- "Some economists say the U.S. recovery is being
constrained by the job outflow. Forrester Research estimates a loss of
400,000 jobs this year alone and 3.3 million by 2015 -- the equivalent
of 7.5 percent of all present U.S. jobs."
-
-
- CHICAGO (CBS.MW) -- Billionaire
presidential hopeful H. Ross Perot warned America in 1992 of the "great
sucking sound" of U.S. jobs flowing abroad. Today, his Perot Systems
is making sucking sounds of its own.
-
- The computer-services company recently bought India-based
Vision Healthsource, described as a leading billing and claims processor
for U.S. health-care providers. While Perot officials said no job cuts
resulted, the new 500-employee subsidiary competes with U.S. firms, putting
American jobs at risk.
-
- After sacrificing millions of high-paying manufacturing
jobs to cheaper imports, the U.S. economy now faces the unforeseen consequence
of technological innovation -- the loss of service-sector jobs few imagined
could be exported overseas.
-
- Some economists say the U.S. recovery is being constrained
by the job outflow. Forrester Research estimates a loss of 400,000 jobs
this year alone and 3.3 million by 2015 -- the equivalent of 7.5 percent
of all present U.S. jobs.
-
- "How is the economy going to create the tens of
millions of new jobs it needs when companies can offshore everything besides
burger flippers?" said Marcus Courtney, president of WashTech, the
Seattle-based local of the Communications Workers of America.
-
- Yet others contend cost-savings reaped by lower-cost
foreign labor ensures cheaper products and services for U.S. consumers
and allows firms to stay competitive. Companies that don't exploit cheap
labor abroad could go belly up, leading to job losses here, they say.
-
- "If you don't take advantage of opportunities to
save money and become more efficient, you become less competitive and in
the end non-viable," said Martin Regalia, chief economist at the U.S.
Chamber of Commerce.
-
- The large-scale "offshoring" of high-tech jobs
began as the Internet explosion and fears over Y2K prompted widespread
information-systems upgrades, and left employers going begging for help.
There simply weren't enough trained Americans to do all of the necessary
tasks.
-
- One solution was to bring in foreigners, including tens
of thousands of highly educated and well-trained Indians. In addition,
U.S. firms began outsourcing IT work to foreign companies through ever
improving global computer networks.
-
- At the time, labor-cost savings were often seen as little
more than a bonus; the main thing was to get the job done.
-
- As the crunch subsided with the recession's onset in
early 2001, many of the guest workers headed home with their contacts and
skills -- which became marketable across international borders as telecommunications
networks grew cheaper and more reliable.
-
- A growing U.S. corporate focus on cost cutting to prop
up sagging profits created what Gartner analyst Frances Karamouzis called
"almost like a perfect storm."
-
- Gartner estimates one in 10 jobs at specialty IT firms
in the U.S. will move abroad within the next 16 months, along with one
in 20 IT jobs at general businesses -- a loss of about 560,000 positions.
-
- "Clearly, there are some skill sets that even if
the economy rebounds, you are not going to see coming back to the U.S,"
Karamouzis said.
-
- Looking further ahead, "it's a little murky,"
but her rough estimate is that another 2 million jobs could be displaced
by 2008.
-
- Bank One Chief Economist Diane Swonk considers IT offshoring
"more symptomatic of what we have experienced than of where we are
going.
-
- "As your profits come back, you aren't going to
have to do that as much. We have begun to see some more IT investment again
and finally we are getting to the point where CEOs are going to start hiring
again."
-
- Still, as U.S. businesses start reinvesting in their
operations, some of that will inevitably go to their offshore operations,
said Dean Baker, co-director of the Center for Economic and Policy Research,
a nonpartisan independent research organization.
-
- "A lot of people are holding out hope that they'll
be a resurgence in business investments and that will be the big boost
to the economy. There is some evidence that business investment is increasing,
but a lot of that is going to go overseas," Baker said.
-
- Also, in a Catch-22, cheaper goods and services produced
overseas will have a limited market among displaced U.S. workers and those
who fear losing exportable jobs.
-
- "The U.S. as a whole might gain from this but you
have to look at who within the U.S. are the winners and losers," said
Josh Bizens, an economist with the Economic Policy Institute, a Washington-based
think tank. "The winners tend to be very concentrated, generally affluent
people, shareholders and corporations or privileged white-collar occupations."
-
- As for Ross Perot's perspective, he declined to comment
on both the acquisition of Vision Healthcare and the overall trend toward
looking abroad for less expensive IT solutions.
-
- In a written statement, Perot Systems told CBS MarketWatch
that it "has been a global company with international operations for
many years. The fact is, our United States workforce has grown by thousands
in the past few years -- much more than our international workforce --
and our team works hard every day to grow our business even more."
-
- Perot Systems is not alone in that regard. Among the
companies that have planned, announced or made large job moves overseas
are Microsoft, Hewlett-Packard, IBM, Sun Microsystems and Oracle.
-
- © 2003 E*TRADE Group, Inc. All rights reserved.
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