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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
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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....
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
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.