar jobs going overseas, demanded last week to know who was answering his AT&T service call and where the chap lived. The Indian technician, Seaman said, empathized with America's loss of white-collar jobs.
"And then he said they were having trouble because their jobs were now moving to Russia," Seaman added.
Not surprisingly, America's anti-offshoring backlash grows. The Boeing Co. has simultaneously laid off 5,000 engineers since 2001 and hired replacements in Russia who make as little as $5,400 annually. Boeing employs Russians in seven cities to help design parts for jet wings and the international space station.
A year ago, Boeing's Moscow Design Center employed 700 -- far too many for its Washington-based union members. Engineers threatened to walk out last December, when their contract expired, if the Russian venture was not scaled back. Boeing cut its Moscow operations in half, but it won't rule out further expansion in the former Soviet Union.
"To be economically competitive in the future, we need to make sure that we keep science and technology jobs here in this country," said Marcus Courtney, president of WashTech, a burgeoning Seattle-based union for high-tech workers. "But the opposite, in fact, is happening. I don't see how this makes America and our economy more competitive when we're exporting every job."
Corporate America begs to differ. Buffeted by the recession, lowered profits and Wall Street disillusionment, U.S. businesses have been slashing costs for three years. Jobs and benefits have been obvious targets for productivity-minded companies.
Management gurus insist offshoring can shave 40 percent or more from corporate bottom lines. Coca-Cola says it can save 20 percent by outsourcing.
Better days ahead?
Even Wall Street may feel the sting. Wages comprise three-fourths of a Wall Street researcher's expenses, according to the New York state comptroller's office. The average Wall Street bonus last year: $48,500.
It's little wonder, then, that U.S. financial services firms expect to ship 500,000 jobs overseas over the next five years, according to management consultant A.T. Kearney.
India's gain, though, won't necessarily come at the expense of American workers. Daryl Buffenstein, general counsel to the pro-business Global Personnel Alliance, argues that without cost-cutting measures, many U.S. companies would fail, taking thousands of jobs down with them.
"To make a blanket assertion that every time a company moves jobs offshore means that somehow we've been robbed of jobs in the United States is not necessarily an accurate assertion," said Buffenstein, an Atlanta immigration lawyer. "By moving certain functions offshore, it enables [U.S. companies] to be much more competitive domestically, and it can even increase employment domestically."
Economists also question the dire prognostications that millions of white-collar jobs will disappear during the next decade. Bivens, at the Economic Policy Institute, says U.S. Department of Labor statistics remain too outdated for accurate crystal ball predictions.
"There have been lots of anecdotes about companies planning to move jobs abroad, but companies plan lots of stuff," he said. "And they also have an incentive to talk up plans to offshore to keep wages down and to keep current employees uneasy so they can extract some wage concessions."
Clearly, though, jobs of all stripes are gone for good. Nearly 3 million jobs -- white- and blue-collar -- have disappeared since the recession began three years ago. More than 9 million Americans are looking for work.
Job creation lags
Hope wanes that many of the lost jobs will return. Within 18 months of the end of the 1990-91 recession, for example, 516,000 professional and business service jobs were created nationwide, according to Rajeev Dhawan, an economist at Georgia State University. But 18 months after this latest recession officially ended, in November 2001, an additional 102,000 white-collar jobs have been lost, Dhawan noted in his recently released economic outlook.
Nonetheless, Dhawan predicts the white-collar work force will rebound the next two years. Brannon won't wait to find out.
Soon after being laid off, Brannon lined up a half-dozen interviews. But much-reduced salaries and the fear of another layoff convinced the Gwinnett County father of two that the software development industry was no longer for him.
When an old acquaintance extolled the money-making virtues of invisible fences, Brannon bit. Now he owns his own "pet containment" business. He earns one-third less than before, but says he's much happier away from the increasingly globalized dog-eat-dog world.
"I always thought I needed to have a prestigious office and a job with a briefcase, a suit and a laptop and go to corporate meetings," he said. "But now I don't have to worry about the next ax falling or somebody saying, 'If we don't get those numbers up next quarter, you guys will be in trouble.' I also control my destiny a lot better."
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http://www.ajc.com/news/content/news/atlanta_world/0803/27jobs.html
Forrester Research expects U.S. companies to ship 3.3 million white-collar jobs overseas, most to India, by 2015.
22,916 jobs/month for next 12 years = 3.3M jobs / (2015-2003 yrs x 12mo/yr)
The BEA payrolls reports have shown a range of 44,000 to 76,000 jobs lost per mont for the last 3 monthly reports.
Losing 23,000 jobs per month for the next 12 years is 33-52% of what we've been losing already.
Assuming the report is reasonable (?), that's quite a hurdle for our economy to compensate for, beyond what it already needs to produce.
This will only be true if baby boomers retire faster than offshore jobs are "shipped out."
It is real tough to make it in business these days in the good old US of A.
This will only be true if baby boomers retire faster than offshore jobs are "shipped out."
Retire ? A baby boomer who has to start at the bottom again when he has middle aged committments (mortgage, family, children in college, aged parents, his own retirement, etc) can forget about retiring.
And that is the lunacy of the free traders. They constantly whine about the lack of 'entrepreneurial spirit' as if the prospect of bankruptcy and foreclosure in your advanced years were some sort of exciting adventure. If the 'global economy' pitches people headfirst into the dirt at regular intervals, people will demand a safety net. People will demand European levels of social welfare to cushion those falls.
I still have my IT work, but the simple fact is tools are making it easier and easier for less people to do more. I could run three or four offices the size of mine, if I had them squared away like mine (~50 users). I can cling to it until they start pairing down and realizing the effeciencies I've helped put in place, or I can look to the future. Soon my brother and I intend to buy a plane, I'll get my pilots license. Wouldn't mind being a bush pilot in Alaska, etc, at a minimum I hope to rent the plane to an instructor to recoup some of the expense. At the same time I intend to start working with a friend in his freelance consulting. He's setting up point of sale systems and handling small support for individuals and small business. Two POS installs a month pays his bills, they take about 25 hours each depending how much of a handle the customer already has on their inventory, and if they know what they want to do. He hasn't even looked for business in the year he's been doing it, all word of mouth and recommendation. Bottom line, don't rely on others to find something for you to do, you better be looking out for yourself.
Probably a lot of the free traders are kids who think working at McDonalds is a pretty nice job --- and it is for them because they still live at home and never had bills to pay or kids to support.
(sigh) I love Alaska. I rode a BMW to Deadhorse up the oil-co haul road one summer, back down through Yukon, Canadian Rockies...(sigh)
They need to be taught there is no future in it. They need to learn about Eastern Europe's past, which is Western Europe's future...
You owe it to your children to do so. They can't eat copies of "Atlas Shrugged".
That's ok. These are the distasteful, unpleasant jobs that Americans don't want anyway, jobs that go mostly to unskilled labor. In this hi-tech and global society, displaced workers will find higher-paying jobs in a different sector.
Forced? That's all you have to offer? You have to earn someone else's money, voting for it is just stealing by proxy. It'd be less cowardly to get a gun and do the dirty work yourself.
What do you eat after you've made a meal of the rich? Quit focusing on how to cut a fixed pie, and think about how you can contribute to grow the pie.
They need to be taught there is no future in it. They need to learn about Eastern Europe's past, which is Western Europe's future...
They know that the future is home foreclosure due to unpaid taxes, no health insurance so all those middle aged and elderly people had better stay healthy, using your savings nest egg to buy heating oil and food, bankruptcy to get out from under the credit card debt, and the reality of downward mobility so those in gated communities can prosper.
Trust me. They won't be very interested in libertarian lectures about the 'free market'.
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