Tuesday, September 7, 2010

The New Economy, the Tech Industry, Outsourced. So the old free market health care, energy and service industry is it?

Now on PBS back in 2005 featured the documentary American Jobs and its filmaker Greg Spotts, who talked about the the truth behind outsourcing and the tech industry. It ties in well with the NY Times piece today about that struggling industry in this country, and its emergence in developing countries, along with China and India. First, the setup:

For years the technology sector has been considered the most dynamic … But as the nation struggles to put people back to work, even high-tech companies have been slow to hire. The disappointing hiring trend raises questions about whether the tech industry can help power a recovery and sustain American job growth … Employment in areas like data processing and software publishing has actually fallen. Additionally, computer scientists, systems analysts and computer programmers all had unemployment rates of around 6 percent in the second quarter of this year.

The chief hurdles to more robust technology hiring appear to be increasing automation and the addition of highly skilled labor overseas … not enough workers with the cutting-edge skills coveted by tech firms, and too many people with abilities that can be duplicated offshore at lower cost. Nevertheless, many high-tech companies large and small say they are struggling to find highly skilled engineering talent in the United States.

But as you can see in the video clip below, “cutting-edge skills” is just an excuse:




Rosamaria Carbonell Mann, 49, a software engineer … was terminated in June when her employer closed its branch and sent the work to China. Ms. Mann said that with layoffs from other tech companies in the area, including Hewlett-Packard, the city now has a glut of people like herself: unemployed engineers with multiple degrees.

Economists who follow highly skilled employment say that some of the most prominent companies that laid off workers during the recession … are expanding their work forces abroad. A global finance professor at the Brandeis University International Business School who studies the outsourcing of jobs (said)… you’re competing with people in India or China who will do the work for less.” In addition to lower wages, developing countries offer significant consumer growth.

“There’s been this assumption that there’s a global hierarchy of work, that all the high-end service work, knowledge work, R.&D. work would stay in U.S., and that all the lower-end work would be transferred to emerging markets,” said Hal Salzman, a public policy professor at Rutgers and a senior faculty fellow at Heldrich Center for Workforce Development.

The experience of Ms. Mann and others like her suggests that the technology industry may not be the savior of the American job market and a magic bullet for a moribund economy — even though the Obama administration has called for a revival of math and science training and emphasized the need for American companies to take the lead in fields like clean energy.


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