Protectionist bills surface as tech jobs join move overseas
By Aaron Davis and Margaret Steen
Knight Ridder News Service
SAN JOSE, Calif. — When Natasha Humphries went to Bangalore, India, in December 2002 to train Indian contract workers to do quality-assurance testing for her employer, she noticed her own job could be done by workers there as well.
"I'm fairly intuitive — I saw the writing on the wall," said the 30-year-old Santa Clara, Calif., resident.
Humphries was indeed laid off in August, but Palm Inc. — now palmOne — says her layoff was not directly related to its outsourcing in India. Humphries disagrees.
"I am not angry with companies for trying to conserve costs, but at the same time we do have to acknowledge that it's going to create more problems for us domestically if we don't create more jobs for U.S. citizens," said Humphries, who has become an activist.
With the domestic economy finally gathering steam while job growth lags, offshoring of U.S. tech and service jobs has stirred the globalization debate like never before. On one side are workers in Silicon Valley and elsewhere who feel anger, fear and profound uncertainty as white-collar tech jobs move to lower-cost countries such as India, China and the Philippines.
On the other side are business executives and economists who argue that the trend is unstoppable and ultimately healthy, spurring the United States to shed certain jobs and create more sophisticated ones to stay atop the ladder of innovation. The shift of tech work overseas is just the latest chapter in decades of globalization, they say.
"I think overall, long term, the U.S. economy can take it. But there's going to be a huge amount of restructuring pain," said Rafiq Dossani, senior research scholar at Stanford University and co-author of a major offshoring study.
Such forecasts are of little comfort to the tens of thousands of tech workers who have seen their employers create jobs in other countries even as they lay off workers here. Offshoring has sparked a small backlash from New York to California, and spurred protectionist legislation in eight states. The issue promises to become a hot election-year topic if job growth — shown rebounding recently — doesn't come back quickly enough.
"What Humphries represents — having had to train her own successor — that's like digging your own grave," said Rep. Don Manzullo, R-Ill., chairman of the House Small Business Committee, who proposed a new wave of "Buy American" legislation to limit federal agencies from outsourcing government jobs overseas.
In one protest this fall, about 40 offshoring opponents took to a street corner in Concord, Calif. One programmer who asked for anonymity said she had watched her employer, Kaiser Permanente, shift jobs to a contractor in India.
"They say they're freeing us up to do more exciting jobs and sending more mundane work to Indian companies," she said. "Nobody believes them."
Kaiser Vice President Mary Henderson acknowledged the company had transferred about 200 information-technology jobs to Indian companies, but said no Kaiser employees were laid off because of the shift.
What's making the loss of jobs scarier for tech workers is the speed with which jobs can be moved overseas, using today's communications technology. "Thousands of jobs can literally be moved to India overnight. Last week, three of my friends' jobs moved there," said Arvinder Loomba, professor of operations and international supply-chain management at San Jose State University.
Some lawmakers are feeling a need to respond. In New Jersey, a bill to outlaw offshoring of state jobs passed the state Senate unanimously after legislators discovered welfare recipients were calling Mumbai, India, with questions about their food-stamp payments.
The bill was defeated after technology trade groups lobbied against it. But the state did move about 10 welfare department jobs back to New Jersey — at a cost of more than $1 million per job.
Companies say they have no choice but to hire the lowest-cost labor available. "In business, there are only two levers: the cost side and the revenue side," said Ajit Gupta, chief executive and co-founder of Santa Clara, Calif.-based Speedera Networks. "Since the economy is not improving, you redirect your cost. There's no other way."
