A grim outlook

Opinion: Some say it's a fairy tale to think that companies can recycle the money they've saved from outsourcing to keep jobs in the United States; the reality is less black-and-white.

Whether offshoring is good, bad or indifferent depends on the observer, Hira said.

What really matters, he argued, "is to look at the U.S. labor market."

Here, the reality for tech workers appears grim, according to Hira's assessment.

In Capitol Hill testimony earlier this year, Hira said that "U.S. electrical and electronics engineers and computer scientists have experienced higher levels of unemployment over the past four years compared to any similar time-span since IEEE-USA was established in 1973."

He cited lingering effects of the dot-com bust as part of the problem. "However, it is apparent that offshoring is a significant and growing cause of low demand for U.S. high technology workers," he said.

Hira said the labor market has improved somewhat this year, "but there is no robust hiring. So there's really no reason for students to go into these fields, and there is no long-term … job security in those fields."

According to Techsunite.org&#151a labor site for high-tech workers&#151354,974 tech jobs were offshored between Jan. 1, 2000, and March 31, 2005.

The Web site, operated by the WashTech/CWA labor union, reports a total job loss of 172,109 during that period.

The offshoring trend shows no signs of abating. Forrester Research projects that 3.4 million U.S. services jobs will move offshore by 2015.

When workers are displaced, the typically prescribed antidote is retraining.

Hira, however, questioned this tactic. "What do you retrain for?" he asked. "No one has an answer for that."

The question becomes particularly difficult to answer when employees with master's degrees and Ph.D.s find their jobs have been eliminated, Hira said.

Meanwhile, a government program that could potentially help displaced technology workers doesn't apply to the software industry.

The Trade Adjustment Assistance program was launched in the 1970s to help workers whose jobs disappeared in light of increased imports.

A 2002 reform of the act introduced additional features. For example, some workers 50 years and older who lack readily transferable skills but find new jobs may "choose to receive 50 percent of the difference between their new salary and old salary for two years, up to a maximum of $10,000," according to the Department of Labor.

Trade Adjustment Assistance only applies to goods manufacturing, however, Hira said.

"Software is not considered manufacturing; it's considered a service."

He said a proposal last year in Congress to extend Trade Adjustment Assistance to software was unsuccessful.

Offshoring may indeed be the answer for many IT services companies. But displaced tech workers are left with plenty of questions.

This article was originally published on 04-01-2005
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