Opinion by John Pardon
Originally published on April 12, 2004 in COMPUTERWORLD; republished here with permission of the author.
Frank Hayes' fears about techies bailing out of a declining American IT workforce are already being realized ["ITAA's Job Dream"].
I've done it. I concluded that IT is largely a dead-end career for Americans and opted out so that my wife could pursue advanced degrees in education and move up in a field that can't be so readily outsourced or filled by guest workers. I rebelled at my former employer's "wage compression," outsourcing and use of H-1B and L-1 visa holders.
One year ago, I resigned my IT job at NCR Corp., a Fortune 500 company based in Dayton, Ohio, because I was too disgusted and demoralized to continue working in a profession I enjoyed after my employer made it evident that American workers are disposable and replaceable no matter how loyal, productive, competent or well educated. I concluded there was no future for me at NCR or in IT. Like many other corporations, NCR was indifferent to its employees and American society. And, like many other companies, it has thoroughly embraced the policy of outsourcing.
NCR's outsourcing partners are HCL Technology and Saytam, which provide an IT workforce in India. NCR also has a contract with Accenture, and it has an Indian subsidiary that is also hiring a non-American workforce and isn't subject to American taxes or workplace laws.
Unlike Frank Hayes, I don't believe that it's widely possible to dodge the offshoring bullet by building up business skills and increasing face time with users. This sounds good, but techies are very busy with responsibilities. And I've noticed that IT writers seem a bit uncertain about how techies should remain competitive. Not long ago, we were being urged to gain new technical skills. How certain is anyone that broader business skills are now the answer to job retention? The truth is there really isn't much certainty regarding the actions to take or the skills to acquire to prevent outsourcing job loss. After all, many of us in the IT workforce have learned the indisputable truth that outsourcing and use of IT guest workers is really all about slashing labor costs, not increasing the quality of products and services.
I came to these conclusions long before the most recent ITAA study, which was the subject of Hayes' article. The public statements and actions of people like Harris Miller of the ITAA, Carly Fiorina of Hewlett-Packard, Sam Palmisano of IBM, and Lars Nyberg and Mark Hurd of NCR made it abundantly clear that there were declining opportunities for American IT employment. Many of us in the IT workforce saw the writing on the wall. I'm just more fortunate than most in that I was able to walk away altogether.
Though people like Miller and Fiorina deny it, America's displaced IT workers don't lack for skills or education. There is no urgent need for guest workers and no internal shortage of technically trained workers. Technology hasn't made American IT workers outmoded. Access to cheaper, more submissive and more manageable non-American labor has just made American IT workers undesirable and frequently unemployable.
I am not a person who expects others to manage my career or provide me lifetime employment. But on the other hand, I don't expect my government or powerful multinational corporations to conspire to undermine my employment opportunities and, more broadly, eliminate job opportunities for Americans. As I told Bob Herbert of The New York Times ["Dark Side of Free Trade," Feb. 22, 2004], I'm a moderate conservative now alienated from the Republican Party and the Bush administration because of free trade, outsourcing and the H-1B/L-1 visa programs championed by free-trade ideologues. People such as me are often disparagingly referred to as "disgruntled IT workers" by both politicians and many in the news media. Our arguments are dismissed as sour grapes and we are told to face reality. In other words, shut up and get another job because outsourcing will continue and it's part of doing business today.
The Visa Problem
Offshoring isn't the only way that American jobs are being eliminated. Many companies are also insourcing, importing low-wage, nonimmigrant H-1B or L-1 visa workers into the U.S. These visa programs are championed by people like Harris Miller and the member companies of the ITAA and are used by hundreds of multinational corporations intent upon cutting labor costs.
As with outsourcing, many in the media and politics make inaccurate statements regarding the H-1B and L-1 visa guest worker programs. These misrepresentations provoke frustration and anger similar to that evoked by the latest ITAA study. For example, The Washington Post's editorial "Cap on Hiring" states, "It isn't possible to argue that the holders of these visas bring down American wages. No one doubts that they do jobs for which there are clear, well-defined shortages of Americans." This is complete nonsense. Such statements are totally at odds with the reality of how these programs are used to replace American IT workers all over the U.S.
Some in Congress do believe there is a problem of job loss related to the H-1B and L-1 guest worker programs. On Feb. 4, 2004, the House International Relations Committee held a hearing called "L Visas: Losing Jobs Through Laissez-Faire Policies?" The testimony of Michael Emmons, Sona Shah and Patricia Fluno provided firsthand evidence of how L-1 visa programs are used by corporations to systematically replace Americans (and those who hold green cards) while abusing the imported visa workers. (A video webcast of the hearing is available.)
The H-1B visa program has long been used as a tool to facilitate outsourcing and circumvent the labor costs of American IT workers. Norman Matloff, professor of computer science at the University of California, Davis, has written extensively on this subject and testified before Congress about how the H-1B program has injured American IT workers. He is clear that the H-1B program is premised on misrepresentations and false studies. He has a new article on the subject in the University of Michigan Journal of Law Reform.
I have direct knowledge of these issues through my experience with outsourcing and guest worker replacement programs at NCR. I watched non-American (Indian) workers enter NCR facilities in the U.S. and receive "knowledge transfers" from American IT workers. Then the Indian replacement workers usually returned to India to do the work previously performed by the Americans who had trained them. On other occasions, the replacement workers remained in the U.S. on H-1B or L-1 visas and continued to perform necessary IT work in the same buildings in which the Americans had formerly worked.
This is not an urban legend; I watched it happen. It has occurred all over the U.S. Understandably, Americans who remain in IT jobs often work in fear of job loss since employers now have ready access to low-wage guest workers and have displayed a ruthless lack of concern for the American workforce. Most of us who have gone through this experience have finally realized that we are competing with a Third World wage scale while our employers continue to charge U.S. prices. It's not fair and it's not just, but thanks to the actions of the U.S. Congress and successive presidents, it is completely legal.
The Retraining Fallacy
Free-trade and outsourcing proponents publicly hold out the option of retraining into other professions, but these other professions are mostly unidentified. The reality, as I told Bob Herbert, is that there aren't any new middle-class postindustrial jobs for displaced Information Age workers. There are no opportunities to leverage our experience into higher-value-added jobs. Instead, there are persistent credible accounts of software engineers taking low-wage unskilled jobs just to survive.
Health care is often cited by outsourcing and free-trade proponents as an area in which new jobs are available. Free traders don't care to mention that many white-collar workers would see dramatic decreases in their earnings (wage compression) even if they could afford to undergo the time-consuming and costly retraining necessary to enter the health care profession. In any case, software engineers changing bedpans and giving injections would be a waste of resources and educational capital. What a loss of skills and knowledge to our economy! What a costly betrayal of workers!
There is no employment rebound for IT workers. Recent college grads or new entrants into IT can't even get jobs on help desks, which are now increasingly moving offshore. The reports from companies such as Challenger, Forrester and Gartner all point to increased IT outsourcing and use of IT guest workers. "Global competitiveness" sounds good in corporate boardrooms and political speeches, but the reality is that increasing numbers of American IT workers are suffering and losing confidence in our political and business leaders. We are locked in a merciless, unrestricted competition with low-wage workers of the developing world. This is ultimately an unwinnable competition. American IT workers, like many in the middle class, are learning that education, skill and hard work are no longer indicators of success. It's all about cheap labor -- a fact not lost on Harris Miller, Carly Fiorina, Mark Hurd and Sam Palmisano.
Global free trade is ultimately an emperor with no clothes. As Paul Craig Roberts has discussed in "Clarifications on the Case for Free Trade" and "The Harsh Truth About Outsourcing", the premise for free trade to be beneficial to all parties is that some comparative advantage must exist for all parties. This is not possible with the full worldwide mobility of labor and capital. The U.S., its workers generally and American IT workers in particular have no comparative advantage in the world today. Nations such as China and India command an "absolute advantage" over the U.S. This situation is more than just the result of what Frank Hayes calls the "ITAA's fumbled efforts to hype the benefits of offshoring," and if it leads to an IT staffing nightmare for American corporate HR departments, my response is, "You reap what you sow."
John Pardon is a former technical writer, software engineer and database administrator who has worked for a number of software development and IT corporations. Since his departure from NCR in early 2003, he has written on the topics of outsourcing and the H-1B and L-1 visa programs, inspired by his own experiences and those of other U.S. IT workers, notably Scott Kirwin, founder of the Information Technology Professionals Association of America, and Michael Emmons. Emmons' story was told in Computerworld's sister publication, CIO magazine [ "The Radicalization of Mike Emmons"].
Instead, ask the employees -- IT workers -- the programmers, DBAs, programmers, sys admins and network people... I'm sure that if you look around, you'll also find the NIV replacement workers too.
And remember that these situations don't occur at strictly "IT companies"; they occur at any company which has an IT department or which outsources the function to another company. Some of the most notorious are all foreign staffed (U.S. equal opportunity laws seem not to apply; they discriminate against Americans): Wipro, HCL, TATA/TCS are a few of the bigger ones.
Since this article was written, a number of "American companies" have been pushing their accounting departments offshore too. This is further evidence that the IT outsourcing is just the tip of the white collar job loss nightmare. The lessons learned in the IT outsourcing are being applied to wider categories of backoffice business functions.
This can only occur with "knowledge transfers" from trained American staff making NIV programs critical to facilitating the offshore outsourcing. As with IT outsourcing, the foreign workers enter the US on NIV's to receive training and then they return having learned that which is necessary to perform the job function. India is now the major destination of this sort of outsourcing as well.
The laws which Harris Miller helped make continue to yield a harvest of despair for American workers and increasing labor cost savings for ruthless corporations.
[Posted originally at JC's blog, the Richmond Democrat]
About 3 years ago, I was having lunch at a local restaurant here. Most restaurant workers here are students from VT, making a little money on the side, doing those famous "jobs no Americans will do". I asked my waitress what her major was and she said something in bio-technology. I congratulated her on her major and said that she was wise not to be majoring in IT or computer science because of outsourcing, H-1B's, etc.
He reply was instant. "Oh, yes. Students who graduate can't get jobs in those fields." She then said that word of this failure got back to students still in those majors and a lot switched majors to something else. A few weeks later, the "Roanoke Times" wrote that VT was graduating significantly fewer IT/CS majors than it had in past years.
The "tech dearth" is beoming a self-fulfilling prophecy, thanks to business interests, organizations like ITAA and, of course, Harris Miller. Unfortunately, now bio-technology, engineering, and a number of other high-tech fields are in danger of the same fate, as is teaching. Yep, we're importing teachers as well. Apparently teaching has become a "job no American will do". The current Senate immigration bill has a huge increase for high-tech white-collar professional visas.
However, the H1B guys I work with are very smart. I don't blame them for wanting to come to this country. One guy I work with is from Pakistan, and after 9/11 had to go register at the local police station. He's still here (at Penn State getting his phd), but he pays taxes and works hard.
This is the same thing the auto/manufacturing industry went through in the early 90's, late 80's. IT worked assumed that would never happen, but it has, and I guess the next step is job retraining. Makes you wonder who's next? Accounting, biotech?
Accounting and biotech are already being outsourced and "insourced".
Obviously not all jobs can be outsourced since many require that the worker actually be present to do it but almost any white-collar professional/technical job can be "insourced" using H-1B's and L-1's. Education has NOTHING to do with it - it is a smokescreen. The only jobs that may not be likely to be "insourced" are jobs that specifically require US citizens (as in security clearances) and those that largely depend on connections and influence. Notice, if you will, that politicians and think-tankers are in this last category. Now do you see why they don't give a rip about what happens to US workers?
BTW they don't have to "insource" all of these jobs to be successful - just enough to drive wages down so that US workers have to take whatever wage scale is available.
The thing that gives me some hope is that I have worked on projects with in and outsourced developers from overseas and have seen how badly they actually perform. They might cost 1/3 as much as I do per hour but you get an equivalent amount of work out of them (i.e. 1/3 as much productivity). Several years ago I was on a team of developers that had to come in and rescue a project that was more than 9 months overdue. The code had gone overseas and never came back. So much for saving money.
These days, if you happen to live around DC, the one sure fire way to stay employed in IT is to get a security clearance. Fortunately that kind of work can't get outsourced.
Watch out if people like Harris Miller get elected...
We may not have to wait for Miller to see sensitive government defense work being performed by non-citizens.
Do a google search on Indian-American business man name Raj Soin. He is a dual national with operations in India and the U.S. He has acquired American companies which perform defense contract work and he moves workers back and forth from India to the U.S. (using Miller's "business visa" programs) along with actual work via the 'net.(He is an outspoken proponent of outsourcing which isn't surprising because this generates considerable revenue for his companies.)
Now, I cannot say for certain that this situation means that Americans "secrets" are being compromised but I find this situation highly problematic and expect that similar transnational non-American companies do the same.
In other cases, I would point out that even well known "American" companies such as CSC, IBM, NCR, EDS, Oracle and Microsoft have extensive offshore operations in India and/or China (PRC). They have all adopted policies to outsource all possible work/jobs and they make use of non-immigrant visa programs to import low-wage Third World workers in the U.S. in preference to hiring Americans.
Can we say for certain that classified government work is only seen/worked on by American engineers, programmers and other American nationals?
We have all seen how the Bush administration has readily outsourced key elements of the military support functions in Iraq. Should we expect that military software projects remain "American" when Bush administration officials gush at the thought of outsourcing all possible work?