Off-shore outsourcing

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(Host) In the 1990s we heard what Ross Perrot called the “giant sucking sound” of blue-collar jobs leaving the U.S. for Mexico and other cheap-labor countries. In the first decade of the 21st century, a similar phenomenon may be taking place with white-collar jobs. Commentator Allen Gilbert looks at “offshore outsourcing.”

(Gilbert) I was surfing the Web one day this summer when I noticed a news story about the outsourcing of tech jobs to foreign countries. I’d been curious about this topic. A graphic designer had told me about a project that she had worked on for years but might now be handled by a firm in India. Then, shortly after that, I attended a presentation on e-mail management. It was by a Web development firm that uses software developers in Asia to provide some of its services.

The story that I found on the Web in late July had a grabber for a headline: “One in 10 U.S. Tech Jobs May Move Overseas, Report Says.” I read the story. And I noticed that within 12 hours of the story’s being posted, 3,667 messages had been sent to a related message board. This was a topic that hit home with a lot of people.

The report was from a high-tech forecasting firm. It predicted that in the next two years, as many as half a million tech jobs could be “outsourced off-shore” – the euphemism for shipping work abroad. These are so-called “knowledge jobs.” Typically, they are in software development, computer services, accounting, and customer service.

It used to be that only folks who made shoes or cars had to worry about their jobs being sent abroad. Not anymore. There’s no protective tariff, so to speak, around white-collar jobs. It’s a cheap-labor-takes-all situation.

Veteran journalist Bill Moyers highlighted the situation in the Labor Day weekend edition of his PBS show, “Now.” Moyers ticked off the list of American corporations that have moved jobs offshore: Oracle, Dell, J.P. Morgan Chase, Microsoft, Texas Instruments, Delta Airlines.

And apparently we can soon add IBM to that list. According to the Reuters news agency, a union seeking to organize IBM workers obtained a recording of IBM executives. In the recording, the executives said that they had no competitive choice other than to expand software and semiconductor development overseas. IBM currently employs 5,400 workers in India out of a total work force of 316,000.

The arguments over whether IBM will leave Vermont if the Chittenden County circumferential highway isn’t completed seem irrelevant compared to this trend. Vermont – and all other states – should be worrying about every company that can easily move workers’ voices and data over phone lines. It doesn’t matter whether those workers are in Burlington or Bangalore.

Is anyone safe in this rush to the bottom of the wage ladder? Might it only be a matter of time before the jobs of corporate executives – the ones who make the decisions to outsource jobs – also get outsourced? A displaced tech worker may feel there’s some justice in that situation. But at what point will there be no more customers to take advantage of the cheaper goods and services that outsourcing helps create?

A final note: those blue-collar jobs that went to Mexico in the 1990s? Mexico is now losing them to China. And the tech jobs now going to India? Russia, Vietnam, China, and the Czech Republic are apparently already standing in line to grab some of them.

This is Allen Gilbert.

Allen Gilbert of Worcester is a writer and parent who is active in education issues.

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