The New Global Job Shift

Business Week ^ | Feb 3, 2003 | Cover Story

[ex-snook]

The New Global Job Shift The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?

The sense of resignation inside Bank of America (BAC ) is clear from the e-mail dispatch. "The handwriting is on the wall," writes a veteran information-technology specialist who says he has been warned not to talk to the press. Three years ago, the Charlotte (N.C.)-based bank needed IT talent so badly it had to outbid rivals. But last fall, his entire 15-engineer team was told their jobs "wouldn't last through September." In the past year, BofA has slashed 3,700 of its 25,000 tech and back-office jobs. An additional 1,000 will go by March.

[ex-snook]

What should be the 'conservative' view on this? In the global economy is it the citizen or the corporation that our government must protect? Is there a balance or does the world marketplace demand a Darwinian solution.

Further in the new Bush aim of world democratization, should the country only call upon its citizens for military duty or could the country supply USA uniforms to recruited international Gurkhas? They might do the job better and we would not have to ever think of 'the draft' again. What say you Conservatives?

[Alberta's Child]

I remember when New York Life opened their first back-office operation in Ireland back in the 1980s. Their motivation was not so much to save money, but to gain access to a well-educated workforce that showed up to work on time and could speak perfect English on the phone (with a real cute accent, too).

[dirtboy]

I'm really at a loss to figure out an answer here, being in IT myself. However, I've dealt with a fair number of H1-B techies and found them for the most part to have a very limited business vision, so IMO the best route for American IT professionals to go in order to save their jobs is NOT to learn another programming language, but learn how their business works, and be the layer that translates technology into business reality. In my department, other people know more about the technology than I do, but I know more about the business ramifications of the data, and they are bending over backwards to keep me as a result.

[dirtboy]

In 2000, senior software engineers were offered up to $130,000 a year, says Matt Milano, New York sales manager for placement firm Atlantis Partners. The same job now pays up to $100,000. Entry-level computer help-desk staffers would fetch about $55,000 then. Now they get as little as $35,000.

In other words, tech salaries are now facing the same adjustment towards economic reality that tech stocks faced over the last few years.

[mr.pink]

Interesting.

Technology has even accelerated the obsolescence of high paying Stateside IT jobs? Who da' thunk it?

[Jim Noble]

I don't know what the "conservative" view should be, but I'll tell you mine.

I think it has been a terrible, world-historical error to allow jobs to be shipped overseas. I was against it when it was the steelworkers, I was against it when it was the factory workers, and I'm still against it now that it's IT and other tech workers.

I just don't know what to do about it.

[dirtboy]

Technology has even accelerated the obsolescence of high paying Stateside IT jobs? Who da' thunk it?

What I see happening is a prolonged stretch of deflation in this country as globalization equalizes middle-class salaries around the world, and anyone holding a lot of debt is gonna get hammered. In the end, if your salary goes down fifty percent and your cost of living goes down fifty percent, you're OK. But if your salary goes down fifty percent but your mortgage was based upon your old salary and the old value of your home, then you're screwed.

[dirtboy]

I just don't know what to do about it.

You and me both. I'm not sure how to get the genie back in the bottle, or if was even possible to keep him there. However, this is the new reality, and folks are going to have to adjust to it.

[Centurion2000]

The name SGV & Co. probably means nothing to you. But this Manila firm's accountants may crunch the numbers the next time Ernst & Young International audits your company.

Hmmm .. and how hard would it be for a rival competitor to slip in, offer 50K to some analyst going over your data and have EVERYTHING on your company?? .....

[VadeRetro]

Should the West panic? It's too early to tell.

Why wait?

[maui_hawaii]

bump for later comment

[christie]

I've pretty much been forced to cut my fees by fifty percent due to competition from India (graphic design/electronic publishing). Trying to figure out how to cut my expenses by fifty percent. The government will get a whole lot less taxes, too.

[mike_9958]

I don't like it either, particularly when I think about the effect on my kids, relative to my lifestyle....

But I don't think it can be stopped, we must adapt, and build other businesses. Do what capitalist's do, take risks, invest money, and build a stronger economy.

[the gillman@blacklagoon.com]

...Should the West panic?...

The time to panic was years ago. This is like a sporting event where one team only realizes there's a game on when there's two minutes left to play.

At least when there's nothing left to be pillaged, the illegals will go home.

[ex-snook]

the best route for American IT professionals to go in order to save their jobs is NOT to learn another programming language, but learn how their business works,

Yes, that's well stated. You also have to consider matters of quantity and frequency. For example - there are many more head-down grunts needed that needed to understand the business. Also technology dictated changes happen more frequently than re-understanding business.

Me, I'm retired but you guys are on the ground. As 'conservative' citizens, what, if anything, do you want your government to do?

[dirtboy]

As 'conservative' citizens, what, if anything, do you want your government to do?

Halt H1-B visas. It's a lie that we need more foreign technical workers in this country. That way, native workers can compete as a larger block of American IT and have a fighting chance to earn a decent living with domestic-oriented IT jobs.

[Semaphore Heathcliffe]

...globalization equalizes middle-class salaries around the world...

The vaunted American middle class is about to take it in the shorts. Without some industry to replace IT that replaced manufacturing, we can assume our most prosperous days are behind us.

[ex-snook]

"but to gain access to a well-educated workforce that showed up to work on time and could speak perfect English on the phone (with a real cute accent, too). "

LOL - You're assuming competent English speaking Americans are in short supply. But I think help-desks have migrated all over the world since then. (based on some calls I made and tried to understand the 'helper'.)

[mr.pink]

This is like a sporting event where one team only realizes there's a game on when there's two minutes left to play.

I think I watched that game this past Sunday evening. ;o)

[dirtboy]

Without some industry to replace IT that replaced manufacturing, we can assume our most prosperous days are behind us.

Well, I have about $700 in total debt, so I can ride this one down. But for the vast majority of people whose personal financial structure is based upon inflationary economies, it could get brutal.