11 Articles Worth Reading
11 Articles Worth Reading
Date: Saturday, July 17, 2004 5:38 PM
JOB DESTRUCTION NEWSLETTER
July 17, 2004 - No. 1058
Article 1:
http://www.washingtondispatch.com/article_9419.shtml
The Poverty of the Rest of the World
The United States runs a $400 billion a year trade deficit. Last
month, we ran a $48 billion trade deficit. Why? Simple. H-1B and L-1
visas removed one million U.S. jobs in the past 10 years. In-sourcing,
out-sourcing and off-shoring of American jobs have left millions of us
in unemployment lines.
Article 2:
http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=123230
Human bargains
Being called cheap labour might seem an unfair taunt to a highly
qualified, hardworking Indian who was given the job some American lost.
But squash the ego and face a fact: the quality is not quality enough
that is being purchased at any price. The clinching factor is its
cheapness.
Article 3:
http://www.ajc.com/health/content/shared/health/ap/ap_story.html/Health/AP.V2767.AP-Australia-Docto.html
Australia Worries About Foreign Doctors
An influx of foreign-trained doctors may be jeopardizing the quality of
health care in Australia's physician-short rural areas, a health
official said Monday. Foreign doctors on temporary visas need to be
educated about the Australian health system as well as receiving
cultural training, said Australian Medical Association Vice President
Mukesh Haikerwal.
Article 4:
http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,94337,00.html?nas=XSP-94337
BearingPoint opens second development facility in China
The consulting firm has opened a 56,300-square-foot facility in Dalian
BearingPoint Inc. is opening its second offshore development facility
in China, a move analysts see as part of a trend by U.S. firms to
expand offshore development operations in that country.
The McLean, Va.-based consulting firm said late last week that it has
opened a 56,300-square-foot facility in Dalian, a city in the
northeastern part of the country. U.S. and Indian firms are
establishing services operations in China, in part as a hedge against
the increasing costs of labor in India.
Article 5:
http://www.freerepublic.com/focus/f-news/1166261/posts
Immigration-Trade Link Can No Longer Be Ignored
Unemployment rates for high-tech workers are still above the national
average. Pay in these fields has gone nowhere for 20 years. As a
result, national anxiety about job flight overseas has hit levels not
seen since the 1980s. Yet Congress is considering a bill to make it
easier for high-tech companies to bring cheap foreign workers into the
United States. Worse, this bill is being sponsored by a Congressman --
Texas Republican Lamar Smith -- who4s been an immigration control
advocate for years. What in blazes is going on here? Rep. Smith4s
latest bill, which would permit high-tech companies to import 20,000
more H-1B specialized foreign workers, is a great example. Rep. Smith
portrays his legislation as a compromise that has fended off even
greater quota increases. And he claims it will ultimately help American
workers by reducing many abuses associated with these immigration
programs -- like the common practice of paying immigrants much lower
wages than comparable domestic workers earn. But the Smith bill is
simply rearranging the deck chairs on the Titanic at the last minute.
Article 6:
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3037926,00.html
Colorado offshores benefit work
Contract uses India's MsourceE; study cites low-cost labor
Colorado is among the vast majority of states that have sent government
work offshore to India and other nations with low-cost labor, according
to a new study.
Article 7:
http://www.itaa.org/news/pr/PressRelease.cfm?ReleaseID=1089843408
ITAA Cries Foul on Food Stamp Program Provision
July 14, 2004
The Information Technology Association of America (ITAA) criticized a
House passed amendment yesterday that would bar states from using
federal funds to pay for food stamp program costs if program operations
take place offshore. ITAA called the action unwise, putting politics in
front of poor people at the nation's check out line. "This amendment
shows that when it comes to government services in a global
marketplace, some lawmakers still don't get it," ITAA President Harris
N. Miller said.
Article 8:
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/07/16/BUGOJ7MD081.DTL
No use opposing offshoring
"Offshoring is here to stay. We're whistling in the wind if our
approach is how to make it go away," said Russell Hancock, president
and CEO of Joint Venture: Silicon Valley Network, a nonprofit that
analyzes issues affecting the area's economy and quality of life. "We
don't view it as a problem. It's been going on a long time. Now it's
found its way up the value chain. That's normal economics. The report
says, 'Get used to it. Stop all the hand-wringing. Let's figure out
what the Bay Area does best and promote those kinds of industries,' "
he said.
Article 9:
http://online.wsj.com/article_email/0,,SB108984243120664037-IZjfYNglaR3oJysaXmHaqqBm4,00.html
Vaunted German Engineers Face Competition From China
Siemens Taps Beijing for Help In Designing New Phone
For years, Germany, like many other countries, lost manufacturing jobs
to China and other low-wage countries in Asia and Eastern Europe. But
its engineering sector remained a safe haven, one of the few areas
where the country could hold its own globally. Highly paid German
engineers proved their worth with a steady stream of innovations,
including the world's fastest train, designed by Siemens and
ThyssenKrupp AG. Now engineering jobs are beginning to move abroad
Article 10:
http://www.teamamericapac.org/ta-n-040611-piatek.shtml
Outsourcing Our Future
Earlier this year, Hewlett-Packard CEO Carly Fiorina defended her
companys decision to send American jobs to Asia by declaring, "There
is no job that is Americas God-given right anymore." She probably
did not mean to include CEOs of Fortune 500 corporations in this
statement -- Hyderabad does not offer all the amenities she is used to,
after all -- but her blunt declaration that patriotism has no place in
the board room perfectly captures the logic behind outsourcing.
Fiorinas sentiments were echoed by Greg Mankiw, the chairman of
President Bushs Council of Economic Advisors, who observed that
"outsourcing is just a new way of doing international trade" that would
help the U.S. economy "in the long run."
Article 11:
http://www.starbanner.com/apps/pbcs.dll/article?AID=/20040607/NEWS/40607003/1009/BUSINESS
Moving to bring jobs back home
Outsourcing issue trickier when taxpayer money involved
Governors and legislators in two-thirds of the states have ordered or
proposed anti-outsourcing actions. But many of those efforts at
"economic patriotism" have run headlong into another time-honored
American tradition - taxpayers demanding government give them the most
bang for their buck.
http://www.washingtondispatch.com/article_9419.shtml
From Washington Dispatch.com
Commentary
The Poverty of the Rest of the World
Commentary by Frosty Wooldridge
June 29, 2004
Grinding poverty exists in Africa, China, India, Bangladesh, Mexico,
South America, Indonesia, Russia and many other parts of the world. It
chokes its victims in a vice-like grip of futility. It features
disease, an uneducated populace, corruption and starvation. Its
called the Third World. Most of us have no clue how much suffering
exists outside America while we spend $9.2 billion on weight loss
programs every year.
Nonetheless, hundreds of letters arrive in my email box weekly from
around America. But several times a month, letters arrive from foreign
countries. One angry writer from Madras, India, a Mr. Singh, expressed
his dim view of a piece I wrote concerning H-1B visas that displaced
jobs from American citizens.
"I suppose you think Im the enemy," he said, "because I have taken
one of your out-sourced jobs as well as an entire factory of workers
here in India. However, we can make the product cheaper than you
Americans. Your artificially high wages can not compete with our labor
market. Besides, its time Americans drop their artificially high
standard of living to the poverty levels of the rest of the world."
I wrote back, "Is it possible that you maintain an artificially low
standard of living by sustaining an artificially high overpopulation
level of 1.1 billion people? Wouldnt India be better off with only
292 million like America? Wouldnt China be better off with 300
million instead of 1.3 billion? Wouldnt Bangladesh with 129 million
people in a landmass the size of Ohio be better off with only a
million? Wouldnt your standard of living rise to the level of a
First World country if you had a smaller population?"
Singh wrote back, "I never thought of it that way," he said. "You make
an interesting point."
Nonetheless, he made an cogent point. America IS dropping its standard
of living for all its citizens as this country suffers an invasion by
millions of immigrants annually. Most people dont realize the world
population grows by 80 million annually which creates an endless line
awaiting entry into the portals of America. Since 1965 when the
Immigration Reform Act opened the floodgates to one million immigrants
annually, we have been inundated with over 60 million. Still the world
grows out of control with no end in sight. It now totals 2.3 million
annually.
How are we becoming impoverished like the Third World? For starters,
the USA stands neck deep in $7 trillion debt. Consumer debt adds up to
$2 trillion. Credit cards average a $7,000.00 balance according to Tom
Brokaw. We pay $600 million of our tax dollars daily for interest on
the debt.
Every state is in financial crisis. California runs a $38 billion
debt. Texas stands at $10 billion according to the Dallas Morning
News. But more frightening is the city and county debt across Texas
that stands at $86.6 billion.
According to an Associated Press piece "Black Children in Deepest
Poverty Up 50%" by Genaro C. Armas, May 1, 2003. The number of black
children in extreme poverty rose sharply last year. From 622,000, the
numbers stand at 932,000 and rising.
The United States runs a $400 billion a year trade deficit. Last
month, we ran a $48 billion trade deficit. Why? Simple. H-1B and L-1
visas removed one million U.S. jobs in the past 10 years. In-sourcing,
out-sourcing and off-shoring of American jobs have left millions of us
in unemployment lines. To top that off, legal and illegal immigrants
sent $56 billion to their home countries last year. Thats $15
billion to Mexico, $25 billion to South America and $16 billion to
Asia. Finally the drug trade annually siphons $100 billion in hard
currency out of the United States. And the coup de Gras from last year
was the cost of the Iraq War at a $544 billion budget spending deficit.
Notwithstanding, high school and college kids cant find jobs because
9 to 13 million illegal aliens already work them.
Is America dropping down to Third World wages, standards of living and
quality of life?
As we import 2.3 million legal and illegal immigrants annually, yes, we
diminish our own work force into the lowest standards of living.
"Overpopulation can be avoided only if borders are secure; otherwise
poor and overpopulated nations will export their excess to richer and
less populated nations. It is time to turn our attention to this
problem." Garret Hardin.
Are we complying with Singhs idea that its about time we drop to
the rest of the worlds poverty levels? If the aforementioned items
and Hardins thoughts are any indication, the answer is "Yes,"
were well on our way.
Frosty Wooldridge, is a teacher and author who has bicycled 100,000
miles on six continents to see overpopulation up close and ugly. Next
book due out in July: IMMIGRATIONS UNARMED INVASION -- DEADLY
CONSEQUENCES.
http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=123230
Human bargains
PLAIN SPEAK / RAJA M
[ SUNDAY, AUGUST 10, 2003 01:27:16 AM ]
Fortune magazine recently told the story of how an American lost his
white-collar job because of India. A photograph showed his family of
six having a meal in their pretty suburban home. Two of his four kids
are toddlers. The eldest son, aged six, thinks his father is in the
middle of switching jobs, not jobless. Every morning, the father leaves
for the railway station pretending he is commuting as usual to town to
work. He hunts for work.
The story gripped me because it lost no time naming Bangalore as the
culprit behind this familys plight. Outsourcing was the crime.
Bangalore eats a chunk of American accounting and software jobs. Other
cities like Mumbai account for the call centre frenzy. An acquaintance
who hates his call centre job told me how Americans react when they
detect the phoney accent. "I cant understand a word of what you are
saying," they coldly tell the Indian-trained-to-sound-American, before
hanging up.
All this might be good stuff for a 21st century version of Mind Your
Language but for the fact how Indians in the USA face a backlash.
The Fortune article was mostly from a local perspective. If I were an
American fed on such media stories as Americans now are, I would be
indignant or furious. Greedy American companies are throwing American
families onto the streets, I might have fumed to my Congressman, and
giving American jobs to foreigners. Do something about it or you
dont get my vote next year.
Lets reverse the picture. Imagine if over three million Indians in
India risk losing their jobs. Their employers discovered that Eskimos
and Mongolians could do the same work as well as we do, at cheaper
wages. Likely result of such outsourcing: bandhs, paralysed Parliament
and probably a government that committed suicide.
But we feel smug being at the happy end of outsourcing. "Not our
fault," we say. It isnt. Simple market force at work, we say. It is.
But outsourcing and the dollar deluge cannot hide a reality. Being
called cheap labour might seem an unfair taunt to a highly
qualified, hardworking Indian who was given the job some American lost.
But squash the ego and face a fact: the quality is not quality enough
that is being purchased at any price. The clinching factor is its
cheapness.
Hopefully the day dawns when foreign companies can tell their
shareholders: "Look, we employ Indians because they are the best in
this business." But for now, could a cunning Chanakya-like American
burst the outsourcing bubble? Pay overseas workers the same as American
workers, Yankee Chanakya might demand in his purportedly anti
exploitation suit. Stranger things have happened in this world. If
foreign workers are to be compulsorily paid the same as American ones,
lets see how many American companies continue outsourcing work to
India.
http://www.ajc.com/health/content/shared/health/ap/ap_story.html/Health/AP.V2767.AP-Australia-Docto.html
Australia Worries About Foreign Doctors
CANBERRA, Australia (AP)--An influx of foreign-trained doctors may be
jeopardizing the quality of health care in Australia's physician-short
rural areas, a health official said Monday.
Foreign doctors on temporary visas need to be educated about the
Australian health system as well as receiving cultural training, said
Australian Medical Association Vice President Mukesh Haikerwal.
``We are concerned about the level of competencies and it is important
we see that is achieved and maintained,'' Haikerwal said. ``We don't
want the mark to be lowered.''
It is not mandatory for foreign-trained doctors to take Australian
medical exams to ensure they meet national standards.
``If they come without the AMC (Australian Medical Council) exam level
of competencies, they should certainly be monitored and mentored
through the system,'' Haikerwal said.
Many small Australian towns struggle to keep doctors. Last year,
Australia temporarily employed 3,000 overseas-trained doctors to
supplement a permanent work force of fewer than 25,000, a study by the
Melbourne-based Monash University published Monday said.
The study's co-author, Bob Birrell, said the number of overseas-trained
doctors who had not taken Australia's medical exams will likely rise by
a third next year because of the government's new policy to employ them
in rural areas desperate for doctors.
``The draw now is increasingly people trained in non-Western medical
schools,'' Birrell told Australian Broadcasting Corp. radio. ``Issues
of language, relevance of training and skills are increasingly
important.''
Federal Health Minister Tony Abbott said state medical registration
boards looked at the experience, qualifications and training of
overseas doctors before allowing them to work in Australia.
The Monash study found many Australian doctors were reluctant to
relocate to rural practices because they preferred living in larger
cities, and because urban work is more lucrative.
AP-NY-07-05-04 0747EDT
http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,94337,00.html?nas=XSP-94337
BearingPoint opens second development facility in China
The consulting firm has opened a 56,300-square-foot facility in Dalian
News Story by Patrick Thibodeau
JULY 06, 2004 (COMPUTERWORLD) - BearingPoint Inc. is opening its second
offshore development facility in China, a move analysts see as part of
a trend by U.S. firms to expand offshore development operations in that
country.
The McLean, Va.-based consulting firm said late last week that it has
opened a 56,300-square-foot facility in Dalian, a city in the
northeastern part of the country.
The Dalian facility now has 60 employees, but BearingPoint hopes to
have 1,000 people working there "as quickly as possible," said Craig
Franklin, an executive vice president at BearingPoint and head of its
Global Technology Services arm. The company, which has 15,500 employees
worldwide, also runs a development facility in Shanghai with 400
employees, as well as one in Chennai, India, with 100 people. It plans
to expand the Chennai facility to 1,000 workers during the next year.
BearingPoint also operates a development center in Spain.
The company's interest in China mirrors developments by other
multinational firms, although the country remains well behind India in
developing a significant offshore export operation, said Eugene
Kublanov, an analyst at NeoIT, a San Ramon, Calif.-based outsourcing
consulting firm.
In 2003, India had IT services exports of about $9.5 billion, compared
with IT services exports worth about $700 million in China, said
Kublanov. Moreover, most of the export work in China is for the Korean
and Japanese markets.
According to Michael Ye, general manager of business operations at
Dalian Software Park Co., other IT firms with offshore operations in
Dalian include Accenture Ltd., SAP AG, Hewlett-Packard Co., IBM Global
Services and GE Capital. Ye's comments came in response to questions
sent via e-mail.
Franklin said the Dalian facility will also serve the Asia-Pacific
region. The area is well suited for providing services to that part of
the world, because it has a large number of Japanese-speaking residents
as well as a substantial Korean population, said Ye.
Kublanov said other U.S. and Indian firms are establishing services
operations in China, in part as a hedge against the increasing costs of
labor in India. Language issues and a lack of project management skills
remain key hurdles for China's efforts to develop an offshore market
with North America. But Kublanov believes that as firms such as
BearingPoint build a presence there, those problems will diminish.
BearingPoint's Franklin said he believes the company has the processes
in place, including bilingual workers based in the U.S., to ensure good
project management and clear communication, and he sees China as a good
alternative to India.
http://www.freerepublic.com/focus/f-news/1166261/posts
Immigration-Trade Link Can No Longer Be Ignored
AmericanEconomicAlert.org ^ | Monday, July 05, 2004 | Alan Tonelson
Posted on 07/06/2004 10:18:41 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
Unemployment rates for high-tech workers are still above the national
average. Pay in these fields has gone nowhere for 20 years. As a
result, national anxiety about job flight overseas has hit levels not
seen since the 1980s.
Yet Congress is considering a bill to make it easier for high-tech
companies to bring cheap foreign workers into the United States. Worse,
this bill is being sponsored by a Congressman -- Texas Republican Lamar
Smith -- who4s been an immigration control advocate for years. What
in blazes is going on here?
Very simply, we4re starting to pay the price for failing to recognize
that our immigration and outsourcing problems are closely connected. By
treating these policies in isolation, even many champions of urgently
needed immigration reduction policies have painted themselves into
corners and left themselves -- and Americans as a whole -- few good
choices.
The case for creating and maintaining high-tech jobs and industries in
the United States can4t be made often enough. These jobs are critical
for our nation4s future prosperity, not to mention national security.
High-tech industries pay excellent wages, contribute mightily to U.S.
innovation and productivity, and help ensure our global technology
leadership. And of course, high-tech jobs are the jobs our leaders have
told us to re-train and re-educate ourselves for in the wake of
mounting competition for so-called old-line manufacturing jobs from
third world countries.
For more than a decade, however, these high-tech jobs and industries
have been turned into much lower paying jobs and industries by two
developments: First, greatly loosened immigration laws and second,
NAFTA-style trade deals whose purpose is really to encourage U.S.
multinational companies to supply U.S. markets from low-cost third
world countries.
Throughout the 1990s boom, these looser trade and immigration policies
gained powerful momentum, as the bubble economy undercut worker
opposition, and multinationals literally bought Congress and the
Executive Branch with lavish campaign contributions.
Yet critics of these policies sabotaged themselves, too. Trade policy
critics tended to ignore immigration issues. Indeed, organized labor in
America has recently completed an historic transformation and become a
powerful pro-immigration force. Meanwhile, immigration policy critics,
like Rep. Smith, tended to ignore trade issues. With the critics
divided and incoherent, the outsourcers and globalizers did a pretty
good job of conquering. As a result, the globalization cheerleaders
were able to create powerful new economic realities on the ground that
threw the critics on the defensive and narrowed their room for
maneuver.
Rep. Smith4s latest bill, which would permit high-tech companies to
import 20,000 more H-1B specialized foreign workers, is a great
example. Rep. Smith portrays his legislation as a compromise that has
fended off even greater quota increases. And he claims it will
ultimately help American workers by reducing many abuses associated
with these immigration programs -- like the common practice of paying
immigrants much lower wages than comparable domestic workers earn.
But the Smith bill is simply rearranging the deck chairs on the Titanic
at the last minute. Ten years of NAFTA-like outsourcing-focused trade
deals have opened the low-wage road to success for American companies
and turned this strategy into the way business is done in industry
after industry. With so many firms routinely supplying the U.S. market
from abroad, their counterparts that have remained at home have felt
that much more pressure to cut costs. Hiring cheap immigrants
understandably is one very appealing option. In addition, the flight
of manufacturing production abroad has encouraged the flight of much
high-tech service work associated with manufacturing -- research,
development, design, engineering. Hence, the cost-cutting heat has been
rising in career fields once thought immune.
Immigrants4 numbers, as a result, are growing so fast that the
government4s enforcement capabilities are swamped. The abundance of
this labor, in turn, has lowered the wages of domestic high-tech
workers even though the regulations are supposed to prevent this.
Indeed, a reverse Catch-22 situation has been created. Employers are
simply obligated to pay H-1B immigrants prevailing wages. Yet
Washington4s failure to enforce this requirement has naturally driven
the prevailing wages in high-tech industry ever lower.
Surging immigrant flows have also discouraged many young Americans from
pursuing high tech schooling and careers. Consequently, continuing
credence is lent to claims of high tech labor shortages and more
pressure mounts for even looser immigration policies to meet the
alleged needs. In other words, the free-immigration interests Rep.
Smith forestalled this time will be back again and again.
If Rep. Smith and his colleagues in Washington are serious about
bringing U.S. immigration under control and genuinely helping U.S.
workers, they4ll realize that a comprehensive strategy is needed. The
very idea that multinational companies can pay Chinese or Indian or
Mexican wages for the creation of their products, yet charge American
prices for the sales, has to be challenged frontally as a dangerous
economic fantasy that is sinking our nation deeper and deeper into
foreign debt. The need to maintain America4s world technology
leadership by developing new innovative capabilities at home and
keeping them here has to be championed. And if genuine labor shortages
do emerge in high tech industries -- as they do from time to time in
every industry -- U.S. companies have to be told to attract workers the
old-fashioned way -- by raising wages or developing new labor-saving
technologies.
The latter, by the way, historically has been a great engine of
progress -- as research from the respected Center for Immigration
Studies has made clear. But with the crutch of low-wage labor
available, many American companies have lacked the requisite kick in
the pants.
Rep. Smith and others view his 20,000 H-1B quota increase as American
workers4 best hope to get back into the high-tech game. But he and
others concerned about immigration need to understand that this
isn4t policy and it isn4t tactical brilliance. It4s nothing more
than defeatism.
Alan Tonelson is a Research Fellow at the U.S. Business & Industry
Educational Foundation and the author of The Race to the Bottom: Why a
Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking
American Living Standards (Westview Press).
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3037926,00.html
Colorado offshores benefit work
Contract uses India's MsourceE; study cites low-cost labor
By Roger Fillion, Rocky Mountain News
July 15, 2004
Colorado is among the vast majority of states that have sent government
work offshore to India and other nations with low-cost labor, according
to a new study.
Of 42 states that sent call center work offshore, only New Jersey has
brought its call center back to the U.S., said the report sponsored by
WashTech, a local Communication Workers of America union.
In most cases, the work was outsourced because states struck deals with
Citibank Electronic Financial Services involving the electronic
transmission of food stamp benefits. Citibank, in turn, subcontracted
the call center work to an Indian firm, MsourceE.
In 2003, Citibank sold the business to J.P. Morgan Chase, which
continued to use MsourceE. Colorado has contracted for such work with
J.P. Morgan Chase. The annual cost of the state's so-called electronic
benefit transfer program is $2.8 million. A state official didn't
return phone calls seeking comment.
As previously reported, Texas-based tech giant EDS, which has offices
in Colorado, has an information technology services contract with the
state to provide information to newly unemployed Coloradans about
available benefits. Roughly 150 workers are involved in the project,
with six doing the work from India.
State lawmakers here killed two bills this year to curb the outsourcing
of state contracts. A group is seeking to put the issue on the ballot
in November.
According to the report, at least 18 firms specializing in offshore
outsourcing are jockeying to capture a larger share of the state
government market in at least 30 states, including Colorado. In
particular, they are targeting IT services.
In Colorado, four of the 18 have officially registered as vendors that
can provide services. They are: Auriga Inc., with headquarters in
Russia and New Hampshire; HTC Global Services Inc., headquartered in
Michigan; R Systems Inc., based in India; and Tata Group of India.
fillionr@RockyMountainNews.com or 303-892-2467
http://www.itaa.org/news/pr/PressRelease.cfm?ReleaseID=1089843408
ITAA Cries Foul on Food Stamp Program Provision
July 14, 2004
For More Information Contact:
Bob Cohen (703) 284-5301 bcohen@itaa.org
Arlington, VA - The Information Technology Association of America
(ITAA) criticized a House passed amendment yesterday that would bar
states from using federal funds to pay for food stamp program costs if
program operations take place offshore. ITAA called the action unwise,
putting politics in front of poor people at the nation's check out
line.
"This amendment shows that when it comes to government services in a
global marketplace, some lawmakers still don't get it," ITAA President
Harris N. Miller said. "Are we trying to get the most citizen benefit
out of every tax dollar, or are we trying to use the food stamp program
to load the cart with political baloney? Best value comes from open
markets, not government mandates."
ITAA said the amendment signals a shift in the mission of government
from delivering cost efficient, best value services to operating
politically expedient jobs programs. In fact, anticipating
inefficiency, the amendment appropriates an additional $6.5 million to
pay for the added costs of the new barrier, money that could be better
spent on assisting the less fortunate or cutting the Federal deficit.
ITAA also said the same type of amendment would no doubt be applied to
other types of government programs if this provision becomes law.
"This House action sends an extraordinarily bad signal to state
governments, foreign governments and, most importantly, the American
taxpayer," Miller said. "The same group of officials who passed this
amendment would be outraged if Australia or Canada or Britain said that
US companies could not win contracts to provide services to their
governments or could not buy US hardware or software to operate their
IT systems."
The amendment is part of the Agriculture, Rural Development, Food and
Drug Administration and Related Agencies Appropriations Act of FY 2005.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/07/16/BUGOJ7MD081.DTL
No use opposing offshoring
Study of Bay Area economy recommends finding ways to promote region's
strengths
- Carolyn Said, Chronicle Staff Writer
Friday, July 16, 2004
Offshoring is firmly entrenched in the Bay Area -- and that's not
necessarily a bad thing.
That was among the conclusions of a major study sponsored by Joint
Venture: Silicon Valley Network, the Bay Area Economic Forum and the
Stanford Project on Regions of Innovation and Entrepreneurship.
"Offshoring is here to stay. We're whistling in the wind if our
approach is how to make it go away," said Russell Hancock, president
and CEO of Joint Venture: Silicon Valley Network, a nonprofit that
analyzes issues affecting the area's economy and quality of life.
"We don't view it as a problem. It's been going on a long time. Now
it's found its way up the value chain. That's normal economics. The
report says, 'Get used to it. Stop all the hand-wringing. Let's figure
out what the Bay Area does best and promote those kinds of industries,'
" he said.
The study was conducted by management consulting firm A.T. Kearney,
which based it on 120 interviews, analysis of 9,000 job listings and
other data.
It found that 94 percent of companies in the semiconductor and software
industries use overseas resources, compared with 66 percent of U.S.
companies across a broad spectrum of industries.
At the same time, though, globalization benefits local companies. Bay
Area manufacturers earn almost 60 percent of their revenue in overseas
markets, the study found. And California, including the Bay Area, leads
in "in- sourced" jobs created by U.S. subsidiaries of foreign
companies, with almost 700,000.
Offshoring hasn't necessarily squashed job creation. In April, one-
quarter of job postings for large semiconductor and software companies
were in the Bay Area, the study said.
"Offshoring is not a zero-sum game," said Sean Randolph, president and
CEO of the Bay Area Economic Forum, a public-private partnership of
business, government, university, labor and community leaders. "There's
a perception that one job that's created in India is a job that's lost
here. That's not necessarily true."
The study underscored the Bay Area's strengths as well as weaknesses.
The region remains fertile ground for the startup of innovative new
companies, leading in such core competencies as entrepreneurship/new
business creation, research in advanced technologies and bringing new
concepts to market, the study said.
In addition, the region shines in two areas that haven't received a lot
of attention: cross-disciplinary research and what the report called
"global integrated management."
"Because the Bay Area has been living with this offshoring/outsourcing
phenomenon for so long, it's developed the capability to manage
businesses that are globally dispersed across company and country
boundaries: joint ventures, globally strewn operations, business
partnerships, virtual business models," said the study's leader, John
Ciacchella, an A.T. Kearney vice president in Santa Clara.
Crossing disciplinary boundaries is also a strength. "Bringing together
multiple disciplines such as nanotechnology and biotechnology is a
skill set, capability and experience the Bay Area has that's quite
unique and quite strong versus other parts of the country and world,"
he said.
The Bay Area lags other regions in such areas as mass production, back-
office operations and product/process enhancement, the study found.
Although manufacturing and back-office functions already had eroded,
the loss of occupations that deal with fine-tuning processes and
products is new.
"Engineering cost reductions and tailoring products for consumer niches
is an area the Bay Area is rapidly losing out on," Ciacchella said.
"Other regions are catching up with that kind of engineering capability
because it tends to follow methodologies. When you're cost-reducing a
product or validating source code, you're going through a disciplined
process that is easy to duplicate."
The study said legislation designed to slow or stop offshoring would
ultimately hurt the region. "This is a train that's long left the
station," Ciacchella said. "If we restrict companies from being able to
use a tool that's really required for playing at a global level,
they're going to lose the game, and that's a loss for everybody."
Instead, the Bay Area could benefit from implementing policies to play
up its strengths and address its weaknesses, the study said. Among
those would be sustaining the region's competitive capabilities such as
its leadership in the "three O's": bio, info and nano; supporting
infrastructure needs such as transportation, affordable housing and
education; and encouraging business leaders to share the load of job
transitions.
"Innovative companies today rotate their employees in and out of
regions, skill sets and disciplines," Ciacchella said. "That's how you
start to prepare your workforce. You don't wait; you get ahead of
transitions."
Specifically, the report said the Bay Area could continue to expect job
growth in high-level research, strategic marketing, global business and
headquarters management.
Norman Matloff, a professor of computer science at UC Davis and a
frequent critic of policies that lead to loss of American jobs, was not
involved in the report, but reacted to some of its findings.
"The problem is that what's really going on is we're trading jobs that
require rigorous levels of education for jobs such as sales and
marketing. There's clearly something wrong with that picture," he said.
"The point is that even if we innovate, the companies that love
offshoring will go offshore to develop an idea that was innovated here
or will bring H-1B visa holders here to work on it."
He said that while major employers pay lip service to the idea that the
United States needs more math and science graduates, "those same
employers are laying off math and science whizzes by the tens of
thousands, if not the hundreds of thousands."
Hancock said the report showed that the Bay Area is far more vibrant
than Detroit, to which it's sometimes compared.
"Detroit was a one-industry town that didn't keep moving up the
innovation ladder. Now it's a region in decline," he said.
"A lot of people say the same thing is happening to the Bay Area now,
that it will be shuttered and turn into a ghost town. Our report says
absolutely not. We continue to discover new industries. Our strength is
the formation of companies, entrepreneurship, highly
knowledge-intensive work. What we have to continue to do is provide the
habitat for that," Hancock said.
Randolph echoed that view.
"We need to continue to provide a positive climate for new company
formation because that's where new jobs will come from that will offset
jobs that go overseas or elsewhere," he said. "We need to pay attention
to creating the workforce that will meet industry needs and be
competitive globally. That means investment in higher education,
innovation jobs that are leading us forward, basic research."
Key findings
A study of the Bay Area economy concludes that the movement of jobs to
overseas locations is inevitable and that the region should play to its
strengths.
-- Areas of Bay Area job growth: high-level research, strategic
marketing, global business and headquarters-management.
-- Areas of Bay Area job erosion: manufacturing, back-office and
product enhancement..
Source: "The Future of Bay Area Jobs: The Impact of Offshoring and
Other Key Trends," A.T. Kearney
E-mail Carolyn Said at csaid@sfchronicle.com.
http://online.wsj.com/article_email/0,,SB108984243120664037-IZjfYNglaR3oJysaXmHaqqBm4,00.html
Looking East
Vaunted German Engineers
Face Competition From China
Siemens Taps Beijing for Help
In Designing New Phone;
Wanted: Flashier Models
'Leopard' Leaps Into Fray
By MATTHEW KARNITSCHNIG
Staff Reporter of THE WALL STREET JOURNAL
July 15, 2004; Page A1
BEIJING -- Li Tao, a 33-year-old engineer for Siemens AG, unfolded a
silver, clamshell-shaped mobile phone and broke into a grin as the
orange lights in its frame began flashing.
"It's unique," he said with an excited laugh.
What's more remarkable about the handset, nicknamed "Leopard," is its
birthplace. It was developed not at Siemens' headquarters in Munich,
but in a white six-story building on the outskirts of Beijing by Mr. Li
and a crew of young Chinese engineers.
Siemens' decision to turn east for engineering know-how represented a
big gamble for a company that has relied on the ingenuity of its German
engineers for more than 150 years. It also reflected one of Germany's
biggest economic challenges ever: The erosion of its dominance in
engineering, long the lifeblood of the world's third-largest
industrialized economy and a source of cultural pride.
For years, Germany, like many other countries, lost manufacturing jobs
to China and other low-wage countries in Asia and Eastern Europe. But
its engineering sector remained a safe haven, one of the few areas
where the country could hold its own globally. Highly paid German
engineers proved their worth with a steady stream of innovations,
including the world's fastest train, designed by Siemens and
ThyssenKrupp AG.
Now engineering jobs are beginning to move abroad as well. "If the
Chinese can produce high tech at low cost, one has to consider where
that's going to lead," said Siemens Chief Executive Heinrich von
Pierer, who in May announced plans to hire 1,000 Chinese engineers this
year and invest about $1.23 billion in China. "In Germany, we have to
ask ourselves what we have to offer."
Germany's predicament shows how the flow of increasingly sophisticated
jobs into low-wage markets is reshaping economies around the world. And
the biggest winner -- China -- is not merely taking away existing work
from industrialized nations, but is also creating thousands of new
jobs.
Germany's preeminence in engineering is being threatened by several
stubborn problems. The most obvious is high labor costs. Mr. Li and his
colleagues earn about a fifth of the typical salary for a German
engineer and work up to 25 hours a week more. At an average age of 32,
they are about a decade younger, and turning out to be just as good.
"We've reached a level of maturity comparable to Germany, where they've
been developing mobile phones for more than a decade," says
Beijing-based Wolfgang Klebsch, the head of Siemens's
research-and-development operation here.
A lagging German education system also is contributing to the
engineering decline. German high-school students rank below average in
math and science compared with 31 other countries, according to a
recent study by the Paris-based Organization for Economic Cooperation
and Development. The nation's universities, once famous for their Nobel
prize winners, are now overcrowded and underfunded, and the number of
engineering graduates has declined by almost a third since 1995, to
about 36,000 a year. Moreover, 14% of Ph.D. graduates in engineering
and science head for the U.S. every year in search of better
opportunities, according to the German Scholars Association.
Beginning with the development of the gasoline engine and X-ray
technology in the 19th century, engineering innovations have nourished
Germany's economy and fueled exports ranging from Mercedes-Benz sedans
to Leica cameras. The country's engineering prowess grew out of a
robust education system that produced more high-school graduates in the
19th century than the rest of Europe combined. Its guild system, under
which budding tradesmen became apprentices at an early age, also
promoted ingenuity.
Today, engineering remains crucial to Germany's manufacturing sector --
which accounts for a quarter of the nation's gross domestic product, a
higher share than any other major industrialized nation. Engineering is
also at the core of the country's Mittelstand, the 3.3 million small
and medium-size businesses that make up 60% of the economy.
'Year of Innovation'
With so much at stake, Chancellor Gerhard Schroeder is trying to shore
up the engineering sector. He declared 2004 the "year of innovation,"
and recently unveiled plans to upgrade 10 universities to "elite"
status. "We're doing everything we can to get Germany's innovation
systems up and running," he said.
But so far, the effort is sputtering. Germany's exploding deficit and
stagnant growth forced Mr. Schroeder to trim federal support this year
for research and development. Companies also are investing less.
Corporate spending on R&D, which accounts for two-thirds of the total
for the country, fell slightly last year, according to German industry
trade groups, and a recent survey found that companies plan to invest
even less in 2005.
China, meanwhile, is marching in the opposite direction. In recent
years, the Chinese government has moved aggressively to improve
technical education, both to serve the booming economy and to make the
country less reliant on foreigners. The result: China's universities
crank out more than 300,000 engineers annually -- almost 10 times the
number in Germany.
Siemens, which makes everything from power turbines to kitchen stoves,
has had a relationship with China since the 19th century. In 1879, the
company delivered a generator to power the lights in Shanghai Harbor.
In 1899, it built China's first tram line in Beijing. Its activities
were limited after the Communists took power. When the Chinese
government cracked open the door to foreign investment in the late
1970s, Siemens was one of the first companies to jump in. Soon, it was
producing components for telecommunications infrastructure and
switching gear. Shanghai is now home to its largest operation outside
of Germany.
In December 2000, Siemens decided to take its involvement in China a
step further. It dispatched Mr. Klebsch, an experienced
handset-development engineer, to China to set up its first R&D center
outside of Germany.
Within six months, he had hired 50 engineers, all in Beijing, to work
on a high-speed wireless network and on software development. It had
taken him twice as long to do similar hiring in Germany a couple of
years before, he says. "The advantage of China is that everything is
fast," he says.
In April 2002, Munich gave the Chinese team a new task -- the
reengineering of Siemens mobile phones for low-end markets from the
Middle East to Eastern Europe. To make the phones less expensive, the
Chinese engineers removed Internet hardware and other costly features.
[snipped due to length of article]
Mr. Li, who talks in rapid-fire English, praises the "experience and
knowledge" of his German masters and is careful to credit their input
on the project. But he isn't afraid to laugh at their peculiarities
either. Walking across Siemens's campus-style compound in northern
Beijing, he pointed out that the 1980s-era gray, low-rise buildings
were built entirely of German materials, an indication of the company's
initial determination to micromanage every detail of its Chinese
operations. For most of the past 20 years, Munich treated the Chinese
outpost like a colony, with a large staff of German expatriates at the
top and little chance for locals to advance.
Today, things are changing. The company canteen may still offer German
wurst for lunch, but the operation here is increasingly Chinese. During
his May visit, Mr. von Pierer announced plans to build a 30-story, $100
million skyscraper on the Beijing site.
In addition, Mr. Klebsch and 200 other top Siemens managers in China
have been told by Munich to find Chinese replacements. Mr. Klebsch says
some of his colleagues in Germany have reservations.
"It's a threat to their own organization," he says. "The products we've
developed here are for the global market. Our phones have the German
quality standard."
Sensitive to political fallout at home, Siemens rejects suggestions
that it plans to shift R&D jobs out of Germany. Still, new R&D
positions are increasingly being created abroad and not in Germany. Mr.
von Pierer plans to hire more software engineers in China and build a
central research facility there.
Mr. Klebsch's operation recently became too large for the cramped
facility where the Leopard was designed, so Siemens rented out a
neighboring high-rise. Mr. Klebsch, who now has a penthouse corner
office, says he expects to hire more than 800 engineers by the end of
next year for a total of 1,200. The goal is to design five new models
of handsets simultaneously.
Write to Matthew Karnitschnig at matthew.karnitschnig@wsj.com1
http://www.teamamericapac.org/ta-n-040611-piatek.shtml
Outsourcing Our Future
Tom Piatak
June 11, 2004 - Chronicles Magazine
The antidote to outsourcing is a return to economic patriotism by
businessmen, consumers, and government...
Earlier this year, Hewlett-Packard CEO Carly Fiorina defended her
companys decision to send American jobs to Asia by declaring, "There
is no job that is Americas God-given right anymore." She probably
did not mean to include CEOs of Fortune 500 corporations in this
statement -- Hyderabad does not offer all the amenities she is used to,
after all -- but her blunt declaration that patriotism has no place in
the board room perfectly captures the logic behind outsourcing.
Fiorinas sentiments were echoed by Greg Mankiw, the chairman of
President Bushs Council of Economic Advisors, who observed that
"outsourcing is just a new way of doing international trade" that would
help the U.S. economy "in the long run." President Bushs response to
outsourcing has been to denounce the "economic isolationists" who would
rather see high-paying computer jobs stay in the United States.
The majority of Americans, however, do not share the One Worldism of
the Fortune 500 and the Bush administration. A recent Gallup Poll
revealed that 61 percent of Americans are concerned that they or a
friend or relative might lose a job to outsourcing. The same poll
showed that 85 percent of Americans feel that a candidates stand on
outsourcing will be important in how they vote, with 58 percent saying
that it will be "very important." It is safe to say that not many of
these voters are as enthusiastic about their jobs disappearing as Carly
Fiorina is.
In one sense, the popular outrage over outsourcing is a bit puzzling.
As Mankiw noted, outsourcing is perfectly consistent with the
free-trade ideology that has been embraced by the elites of both
parties. Those elites, however, have been telling us that, even though
the loss of manufacturing jobs was somehow "inevitable," we would
prosper because high-paying computer and technical jobs would be ours.
The rise of outsourcing has exposed this fatuousness, as corporations
rush to replace their American technical employees with foreigners. The
unemployment rate for electrical engineers stands at 6.2 percent,
higher than the national average. News stories have described how
students previously interested in engineering are now pursuing jobs
that they expect will continue to be performed here, such as those in
law and the ever-growing government bureaucracy. And the trickle of
outsourcing threatens to become a flood. Forrester Research projects
that 500,000 computer-programming and information-technology jobs will
migrate to India alone by 2015, joining a projected total of 3.3
million private-sector service jobs moving abroad over the same period.
Predictions from the University of California-Berkeley run somewhat
higher: 14 million American jobs could be outsourced in the next
decade.
Despite the platitudes mouthed by the Bush administration, the answer
is not more education. After all, many of the jobs being sent overseas
require great intelligence and an advanced education. It is not a lack
of education that is causing American engineers to be replaced by
Indian engineers making one fifth of what they do. Those jobs will
continue to move overseas, at least until American engineers
salaries have dropped to the point where it is no longer attractive to
replace them with Indians. In fact, the Bureau of Labor Statistics
recently released a list of the 19 fastest-growing occupations in
America, and only two -- registered nurses and postsecondary education
-- require any advanced education at all. The blunt truth is that we
can expect any job that is open to foreign competition will be
performed by declining numbers of Americans at wages facing continued
downward pressure.
As shown by both the February and the March job figures, the growth
areas in our free-trade economy are government and areas subsidized by
government, such as education and health services (which together
accounted for 36,000 of the 46,000 jobs added in February), and areas
insulated from foreign competition, such as retail trade, leisure and
hospitality, and construction (which, together with government-related
employment, accounted for over 70 percent of the job growth in March).
Although the more robust March job figures are good news, this remains
the slowest recovery in terms of job creation since the 1930s.
Reporter John Allen, writing in the March 7, 2004, Washington Post,
cites Georgetown economist Harry Holzer, who notes that there has not
been a similar decline in payroll jobs since the 1930s, and Johns
Hopkins economist Arnold Packer, who observes that employees share
of the value added to the U.S. economy has fallen to its lowest point
since such records were first kept in 1947. Four million Americans have
run through unemployment benefits without finding a job, and
inflation-adjusted hourly wages have barely risen over the last year --
even though the economy was growing during that entire time.
More and more Americans are coming to believe that there may be
something fundamentally wrong with our economy. And even some
economists and businessmen are starting to rethink their adherence to
free-trade ideology. CNNs Lou Dobbs has made opposition to
outsourcing something of a personal crusade. Economist Jeff Madrick,
writing in the March 18, 2004, New York Times, cites several economists
who now believe that their profession has seriously underestimated the
costs of job dislocation caused by free trade. And supply-side
economist Paul Craig Roberts, a staunch opponent of big government and
one of the architects of Ronald Reagans 1981 tax cut, has written
column after column exposing the fallacies of free-trade ideology.
The antidote to outsourcing is a return to economic patriotism by
businessmen, consumers, and government. Despite what free-trade
ideologues maintain, this is not synonymous with big government. Our
current "recovery" has seen continued job growth in government, while
private-sector jobs have disappeared, and it is hard to see government
diminishing when disappearing jobs and declining wages create more
government dependents, including two-income families relying on
government to help with childcare and with the "advanced education"
that is being touted as the remedy to job displacement. By contrast,
before America embraced free trade, government was small, taxes were
low, and families largely cared for themselves. Maybe that was not a
coincidence.
http://www.starbanner.com/apps/pbcs.dll/article?AID=/20040607/NEWS/40607003/1009/BUSINESS
Article published Jun 7, 2004
Moving to bring jobs back home
Outsourcing issue trickier when taxpayer money involved
EVERETTS, N.C. - Sitting around the wood-burning stove at the Barnhill
Supply Co., regulars sip coffee and give a knowing nod as owner Ed
Cratt ticks off the list of plants that have closed near this eastern
North Carolina town.
There was the VF Jeanswear plant, where they once made Wranglers. The
Perdue chicken-processing plant. And Eagle Snacks, where Cratt himself
once supervised the bagging of potato chips. Several thousand
good-paying jobs, gone.
As far as Cratt is concerned, enough is enough. So if the state wants
to spend $1.2 million of his taxes to hire 30 new people to answer food
stamp questions at the local call center instead of having workers
halfway around the world in India do it, he's all for it.
"We don't need to send jobs nowhere," says Cratt, whose general store
promise of "Everything for Everybody" means selling night crawlers next
to flapjack flour.
"I mean . . . help around here first. We've got to start looking after
America and stop looking after everybody else."
EMBARRASSED
Officials in a number of states, embarrassed to find taxpayer services
"outsourced" to foreign subcontractors, have moved to bring those jobs
back home. Welfare administrators in New Jersey paid nearly $1 million
to create a call center rather than continue doing business with a
contractor who outsourced those phone duties to Asia.
Governors and legislators in two-thirds of the states have ordered or
proposed anti-outsourcing actions. But many of those efforts at
"economic patriotism" have run headlong into another time-honored
American tradition -- taxpayers demanding government give them the
most bang for their buck.
When Kansas officials learned that food stamp questions were being
answered by workers in India under a contract with an Arizona company,
state senators added language to the budget requiring the work be done
in the United States. But the language was deleted when negotiators
learned it would boost the state's costs by $640,000 -- about 38
percent.
Other efforts have been derailed by questions about whether such
measures would be illegal protectionism or simply invite a foreign
backlash.
A bill in Tennessee would have banned the state from contracting with
companies employing foreign workers. But by the time Gov. Phil Bredesen
signed it in mid-May, it had been watered down to the point where
companies using only American labor would simply get extra points in
the bidding process -- so companies that outsource could still win
contracts.
EXTRA LAYERS
Sometimes, there are two or three or more layers between the actual
contractor and the foreign workers. Vermont contracted with Citibank to
work on its food stamp debit card program; Citibank subcontracted with
a Wisconsin firm, which in turn outsourced some of the work to India.
After learning that Citicorp had subcontracted the customer service
portion of Wisconsin's electronic swipe card food stamp program to Ohio
and Texas companies that had subbed work out to call centers in India
and Mexico, Gov. Jim Doyle ordered the contract renegotiated.
The company at the center of many of these controversies is
Arizona-based eFunds, which operates hundreds of call centers around
the country and the world.
Company chairman and CEO Paul Walsh says much of this discussion is
happening now because "we're in a political season, to be fairly
blunt." But he acknowledges that doesn't change the fact that
underlying the discussion are some real "economic realities."
Outsourcing, Walsh says, allows companies to be competitive by helping
them save money on functions that are "not their core competency." He
doesn't see why states should not seek the same efficiencies,
particularly when many are either just emerging from or remain mired in
the worst budget crisis in history.
He rattles off recent studies showing that the United States recaptures
at least 62 cents of every dollar of spending that goes to India and
that, despite outsourcing, the U.S. tech industry will add a million
net jobs over the next eight years.
"For anybody to reduce what is going on here to something being
unpatriotic or Benedict Arnold in nature, I think, is a terrible
mischaracterization," Walsh says. "People have to ask the question, if
we're so anti-outsourcing . . . if we have German or Japanese companies
outsourcing the manufacturing and assembly of automobiles here in the
United States . . . we should stop that as well, right?
"It's a double-edged sword here."
A DIFFERENT STANDARD
When it comes to spending tax dollars, a different standard seems to
apply.
Utah legislators are currently rethinking a contract Utah entered last
year with eFunds to have its welfare help-line questions answered by
workers in India. Previously, those calls were forwarded to a facility
in Wisconsin.
State Rep. David Clark, chairman of the Utah Technology Commission and
a banker, says the difference between a consumer buying a foreign-made
shirt at Wal-Mart and a government agency paying for outsourced
services is that governments have a "fiduciary responsibility to pay
the taxpayers' money to the highest and best use."
But, he asks, how far do you carry that?
Clark notes that about 30 percent of the produce consumed in the United
States comes from South America. Yet would anyone suggest that American
schools serve only homegrown fruits and vegetables?
"I dare say the phone I'm talking on and the phone you're receiving on,
certainly our mobile phones, were not made in the U.S.," he says.
"Exactly where do you draw the line? It is a global economy."
To North Carolina Rep. Edd Nye, the line is as clear as the 38th
Parallel that divides North and South Korea.
"I went to other lands to defend America, and I want to buy and promote
American," says the Korean War-era veteran, whose committee recommended
adding the call-center jobs in Everetts. "I don't mind paying a little
more for American. I paid four years for it, so I don't mind doing it."
CAN USE THE JOBS
One thing is certain, Nye's area can use the jobs.
The North Carolina call center sits just off U.S. 64 in Martin County,
surrounded by barren farm fields and scrub pines. Across the two-lane
access road sits a vacant, government-built spec building with a huge
banner reading "For Sale or Lease . . . Maximum Incentives."
In a tobacco-growing county where recent unemployment rates have
hovered between 7.8 percent and 9.2 percent, always two to four points
above the national average, some say the notion of someone in India
fielding questions from North Carolina food stamp recipients is the
height of irony.
"I can see them over there laughing, I think, when they're answering
the phones," says Renee Keel, who has worked at the call center for
three years answering child support questions.
Keel occupies cubicle No. 20 in a bustling office where she and about
60 colleagues field upwards of 3,000 calls a day. Two American flags
sit perched atop the divider above her desk.
A veteran of 12 years working with a federal nutrition program for poor
mothers, Keel wonders how someone in India can relate to a caller from
North Carolina. She was on food stamps for six months herself after her
self-employed husband hurt his back. And though she knows there is
crushing poverty in Southeast Asia, the U.S. support system is
completely foreign to workers there.
"I know the humiliation that you have to go through sometimes. And in
dealing with these people sometimes you need to know where they're
coming from. . . . I think we can do it better."
Under the five-year, $25 million contract with eFunds, North Carolina
was saving about 66 cents per food stamp call -- down to $1.65. State
officials said when they found out the work was being done in India,
they renegotiated to have the remaining year and a half of the contract
done in North Carolina -- for $2.05 a call.
The new positions at the Martin County call center will pay about
$30,000 a year, with benefits. The state expects to have them filled by
July.
For Vivian Jane Wiggins, that would be just in the nick of time.
Five years ago, she lost everything she had when Hurricane Floyd
devastated the community of Princeville. Last summer, she lost the job
she'd held for 24 years when Sprint moved its call center functions to
Dallas and Denver.
When Wiggins applied for one of the new openings, she had no idea the
work was being done in India.
"Oh, that's kind of not understanding what's going on in America," she
says with a hearty laugh. "To me, it's a slap in the face for the
Americans. That's the way I feel about it."
Allen G. Breed is the AP's Southeast regional writer, based in Raleigh,
N.C.
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