Cheap Labor

Date: Thursday, February 06, 2003 8:44 AM

H-1B and JOB DESTRUCTION NEWSLETTER

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http://www.calnews.com/archives/guzzardi17.htm

Cheap Labor
Joe Guzzardi
February 3, 2003

In 1965, fresh out of college, I went to work for the United States
Steel Corporation.

How I ended up at Big Steel remains a mystery. There could not have
been 100 people in Allegheny County who knew or cared less about steel
than I did.

But I was willing and eager. Pittsburgh was the home of dozens of
Fortune 500 companiesWestinghouse, National Steel, Alcoa, Jones and
Laughlin Steel to name a few. Back then, a young man showing aptitude
and spark had a pretty good chance.

I was hired as part of the sales training program. For the next 18
months our group of 20 trainees went from mill to mill along the
eastern seaboard. In the mornings we watched wire, flat rolled and tin
plate manufactured. And in the afternoon, we listened as product
specialists told us why U.S. Steel made the best steel in the world.

At the end of a year and a half, we werent metallurgists but we knew
a lot about steel.

My first assignment was in New York assisting a salesman who sold
specialty steel to railroads. I processed the orders, checked the
credit, followed up with the mill and fielded the phone calls. All the
while, I was becoming savvier about life at a big corporation.

In the mid-1960s, U.S. Steel employed about 300,000 people. The workers
had the powerful United Steel Workers of America in their corner. Their
mill jobs were tough but they earned solid middle-class wages and had
excellent health and retirement benefits.

The sales and administrative personnel rooted hard for the union at
contract time. Whatever they got, we got. And those were the days when
steel executives and the White House trembled when union leaders
expressed discontent.

In 1970, I moved to Bankers Trust where I learned the corporate
finance ropes. I crunched numbers during my first year. But I moved
quickly and steadily upward. I always was looking for greener pastures
and when the opportunity to work in the corporate finance division of
Merrill Lynch came, I grabbed it.

Fast forward to 2003. U.S. Steel and the other Pittsburgh corporate
giants are all but gone. Gone too are the blue-collar jobs performed
with pride and dignity for fair pay and benefits.

For the last twenty years, the focus at corporate America is on one
thing only: cheap labor. There are no other considerations.

First shoe, low grade electronic and toy manufacturing were sent to
developing countries. Then credit card receipt processing and writing
software code went.

In the early 1990s, Silicon Valley howled that it could not find
software engineers and accordingly needed to import workers from
overseas. Congress complied by authorizing 65,000 H-1B visas annually.
The total gradually increased to 115,000; then, 195,000.

Of course, the industry created the shortage by firing American
workers and replacing them with the much less expensive foreign
workers.

Even if there were a true shortage, do you think for an instant that
Silicon Valley would hire the local high-school student and train him?
Fat chance.

Importing foreign workers to displace Americans is shameless. But now
the other shoe has dropped.

Today, my old Bankers Trust job would be done offshore. According to
the February 3 Business Week cover story titled The New Global Job
Shift all kinds of work can and is done anywhere.

Even Wall Street jobs paying $80,000 and up are getting easier to
transfer. Brokerages like Lehman Brothers Inc. and Bear, Stearns & Co.
for example, are starting to use Indian financial analysts for
number-crunching work.

"You will see an explosion of work going overseas," says Forrester
Research Inc. analyst John C. McCarthy. He goes so far as to predict at
least 3.3 million white-collar jobs and $136 billion in wages will
shift from the U.S. to low-cost countries by 2015.

All this is music to the ears of companies like Microsoft. Said Senior
Vice President Brian Valentine the company could get ``quality work at
50 to 60 percent of the cost,'' adding, ``that's two heads for the
price of one.'' Valentine also urged managers to ``pick a project and
outsource today.''

Added Sivaramakichenane Somasegar, Microsoft's vice-president for
Windows engineering in reference to moving jobs to India said. "If I
can save a dollar, hallelujah."

A backlash has already started. But will anyone listen?

New Jersey legislators are pushing a bill that would block the state
from outsourcing public jobs overseas. At Boeing Co., an anxious union
is attempting to block more job shifts to the aircraft maker's new
350-person R&D center in Moscow.

And the Washington Alliance of Technology Workers started a nationwide
Internet campaign calling for the federal government to investigate the
practice of U.S. technology companies sending jobs overseas.

If outsourcing is allowed to mushroom, then the American economy will
slide into a long and deep recession.

The combination of cheap imported labor used by hotels, construction,
meat and poultry processing, food and restaurant services and
outsourcing high five figure salaried jobs is a formula for disaster.

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