Protests grow as tech jobs move offshore

Date: Friday, June 27, 2003 4:45 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

http://www.ajc.com/business/content/business/0603/27jobsout.html

Protests grow as tech jobs move offshore

By MARILYN GEEWAX

The Atlanta Journal-Constitution

Rick McKay / Cox Newspapers

picture
[Pamala Slight (left) of Columbus, Ohio, and Marvin Selsky of Cromwell,
Conn., joined dozens of other high-tech workers to protest outside the
Waldorf Astoria Hotel in New York where a group of business executives
held a seminar to encourage companies to transfer jobs overseas.]

NEW YORK -- A backlash is growing against one of the business world's
hottest trends: moving a wide range of high-tech and service-sector
jobs to developing countries.

At the Waldorf-Astoria hotel Thursday, about 125 executives attended
the 2003 Strategic Outsourcing Conference, sponsored by the Conference
Board, a business association.

They heard Chris Disher, a vice president of consulting firm Booz Allen
Hamilton, describe how companies can lower costs as much as 80 percent
by shifting tasks such as computer programming, accounting and
procurement to India, the Philippines, China, Malaysia and elsewhere in
the developing world.

"There's just no place left to squeeze" costs in the United States, he
said. "We need to look to other areas."

Outside the Waldorf, dozens of high-tech workers with advanced degrees
but no jobs marched in protest, carrying signs with slogans such as
"Outsourcing Is Stealing Billion$ From America."

"People are giving us the thumbs up as they walk by," said protester
John Bauman, president of the Organization for the Rights of American
Workers.

"I can't find work," said Bauman, who nine months ago lost his job in
the information technology sector. "The bottom line is there are no
jobs out there -- they're all being taken by foreign workers."

A recent study by Forrester Research Inc. estimated that by 2015, 3.36
million jobs, worth about $136 billion annually in wages, will have
moved offshore as U.S. employers look for ways to reduce salary costs
and office rents.

James Pace Jr., an unemployed information technology worker who helped
organize Thursday's protest, said it was just the start of a national
effort to spur Congress to action. He said lawmakers should impose
surcharges on outsourced work to discourage the use of foreign labor
and tighten limits on foreign-worker visas.

"This [movement] is going to be building up around the nation," he
said. "We're talking to other groups and legislators to get something
done. We're trying to say that every lost job is a lost taxpayer."

Outsourcing has already started drawing attention on Capitol Hill. This
month the House Small Business Committee held a hearing to examine the
practice.

"The U.S. economy is growing and creating jobs; it's just not Americans
filling those jobs," said the panel's chairman, Rep. Donald Manzullo
(R-Ill.). "They have been moved overseas, where foreigners will work
for a lot less."

For example, a beginning computer programmer in the United States might
earn $60,000 a year, while the same job in India pays less than $6,000.

Marc Schwarz, global director of outsourcing for Deloitte Consulting
and a speaker at the conference, said telecommunications networks in
the developing world were too primitive and unstable in the 1980s to
allow for companies to send service work overseas. That changed in the
1990s as new technologies, especially the Internet, became mainstream.

The ability to communicate globally "has improved dramatically; it's
much, much better," Schwarz said.

At the same time, poorer countries were cranking out more college
graduates who could perform as well as their U.S. counterparts. India
alone is estimated to have more than a half-million computer engineers.
In the Philippines, China and other countries, students are racing to
become architects, accountants, mechanical engineers and more, all
hoping to provide services for companies based in the United States,
Europe and Japan.

Proponents say that even though it does cause some job losses, foreign
outsourcing will strengthen the U.S. economy by lowering costs and
giving companies more flexibility to hire and fire employees as
business conditions change.

By sending routine jobs overseas and boosting profits, U.S. companies
can afford to focus more intensely on cutting-edge research and
development, they argue. They say as American companies grow stronger,
profits will trickle down to create new jobs in this country at
everything from restaurants to car dealerships to universities.

They also point out that outsourcing creates good jobs in poor
countries, shrinking the huge gap between the world's rich and poor
nations, and reduces inflation in the United States.

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