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Volume 1, Number 6 -- March 2, 2004

As I See It: Jobs and Jehovah


by Victor Rozek

Hewlett-Packard's CEO, Carly Fiorina, made a provocative statement a while back. "There is no job that is America's God-given right anymore," she said. It was a telling, if somewhat flippant, remark that sought to vindicate the practice of outsourcing, while dismissing opposition to it for not being divinely sanctioned. As a measure of how far we've slid down the outsourcing job drain, Ms. Fiorina apparently could see no benefit in preserving middle class jobs.

Indeed, it was a disingenuous statement coming as it did from the CEO of a major technology company. For one thing it's a metaphor, composed of equal parts presupposition and implied threat. For another, it's a statement, pretending to be global, that clearly does not apply to the speaker. Ms. Fiorina's job is in no immediate danger of being outsourced.

Note what Ms. Fiorina is asking us to believe. Her statement presupposes that at one time there were some jobs that were, in fact, America's God-given right. I know of no such jobs, and unless God speaks directly to Ms. Fiorina, neither does she. The statement further presupposes that although in the past God favored our nation with exclusive employment opportunities, that is no longer the case, and thus we have no cogent claim on our earthly employers. By logical extension, if God is no longer the granter of employment rights, who then is empowered to take God's place? Why, the market, of course, and its high priests, the corporations. And here's the implied threat: Having assumed the full mantle of divinity, Ms. Fiorina and her colleagues can do anything they wish, with impunity. The message Ms. Fiorina is sending is this: Since God abandoned you, don't expect much from us; you're on your own.

I frankly don't know of anyone who believes his job is a God-given right. That does not, however, preclude the fact that a job is a two-way partnership, with rights and responsibilities on both sides. The most elemental expression of that partnership is based on the voluntary exchange of values, where one person trades his time and skill for compensation supplied by another. That's a noble ideal, and one that, historically, both labor and management have sought to bend to their advantage. Whether it's the reckless demands of unions or the exploitative tendencies of employers, each side was constantly angling for a bigger slice of the pie.

For many years the system worked well because the opposing forces provided a counterbalance. If union demands became too outrageous, they choked the golden goose; and if companies were too penurious, employees could either organize or seek fair compensation elsewhere. But for that counterbalance to exist, the underlying necessity is that all stakeholders have a measure of control and choice over their destiny.

Recently, however, an unprecedented confluence of factors has radically shifted the balance. Jay Bookman of the Atlanta Journal Constitution describes it as "a historic convergence of economic, cultural, political and technological trends that have seriously eroded the typical worker's earning power and economic stability."

Events over the last few decades have dramatically shifted the advantage toward employers. Global markets enticed capital and technology to move across borders and oceans in search of cheap labor. And it wasn't hard to find. China and India alone have a nearly inexhaustible labor supply of some 2.4 billion people. Meanwhile, the quest for efficiency increasingly favored machines over workers, and cost cutting itself became a competition that rewarded winners with obscenely swollen compensation packages. While Ms. Fiorina wants the rest of us to compete for salaries with the third world, her $11 million reimbursement package in 2002 only increased as a reward for eliminating high paying jobs.

For its part, the Bush administration thinks all of this is just fine, praising the practice of outsourcing in the recent "Economic Report of the President." And culturally, compassion is being redefined to mean every man for himself. As if on cue, several days ago Fed Chairman Alan Greenspan floated a trial balloon suggesting the way to address the deficit is to reduce future Social Security benefits.

Call it the perfect middle-class demolition storm.

The dilemma is that Information Age jobs were supposed to replace jobs lost in the manufacturing sector. But there is no new technology on the horizon that promises to take the place of the high-paying technology and service jobs moving overseas. Consequently, there is no clear way for the struggling middle class to get ahead. When an $80,000-a-year programmer is terminated, where can he realistically expect to find a higher paying job?

The failure to deliver trickle-down affluence accounts for why the promise of free trade continues to be sold as a benefit that will accrue to everyone "in the long run." But as one commentator quoting economist John Maynard Keynes quipped: "In the long run, we are all dead." The inescapable fact, in the words of Mark Weisbrot, co-director of the Center for Economic Policy Research, is that "international competition is creeping up the occupational ladder," and more of the middle class will likely be hammered for the foreseeable future. Saving middle class jobs is the pressing short-term problem that needs to be addressed.

While it is totally appropriate that employers and employees act out of self interest, there comes a point at which the interests of both sides are harmed by a severe imbalance in the system. The relationship between labor and management is symbiotic, and as such, both thrive or both suffer. Jobless recoveries are an illusion. When the bounty of cheaper goods is offset by excessive downward pressure on wages, both sides lose. Although there may be more stuff to buy, there is less money with which to buy it. As the middle class falls further behind, purchasing decisions are postponed, cars are driven longer, remodeling projects are cancelled, vacations are shortened, and non-essentials are eliminated. That's bad for business, which responds by cutting more jobs, which further depresses spending, leading to recession and worse.

The alternative is some form of protectionism, over which trade advocates will, with feigned shock, all but swoon in protest. But their protestations are just as disingenuous as Ms. Fiorina's remark. Protectionism exists for those industries with enough political clout to purchase it: steel, agriculture, and timber, to name a few. For that matter, one wonders how free trade apologists would explain to seniors and the 44 million people without health insurance why there is a comprehensive ban on importing low-cost prescription drugs from Canada and Australia. This is not, and never has been, about trade. It's about maintaining advantage.

So if we can tolerate protectionism for special interests, why not for jobs? It only makes sense, because without them, the biggest market in the world will shrivel. When we find the will to do so, we can reward the behaviors that create jobs and penalize the behaviors that destroy them. We can provide attractive tax benefits for those corporations that create and maintain jobs at home (a sensible investment of public funds, since employed workers will return taxes to the federal and state treasuries), and tax those that move jobs overseas (which could offset the cost of unemployment benefits or retraining).

Further, taxing the international movement of capital (even at a fraction of a percent) would raise enormous amounts of money, which could be reinvested in developing new, promising technologies and in expanding the employment base at home.

Solutions are a matter of priority, not possibility. Right now, outsourcing benefits the corporate bottom line, so nothing is being done. There will come a point, however, at which its benefits will be offset by shrinking sales. When the top of the economic food chain is impacted, then perhaps we will find the will to maintain a thriving domestic job base.

It was recently reported that X-rays are now being routinely sent to India for evaluation. I wonder if Ms. Fiorina would be content to have her healthcare decisions outsourced to some unseen doctor with uncertain credentials? But, then, she probably hasn't been faced with that decision yet.

Or perhaps she is like the rest of us for whom that decision is made by the economic mandates of medical efficiency, and she doesn't even know.

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Editor: Timothy Prickett Morgan
Managing Editor: Shannon Pastore
Contributing Editors: Dan Burger, Joe Hertvik, Kevin Vandever,
Shannon O'Donnell, Victor Rozek, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
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THIS ISSUE
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CONTENTS
Intel Cranks Up Xeon Clocks, Caches

HP to Push Linux-Based Opteron Servers

Cray Buys Opteron-Linux HPC Upstart OctigaBay for $115 Million

As I See It: Jobs and Jehovah

But Wait, There's More



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