Patrick Dotterweich
Creative thinker, enthusiastically
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Hoax
Museum
Present -day as well as past
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Sep 16 2003 12:10PM
National Institutes of Health
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Sep 15 2003 09:48AM
UC Berkeley chemists using
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GTC East 2003
Sep 11 2003 09:53AM
Government Technology Conference -
Sept 15-19
Programmable Logic
Sep 08 2003 01:51PM
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2003 conferences - Sept 30-Nov 6.
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What Is To Become Of The American IT
Worker?
Part Two: Going, Going, Gone...?
by: Kamil Z. Skawinski
Reacting to ongoing national and international socioeconomic factors and
trends, America's corporations continue to remain under pressure to cut costs
and build worldwide supply networks to maintain competitiveness in today's
less-than-hospitable global trading arena. More often than not, though, to
ensure their viability and long-term profitability, U.S. companies have had
to adopt a variety of strategies-not all of which have proven positive or
palatable for American workers-to maintain their edge vis-a-vis increasingly
aggressive foreign competitors.
In last month's issue, CCN focused attention upon one such stratagem: the IT
industry's reliance upon H-1B and L-1 skilled, short-term labor immigration.
Viewed from the corporate world's perspective, these two visa programs have
proven invaluable, for not only have they helped U.S. companies fill critical
IT positions, which would otherwise have remained vacant, but they have also
afforded our nation's employers easy access to a labor pool with life
experiences and skill sets that are not readily available domestically. And
when exploited according to the letter and spirit of the immigration laws,
both of these special non-immigration visa programs have, indeed, made
contributions toward helping keep America's technology-dependent enterprises
adaptable, dynamic, and competitive within an increasingly cut-throat global
marketplace.
Viewed from the perspective of the American IT worker, though, U.S.
industry's growing reliance upon foreign skilled labor is not exactly
heartening, particularly when you take into account the insufficient
governmental oversight and regulation of visa programs such as the L-1.
Companies that utilize non-immigrant, temporary contract labor underscore
that their decision to do so is based on factors like skills, not on cost
alone. That said, many industry observers now charge that L-1 visas have
recently become increasingly popular because they allow American firms to
legally bring in large numbers of foreign workers into the United States,
often solely as a means to reduce labor costs. The number of temporary L-1
visas granted in 2002, such critics underscore, has risen by almost 40
percent to 57,700 compared to 41,739 back in 1999.
Unlike H-1B, L-1 visa provisions neither require employers to pay workers
prevailing wages, nor do they place a cap on the number of L-1 visas that can
be granted. Unsurprisingly, alleged abuses concerning this particular visa
program have provoked the greatest outcry from hard-hit technology workers
who have recently lost their jobs. Many claim that not only are L-1 employees
being paid considerably less than their U.S. peers, but American technology
workers often have to first train them to do their own jobs before they
themselves are let go-and if they refuse to do so, they face a variety of
reprisals.
Technically, the L-1 visa requires that such temporary foreign employees possess
specialized knowledge of the work to be done. Ergo, these workers should not
need any additional training whatsoever to do their jobs.
Clearly the problems and challenges posed by H-1B and L-1 visa misuse must
not go unaddressed or be downplayed, and all such abuses of these programs
should be adequately documented and forwarded onto the U.S. Department of
Labor so that they can be acted upon by proper authorities. But more
importantly, the laws and regulations controlling these and other non-immigrant
visa programs should be tightened, simplified, and stripped of the Byzantine
"legalese" that currently makes them about as clear as mud. Such
rules should be unambiguous and easily understandable to everyone-American
workers, U.S. employers, non-immigrant visa holders-and not just
comprehensible to politicians, immigration lawyers, and regulating
governmental agencies.
America's IT workers, alas, face more than just "The Visa
Challenge" today. Increasing reliance upon offshoring by cost-conscious
corporations poses an even greater dilemma for our nation's workers, for this
particular "bottom-line friendly" strategy ends up permanently
exporting once high-paying and highly desirable IT and other service-sector
jobs to countries where the prevailing wages for such professions are a
fraction of what they are in the United States.
Where The Jobs Are Going And In What Quantities
In decades past, it was millions of American manufacturing jobs that were
either lost to direct competition from abroad or which wound up relocated to
more economical and cost-effective overseas U.S. subsidiaries. Lately,
though, this unhappy phenomenon of "job-relocation" has had the
most impact upon positions of America's service sector.
Forrester Research estimates that the number of service-sector jobs newly
located overseas, many of which are tied to the information technology
industry, will climb from about 400,000 this year to nearly 3.3 million in
2015. This shift of over 3 million positions represents about 2 percent of
all American jobs. What is more, Forrester predicts that approximately
450,000 computer industry positions could ultimately end up transferred
abroad within the next 12 years, representing 8 percent of our nation's
computer-related jobs.
Corporate executives contend that the transfer of such jobs to lower-cost
locations abroad makes America's industries competitive, keeps U.S. consumer
costs down, and helps foster development in poorer nations while at the same
time supporting overall employment in the United States by improving
productivity and expanding America's global reach. Beyond providing our
nation's corporations with notable economies in terms of labor costs, the
creation of such positions overseas also helps U.S. companies reap not
insignificant benefits from the "24/7 Follow-The-Sun Model" of
product development and support. A number of industry insiders, moreover,
maintain that many of these offshore job positions are strictly
"additive" in nature, meaning that they are not taking away any
existing U.S. jobs.
Still, when all is said and done, it is hard to conclude that those
substantial savings in labor costs are not the most alluring factor
contributing to the recent rise in offshoring. The going salary of a freshly
graduated Java programmer in India, for example, is about $5,000 a year; an
equally experienced and educated U.S. programmer can expect to earn $60,000.
Oracle, a well-known U.S. producer of specialized business software, is
already planning on increasing its workforce in India to 6,000 from 3,200
existing positions. Microsoft plans on doubling the size of its software
development operation in India to 500 positions by late this year, too.
Accenture, a leading American consulting firm, currently has 4,400 employees
working in India, China, Russia and the Philippines. Industrial giant General
Electric also has thousands of workers in India in call-center,
research-and-development efforts, as well as information technology. And, as
the New York Times reported back on July 21, two senior IBM officials told
their corporate colleagues around the world in a recorded March 2003
conference call that IBM, the world's largest computer maker, also needed to
accelerate its own efforts at moving high-paying, white-collar jobs overseas
even though such a move could spark a backlash among politicians and its own
employees.
Needless to say, many worry that American industry's tactics and practices
will ultimately end up doing more harm than good to our nation's economy.
These critics charge that such moves create increasingly downward wage
pressures on the U.S. workforce as a whole. Other industry observers worry
that once formerly "American jobs" are sent overseas, they will
never come back. What is more, if we continue losing such jobs in the anticipated
numbers, there is a general concern voiced by all sides that our nation's
schools will simply stop producing the vital computer engineers and
programmers the United States will undoubtedly need in the future.
"Increased global trade was supposed to lead to better jobs and higher
standards of living," bemoaned Representative Donald A. Manzullo
(R-Illinois) while chairing a hearing the House Small Business Committee
earlier this summer. "The assumption was that while lower-skilled jobs
would be done elsewhere, it would allow Americans to focus on higher-skilled,
higher-paying opportunities. But what do you tell the Ph.D., or professional
engineer, or architect, or accountant, or computer scientist to do next?
Where do you tell them to go?"
Non-Immigrant Visas, Outsourcing, Offshoring, Etc.,
As Seen From The Perspective of American IT Workers
"Programs like the H-1B visa program should be based on unemployment
numbers, the 'real need' to hire workers. Right now, there's no law on the
books that would prevent an employer from hiring an H-1B worker to replace an
American, which is a real problem," said John A. Bauman, president of
the Organization for the Rights of American Workers http://www.toraw.org/, a nonprofit group based
in Meriden, Conn.
T.O.R.A.W. is a grass-roots initiative demanding that U.S. jobs be preserved
first and foremost for U.S. citizens. Offshoring, near-shoring, H-1B, L-1 and
many other visa types have displaced millions of American workers and students
throughout the country, and the group is working to put pressure on
politicians and U.S. industry to reverse the loss of American jobs and the
lack of employment opportunities. The organization also hopes to do something
about the current seeming ineffectiveness of educational advancement.
According to the N.I.V. Information Center, over 17 million visas have been
issued to allow aliens to work in the United States since 1985. These
non-immigrant visas (NIVs) are company-sponsored visas that use a variety of
different names including H-1B, H-2A, H-2B, J-1, L-1 and TN. By the end of
2001, more than 890,000 H-1B workers were employed in the United States.
Bauman and his organization contend that visa programs like H-1B and L-1,
when they are misused by bottom-line fixated U.S. companies, not only have a
negative impact upon the salaries and wages of those American citizens who
are fortunate enough to retain their jobs, but they also unnecessarily
exacerbate the ongoing IT unemployment problem in the United States.
"There's no justification why the H-1B quota should even be at
65,000," argues Bauman. "Our elected officials in Congress should
reduce that number to less than 65,000 because the WTO says that that quota
can be up to 65,000, it doesn't necessarily have to be 65,000."
"Some of these people are very talented people, make no mistake, and
certain of their skill-sets might be lacking here in the U.S. So, therefore,
you probably might need quote-unquote 'some of them.' But we also have
talented people here in the U.S., people who've graduated from Berkeley and
Stanford and other great schools, and they can't find jobs.... You can't tell
me that with over a half-million unemployed high-tech workers in the U.S.
that some of these people can't fill some of those [H-1B] positions if not
most of them .... I have friends whose children have just graduated from
college with degrees in computer science who are unemployed; I know computer
science people with Ph.D.s who cannot find work."
T.O.R.A.W. is also very concerned that U.S. students currently enrolled in
computer science coursework in our nation's universities, colleges, and
technical schools now have to face unfair competition in the American IT
labor market, often from fellow students from foreign countries who are
learning the same skills in the very same schools.
"Only these foreigners are often here under the auspices of a specific
U.S. company's scholarship program; they are afforded the benefit of
participation in internship programs at that company; and once they graduate,
they have the first shot at any of the jobs that company has available. And
so they can readily change their F-1 visa, which is a student visa, into an
H-1B and legally remain and work here," said Bauman. This reality also creates
a vicious circle, for it discourages many U.S. students from pursuing a
technical field of study. "And what then happens is that you find you
don't have enough U.S. candidates to fill the jobs, and so you then need more
H-1Bs."
Although he does not dispute that there is a genuine need for temporary work
visas such as the L-1, Bauman wants to see much tighter regulation of such
programs to ensure that such visa programs do not end up being misused to the
detriment of American workers. Above all, he would like to see immigration
laws revised and rewritten so that they incorporate explicit language stating
that visa programs such as H-1B or L-1 will, first, not displace any U.S.
workers and, second, that they will compel foreign temporary employees to
work only upon the grounds of their company's site and so that they will not
wind up farmed out to work at some third party's location as a cheap,
itinerant labor force. Fines for violations should also be made more
substantial.
"We hold no personal animosity toward these non-immigrant workers,"
said Bauman. "Faced with a chance to earn five to 50 times our annual
salary, many Americans would undoubtedly do the same. Our issue is with our
laws, our treaties and our international trade agreements, which fail to protect
the American worker. Our grievance is with our American companies who
deliberately and unfairly reject qualified Americans and elect to import
workers from another country simply in order to improve their
bottom-line."
Worries Beyond The Unemployment Numbers
Bauman's concerns, however, revolve around more than just the issue of
American IT employment opportunities or, more accurately, the current lack
thereof. He is anxious that many of these otherwise "helpful"
temporary foreign workers also might have the potential of becoming moles
which, in turn, could in the future provide foreign competitors/foreign
countries with intelligence and practical know-how that could ultimately
adversely affect U.S. interests and/or impede America's competitiveness in
the global marketplace.
"What's occurring is that these overseas firms are shipping their
employees over here. Our employees in the U.S. are then forced to train those
workers in order to get a severance package, and then all that knowledge goes
back offshore. Our knowledge-base is being transferred offshore, and that can
be very dangerous."
And this is why the L-1 "blanket visa" troubles Bauman greatly.
"If a company is of a certain size and dollar amount and presence in the
U.S., what that company can then often do is request a blanket visa which
allows certain [foreign] employees to come into the U.S. within a few days.
That, in my estimation, raises some national security issues [for those
employees don't have to go through the usual extended application and
interview processes at an American consulate or embassy]."
Offshoring jobs related to the computer and aerospace industries opens up a
Pandora's Box of national security dilemmas, too, for U.S. companies have no
real security controls or guarantees that such critical, often dual-use
technology (and its requisite know-how) will not inadvertently wind up in the
hands of foreign governments and/or their military forces-not all of which
are always amicably disposed toward the United States or its national
interests.
From the standpoint of America's own financial security, the practice of
offshoring is equally worrisome.
"America's CEOs, CFOs and other executives are all making big bucks and
earning big bonuses because they can prove that they can reduce their
companies' costs," said Bauman. "But what is happening all across
the country is that salaries are now all coming down in order to meet, or
come close to meeting, these foreign firms. I have friends who were told they
had to take a $30,000 cut in pay to keep their jobs...highly-skilled
technicians who've been in the business for more than 20 years, and they were
told, emphatically, you have to take a $20,000 to $30,000 cut in pay to keep
your jobs. We simply can't compete with the foreigners."
"Consequently, I'm not optimistic about a rebound in the U.S. tech
sector," he continued, "but that's only if our legislators fail to
follow through on their commitments to their constituents and fail to protect
all American workers. We've met here in Connecticut with our legislators, and
they've investigations going, they have studies going, and if they follow
through on their commitments, then we have a chance-and now I mean 'chance,'
for there's nothing definite in this world."
Bauman, ideally, would like to see sizeable tax-surcharges imposed on all
U.S. companies that send work offshore and/or which hire H-1Bs. At the same
time, he would give equally hefty tax incentives and tax breaks to those
American firms that do not utilize foreign labor either at home or abroad.
Such moves could go far in reversing the flow of jobs overseas. He notes that
consumer pressure, too, should also play a critical role, especially with
respect to the practice of offshoring U.S. company customer service
facilities.
"[You as a consumer] might want to wish to boycott such companies if you
know that they are giving away your name and address, your Social Security
number, your date of birth, your medical history, your phone number, the
history of every phone call you've ever made to someplace offshore. To my
knowledge, only two countries in the world have adopted 128-bit encryption
[for such sensitive information], and that's us and Great Britain, which
really makes it secure. If you're going to transmit this data overseas through
other than 128-bit encryption, you have to unscramble it, transmit it, and
make it open to hacking or whatever. Fortunately, it does not happen too
often, but then again, how would you ever know?"
For Richer, For Poorer: The Long-Term Decision
U.S. CEOs Need To Make About America's Economic Future
Outsourcing offshore might save U.S. employers significant sums of money, but
as critics and former IT workers charge, the practice ends up permanently
displacing American jobs with cheap foreign labor. Over the long-term, it is
quite likely that this business strategy could weaken our nation's future
financial health and erode our economic standing in the world, because
declining American salaries ultimately lead not only to a declining standard
of living, but they weaken the buying-power of U.S. consumers, the driving
force of our national economy. And all this, in turn, has a long-term
negative impact on future corporate incomes, employment opportunities, and
the governmental income tax revenues that are in many ways fundamental to
ensuring the quality of life in our nation's communities.
"Many of our companies are only thinking 'bottom-line' and
'short-term,'" Bauman said, "They're not thinking of the millions
and billions of dollars of tax revenue lost to our nation's state and federal
governments in terms of income taxes. Fewer U.S. workers means less revenue
in terms of state and federal taxes, it means increased property taxes for
our nation's communities, and it means a future with widening underemployment-and
this all leads directly to the reluctance of U.S. students to pursue
high-tech degrees, which, down the road, is going to be an even bigger
problem for us."
The carrot-and-stick approach of tax incentives and tax penalties probably
would have the greatest impact toward restoring a sense of normalcy and
balance in our nation's employment opportunities in IT and related
industries. Moves by states like New Jersey, which is slated to consider a
bill requiring that only citizens or legal residents of the United States be
employed to perform certain state contracts, might also give America's
executives reason to think twice about the overall wisdom of offshoring and
over-relying upon H-1Bs. And perhaps a good old fashioned
"dope-slap" should also be administered to America's corporate
bigwigs so that they snap out of their stupor and look upon the U.S.
communities around them not merely through soulless bottom-line calculations,
but with a sense of long-term civic-mindedness, corporate responsibility and genuine
patriotism.
Booms and busts are not new to the American economic landscape, and hard
times have generally been followed by good ones. And perhaps, years from now,
we will look upon the current IT employment difficulties in much the same way
historians look upon those faced by the Great Lakes shipbuilding industry
back in the late 1800s, seeing it all as an uneasy period of technological
transition from "old" to "new."
Right now, unfortunately, there are no easy answers to the challenges faced
by America's IT and other workers-and we have yet to come upon anything
resembling that much anticipated "technological next-big-thing." As
a result, we must deal with the drawn cards we presently have in hand.
Next month, CCN will take a look at what U.S. IT workers are doing to
attract attention to their concerns and complaints and how they hope to
change things for the better-and we will also examine what American workers
are up against by focusing more attention upon the full scope of their
foreign competition.
|
Kamil Z. Skawinski, Science and Technology Editor
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