IT Industry: A Race to the Bottom?

Discussion in 'Current Events' started by DKSuddeth, Nov 20, 2003.

  1. DKSuddeth

    DKSuddeth Senior Member

    Oct 20, 2003
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    North Texas
    By Alan Tonelson

    The quickening flight of high-tech and white-collar service jobs has always represented the ultimate betrayal of the American worker by globalization. For years, globalization cheerleaders described the hemorrhage of manufacturing jobs as acceptable and even welcome because American workers would be retrained for the higher-paying, knowledge-based “industries of the future” –- especially the research and development, design, and engineering needed to produce cutting edge goods and services.

    Starting during the tech boom, though, U.S. technology companies made clear that the “higher paying” part wasn’t on their agenda. By pumping up the number of technologically skilled immigrants allowed into the country and outsourcing growing numbers of tech jobs abroad, these firms are well on their way to guaranteeing that whatever jobs of the future remain in America pay as little as possible.

    Worse, in the process, they’re discouraging more and more young Americans from studying science and technology, and thus encouraging a dangerous dumbing-down of the nation’s future workforce. Try preserving superpower status after a generation or two of that.

    This year, technology and other white-collar outsourcing has become so widespread, and the economy’s job-creating powers have become so feeble, that the issue has become front-page news and the public is revolting. Like their counterparts in the rest of the economy, the multinational tech-outsourcers and their apologists have begun to react with a combination of almost refreshingly honest arrogance and insultingly incoherent deception.

    In the former category, tech industry spokesman Harris Miller takes first prize. President of the Information Technology Association of America, Miller spent the late 1990s insisting that America faced a tech worker shortage so enormous that only a flood of immigrant techies could fill the gap. He also warned that, without such tech worker imports, these firms would send the jobs overseas.

    Now, as unemployment in technology still tops 8 percent despite months of better economic growth, Miller has shifted toward defending outsourcing as a “hard truth” that Americans must face. The nation’s main hope for stemming this job flight? As Miller told Congress, “downward pressure on salaries.” In other words, U.S. technology workers should plunge deeper into the global race to the bottom.

    More funding for technology education would help, too, he added. But Miller was surely relieved that no Congressmen asked him how this would improve America’s competitiveness with foreign workers who he argued can “compete for increasingly more sophisticated and complex IT work” at “a fraction” of U.S. costs.

    A similar message was broadcast in October by Robert Jones, former head of the National Alliance of Business. In Jones’ view, Americans have enjoyed high living standards because in the half century after World War II, “the United States had a monopoly on the world’s economy and set up costly health benefits systems and pay patterns.”

    Although most Americans applaud this record of turning tens of millions of families into a prosperous middle class, Jones interpreted it differently: “We became spoiled.”

    Jones, too urged major national educational reform – mainly requiring all high school graduates to pass four years of math and science. But he never explained why this would preserve American wage premiums when by his own account, “India, China, Indonesia are investing huge amounts in education to the sole purpose of becoming major producers for the world, not just for us.”

    Setting the standard for incoherent deception has been former Clinton Labor Secretary Robert Reich, who has long successfully masqueraded as a champion of American workers despite supporting nearly every globalization policy that has pummeled their living standards.

    In a November 2 Washington Post article, Reich claimed that high-tech outsourcing is nothing “to lose sleep over.” Some of Reich’s arguments simply parrot the by-now-bewildering and transparently chauvinistic confidence that only the “more standard” high tech work will be outsourced. Americans allegedly will keep monopolizing “more innovative, higher value-added functions such as invention, creation, integration, key R&D, and basic infrastructure.”

    Reich also trots out his tired mantra that, “just as with laid-off manufacturing workers,” reeducation and training will be keys for ensuring “that high tech workers are adaptive and flexible” and employable. Never mind that, even if successful retraining programs did exist in the United States, the superstar tech jobs he believes Americans can still dominate are by definition few and far between.

    But what truly amazes about Reich’s pollyanism is how heavily it depends on ignoring basic economics. The new wrinkle in his shtick is that, “There’s no necessary limit to the number of high tech jobs around the world because there’s no finite limit to the ingenuity of the human mind” and “no limit to human needs that can be satisfied.”

    Reich is obviously right in an abstract sense. But economics (not to mention common sense) tells us that demand for products and services will not actually generate products and services unless the demandeurs have money to spend.

    Policies that gut the ranks of America’s best-paying jobs and slash the compensation of survivors (as Reich admits and Harris Miller hopes for) can only shrink the U.S. economy’s sources of sustainable demand. And don’t look to countries like India to compensate. For all the U.S. tech jobs this Asian giant has received, wages there will go nowhere as long as 25 percent of university grads – the high tech labor pool – are unemployed.

    This, then, is the answer that globalization cheerleaders have for high tech job flight: Cut high tech pay, cut health care systems to pre-1930s levels, promise all American workers that they can become another Einstein or Gates, and spend who knows how much money on this fool’s quest. Spreading this claptrap is contemptible. Taking it lying down would be unforgivable.

    makes me wonder how many people need to fall to the lower class pay ranges before someone gives a damn.

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