By George J. Bryjak
Checking your credit card statement, a friendly voice greets you with: "Hi, ma name's Debbie, kin I hep ya? But this young woman trained to sound like a Texan resides in India. The original worker from Dallas whose job was sent to Asia is a victim of "outsourcing," the euphemism for transferring work to offshore locations.
Few people realize the magnitude and implications of this hemorrhaging of U.S. jobs.
Economists Ashok Bardhan and Cynthia Kroll of the University of California at Berkeley estimate that in July of 2003 between 25,000 and 30,000 IT (information technology) positions were outsourced to India alone. According to the Bureau of Vital Statistics, since 2001 "more than 500,000 people in IT professions in the United States have lost their jobs."
These staggering figures are just the beginning. A study of 400 of the nation's top 1,000 companies concluded that by 2006, between 35 percent and 45 percent of current full-time IT jobs will be sent overseas. The Bureau of Labor Statistics estimates that of the almost 128 million workers in this country, 11 percent - or just over 14 million individuals - are at risk of having their jobs outsourced.
IT positions will follow the millions of manufacturing jobs already lost, only at a more rapid pace. As Matthew Slaughter of Dartmouth College notes, "IT work will move faster because it is easier to ship work across phone lines and put consultants on airplanes than it is to ship bulky raw materials across borders and build factories."
Significantly lower labor costs (which translate into higher stock dividends and ever-increasing executive salaries) is the primary rationale for this job exodus.
While telephone operators in the United States earn an average of $12.57 an hour, in India they make less than a dollar. Payroll clerks in that Asian nation take home less than $2 an hour whereas their counterparts in this country average $15.17 an hour. With well-educated, low-wage work forces, India, China, Russia, Poland, Hungary, Ireland and other nations promise to fill every job sent their way for years.
What will happen to American workers sacrificed to outsourcing? Job-slashing corporations argue that displaced workers will secure employment in the next wave of economic development. They claim that just as agriculture was supplanted by manufacturing, which in turn gave way to the computer-information revolution, today's corporate casualties will find employment in the coming stage of economic progression.
Unfortunately, it's far from clear what that next economic phase will be, and when it will occur. Few experts anticipate the materialization of a "white knight" industry to save the day. And if such an enterprise does become reality, how long before newly created positions themselves are sent abroad, the cycle repeating itself?
For too many outsourced workers retraining for future employment, it will be a simple matter of learning to say, "Would you like to supersize that order?"
Bardhan and Kroll speculate that surviving outsourced occupations could face a "downward adjustment of salary and wages" making them internationally competitive once again. In this scenario, the domestic IT industry would bounce back, but at a significant loss of purchasing power for workers.
The ramifications of outsourcing are staggering not only for individuals whose positions are terminated, but for the larger society. Unemployment and underemployment (working below one's level of skill and training) will contribute to a shrinking tax base, as already financially burdened city, county and state governments cut back personnel and services. In a nation where 15 percent of the population has no medical coverage, that figure can only increase as most people secure health insurance through their employment.
Fewer good-paying jobs will await college and technical schools graduates as the societal opportunity structure is diminished. The upward mobility of African-Americans, Latinos and other minority groups playing catch-up will be slowed.
High-tech cities such as New York, Boston, San Jose and San Diego are certain to be the big losers, while rural areas crippled by the loss of family farms have little chance of economic improvement. Suburbs with an employment base of "back office" activities (customer service personnel and medical transcribers, for example) can expect to see their labor force shrink. Why create jobs in Anytown USA when companies can employ people in Malaysia at a fraction of the cost?
What are the chances of checking this employment exodus? In a word, nil. While manufacturing jobs were leaving in droves, union membership and power declined steadily. There is no reason to believe that white-collar workers, the vast majority of whom have little if any history of collective organization, will create a viable movement to halt this trend.
At the national level, neither Republicans nor Democrats have shown any inclination to deal with this problem, if in fact they even consider outsourcing troublesome. Both parties are more or less committed to "economic globalization," and job outsourcing is but one aspect of this phenomenon.
The American Dream became a reality for millions of families in the post World War II era as a consequence of the rise of the middle class. However, the financial well-being of this socio-economic category is seriously threatened by the loss of manufacturing jobs, an expanding temporary work force (low-pay, no benefits, no job security), what some have referred to as the "Wal-Martinization" of American labor (minimum wage, minimum benefits), and, as of late, outsourcing.
The present group of late teens and twenty-somethings is likely to be the first generation of Americans that will not equal or surpass their parents' financial status. At the current rate of middle-class job erosion, their children will be the second.
Bryjak is a professor of sociology at the University of San Diego, currently on leave. He can be reached via e-mail at Gbryjak@aol.com.
Originally published in San Diego Union
