Your Job May Be Next!
Your Job May Be Next!
Date: Wednesday, February 26, 2003 3:12 PM
H-1B and JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
http://www.thenewamerican.com/tna/2003/03-10-2003/vo19no05_jobs.htm
Your Job May Be Next!
by William F. Jasper
Millions of U.S. jobs, as well as thousands of independent businesses,
face extinction under policies that favor importing cheap labor and
exporting production.
Order This Issue
Vol. 19, No. 05
March 10, 2003
YOUR Job May Be Next
The mood in the conference room was light and festive. It was just two
weeks before Christmas 2002 and many of the 300 or so Dell employees
were getting set for the holidays and year-end vacation time as they
gathered at Dells campus in Austin, Texas, for a "town hall"
meeting. They were ill prepared for the message that senior vice
president Jeff Clarke was about to deliver. Meetings of this sort were
usually big on awards, recognition, and introductions of new products
and project teams. And despite the market drubbing of tech stocks in
general, Dell had posted another banner year in sales, growth, and
profits. The company also benefitted from a nice cash balance, Mr.
Clarke noted. Then came the bad news. The company was announcing new
personnel "attrition goals" of 10 percent per year, about double the
normal attrition rate. These positions would not be filled in the
United States, Clarke explained. They would be filled by new hires in
India, China, and other countries where Dell is shifting business.
Audible gasps came from the employee audience, a hi-tech assemblage of
Dell software engineers, electrical engineers, test engineers, group
managers, and administrative talent. A Dell employee who attended the
meeting told The New American: "A definite pall came over the crowd. It
did not make for a happy Christmas."
Although Clarkes announcement came as a shock, there had been hints
of an impending axe-fall. In 2000, Dell had announced the launching of
its China Design Centre in the Peoples Republic of China (PRC). A
steady trickle of Red Chinese engineers, project planners, and managers
had been brought to Dells Austin campus for training, and some U.S.
Dell employees had made the trek to China for four-to-six-month stints
to train Chinese personnel there. Around the Dell headquarters in
Austin, employees had begun wryly referring to the "Chinese invasion"
as "training our replacements." Few expected that the replacing would
start so soon.
Invasion-Migration Pincer
Dells sparkling new China Design Centre in Shanghai joins similar
research and design centers in China, Russia, and India built by
Microsoft, Motorola, Boeing, General Electric, and other corporate
titans. The hi-tech centers are a distinctly new development, in
contrast to the huge number of foreign manufacturing plants especially
in Mexico and China built by U.S. companies over the past couple of
decades. These early rounds of "globalization" cost millions of U.S.
jobs, but various experts assured us that this should not concern us
because these were blue collar "rust belt" jobs. Old technology, they
claimed. Manufacturing is passi, they said. The U.S. would enter the
new global economy with the new technology. Information, services,
cutting-edge research and development these would be the clean,
high-paying jobs that would keep America on top.
But guess what? After years of strip-mining Americas industrial
base, U.S. corporate elitists and their political allies in Washington,
D.C., Beijing, Mexico, Moscow, and elsewhere are now looking to
dispense with upscale white collar jobs as well. College grads who
obtained degrees in computer science and engineering are finding
themselves replaced by Third World counterparts willing to work for
20-50 percent less pay. In corporate globalese this replacement process
is euphemistically called "outsourcing." Adding insult to injury, many
of the replacement foreign workers received tax-subsidized educations
in U.S. universities.
According to Business Week:
In a recent PowerPoint presentation, Microsoft Corp. Senior
Vice-President Brian Valentine the No. 2 exec in the companys
Windows unit urged managers to "pick something to move offshore
today." In India, said the briefing, you can get "quality work at 50%
to 60% of the cost. Thats two heads for the price of one."
The same issue of Business Week offered this glib forecast:
Now, all kinds of knowledge work can be done almost anywhere. "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.
This is a massive shift that bespeaks far more than the number of jobs
and the billions of dollars on the bottom line. It concerns the
critical competitive edge that the U.S. has enjoyed due to our
innovation and technological leadership. That competitive edge is
disappearing. It is being given away to our competitors and even to
our avowed enemies. The Business Week quotes above came from the
magazines extraordinary February 3rd cover story, which ran under
the alarming heading, "Is Your Job Next?" This was followed by a long
cover subtitle: "The next round of globalization is sending upscale
jobs offshore. They include basic research, chip design, engineering
even financial analysis. Can America lose these jobs and still
prosper?"
The very obvious answer to Business Weeks question is a resounding
no! These hi-tech jobs are not luxuries that we can allow to be
nonchalantly discarded. They are critically important, as are many of
the low-tech jobs exported to foreign lands in recent years.
Manufacturing does matter. It is essential to a strong national
economy, especially for a world power like the United States with
sizeable defense imperatives. We will have little hope of prosperity if
we allow our nation to depend on competitors or outright adversaries
for basic parts, supplies, technologies, and resources. America needs a
solid base of the "old," "dirty" industries of mining, metallurgy, oil,
coal, timber, steel, agriculture, and manufacturing, not only for
prosperity, but for survival. All of our hi-tech advantages on the
virtual battlefield will quickly prove a hollow reed if we do not have
the means to produce arms, munitions, equipment, transportation, food,
and clothing for our forces on the real battlefield.
Under the vaunted "globalization" process, some indeed are prospering
and will continue to prosper. But only an elite few. Americas middle
class is being squeezed and is in danger of being wiped out. If the
process is permitted to continue, we will be reduced to a nation of
peons ruled by a political-corporate elite indistinguishable from their
socialist counterparts in China. In that tragic land, the privileged
ruling class, the Communist Partys nomenklatura, live in regal
splendor while the toiling masses grovel in wretched servitude.
Dont Worry, Be Happy
Incredibly, Business Week (BW) answers its own question by suggesting
that the predicted hi-tech job hemorrhage already underway may
benefit the U.S.! "By spurring economic development in nations such as
India," BW avers, "U.S. companies will have bigger foreign markets for
their goods and services." How so? The same promises were made
regarding low-tech jobs for the "China market." But we have found after
three decades of "spurring economic development" in China that the PRC
allows few of our products to reach Chinese markets. Each month China
erodes more of our economic infrastructure and job base with cheap
goods produced by slave labor and new factories subsidized by loans,
credits, and guarantees from the U.S. government, the World Bank, and
the International Monetary Fund. As Dr. Roger Canfield, author of the
new book Chinas Trojan Horses, told The New American, "Our largest
export to Red China is empty cargo containers and American jobs.
Beijing turns around and sends those containers back to us with
slave-labor-produced goods that continuously undercut more and more
American-based businesses and our nations security. For every dollar
that we make from exports to China, we spend six dollars on imports
from China. Chinas Communist government then uses this huge cash
windfall as a strategic weapon to bribe our politicians and
businessmen, buy military hardware, and obtain critical technologies
and long-term productive assets that will continue to widen the trade
gap while we get consumables." India is following much the same
pattern.
Nevertheless, as Business Week notes, "Intel Inc. and Texas Instruments
Inc. are furiously hiring Indian and Chinese engineers," as are many
other U.S. companies. According to that magazine voice of the
Establishment corporate community, this trend should not alarm us since
"a case can be made that the U.S. will see a net gain from this shift
as with previous globalization waves." "In the 1990s," BW continued,
"Corporate America had to import hundreds of thousands of immigrants to
ease engineering shortages. Now, by sending routine service and
engineering tasks to nations with a surplus of educated workers, the
U.S. labor force and capital can be redeployed to higher-value
industries and cutting-edge R&D."
Business Week is being intentionally deceptive here on several points.
First, there was never any "engineering shortage" in the U.S. to
necessitate importing foreign engineers. In fact, with the downsizing
of the U.S. military and layoffs from the defense contractors and
aerospace industries, there was a huge domestic surplus of qualified
engineers, programmers, and other technical specialists to supply
corporate Americas needs. But not at the Third World wages sought by
the corporate elitists. So the corporate lobbyists prevailed on
Congress and President George Bush (the elder) to pass legislation in
1990 creating the special H-1B visa program allowing a flood of alien
hi-tech workers into the U.S. According to figures compiled by eWEEK,
the number of H-1B visas granted annually hit an all-time high of
355,605 in 2000. Since then the number has been capped at 195,000 visas
annually. The H-1B program has already handed between 800,000 and one
million hi-tech jobs to these foreign workers, many of whom are far
less qualified than American engineers, programmers, and technicians
forced to take lower-paying positions.
Dr. Norman Matloff, professor of computer science at the University of
California at Davis, points out that "Microsoft only hires 2% of its
applicants for software positions," and that this rate is typical in
the industry. "Software employers, large or small, across the nation,
concede that they receive huge numbers of risumis but reject most
of them without even an interview," says Matloff. "One does not have to
be a techie to see the contradiction here. A 2% hiring rate might
be unremarkable in other fields, but not in one in which there is
supposed to be a desperate labor shortage. If employers were that
desperate, they would certainly not be hiring just a minuscule fraction
of their job applicants." The real reason for importing workers under
H-1B is the same one used to justify exporting jobs to outsource
workers overseas: to avoid paying realistic salaries to U.S. hi-tech
workers. As Forbes magazine noted: "Indian programmers working in the
U.S. on temporary H-1B visas typically earn 25% to 30% less than their
naturalized colleagues." The Wall Street Journal likewise, was stating
the obvious when it reported that "recruiting foreign talent is cheaper
than hiring Americans."
The H-1B workers officially are not immigrants; they are "temporary"
workers. However, like the desperate engineer shortage, this too is a
fraud. When the H-1B legislation was passed in 1990, industry lobbyists
said it was a temporary fix only necessary for a few years. However, in
the year 2000, after the H-1B was renewed, Texas Instruments and other
hi-tech firms said that they would need H-1B for "the next 20 years."
Moreover, like every other visa category (student, tourist, business,
etc.), H-1B workers know that the Immigration and Naturalization
Service rarely enforces the policy. Many H-1Bs leave the jobs they used
to enter the U.S. and melt into the population, the same as other
illegal aliens.
The displaced American hi-tech workers have organized some effective
campaigns causing Congress to feel some heat. The tech industry and the
H-1B lobbyists are concerned that the present economic climate may help
this politically savvy domestic labor force prevail. The H-1B program
may go down the tubes this year. Thus, many tech firms have already
been ramping up an alternative route for foreign workers through the
little-known L1 visa program.
As reported recently in eWEEK, "the L1 visa has clear advantages for
employers." "Technically," eWEEKs Lisa Vaas reported in a January
6th article, "the L1 is an intra-company transfer visa that allows U.S.
companies to import employees from foreign subsidiaries, affiliates or
parent companies. One big plus for the L1 at least in the eyes of
employers is that theres no limit on the number that can be issued
each year." Another advantage Vaas points out is that the L1 can be
used to import large numbers of workers at one time. She reports that
the number of L1 visas granted climbed from 112,124 in 1995 to 294,658
in 2000. And its use appears to be going up. Software company Wipro
Technologies, a Bangalore, India, division of Wipro Ltd., exemplifies
why this is so. eWEEK reports that "according to Laxman Badiga, chief
executive of talent transformation and external relations at Wipro, the
company can get L1 visa applications approved four to eight weeks
faster than it takes to process an H-1B visa."
Wipro figures prominently not only in the H-1B and L1 import game; it
is also a major player in exporting or "outsourcing" U.S. "information
technology" (IT) jobs. As a major partner of Lucent Technologies, Inc.,
Wipros India-based software engineers are replacing many of
Lucents U.S. employees. In the sprawling office complexes of
Wipros various subsidiaries throughout India, thousands of hi-tech
IT workers process information and handle work once done by Americans.
Wipro IT workers, for instance, process insurance claims for major U.S.
corporations, sift research for pharmaceutical companies, and handle
customer service telephone calls long distance from the U.S. for banks,
credit card companies, and Internet providers. Other Indian giants such
as Tata Consultancy Services and Infosys Technologies provide similar
services to corporate America. If the person answering the 800 customer
service line for your American Express card, your Citibank statement,
your Dell computer tech support, or your CompUSA service contract talks
with a heavy Indian accent, its likely because he or she is an
Indian and is speaking to you from Bangalore, India, if not from a H-1B
"temporary" office in the U.S.
Pink Slips Made in the U.S.A.
Americas white collar work force is facing the same twin battering
rams of imported cheap labor and exported production that have ravaged
our countrys blue collar work force for years. Millions of American
jobs in basic resource industries as well as manufacturing, residential
and commercial construction, food processing, textiles, hotel and
restaurant services, landscaping, nursing, and health care have gone to
alien workers (both legal and illegal) here in this country, while
millions more jobs have been outsourced to foreign lands. It has become
a familiar, bitter story in cities, towns, and communities across the
country, as layoffs are announced, pink slips are issued, and factories
are closed down. The jobs often reappear at new factories in Mexico,
Indonesia, India, China, and dozens of other countries. But the jobs in
those factories dont go to U.S. workers, of course. The blue collar
job drain has not let up; many more companies will move off-shore in
coming years, or simply sell out to foreign corporations or larger U.S.
companies that have already set up operations overseas.
Bob Davis, general manager of Modern Die Systems Inc. of Elwood,
Indiana, has been watching this development for years with a mixture of
alarm, sadness, and disgust. "Our government has set it up so that it
is unprofitable to manufacture here in the U.S." he told The New
American. Mr. Davis noted the tremendous disincentives to production
posed by taxes, regulations, employee medical insurance, and labor
union obstruction the combined effects of which are driving many
businesses into the ground, or out of the country. Occupying a hi-tech
niche in the tool-and-die business, Modern Die Systems has managed to
keep going, but it has had to cut its work force by about half of what
it was several years ago. The company used to be very busy producing
stamping dies for the automotive, appliance, electrical, recreational,
heating and air conditioning, and defense industries. But, as Mr. Davis
noted, "Much of my business has gone to Mexico." So have many area
employers.
Dan Neuendorf, the companys president, told The New American about
an example that typifies the dire situation he and other manufacturers
face. "One of our customers in Indiana asked us to give him a quote on
some metal stamping dies," he said. "We quoted a price that was as low
as we possibly could go and still make any profit. But they could get
it for one-fifth of our price from Red China."
Bob Davis said, "I told the customer that there is no way that we could
match that price, but that it would be unfair and immoral for me to ask
free men to work for the same wages as slaves. The companys owners
are patriotic, Christian men, and they agreed that since they didnt
need it right away they could let us produce it as fill-in work,
according to our schedule, so that we could keep the cost down." But
not all stories turn out so happily. Under tremendous pressure to cut
prices, thousands of businesses opt for cheaper imported labor and/or
foreign production facilities. Mr. Davis lists some of the recent
losses. RCA has closed or drastically reduced its plants in
Bloomington, Indianapolis, and Marion, laying off thousands. Lau Corp.
of Indianapolis, a heating, ventilation, and air conditioning
manufacturer, is moving assembly lines to Mexico. So is Revcor, a
Carpenterville, Illinois-based producer of air conditioning fans and
blower wheels. Huffy Bicycle, located in Celina, Ohio, is all but out
of business, thanks to pressures from China and Mexico. Then there is
the recent sale of Indianapolis-based Magnequench Inc. to China,
eliminating around 400 jobs. But the Magnequench deal involves far more
than jobs; it involves the sale of very sophisticated technology used
to produce critical parts for smart bombs (see the article on page 17).
What is especially galling to Bob Davis is that ongoing government
policies favor these trends that are killing the goose that laid the
golden egg. "Our countrys entire production capability will be
stripped bare if this continues," he says. "And with it will go all of
the jobs and small and medium-sized independent businesses that are the
bedrock of the American middle class."
Fighting for Our Jobs
If American jobs, businesses, and communities are to be saved from this
devastation, American middle-class white collar and blue collar
workers, together with independent business owners, must combine to
force Congress to reverse the destructive policies that are importing
foreign workers and exporting our productivity. That means abolishing
the H-1B and L1 visa programs, drastically reducing all other levels of
immigration, and insisting on credible INS and Border Patrol
enforcement levels. It also means defeating all proposals to grant yet
another amnesty to millions of illegal aliens who have come to the U.S.
since the last amnesty.
Equally important, it also means cutting off federal funding to the
many agencies and programs providing loans, credits, subsidies, and
loan guarantees to U.S. corporations to move to foreign countries. This
especially includes U.S. funding to the World Bank and its sister
institutions, which enable the financing of many of these harmful
transfer projects. Finally, it means defeating the proposed Free Trade
Area of the Americas (FTAA) and the separate "free trade" treaties that
the Bush administration is negotiating between the U.S. and Latin
American countries. If these individual treaties are ratified, the FTAA
becomes a piecemeal fait accompli, and importing foreign labor and
exporting U.S. jobs and companies will accelerate.
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