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According to Money Magazine, Mogul Donald Trump claims that China is playing by lopsided trade rules. Excerpts: America's middle-class was shrinking as the country lost its manufacturing base and jobs to inexpensive imports... "If you want to open a business in China, it is virtually impossible," Trump said. "And yet, if China wants to come here and do something, there is no problem whatsoever."... Trump...said the U.S. government had given China the advantage, and failed to promote the interests of U.S. businesses in negotiations. "China is doing a major number on the United States," Trump said. "If we had politicians that knew what they were doing, they would stop that so fast that your head would spin." ...MORE...

According to a Wall Street Journal article by Lee Gomes, a dwindling number of US winners in international programming contests is "proof" our education is slack. This is a classic excuse that the Cheap Labor Lobby uses to offshore technology jobs for lower wages. If they can convince the populace that Americans are too dumb to compete, then job-loss whiners will hopefully be ignored by voters, according to their strategy. (See links below for related tricks.) The poor US showing is likely because we have been focusing on our people skills of late. That is what we need to do to avoid being offshored. Raw brains are cheaper to hire overseas and thus raw smarts cannot be our economic comparative advantage. We must party hardy to survive instead of (just) studying so much. I've read several "how to survive IT globalization" type articles, and they all talk about gaining some form of "face time". It is our social skills that we are being encouraged to improve, not so much programming subtleties. The theory is that if your job doesn't...MORE...

IBM has an article about the alleged bright future of computing and software jobs. Here are some snippets and responses: ...women and under-represented minorities are leaving at alarming rates or not even considering science and engineering programs. There are a couple of reasons: one is a myth, believed by parents, students, and high school guidance counselors, that computer science and engineering jobs are all being outsourced to China and India. This is not true. The percentage of the total number of jobs in this space is quite small -- less than 5%. The numbers are probably disputable. It is hard to say what would have happened if outsourcing was not taking place because the decision process of managers is not always documented in detail or shared with the government. Regardless, the "globalism gun" has targeted software-related jobs and the history of fields targeted by globalism is not sunny. It may be 5% this year, but 50% in a decade. With investments you usually expect a higher return for risk. A student evaluating careers should appro...MORE...

If I hear the phrase, "jobs Americans don't want" one more time, I am going toss the idiot saying it over the border. Who is going to want a job that pays three dollars an hour with a boss that makes you sleep in a shed? Of course we don't want that: the flood of illegal immigrants ruined such jobs. The egg is the problem, not the chicken. This infamous phrase used to only be applied to blue collar jobs such as farming and hotel cleaning. However, it is leaking into the white-collar world also, thanks to some savvy but sinister pro-big-business lobbyists. They claim that not enough Americans are going into technology and engineering, making a "skill shortage". (You can read the rest of my blog to see what I think of "tech skill shortage" claims. I know personally that they are full of it. Lobbyists can lie to the papers, but not to someone whose career has been kicked in the caboose by offshoring and visa workers.) Under regular ol' supply-and-demand economics, if a job is tough to train for or tough to perform, then it generally pays more. If we didn't allow migrant workers to farm our fields, then the demand for farm workers would go up and so would the pay. Instead of being ...MORE...

Recently there has been a lot of brouhaha about proposals from Catholic officials regarding the aiding of illegal immigrants. One example is Cardinal Roger M. Mahony's call to offer assistance to illegal immigrants, even if such practice ends up being against the law. This is allegedly backed by Bible teachings saying one should help those less fortunate. Helping the less fortunate is a nice goal, but it adds to this problem instead of improving it in two ways. First, it encourages more illegals to risk their lives to cross the border. Second, it distracts attention from the bigger problem: South American economies. There is a very applicable saying: "To feed a man for one day, give him a fish. To feed him for life, teach him how to fish." Mahony is doing the first and ignoring the second. Catholic nations have a dismal economic record, and nobody in the ...MORE...

The March 6, 2006 Los Angeles Times has an article by Peter G. Gosselin titled, That Good Education Might Not Be Enough. The large papers are finally starting to see through the political mantra that America's education is the magic solution to offshoring and jobs lost to visa "guest" workers. Here are some snippets: American workers at all levels are vulnerable to outsourcing, experts say, posing a challenge to the assumption that more schooling is the answer... But the president's assertion that the answer to foreign outsourcing is education, a mantra embraced by Democrats as well as Republicans, is being challenged by a growing body of research and analysis from economists and other scholars. Education -- at least as delivered by most of the nation's colleges, universities and technical schools -- is no longer quite the economic cure-all it once was, nor the guarantee of financial security Americans have come to expect from college and graduate degrees... Starting in 1975, the earnings difference between high school- and college-educated workers steadily widened for 25 years. But since 2000, the trend appears to have stalled. Census figures show that average, after-inflation earnings of college graduates fell by more than 5% between 2000 and 2004, whereas the earnings of those with only high school degrees rose slightly. Most studies suggest that beyond the manufacturing sector, the "offshoring" of jobs has been comparatively modest. But some analysts say the ground has been laid for a substantial pickup. In a recent paper, Blinder offered a rough estimate that suggested that as many as 42 million jobs, or nearly one-third of the nation's total, were susceptible to offshoring... "When they don't know what else to do," he remarked, "there's a tendency among politicians to stand up and say 'education.' "... In Bush's case, arguing for more schooling draws particular fire from some educators, because the ...MORE...

CNN has an article titled, Mind the record trade gap. Here are some excerpts: ...University of Maryland Professor Peter Morici argued in a note Friday that the trade gap is hurting American workers more than they are being helped by lower prices. "Were the trade deficit cut in half, GDP would increase by nearly $300 billion, or about $2,000 for every working American," he said. "Workers' wages would not be lagging inflation, and ordinary working Americans would more easily find jobs paying good wages and offering decent benefits." Morici also argued that the growing trade gap poses a long-term threat to U.S. competitiveness, companies and workers. "By shifting employment away from trade-competing industries, the trade deficit reduces U.S. investments in new methods and products, and skilled labor," he said. [emph. added]

Computerworld.com has two interesting articles about globalization. The first is titled, A High-Tech Worker's Guide to Globalization's Myths It mirrors many of the statements made elsewhere on Gonewiththeworld, and includes the following myths: Myth 1: "Free trade is an economic wonder. Protectionism is a disaster." - Many successful countries practice heavy protectionism. Myth 2: "Globalization is inevitable. It's impossible to save your job." - Examples given of industries that protect themselves and how widespread protectionism really is already in the US. Myth 3: "Better education is the answer to the outsourcing/offshoring stampede." - Education is not a US comparative advantage because ...MORE...

I keep reading chatter about how the US is falling behind the rest of the world in science and technology. As usual, the proposed solution is usually the stick rather than the carrot. They propose more education pressure and lecturing of potential students to encourage them to go into science and technology. It is far cheaper to at least take care of the techies you already got. As a techie who struggled during the 2001-2004 tech recession, I can tell you that nobody was breaking down our doors to help us. Congress was still approving H-1B visas, companies were still offshoring like mad, corporations were still lobbying for cheaper, more docile third-world labor, and Congress was still buying lobbyist lies without a critical eye. ("Buying" in a literal sense. The companies doing the lobbying were avid campaign contributors. So much for democracy.) The real problem is that because of globalism, science and tech has lost is luster as a career choice. To highlight the point, I have built an illustrative chart: ...MORE...

An article at VDare.com talks about how the flood of cheap foreign PhD's has undercut the employment and stability prospects for US citizen PhD's. The cost of a high-end education no longer justifies the poor return rates and instability from a flooded global brain market. Why spend more on your education than your overseas competition will make in their life-time only to find your salary matches theirs after you graduate? However, I have thought of a way to reduce the cost of high-end education: Send our students to 3rd-world Asian universities where the costs are about 25% of what they are here. Parents can save hundreds of thousands of dollars by enjoying the juicy fruits of free trade. Surely US universities wouldn't mind open competition from their cheaper foreign counterparts. After all, they are some of the most vocal of ...MORE...

I recently finished Dr. Ravi Batra's book, The Myth of Free Trade. Although written more than a decade ago, there is much in it still applicable today. Because Dr. Batra has the nasty habit of making odd predictions that only come half-true (in other books and articles), his credibility is sometimes questioned. However, he brings up some interesting theories and statistics that should not be ignored in this book. It is an overused cliche that free trade benefits the wealthy instead of the middle class and poor. However, Batra gives some clarification on why this may be and then presents data to back up this assertion. As we all agree, money cannot flow forever only out of a country if ...MORE...

Recently, Bill Gates has been suggesting more loudly than usual that there is a shortage of "qualified" technical professionals in the US. Although he is mischaracterizing the situation, from his perspective there indeed would appear to be a mild shortage, as we will demonstrate. But first some excerpts: "The whole idea of the H-1B visa thing is, don't let too many smart people come into the country. The whole thing doesn't make sense," Gates said. Gates echoed the concerns of other business and education leaders who warn that the United States must improve science education and boost spending on research and development to avoid falling behind India, China and other countries that are rapidly gaining ground. But he reserved his sharpest criticism for the visa caps, which he called "almost a case of a centrally controlled economy." "If the demand is there, why have the regulation at all?" he said. That is more less the same as "why have borders?" If there was no regulation, the country would be flooded with extra-plentiful labor. Why bother to ...MORE...

An article in Fortune describes how consumption at any cost is putting our nation at great risk. Excerpts: Warren Buffett published his annual letter to shareholders, arguing passionately that our stupendous trade deficit—our insistence on giving away claims on our future just so we can continue shopping the world—is turning us into a "sharecropper's society." ...None of that means the dollar must tank or interest rates explode, as some fear. The unwinding could be far more gradual. The result, years from now, could be Americans paying unimagined portions of their income to cover their parents' and their own debts (personal and national) and to pay interest and dividends to the foreigners who financed our long shopping spree. That experience could even be as traumatic as the Depression was for an earlier generation and lead, as it did then, to a generation of champion savers and investors.       RELATED MESSAGES:

I nearly blew my top when I encountered a blog message by an Indian programmer. The entry for April 10, 2005 states: ...the Zend PHP Certification price is too high to afford in India and I contacted [a Zend representative and he/she] informed me that they're working with Pearson to fix the Indian price. [Emphasis added] In other words, the Indian blogger feels that the software-related item is "too expensive" for an Indian programmer to afford. The item in question is currently globally priced. Yet he feels that Indians should get a special discount because the global price is too high for Indian wages. However, the fact that his wages are low is likely the reason he is a programmer to begin with. India greatly expanded as an IT center primarily because their wages for ...MORE...

One keeps seeing statistics which strongly suggest the higher the education, the more money one makes. This is somewhat at odds with my observation that self-taught sales and management skills are the better route to economic security these days. I graduated in Computer Science with honors, and it has not helped me escape the Free Trade Tar Pit. Part of this difference may be confusion of cause and effect. Generally mostly those from wealthy families can afford Masters and PhD degrees. If you come from a wealthy family you will probably have more lucrative connections than the rest of us. And as ...MORE...

I encountered a somewhat old but relevant article titled Lost Your Job Yet? by John Pardon. Excerpts: 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.... 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.... 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. ...MORE...

Described here is yet another case of free-trade lobbyists insulting the abilities of American IT workers by misusing statistics. I have seen multiple suggestions claiming one of the reasons that companies are moving their software work overseas is that Indian firms have better process systems in place, such as "CMM" (Capability Maturity Model). CMM is a software development methodology and certification process that attempts to better organize, document, and manage software projects. Some free-trade lobbyists say that India has more CMM certified software shops than the US, and this is allegedly one of the reasons for choosing Indian labor over US labor, not lower wages. The implication is that because of lack of education or discipline in such techniques, American workers don't have their act together. A common tactic of free-trade lobbyists is to throw up red herrings to distract one away from wage difference issues, emphasizing something that is harder to measure and verify. The best lies are those that are expensive to refute. (I don't know if India really does have more CMM certifications. However, that quantity is not the key issue here anyhow.) There is an important detail that they usually fail to mention. ...MORE...

I found an article on Reason Online that gives many of the common pro-free-trade myths. Here we go debunking them. But from the save-our-jobs perspective, the new protectionists have more to fear from machines. After all, those soulless slaves to efficiency have stolen more American jobs than any foreigner. That may be true, but that is still not a reason to ignore the problem of offshoring. Machines tend to replace low-education jobs, but offshoring replaces higher-education jobs. It is a one-two punch. The only people who seem safe for the time are salespeople and experts at social manipulation and office politics. (Coincidently, perhaps not, free-traders tend to be expert social manipulators. Do I smell bias?) ...MORE...

I encountered a old Slashdot discussion that in many ways rings true to some of my observations. [Visa demand] is NOT for a lack of skills and it's not because younger people will work for less money. The fact is, most tech jobs (sysadmin, programmer, web developper, etc.) are not 40hr/week jobs. They're demanding 60, 70, 80 hour per week jobs. And they're all "salaried" jobs, which means no extra pay for extra hours. Now young people fresh out of college, and immigrant H1B visa workers have little else in their life to occupy them. Thus they are able to accept the abusive work hours employers expect them to put out. But now something new has happened. The first BIG wave of IT industry workers are just now starting to reach their upper 30s and 40s. What happens when a 70 hour/week employee gets married or has a kid? Suddenly he or she has to cut back working hours to 50 or 40 hours per week as a responsibiliy to their family. ...MORE...

Here are two articles on how globalization is eating into our best workers and best industries. Outsourcing Innovation - America's Has-Been Economy Long-Term Jobless Find a Degree Just Isn't Working (L.A. Times Free registration may be required)       RELATED MESSAGES:

Dr. Lawrence Summers set off a fire storm when he suggested that female brains may be naturally handicapped when it comes to math and science. Whether that is true or not is mostly irrelevant trivia. Math and science careers are dying or stagnant anyhow in the US due to globalization's commoditization of raw brain power. The Age of Nerds is over in the US. The laws of math and science are the same in the third world, but the wages and cost of living are not, so the third world is where the "brain" jobs are shifting. Why complain about not getting a ticket to a doomed train? If anything, the seemingly social tilt of the female brain will give females an advantage over males in the new Persuasion Age. I don't know why math and science are so ...MORE...

It is interesting to see how programming is characterized in speeches and quotes from advocates of cheap overseas and visa labor. I have noticed a contradiction building up in how they characterize programming, changing its characteristics to suit their situational debate needs. Having been programming for more than a decade, I have a pretty good idea by now of the kinds of skills that programming requires and does not require. Thus, I am well-positioned to expose these contradictions. There are two contradictory characterizations of programming that I will explore. The first is that ...MORE...

USA-Today has an article titled, To Start Up Here, Companies Hire Over There. Startups have typically been the source of new jobs as "out of style" industries leaked abroad. Now the pattern seems to be changing in a disturbing way. Excerpts: The rise of these "micro-multinationals" is worrisome because start-ups generate most tech jobs. Their role is now more vital as mature tech firms consolidate and export work, cutting U.S. employment. Indeed, tech's share of all U.S. jobs fell last year to 4.4% from a record 5% in 2001. Tech's job share is now near a level last seen in 1992.... ...MORE...

In other articles I used a working taxonomy of three kinds of work: physical, mental, and social. Globalization and automation have been chipping away at the first two at an increasing pace. In fact, the pace is so fast that the first two may be nearly obsolete sooner than we may think. More and more of the products and services we consume are being produced by machines or in countries where the labor rates (and cost of living) is significantly lower. Certain location-based physical jobs, such as plumbing and cash-register clerking, are one of the last remaining areas that have yet to be significantly touched. Actually, cash-registering is being made obsolete by some larger ...MORE...

I ran across a ridiculous article titled Market Solutions to Outsourcing, by James Klein. James has a very loose definition of "solution". But it has misconceptions and incomplete reasoning similar to what I have found with other pro-free-traders on various forums. Excerpts and responses: I sympathize with someone who is facing diminished prospects in their chosen career, but only to a point. The person who responded to the BusinessWeek Online article enjoys a house, a car, and all the benefits of the American lifestyle. I don't think he or she would want to trade places with the programmer in Russia or India whom they fear is taking their job. Hmmm, a choice between unemployment in America or a programming job in Russia or India. I don't know about others, but I think I would take the programming job overseas (if my family agreed). Programming wages in those countries are fairly decent compared to the cost of living there. In fact, in India many programmers can afford maids. I could never afford a maid in the U.S. ...MORE...

Here is an article about a ski resort which says that there is a "shortage" of US workers that fit this bill: Excellent people skills Highly motivated Accepts crappy wages (at least at US cost of living) Crappy locations In the past if you wanted motivated workers with great people skills you had to pay decent rates to get them. Not any more. Now you can import the cream-of-the-crop from the whole world, pay them crappy wages and/or abuse them, and send average citizens to the unemployment office....MORE...

I have taken some heat for my view that formal education is mostly irrelevant to solving globalization-related labor problems. So, I thought I should further clarify my viewpoint on this. I have been in the software development and analyst business for more than a decade. I also have a four-year Bachelors of Science degree and graduated with honors. I have mostly focused on business-related software applications, and will use this as a reference field in the following explanation. Applicability to other fields will be discussed later. It might seem unrelated to other technical careers at first, but I will show otherwise. For the most part I see very minor connections between formal education and the behaviors that businesses seem to want from software experts. Business applications do not use that much advanced mathematics. The few that do higher math usually just involve transcribing the formulas provided by ...MORE...

A review of an up-coming book on economic warfare gives us actual lessons in what can happen when other countries hold the keys to our economy. Excerpts: Once the CIA became aware of this, President Reagan approved a plan to give the Soviets a version of [the oil flow control] software that had been modified so as to eventually, but not immediately, produce pressures beyond pipeline tolerance. The result, as Reed said, was "the most monumental non-nuclear explosion and fire ever seen from space." The damage done to the Soviet economy by the explosion was significant. [Emph. added] There were other covert technology transfers to the Soviet Union that contained malfunctions as well. In time, the Soviets realized that they had been tricked, and they had no way of knowing which of the technologies they had stolen were sound and which weren't.... Lesson number one in geopolitics: Countries that are economically dependent upon other countries can get hurt. Very badly. Some ...MORE...

Recently I read a discourse between a high-tech visa worker promoter and somebody claiming there was no major "shortage" of skills to justify the visa workers. The non-shortage side supplied statistics to show unemployment going up lately for electrical and electronics engineers. The shortage side then claimed that the increase was because the offshoring of factory work took some engineering jobs with it, and that non-factory-related engineering jobs did not take a hit. That kind of logic reminds me of the time the cigarette companies claimed they should not have to pay into healthcare funds because cigarette smokers tend to die early, before age-related complications set in and increase medical bills. Since smokers die early, they actually save the country money, their logic went. However, the bigger issue is that ex-factory engineers will have a harder time transitioning to non-factory engineering if the non-factory engineering work is filled by visa workers instead of citizen engineers displaced from factory engineering. Specialties in technology work are highly volatile. New and fad technologies come, change, and go all the time. We tech workers need shortages in specific areas in order to make specialty transitions from dying specialties to growing specialties. Without the shortages, we could not make the transitions because employers want specific paid experience in ...MORE...

Business Week has an interesting December 6th article titled, Shaking Up Trade Theory. Excerpt: Globalization, say most trade economists, ultimately should benefit the U.S. more than it hurts. But they can't yet show that to be true. Until someone comes up with a convincing explanation for what happens when the highest-skilled jobs move offshore, battles over globalization are likely to rage even hotter.       RELATED MESSAGES:

All the talk about the grand benefits of "free trade" and plentiful visa workers has a big logical hole: What if everyone's job category was flooded by cheaper and/or more docile third-world labor? Let's do a thought experiment. Tech and agriculture work is currently heavily targeted for plentiful foreign "guest workers" (visa and migrant labor) mostly because big companies have the lobbying power to "justify" them. But car mechanics, doctors, plumbers, lawyers and a host of other service providers could be made less expensive by visa workers also if allowed. But they are mostly not allowed because consumers generally don't provide organized lobbying power; or organizations self-limit who gets certified (such as lawyers). Nobody is shouting on the congressional floor claiming that bad things will happen if we don't "solve" the "plumber shortage" or "lawyer shortage". ...MORE...

All the push to send kids to college to obtain "brainy uppity desk jobs" seems to be resulting in shortages of blue collar trade workers. NPR broadcast a story about the trend on December 8th. Many trades are protected by unions from the onslaught of visa "guest" workers that have stunted the tech and agricultural fields; and are often immune from offshore outsourcing because they often involve physical activity on existing or non-movable large structures, such as buildings and municipal processing equipment. ...MORE...

Here is a list of some of the ways that a company can manipulate Federal applications for H-1B visas in order to fill positions in which there is an alleged shortage of skilled qualified citizens. The list is based on a combination of behaviors I have personally witnessed and those described by colleagues. Note that I have not verified that they all actually have occurred. The main point is that the current process allows too many loopholes, real and potential. Resume Templating - Add every skill that a given H-1B candidate has on his/her resume into the "needed skills" line of the application form. That way the "needs" profile will never match a citizen above the probability of winning the Instant Millionaire lottery. Government inspectors are usually too overworked and/or not knowledgeable enough to check and follow-up on actual skills used on the job, especially if there are more than a few. (This approach was also covered in another message.) Undocumented Experience - Claim a highly experienced H-1B applicant is really only a beginner, and thus a company gets experience at beginner rates. Inspectors cannot realistically check somebody's skill background as obtained inside a foreign country. If they do find out, claim you didn't know. Just make sure the experience is not on your "official" copy of the visa worker's resume. It is an easy lie to get away with. Take Advantage of Situation - Work the H-1B overtime or weekends without extra pay. Complaining risks getting the H-1B sent home, so ...MORE...

Robert Samuelson has an article in the Nov. 17 Washington Post titled The Dangerous Dollar. (Free registration may be required to read the article.) The rest of the world's economic addiction to exporting to the U.S. may finally be catching up to everybody. Record trade deficits and a sliding dollar are warning signs of a potentially bigger global financial calamity. Excerpt: ...the dollar's vulnerability is a symptom of something else: the addiction of Europe and Asia to exporting to the United States. If their economies grew faster on their own [via local consumption], the massive U.S. payments deficits wouldn't have emerged. The dollar would have quietly drifted down. Foreigners would have invested less in the United States, because they'd have more investment opportunities at home. [But instead they keep taking the export route.] ...MORE...

Economist magazine has a series of articles on offshoring. Economist magazine is a right-leaning pro-offshoring British political magazine that repeats false or misleading mantra common among pro-offshoring publications. The first falsehood is the commonly-found theme surrounding a field known as software engineering. Statistics show a decline in computer programming jobs, but an increase in "software engineering". This leads the naive to often conclude that programmers simply need to be retrained to be software engineers, and information technology job losses will end. This is the kind of thing that happens when you do your thinking using paper statistics alone without understanding the actual field or context of the statistics. ...MORE...

Lately there have been some claims of "labor shortage" or "skill shortage" floating around certain technology industries. Claims of labor shortages have often been used to justify allowing more educated visa workers (AKA "guest workers") into the country and/or to allow offshoring of jobs to proceed without regulatory hindrance. (Note that visa workers are not the same as immigrants.) But the problem is that job seekers in these areas often feel that companies are still too picky. If there is truly a "shortage", then a company should not be picky. Somebody who has 2 years of computer language X experience instead of the 4 requested should be hired, for example. There is a reoccurring difference in perception between job seekers and potential employers with regard to supply and demand of skills. Some of this is due to underhanded lobbying on the part of business interest groups who want cheaper, more docile overseas labor to boost profits. But I have heard inside stories from employers who legitimately cannot find ...MORE...

My brother and I both went into technical fields, although in widely different specialties. However, we both now realize that globalization and visa worker influx has cheapened almost every tech field such that technology of any kind is a flat or dying career where someone in the U.S. is competing against well-educated people who earn one or two dollars an hour. We also both realized that the education system has failed to prepare us for the new realities. Although they could not have foreseen the Blitzkrieg-like power of globalization into more than just factory jobs, the schools to this day are still focusing on outmoded knowledge and thinking. They are gearing our children up for the past, not the future. The best off in my brother's suburban neighborhood are those who formed their own companies in areas such as roofing, plumbing, pest control, and real estate; while those with degrees working at the local computer lab are being downsized and jobs offshored to a humid place in Southeast Asia. The owners of these small companies started working on the bottom rung out of high school and simply slowly gained enough knowledge to run such a business on their own. ...MORE...

In the 1980's if you lost your job due to the offshoring of factories, employment "experts" would often steer you toward some kind of computer-related job. "We are entering the information age. Factories are dinosaurs," they would say. "Learn computer operations, data entry, or customer software support from a trade school; or go to college and learn programming." Most of these are now rapidly moving to overseas operations because of the lower labor rates there. Now when an unemployed computer programmer walks into the office of a "career guide" of ...MORE...

An October 21st Washington Post article talks about the growing trend of going offshore to undergo otherwise very expensive surgery. (Free registration may be required to read article.) Excepts: Three months ago, Howard Staab learned that he suffered from a life-threatening heart condition and would have to undergo surgery at a cost of up to $200,000 -- an impossible sum for the 53-year-old carpenter from Durham, N.C., who has no health insurance. So he outsourced the job to India. Taking his cue from cost-cutting U.S. businesses, Staab last month flew about 7,500 miles to the Indian capital, where doctors at the Escorts Heart Institute & Research Centre....replaced his balky heart valve....Total bill: about $10,000, including round-trip airfare and a planned side trip to the Taj Mahal. ...MORE...

USA Today has an Oct. 14 article titled, Endangered species: US programmers. Excerpts: Say goodbye to the American software programmer. Once the symbols of hope as the nation shifted from manufacturing to service jobs, programmers today are an endangered species. They face a challenge similar to that which shrank the ranks of steelworkers and autoworkers a quarter century ago: competition from [cheaper] foreigners. ...MORE...

The American Engineering Association has an article about the politics of offshoring that closely echoes many of the ideas in our main page regarding the politics of offshoring. Excerpts: Naturally, everyone wants the labor they consume, whether directly or embodied in goods, to be cheap. But as a wage earner, they also want the labor that they are paid for to be expensive....Whether this is "efficient," as academic economists understand this term, or not is irrelevant to the politics. ....For example, one could have a coalition of everyone who is not a manufacturing worker (roughly 85% of the population) against everyone who is. Manufacturing workers suffer the competition from cheap foreign labor, everyone else enjoys the cheap foreign goods, and a majority is happy.... What if the percentage balance in the coalition isn't stable? What if we go from 15% of the population harmed and 85% benefited to 30/70? Or 50/50? Or 70/30 the other way? The coalition starts to fall apart. ...MORE...

According to the July 19 International Herald Tribune, McDonalds is experimenting with remote order processing. When you order something through a fast-food drive-through speaker, you may be talking to somebody far away. They type in your order into a computer console, and that information is immediately sent back to the restaurant's cooking area. Although these experiments are being done with phone operators stationed in Colorado, it is only a small leap to hire people in low-wage countries to do that work instead. Other types of phone-based work is often offshored, so fast-food cannot be far behind. India even offers special speech training classes to help phone operations students mimic regional US accents....MORE...

Lately I have been hearing contradictory claims about jobs in the software development profession (my own profession). Some government statistics suggest that the loss of computer programmers is being more than replaced by an upsurge in "software engineers". Software engineers are more or less "glorified programmers" with a bit more customer and management interaction experience. Allegedly their jobs are safer from offshoring than programming because of such interaction requirements. Teachers and parents take note: socializing may be more important than technical skills in the "new world". However, this alleged offset contradicts an ...MORE...

The Chronicle of Higher Education has an article titled, Is there a Science Crisis? Maybe Not -- Leaders warn of a labor shortage in the U.S., but indicators point to an oversupply. It gives a fairly detailed review of claims that there is a shortage of US science students. It seems pretty clear that wages and opportunity availability in science careers is often the problem, not lack of interest in the subject. Some feel that glutting the market with lower-wage non-citizen graduates has made the field financially unattractive to citizens. It is like becoming a Pastor or artist: you do it out of love, not money. ...MORE...

There has been a lot of talk lately about studies that allegedly show that only a small percentage of job loss is due to offshore outsourcing. Yet my colleagues and I personally witness "internationalization" sweeping through companies under various guises. The word "guises" may be the key to the difference between our "live" observations and the statistics being waved about. Most of such studies look for one-to-one swapping of a US employee for a foreign one. In practice it generally does not happen like that. Most "internationalization" that I observe happens during changes in projects or policies, not in the middle of an on-going project. For example, a company may finish up a project where they are currently using dozens of US contractors. Letting contractors go is not statistically counted in most of those studies, since contractors are by definition temporary. The next project that ramps up may use more offshore contractors or services. ...MORE...

I stumbled upon a somewhat older article titled, Realities Make 'Offshoring' Hard to Swallow, by Steven Pearlstein at Washington Post's website. (Free registration may be required). Excepts: The problem with the standard model, however, is that it is based on a number of key assumptions that are increasingly at odds with reality. One big [assumption] is that labor markets are either at full employment, or will get there real soon. What this ignores is that the world has just gone through a political revolution -- the end of communism -- which suddenly has dumped a billion underemployed, low-cost workers into the global labor pool.... At the same time, the arrival of the Internet and the digital revolution have suddenly made it possible for many of those workers to compete against tens of millions of U.S. service workers in sectors once immune to trade.... Another assumption in the standard model is that ...MORE...

An L.A. Times article about an Agilent software expert being required to train his foreign replacements and then being let go just shy of his early-retirement deadline. (Free-registration may be required for L.A. Times articles)

The Washington Post website has an interesting article titled, A Difficult Lesson, about retraining displaced workers affected by offshoring and automation. (Free registration may be required.) General conclusions: More studies are needed. The few existing studies suggest that retraining has not been very effective. The best results appear to come from cooperative training programs with businesses having specific existing openings or needs rather than retraining that targets an industry or trade. Government funding and support for retraining programs often does not match promises and political rhetoric (what a surprise).       RELATED MESSAGES:

A New York Times article titled, Where the Jobs Are, echoes our own article on the rise of social fluff jobs. (Free registration may be required for Times article.) Here is an excerpt from the Times article: Over the past decade the biggest employment gains came in occupations that rely on people skills and emotional intelligence -- like nurse and lawyer -- and among jobs that require imagination and creativity: designer, architect and photographer. But not all of the new jobs require advanced degrees or exceptional artistic talent; note the rise of employment for hair stylists and cosmetologists. How a nation can remain an economic and technology powerhouse if all the jobs and money are shifting toward fluff careers escapes me. That is one I would like to hear a competent economics expert clearly explain. (Again, I don't mean to demean such professions from a personal satisfaction standpoint, but we cannot rely on them alone to remain competitive in the world. A better hair-style might resemble a satellite, but it cannot launch one.) Some will suggest that is not the social fluff jobs that will keep the US a leading economic power, but rather "innovation". However, even if ...MORE...

On our main page we described how a sudden disruption or stoppage of trade between countries can cause perilous shortages of key products or services during military or physical threats. But there is a slower-moving but similar kind of danger. Some countries don't care that much about lower costs for consumers. They may encourage or subsidize economic specialties that give them a strategic military edge. If a country has more manufacturing knowledge, then it will also develop more hands-on engineering knowledge, which leads to more research on hardware, which provides more hands-on military know-how. ...MORE...

An article at the Economic Policy Institute's website talks about some of the misleading use of statistics by pro-offshoring lobbyists and the Bush administration. The pro-offshorers often claim that jobs created in the US from offshore companies offset those lost to offshoring. A closer look behind the raw numbers shows that most of gains in foreign-company jobs come from purchases of existing US companies by foreign firms. In other words, new jobs are not being created, but simply changing categories. For example, if Toyota purchased the Ford company, then all existing Ford employees in the US would now be employed by a foreign company. However, the net US jobs would not change from that transaction. Existing employees simply have a new top boss. Yet, some lobbyists are counting them as insourcing job gains. Whether they are naive or purposely deceitful has yet to be determined.

I encountered another white-to-blue-collar article from ABC's website. Excerpts: Rashidul Islam never planned on driving a yellow cab. But after being laid off 18 months ago, the 28-year-old accountant has been unable to land any other job. "I'm sending out resumés and then there's no call, not a single call that they are willing to hire you," he says. He's not the only overqualified cabbie on the road. Today, nearly 16 percent of America's taxi drivers have attended college. That's up from 13 percent in 2000.... In the last three years, long-term unemployment among college-educated workers increased by 300 percent. Federal labor statistics show that between 2000 and 2003, a growing number of college grads took jobs as cashiers, retail clerks, and receptionists.       RELATED MESSAGES:

An article titled, "Japan's fake funk: the truth about a nation that won't import", argues that Japan has been hiding its success since the alleged 1990 banking and stock collapse, and uses the collapse as an excuse to keep its trade barriers in place. Free-trade theory would suggest that such barriers would hurt Japan. However, Japan is actually thriving so well that citizen purchasing power is greater than that of the United States. In other words, they are beating us economically WITHOUT free trade. Japan's stock and banking slump have not harmed industrial investment because it depends on its citizens' high savings for most financing, not stock and bank loans. Yet Japan has emphasized stock and bank slumps in order to justify a reluctance to open up its markets. The author compares the concealment to kabuki theater, where faking distress is a fine art. ...MORE...

SFgate.com carries an article titled, Are Biotech Jobs Next to Go? Excerpts: Biotechnology, a burgeoning industry born in the Bay Area, is often cast as the savior that will help replace the hundreds of thousands of jobs lost to offshoring, the trend by U.S. firms to cut costs by sending work overseas. But there are signs that the nation's biotech industry may be on the verge of an offshoring wave of its own, awakened to an international climate where firms can get qualified workers for as little as a tenth of the U.S. cost.... Foreign governments are making it a strategic national priority to attract U.S. biotech business, offering access to highly trained workers and fully equipped labs. Gleaming new research centers are springing up, like Singapore's Biopolis and India's Genome Valley around Hyderabad...."They're throwing money at it, let me tell you,'' said Glenn Rice of SRI International.... ...MORE...

Pro-free-traders often talk about how protectionism, that ugly "P-word", kills economies. If it is so deadly, then how come the rampant protectionism that is already present in the US economy has not killed our economy in the past? Existing protectionism comes in many forms in many careers. Some of it is legislated, some comes from unions, and some comes from clever manipulation of many factors of society. We are familiar with factory and grocery unions; but farmers, dock workers, truck drivers, most government workers, doctors, orthodontists, and even lawyers enjoy various barriers also. ...MORE...

The "Infotech" section of the India Times (of all places) has an article titled, Benefits of offshoring jobs exaggerated: Experts. Excerpt: Authors find that in a large sample of manufacturers, 1.3 jobs per 100 were lost on balance each year from 1973 to 1993. But 10.2 jobs per 100 were destroyed, while 8.8 were created. Such a high rate of job destruction carries serious costs for workers, even when they eventually find new jobs. There are long periods of unemployment, retraining costs and costs of searching for a job. And the new jobs usually pay less than the old ones. ...MORE...

Robert X. Cringely has an article about the American "brain drain". Excerpt: In the 1950s and '60s in England, there was a phenomenon they called the "brain drain," which was the mass emigration of scientists and engineers to the United States. The UK was still suffering from World War II....Against this austere economic landscape, America with its big cars and big salaries and technical industries with big ambitions looked to be the place to go. We as a nation benefited immensely from this migration as European science gave us the bomb and took us to the moon. Europe and the UK, in turn, did not particularly benefit from this technical exodus, which hurt their local industries and local economies. ...MORE...

ComputerWorld posted an article about ITAA's lobbying shenanigans (by Frank Hayes). ITAA is the Information Technology Association of America, a pro-business lobbying group that helps large corporations try to justify cheap overseas and visa labor to politicians and voters. Many publications report ITAA's conclusions as if they came from an objective research institute. However, they are a pretty manipulative group, using PR techniques that remind me of Microsoft's. It is nice to see an article that does not lap up their "data" so easily. Excerpt: Here's a comforting bedtime story: Offshoring won't just save companies money. It will also create jobs. And reduce inflation. And grow the economy. Those are the top-line conclusions of a new report from the Information Technology Association of America, the IT vendors' lobbying group. Just don't read very far past that top line -- at least, not if you want to get any sleep tonight. ...MORE...

This may seem sacrilegious to some, but it is actually a social commentary on how the religious right often backs full-out offshoring, leaving those displaced on their own to fight for survival in a Darwinist sense. Has the religious right taken up a Darwinist view?

The San Francisco Chronicle has an article about some of the problems encountered in dealing with confidentially breaches with regard to offshored medical records and other intellectual property allegedly mishandled by workers in other countries. A typical example is an offshore worker who threatens to leak sensitive or private information because of a dispute over wages. "Give me my money or I'll post your patients' medical records all over the Internet!" ...MORE...