As I See It: There's a Man with a Visa Right There Telling Me I've Got to Beware
by Victor Rozek
What globalization did for manufacturing, it is now doing to IT. The reckless race to the bottom in which manufacturers sought third-world relief from livable wages, ethical regulations, and responsible environmental protections has now expanded to include the information technology sector. Under the all-justifying banner of competitiveness, tens of thousands of IT jobs are being outsourced overseas where pay is low and benefits are expendable. If "jobless recovery" sounds like an oxymoron to you, it's just outsourcing by another name.
To our own detriment, we pretty much ignored the job drain when it happened to "those people" on the manufacturing line. The loss of blue collar jobs was cavalierly dismissed as the inevitable consequence of global competition; and the protests of the unemployed were scorned as "whining" from the obdurate remnants of the "old economy." We, on the other hand, belonged to the new, knowledge economy where bright people, it seemed, would reign supreme, prosperous, and unchallenged. If "those people" had only bothered to get a college education, we told ourselves, they'd still have a job.
But, wisdom often comes with hindsight. In another instance of impending loss, a wise man said: They came for the gypsies and I said nothing because I was not a gypsy. Well, this time it's closer to home and we're a couple of decades down the globalization path so this should come as no surprise. One would have to be wholly detached or living in a state of jumbo denial not to recognize that globalization has no conscience and no particular respect for intellect--domestic or foreign. While intellectual property is valued and defended, the creative intellect has become just another commodity.
Until recently, the wealthy and educated wondered why--as was vividly demonstrated at the last globalization summit--the poorest countries which supposedly have the most to gain from globalization, didn't want it. Slowly, the white collar community which, in terms of job loss, includes not only IT professionals but accountants, consultants, electrical and electronic engineers, and others, is beginning to understand. They've already gotten rid of the gypsies, and we're next.
How many IT jobs will ultimately be lost to outsourcing depends on a number of factors. On the surface, outsourcing sounds simple and appealing. Pay some programmer in India $10 an hour to do what it would cost $30 an hour plus benefits to accomplish here. A bean-counter's wet dream. But that's the loss leader. While it's true that an Indian coder may work for $10 an hour, the company that represents him will charge $20. Then there are travel costs, since few managers would entrust the future of their company to unknown people in an unknown location; and additional project management costs. Some companies report difficulties caused by differences in language and culture. Specifications or change requests may be inaccurately translated by coders who have good mechanics but a poor understanding of American business practices. Plus, there is a very real cost associated with plummeting morale at home. It is hard to get good work from people who are angry and frightened.
If sending work overseas is not as cost-effective and problem free as corporations had hoped, their fallback strategy is to bring your replacements here and ask you to train them.
By now most of us are familiar with the special visas that allow foreign guest workers to enter the country. The so-called H-1 visa actually originated about a half-century ago for the purpose of granting temporary residency to skilled foreign workers. But in the early 1990s, the technology boom was in full oscillation and many high tech companies complained they could not find sufficient numbers of qualified workers. The government's answer, at the behest of technology lobbyists, was The Immigration Act of 1990. Among other things, it created the H-1B visa, which turned "temporary residency" into semi-permanent residency. Under its provisions, qualified foreigners could remain in the U.S. for up to six years; and, the visa was renewable.
During the boom years, industry repeatedly lobbied Congress to inflate the number of people who could come to the U.S. under H-1B. During the last three years, those numbers held at about 200,000 a year, up from the original 65,000. Universities and hospitals, however, were totally exempt from established quotas. According to an article in The Oregonian, even though the economy has slowed and Americans are losing their jobs by the millions, "immigration authorities approved almost 800,000 new and renewal visa petitions from 2000 to 2002, increasing the labor supply at a time when many tech workers were laid off."
The temporary good news for the IT community is that there was a sunset provision in the H-1B visa legislation and as of October 1, the allowable number of immigrant workers was once again reduced to 65,000 per year. Right now industry is not fighting very hard for an extension, not because of any special concern for the workers who helped make high-tech enormously successful, but because they don't want to be viewed as "unpatriotic." Apparently, it's bad public relations to hire anyone who may be wearing a turban. Besides, they can still import all the people they want through another visa program that has no quotas at all.
The L-1 visa was supposedly intended for people who are both highly skilled and highly specialized, and who possessed a unique knowledge of a company's business. L-1 was designed to allow companies with foreign offices or manufacturing facilities to bring in specialists to work on domestic projects as needed. A computer programmer would not ordinarily fit this category because his skills are general and available locally. But there is virtually no enforcement of this law. Companies decide who to import and simply sign a form attesting to the individual's uniqueness. Estimates are that in the year 2000 alone, 650,000 jobs were lost to workers entering the country using H-1B and L-1 visas.
Understandably, employees are none too eager to train their replacements and outsource their work, and they often refuse to be good sports about it. Work slowdowns are not uncommon. Employees, who are usually cooperative, suddenly refuse to volunteer information, or may even offer incomplete or false data. And some have sought legal remedy in the courts.
Companies, of course, understand an employee's resistance to orchestrating the funerary arrangements for his own career, so they have taken to bribing their technical staffs to stay and assist with the transition. Cash bonuses are frequently offered to those who will allow the last of their blood to be drained before the body is discarded. Some workers on principle are refusing the bonuses and declining to train their replacements.
For those who still have a job, the threat inherent in the globalization model is that it thrives on winners and losers. No one's job is safe for long, and employment has little to do with knowledge, loyalty, experience, or even performance. It has much more to do with cost. From a labor perspective, globalization is a product of competition only in so far as there is a race to see how low the standards can be pushed; how much can be extracted from people before they can be jettisoned and replaced by a fresh group of more desperate people, and how many social supports can be cut before the whole structure collapses. India is now the outsourcing destination of choice, but it must continually look over its shoulder: China looms, more needy and less demanding.
Perhaps the worst outcome of outsourcing and its endless search for cheaper labor is that it comes at a time when we are beginning to understand our interdependence; when collaboration shows much more promise than cutthroat competition. Depriving people of their livelihood will only turn nation against nation, race against race, losers against winners. And then we all lose. Rousseau spoke of the challenge over two hundred years ago: "It is too difficult to think nobly when one thinks only of earning a living."
Ultimately, outsourcing may contain the seeds of its own destruction; at least it amuses me to think so. My theory is that outsourcing will stop when management positions start getting outsourced. It's only the arrogance of CIOs and other top managers that prevents them from seeing it, just as we didn't see our jobs following on the heels of manufacturing. I just know that some board of directors will eventually get wise. And why not? Why not carry this outsourcing craze to its logical conclusion.
Why pay some Harvard MBA millions when you could have your choice of hundreds of brilliant foreigners who will run your company for a fraction of today's executive compensation, and who could--as their first assignment--replace the rest of the over-paid and under-performing top management team with eager foreign nationals. But as long as we're having fun, why stop there? Why not outsource the government?
If the justifying premise behind outsourcing is to rid the nation of over-paid, under-performing jobs, then government is a target-rich environment. Not only is it a notorious money waster, but it has orchestrated the biggest economic disaster since the Great Depression. The facts speak for themselves: 2.7 million people have lost their jobs, millions more have lost their pensions; another 1.7 million dropped below the poverty line last year, U.S. household income has been in decline three years in a row, 44 million people are without health insurance, and our children will be gifted with multi-generational deficits. "I'm sorry, senator, your services are no longer needed. We've found somebody who will work for a small fraction of the uh, contributions you require."
Some believe it's time for an e-labor movement. Certainly getting organized is not a bad idea. Imagine the power an umbrella union would have to stop the hemorrhage of IT jobs. Given the human propensity for doing stupid things to excess, it would be a sad loss for the nation if, over time, so many IT professionals were rendered jobless that we eventually began to lose our technological edge because, like manufacturing, technology was no longer done here.
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