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Globalization Decimating US I.T. Jobs
mrraven writes, "According to Ronald Reagan's former deputy secretary of the treasury in this
article in Counterpunch, globalization is destroying US I.T. jobs. From the article: 'During the past five years (January 01 – January 06), the information sector of the US economy lost 644,000 jobs, or 17.4 per cent of its work force. Computer systems design and related work lost 105,000 jobs, or 8.5 per cent of its work force. Clearly, jobs offshoring is not creating jobs in computers and information technology.'" Paul Craig Roberts quotes a number of formerly pro-globalization economists who are now seeing the light of the harrowing of the US middle class. It's not limited to I.T. Roberts quotes one recanting economist, Alan Blinder, as saying that 42–56 million American service-sector jobs are susceptible to offshoring.
Of course most folks who are actually working in IT could have told you this. I know a number of folks at companies who experienced several rounds of layoffs. They have survived the layoffs, but they are also currently doing the job of two to three employees now versus prior to the layoffs. Morale is low, pay has not kept up with the cost of living increases, the cost of health care or inflation. Productivity is still there, but burnout is likely in these individuals. Other people I know that did lose their jobs ended up going back to school and getting out of IT entirely which I suspect is not an isolated situation and would lead to skewed unemployment statistics.
The thing that worries me is that this is not an isolated employment sector, and I predict that we are in more trouble than we might know. Historically we have relied on our research and development to keep this country on top technologically, but over the last five years or so, we have been reducing the amount of funding we spend on research and development, particularly in the biosciences. For example, if you were to look at NIH grant paylines, five years ago the payline was around 33%. Next year it is predicted to be anywhere from 10-14% meaning the likelihood that a researcher will obtain funding has been cut by more than half. In fact, research and education spending on the whole is down under the current White House administration. So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
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How about all those Intel, AMD, Dell etc etc in Malaysia, Taiwan and around the world.
Didn't the lower cost of building all the components there help to decrease the prices of computing, encouraging demand. And wasn't the continuosly lowered cost of infrastructure/equipment an integral part of the computing/technological/information/internet revolution. Which incredibly benefited the US economically. Which provided jobs and increased jobs and increased pay scale during the late 90's and early 2000's.
So in other words:
globalization benificial to us: good
globalization detrimental to us: bad
news for ya: globalization works both fucking ways. You think jobs weren't decimated in third world/developing countries when they opened up their markets and have to compete with cheaper US products.
You benefited from it, now its someone else turns.
Or you can ask the US goverment to broke its own agreements and words, and strongarm it way to makes sure the deal is one sided. But don't put your hopes up. God knows it has never done that. And never will. well except maybe for that renmibi thing.. and that textilke subsidy thing..and...
waiting for Flamebait+7 and Troll+7
Timang tinggi tinggi
parang sudah asah
alang alang mandi
biar sampai basah
Are you high? China is a prime example of globalization at work. We get a whole lot more stuff for our money from China than we could produce ourselves for the same cost. At the same time, China gets a lot more money selling to us than it would selling to itself.
Globalization isn't something just corporations are pushing. Most liberal egg-head economists are pushing it too. They push it, because the math works out, it makes sense, and has been demonstrating its usefulness for literally hundreds (if not thousands) of years. Louis XIV drastically turned around the French economy over 300 years ago by breaking down trade barriers, and there are still people who aren't convinced it works...
A deep unwavering belief is a sure sign you're missing something...
The gains from doing this are large, but very spread out. The losses are small, but concentrated. As a result, those who lose out have a big incentive to try and stop this from happening - more so than those who would gain from it. They may attempt to have the government regulate the practice. This is known to economists as rent seeking, when one group seeks the uncompensated transfer of wealth from others (people who buy IT) to themselves through government intervention. These Other People have to expend more resources to get the same things done. This is not a spectacularly noble cause, though it often is hailed in the name of "saving jobs".
But then, if our first concern should be about saving jobs, we ought to do away with computers entirely so there is more work to be done for paper-shufflers in offices. We can save the jobs of hundreds of thousands of office secretaries! Indeed, we could get rid of machines entirely and go back to simple hand tools for everything. Except, well, not.
Of course, that doesn't stop it all from happening. Take textiles. The average US family spends $160 more a year on textiles because of import quotas. Each job saved costs $221,000 a year. This is paid for by other people. Yay.
The World Wide Web is dying. Soon, we shall have only the Internet.
I have no problem with "globalism" PROVIDED that the country getting the jobs has the same level of regulations and protections that we have (or higher).
The problems I have with "globalism" is when companies off-shore because the other country has FEWER worker protections or environmental regulations than we do. Yeah, it's great for your CEO's bonus if you can work 10 year old kids for 12 hours a day at $5 a week making tennis shoes. But this isn't about your CEO's bonus.
We should be bringing everyone else UP to our standards rather than racing to the lowest level out there. But we are racing to the bottom. That is the problem.
From the perspective of someone who is not American, this is a good thing. It means that unions in rich countries are no longer able to keep the rest of the world poor. Poor people in Romania who have excellent IT skills have the freedom and opportunity to enter the capitalist system and compete on the global market.
The Americans spent 50 years trying to win the cold war so the guy in Romania would have this opportunity. Would you now turn around and say "Sorry, we're going to be implementing some socialist protectionist measures.... we didn't expect American workers to have to compete with you".
Looking at the IT landscape, it seems clear to me that the American IT industry is the most vibrant and resilient in the world. Microsoft, Google, Yahoo, HP, Wikipedia, Myspace, Youtube, etc. are organisations which saw the light of day in America. Please don't react in a spastic way when the rest of the world looks at what you're doing and tries to do something similar.
The American president keeps talking about "freedom". For me, freedom includes the freedom to compete with American workers.
Walk the walk....
In my opinion, one of the worst things to happen to the anti-globalization movement, and whole argument in general, in the past several years is its association with leftist fringe groups and sometimes-violent street protests. The first thing that many people think of today when they hear the words "anti-globalization" is a rioter, and this doesn't do very much to help it be taken seriously. Those protests, at least in the U.S., ended much real discussion about globalization by turning the whole thing into a farce. All people had to do was look on the news and see that it was the forces of rationality and authority versus the lunatic fringe, and that was it. (Granted, a lot of media outlets were only happy enough to portray it this way, with various levels of subtlety, but this should be expected.) Whatever salient points the argument might have had, evaporate when you're perceived as being mainly supported by bored college students with nothing better to do than go protest something.
If you want to garner support from blue-collar, red-state America now, you can't say "globalization," you have to say "outsourcing" or "offshoring." That's because the g-word has a strong association with protesters and radical fringe groups; no sane middle-class gainfully-employed person wants to associate themselves with anything "anti-globalization" anymore, lest they end up on some sort of FBI watch list. It's that 'blue collar' crowd who should really be the major backers of anti-globalization, but to date they have been notably absent; I think this is because of a large reluctance on many people's part to do anything that reeks of "dirty hippies." And it's tough to get deeper in hippie territory right now than "anti-globalization."
Violent protests may have been effective in the 60s but today they're cliche; I can't think of a faster way to let your opponents marginalize and demonize you in the press, and frankly to have the general public revel in watching you get tear gassed on TV. Average people don't have much tolerance or sympathy for rioters, regardless of the motivation or politics; it's no longer an acceptable mode of political discourse. This situation may be different in other countries -- it seems like riots and mass demonstrations are accepted by the public rather differently in some European countries. But here in the U.S., riots don't play in Peoria. They're counterproductive.
I tried to explain the anti-globalization position to too many people over the last few years to and have had more people pipe up "hey, aren't those the folks who were causing riots down in New York?" to think that those protests can possibly be constructive. It doesn't matter whether it's the protesters or the cops who start the escalation; if you have a protest and it turns into chaos -- particularly televised chaos -- then you and any arguments or positions that you might be associated with lose a lot of credibility.
The "rads" might think that they've won now, but really, I think that the logic that globalization might not be such a hot thing, has finally come into the light despite the efforts of fringe groups, certainly not because of them.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
That you are trying to convince people that various companies decided in favor of offshoring so that they could make better lives for those "little brown and yellow paupers in Asia and the Middle East...is laughable if not patently absurd. They don't give one rat's about these people - their only concern is a way to make the company's short-term balance sheet look good.
If good people in other countries can do certain things better than Americans, they ought to get the work. It's up to us to compete with them (and each other) instead of whining about the competition. Globalization is helping everyone in the long run. Competition can always be painted as nasty and brutish, but it's the way we get progress. Everyone benefits from it, even if it causes job changes in the short run.
When the Japanese auto manufacturers started sending their vehicles to the United States, nobody took them seriously at first. Then American consumers realized that the Japanese were making better cars, so they started buying them in increasing numbers. The U.S. carmakers (and their unions) simply whined about the competition instead of DOING enough about it. If they had actually competed by producing products that were better than the Japanese products (in reliability, styling and a whole range of issues), they could have fought off the competition. Instead, the unions demanded that they keep their arcane work rules that saved useless jobs in the short run, but which lost a LOT more jobs in the long run. The managements remained in denial that they were that much worse than the Japanese. Even when they DID start improving, it was too little, too late. The culture in Detroit couldn't compete with the rate of change (and improvement) given to us by Honda and Toyota. American consumers benefitted from this competition. The stockholders and employees of the U.S. companies COULD have benefitted, too, but they were both too shortsighted to learn and compete.
U.S. IT is in the position that the U.S. auto industry about 30 years ago. It leads the world, so it doesn't see the need to innovate as much as it did even 10 or 20 years ago. They're arrogant and fat and happy, it seems. Now the rest of the world is starting to catch up to us. Foreigners are learning to do the same things we've been doing, but less expensively. So what's the response? The companies and the employees whine about competition. If you can't see the continued pattern (and what to do about it), you're going to have no one to blame but yourselves.
David
Good points, all. But I know a lot of the Indians taking our jobs (I had to help train them, you know... bah). In all cases, they were educated and now make up the upper-middle class in their country. These are not prison laborers, and they are not working in sweatshop conditions. These same people would try to come to the US to work if the market in India wasn't so good. The reason they have our jobs is that they make about half of what we do, not $0.60 per hour. They are happy, generally nice people who are just glad to be working in such a lucrative field. Your arguments probably make a lot more sense in the manufacturing industries. Unfortunately, there probably is not much of a moral argument against outsourcing in IT.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Most US workers do not "charge" their employers -- instead, they work for that employer for a rate that is set by the employer, and most employees say "okay" and go along.
Salaries and hourly rates for IT workers are generally in-line with other professions in the US. A master plumber or mechanic makes between 50k-100k per yer in most of the US, for example, which is very similar to what a programmer/analyst with similar experience and training would make in the IT world. Also, while a help desk analyst might make $12 or $15/hour, that isn't very much different from folks in other similar types of professions. Heck, a person can make $8-10 an hour in some parts of the US flipping burgers.
Problems start when you start mixing and matching labour from economies with radically different levels of expenses. A person making minimum wage in the US could be very well off in many parts of the world, even though many people find it difficult to live on that same wage in a number of places here in the US. Why? Because it doesn't cost $500/month for a basic apartment in those parts of the world.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
There is no balancing involved whatsoever. BOTH American and third world I.T. workers make LESS as companies scour the world for the cheapest wages they can find. And the I.T. work only benefits a tiny sliver of the billion + people in both China and India something like quite literally .001%. How can you honestly call something that benefits .001& in the third world a little bit while the rest of the world is suffering a setback a balancing? It's a disingenuous use of that word i.e. a lie. What's more I think you people who peddle these falsehoods are engaging in deliberate mendacities i.e. you are shilling to cover some ones ass in the elite. Shame on you I hope you sleep very poorly at night.
Tired of all the isms, don't exploit people as an employer, or a government, mmmmK?
Some of you have pointed out that one reason for the disparity in pay which makes outsourcing attractive is the disparity in living standards. I agree. As more and more high paying jobs leave the US for lower cost regions of the world, Americans will have less disposable income. They are already deep in debt. At some point, consumption must fall.
I don't think many Americans understand the extent of the wrenching adjustments that lie ahead. It will not be pleasant.
Wansu, th' chinese sailor
Over time jobs have continuously moved abroad.
Back in the good old days (you know, when the western world had it's colonizing hat on), we decided it was far cheaper to source raw materials abroad - so we'd say grow cotton in India and import the raw product back to the UK to be refined.
Then we twigged we might as well weave it into cloth abroad (and fired a load of mill workers). Then, realizing we might as well make something out of the cloth abroad before importing it we fired a load of the cloth workers.
Now - at the time there was lots of personal pain for some people - but the benefit was two-fold. The vast majority of people got a far cheaper product and we were forced to up-skill. Do you honestly think we'd be in a better position today if we'd spent a fortune protecting those lost industries?
Same thing is just still happening and will continue to happen - whether you like it or not. You've just got the simple choice whether you want to stand there trying to hold back the sea, or whether you should take a few steps up the beach to get out of the way.
You might get the odd law/import quota protecting your own job, but that's just at the expense of everybody else around you - The USA can't afford to buy everything 'Made in the USA' and expect to keep the same standard of living.
Ah, Slashdot. I find it so ironic that the same people who are for "free software" and "free information" are also against free trade.
The idea of a nation having a comparative advantage (if you're going to talk about globalization, you might as well use the lingo) in certain markets is what this all boils down to.
Let's say you're French. The French enjoy an enormous comparative advantage in producing fine wine. The climate is right, they have the wineries already in place, they are well-known as wine producers and so on. If you own a winery in France, or work at a winery in France, or ship French wines, or even just occasionally mash grapes with your feet, you've got it made it in the shade. Your goods will find plenty of willing buyers in the global marketplace.
But here's the problem. What if you live in France and don't want to have anything to do with the wine making business? You don't know anything about wine, grapes disgust you--whatever. In fact, what if you want to just design and make automobiles? Whoops! You will have a hard time competing against the vast hordes of foreign auto makers. Your French workers will require higher wages and better benefits than their foreign counterparts. Much of the steel you need has to be imported from Germany. Your engine blocks have to come from Japan, but only after they're assembled in Canada. You're really having a hard time keeping your costs down.
Your business is going to fail, and the French government will have little choice but to see your company fall by the wayside, or else pass laws to create subsidies that explicitly favor your goods over their foreign counterparts, which is prohibited by GATT and can only be done under very specific circumstances. The French could still tax foreign goods with tariffs, but even then those are highly regulated by international authorities. No, your auto business will soon be out of business.
Globalization's answer to that French auto maker is "well, you could always make wine" and its answer to the unemployed people who worked for that auto maker is "well that's a shame, go work at a winery." Now that's pretty harsh. How do you respond to something like that? You either go work at a winery or you go riot in the streets. When companies and egghead economists alike are so gung-ho about pushing globalization, the human element seems to get lost in the shuffle.
The best argument for globalization has always been "okay then, suggest a better way." It's impossible because the alternative to the free trade system is pretty horrible: Entire industries that create goods with no useful purpose that cannot be sold overseas; a limited selection of goods for consumers; huge increases in the costs of goods for consumers due to reduced competition, and so on. If the WTO allowed for any more artificial barriers to free trade than tariffs, that is exactly what would happen. And even then, eventually getting rid of tariffs anyway, and removing the last barrier to free trade is the stated goal of WTO/GATT.
Those who embrace the trendy new rhetoric that decries our current free trade system either know nothing about it or refuse to acknowledge how much we truly benefit from it. It is far easier, I suppose, to shill the globalization issue to promote another political motive. Don't be used.
Really? Where do you get your definitions from? Because a "depression" or even a recession (a long term recession constitutes a depression) are not caused by anything like that. Oh wait, you're quoting John Maynard Keynes. Riiiight, I see. Is that what they're teaching in school now? That "hoarding" causes recessions? Good heavens.
When power is concentrated enough, the American Empire will go to war with China
Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy. Then do the same calculation backwards. Now tell us about this "war". What are the justifications for it again? Why does it happen? When? How exactly? Please do elaborate. Unless you're just jumbling together "hot topic" words to get some karma like you always do...
M$ monopoly
Good old twitter. China is evil, "big dumb companies" are evil, "M$" is evil, Kermit the frog is evil and everything should be free. Same broken record but with impressive-sounding words and lotsa links. Karma every time.
For anyone that has forgotten, you could get an IT job during dot.com if you could just spell cumputer^Wcomputer. For a more realistic point of reference, choose a point before dot.com, say Jan 1999. Do that and you;ll probably notice some growth.
Engineering is the art of compromise.
Imagine a company with zero engineers, and 100% managers, it cannot survive.
Now imagine a company with 100% engineers, which spend 5% of their time doing 'management' , it would
still work and turn out a product, see google and apple.
A smart engineer can learn in 6months how to be a manager, a manager though would take 10 years to be as good as an engineer.
After all there are no management 5 year degrees at unis are there.
Liberty freedom are no1, not dicks in suits.
Before taking everything in the article as fact, take a glance at the rest of the stories on the site. You will definitely see a pattern. And NO..I'm not going to suggest what that pattern is.
If you actually read it (I know, it was longer then a digg blurb, so you probably didn't) you'd have seen that he used many dates, but the fact that many of his comparisons STARTED with 2001 (which you yourself said was a shitty time for IT workers) and compare them with TODAY (or close as he could get with the data) while showing NO growth or negative growth is scary. In other words, since the shittiest time after the .com blowout, there's been hardly any tangable IT growth.
He blames it on offshoring in general, and I agree with him. Off-shoring IT is a direct IT-job losing situation, but all off-shoring has a serious impact on our economy in general. It's the huge companies getting bigger, and being as greedy as possible while doing it.
So, imagine if he compared things to the year 2000 or 1999? It would look *completely* bleak.
- It's not the Macs I hate. It's Digg users. -