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White-collar jobs moving abroad

A spate of new studies points to an exodus of skilled labor, from high-tech to financial services.



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By Stacy A. TeicherStaff writer of The Christian Science Monitor / July 29, 2003

For decades, Americans watched as manufacturing plants set up shop overseas to capitalize on cheap labor. Ross Perot immortalized the anger many workers felt, vividly terming the potential exodus of jobs to Mexico that "giant sucking sound."

Now a growing number of US firms are sending coveted high-tech and service jobs "offshore" in a move that's reviving a debate about the future of the American workforce.

No longer is it just Disney toys and Nike shoes made in Haiti and Indonesia. It's software engineering, accounting, and product development being "outsourced" to India, the Philippines, Russia, and China.

The result is a growing backlash from unionists, contract workers, and erstwhile techies with time on their hands. More broadly, the trend raises a pointed question in an age of globalization: Is sending certain jobs offshore - even high-tech ones - better for the US economy, or does it just amount to more pink slips for American workers?

"Manufacturing is a small slice of the economy, and when people saw globalization creating instability there, a lot said, 'It's not my problem,' " says Josh Bivens, an economist at Washington's Economic Policy Institute. "Now white-collar workers are feeling it."

The number of such jobs now outsourced - from information technology (IT) to architecture - is less than half a percent of the US workforce. But it may grow fast:

• Half a million IT jobs - roughly 1 in 20 - will go abroad in the next 18 months, according to Gartner, a research firm in Stamford, Conn.

• Nearly 5 percent of human- resources jobs have moved offshore in the past year, and by 2007 that number will climb to at least 15 percent, says Jay Whitehead, publisher of HRO Today magazine, which tracks outsourcing.

• By 2015, 3.3 million US high-tech and service-industry jobs will be overseas, according to Forrester Research in Cambridge, Mass. That's 2 percent of the entire workforce, and $136 billion in US wages. Oracle, for instance, already has 2,000 employees in India and expects to move 2,000 software-development jobs, plus accounting, payroll, and customer-service positions.

Competition or a zero-sum game?

Granted, projecting to 2015 is risky. And even if these numbers pan out, some say there's no reason to panic: By staying competitive, the theory goes, companies will strengthen their positions in the new global order.

"If you look at history, we create new jobs in new areas to make up for what is outsourced," says Richard Hundley, lead author of a recent report by RAND's National Defense Research Institute. North America will still lead the technology revolution, the report says, partly because of a willingness to engage in "creative destruction" to stay on the innovative edge.

But others - particularly those whose jobs are lost - see overseas outsourcing as a zero-sum game, with US workers sacrificed for corporate profits. "America's leading companies are sending our best-paying jobs to cut labor costs.... I don't buy the idea that new jobs will be created," says Marcus Courtney, organizer of the Washington Alliance of Technical Workers (WashTech) in Seattle, an affiliate of the Communications Workers of America.

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