Job Destruction Newsletter

By Rob Sanchez

Submitted by Bob Johnson, P.E., S.E

Engineers Silence will NOT protect them !
The time has come
Step forward and be heard
"The world is run by those that show up" (Richard Weingardt, S.E)
So when are engineers going to show up ?


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JOB DESTRUCTION NEWSLETTER
by Rob Sanchez
April 18, 2004 - No. 987
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In summary, here is a few ways you can expect to lose your job:

1 - Your job will be outsourced to a foreign country.

Example: Michael Wolfson earned a good living as a computer programmer
but was told last year that his position in the brokerage's Brooklyn
office was being outsourced to India.


2 - You will be forced to train your replacement who will come here on
H-1B/L-1 visas.

Example: Bear Stearns brought in groups of people (H-1B/L-1 visas) from
Tata Consultancy Services, based in Bombay, and many programmers had to
train the supervisors from India who were flown over to learn the
computer systems - and then replace them.


3 - You will be replaced by a worker on a visa H-1B or L-1 but you will
be spared the indignity of training them.

Example: Chester, 40, lost her $200,000-a-year position in August 2001
to a lower-paid colleague from India working here on a temporary visa.


4 - You will be downsized and you won't know where your job went.

Example: Six weeks ago, Paul Schwartz was told his computer programming
job at the giant distributor of electronic components and computer
products had been eliminated. He suspects the main frame projects he
was working on have been transferred to India.

- - - - - - - - - - - -

As we all know, President Bush thinks outsourcing is good for America,
so we can't count on him if we want to have jobs that pay a living
salary. Unfortunately Kerry isn't much better except that he
acknowledges that outsourcing could be disruptive to Bush's campaign.
Kerry's voting record in the Senate speaks for itself - he supports
increasing H-1B visas and he voted for NAFTA and other Free Trade
Agreements. Kerry proposes to make minor changes in the tax code but
that won't be enough to stem the tide of jobs moving offshore. If Kerry
was such a friend of the American worker then I think it's fair to ask
why he hasn't done anything to help us in the Senate.

While the macroeconomics evolve, outsourcing is escalating as
a hot-button issue in the presidential campaign with President
George W. Bush and Democratic candidate John Kerry sparring over
the long-term impact on the U.S. standard of living. Kerry on
Friday proposed tax changes to keep companies from moving jobs
overseas.


In a nutshell, the reason Kerry's mild reforms of the tax code won't
stop offshoring is very simple - cheap labor. The cost savings
companies are enjoying by exploiting cheap labor is so great they will
just write off the tax loss as a business expense. Keep in mind that
Kerry has totally avoided the topic of H-1B and L-1, so the workers in
scenarios 2 and 3 will continue to lose their jobs to nonimmigrants
under a Kerry presidency.

Still, there's no denying that cost savings are luring companies
to hire employees abroad. The average software engineer in India
made 267,000 rupees a year in salary and benefits in 2003, or
about $5,900, according to the National Association of Software
and Service Companies (NASSCOM), an Indian trade group. A senior
project manager earned 1.8 million rupees, or $40,000 per year.

That's just a fraction of the $78,790 the average U.S. software
engineer makes, according to the Bureau of Labor Statistics.


There is one consolation that can be offered to you as your job is
offshored - it was a lousy grunt job anyway, so quit fretting about the
past and go find one of those wonderful high-end jobs manufacturing
jobs at McDonald's, or an exciting service job at Wal-Mart. Look at
your job loss as an opportunity to get away from tedious grunt work
like computer programming and engineering. By using the LCA Database
you will see that Magma also likes to hire H-1Bs to do the grunt work
in the U.S. and their salaries are very low.

"We only offshore grunt work in IT to India ... It's harder to
fill these jobs than people think," said Salvatore A. Magnone,
a partner in Marincorp, which has offices in Manhattan and New
Jersey. "We believe globalization is a positive development.
Only five to 10 percent of the people who lose their jobs to
outsourcing aren't immediately rehired by other companies."


Hillary Clinton is masquerading as a friend of American workers even
though she is an ardent supporter of H-1B and outsourcing to India.
Remember how she invited TATA into Buffalo to make it easier for them
to replace New Yorkers with H-1Bs? Snow is a rabid supporter of
offshoring and deserves criticism, but not by hypocrites such as
Clinton.

Separately, Sen. Hillary Clinton (D-N.Y.) blasted Treasury
Secretary John Snow for his praise of outsourcing in a
newspaper interview Monday. He said the movement of work
overseas was one aspect of international trade that
ultimately will benefit the United States.


Hillary Clinton has no idea what reality American workers are facing.
She is fortunate that the voters in upstate New York are clueless about
the reality of her sellout to Tata, because if they ever find out she
will be out of a job.


Sen. Hillary Rodham Clinton, responding to remarks by a top
U.S. official that outsourcing can be good for the economy,
said the Bush administration isn't facing reality _ at least
reality in upstate New York.

"I don't know what reality the Bush administration is living
in," said Clinton. "But it's certainly not the reality I
represent, from one end of New York to the other."

Three recent articles from Newsday are copied below. Enjoy!

------------------------------------

http://www.newsday.com/business/ny-bz-jobs0328,0,4730158,print.story?col
l=ny-top-headlines

Outsourcing Outcry: How your job may go abroad

BY JAMES T. MADORE AND PRADNYA JOSHI
Staff Writer

The Bank of New York plans to send 250 technology jobs from Manhattan
and elsewhere in the country to India.

The accounting firm Marcum &Kliegman LLP, with offices in Woodbury and
Manhattan, is experimenting with having income tax returns prepared
overseas.

J.P. Morgan Chase &Co. began firing about 1,000 employees last fall at
its credit-card operations in Hicksville, sending some of the work to
Vancouver. It also has created dozens of junior stock analyst jobs in
Bombay.

The Reuters news service is hiring six journalists to write about U.S.
companies from Bangalore, India, while it shifts computer jobs from
Hauppauge to Bangkok.

>From finance to technology, accounting to media, dozens of New
York-area businesses are sending work overseas, joining the
controversial trend called outsourcing. And local workers, who got used
to seeing manufacturing jobs depart for lower-wage countries such as
China and the Philippines, now are alarmed to see the same thing happen
to higher-paying, white-collar positions. While there are no hard local
numbers, about 300,000 jobs nationwide have been lost since 2000,
according to Forrester Research Inc.

For 20 years, Michael Wolfson earned a good living as a computer
programmer, most recently at financial powerhouse Bear, Stearns &Co.
Inc. Now, as he hunts for a job, he's refurbishing computers in the
basement of his Baldwin home and selling them on eBay.

Wolfson, 43, was told last year that his position in the brokerage's
Brooklyn office was being outsourced to India.

Forced to train workers

Bear Stearns then brought in groups of people from Tata Consultancy
Services, based in Bombay, and many programmers had to train the
supervisors from India who were flown over to learn the computer
systems.

"People left there with very bad tastes in their mouth," Wolfson said.
Laid off in December, he is thinking of becoming a public school
teacher.

After years of being counseled to seek jobs that provided higher pay
for higher skills, many workers fear those opportunities are
evaporating for good.

The list of vulnerable occupations has grown as the pace of outsourcing
has accelerated and now affects a broad spectrum including radiology,
paralegal, journalism and government services. For example, the
subcontractor hired by New York State to run the food stamp program is
having questions from the poor answered by telephone operators in
Mexico and India.

Some experts see benefits being derived from outsourcing. Exporting
routinized jobs such as programming can lower costs for companies and
give them the cash to invest in higher-skilled, more innovative jobs in
the United States.

While the macroeconomics evolve, outsourcing is escalating as a
hot-button issue in the presidential campaign with President George W.
Bush and Democratic candidate John Kerry sparring over the long-term
impact on the U.S. standard of living. Kerry on Friday proposed tax
changes to keep companies from moving jobs overseas.

In the New York area, outsourcing opponents argue that if the exporting
of jobs doesn't stop, the economy's mainstay of financial services,
accounting, computer software and business services could follow the
once bustling manufacturing sector into near extinction.

Job lost to worker on a visa

Toni Chester, a computer programmer in Manhattan who blames outsourcing
for the dearth of permanent jobs with benefits, said, "I cannot afford
to live here on what they pay programmers in India and that's where all
the jobs in my profession are going."

Chester, 40, lost her $200,000-a-year position in August 2001 to a
lower-paid colleague from India working here on a temporary visa. The
single mother of a teenage son, Chester spent more than a year largely
unemployed until landing a contract job.

"For tech people like myself, when you take away our jobs it's an ego
deflator; we're really lost," she said. "I love spending 14 to 15 hours
a day writing code." She added, "I cannot find a job. What's wrong with
me? Why won't American companies hire Americans?"

Similar comments are being heard by employment counselors and staffing
agencies throughout the region.

"Everybody is talking about it when you go to an IT [information
technology] event, which wasn't the case last year," said Barbara
Viola, president of Viotech Solutions Inc., a staffing firm based in
Farmingdale. "People are very concerned. This is in our backyard and
affecting our companies," she said.

Some of the companies include:

GreenPoint Financial Corp. The Manhattan-based bank, which recently was
acquired by North Fork Bank, exported some of its mortgage and customer
service operations in 2002 to Bangalore. The move produced
"significant" savings and improved service, executives said, but about
150 employees in Lake Success and Columbus, Ga., were thrown out of
work.

Bank of New York. The Manhattan-based bank hopes to reduce expenses by
shifting about 250 computer-software jobs at several U.S. offices,
including some in the metro area, to Bombay, where it already employs
670. "It makes sense to build up our operation there," said spokesman
R. Jeep Bryant.

The New York Times Co. The publisher has turned to outsourcing for
computer software on selected projects. Spokeswoman Catherine Mathis
said, "We have, from time to time, worked with outside systems
contractors that have operations in Canada, India and Pakistan. ... We
have not downsized our work force or limited the growth of it in favor
of offshore talent."

Major accounting firms also are taking steps toward outsourcing.

"Most firms aren't disclosing to their clients that they are
outsourcing," said Alan E. Weiner, senior tax partner at Holtz
Rubenstein &Co. LLP, with offices in Melville and Manhattan.

Worry about identity theft

Weiner began exploring overseas preparation of income tax returns after
he was approached by three outsourcing firms over two days in November
2002. But he ultimately nixed the idea because he feared clients'
personal financial information would fall into the hands of criminals.
"We tested the system and it worked, but I just couldn't get past the
identity theft concerns I have," Weiner said.

Marcum &Kliegman accountants are currently testing the waters in
India. The results have been mixed so far.

Managing Partner Jeffrey M. Weiner -- no relation to Holtz Rubenstein's
Weiner -- said he was frustrated by the 10 1/2-hour time difference,
which hampers communications. He also doubted whether tax returns could
be completed overseas.

"Outsourcing seems to work well on a data entry and key punch level but
I don't know if it's ideal for a complicated tax return," Weiner said.

Still, there's no denying that cost savings are luring companies to
hire employees abroad. The average software engineer in India made
267,000 rupees a year in salary and benefits in 2003, or about $5,900,
according to the National Association of Software and Service Companies
(NASSCOM), an Indian trade group. A senior project manager earned 1.8
million rupees, or $40,000 per year.

That's just a fraction of the $78,790 the average U.S. software
engineer makes, according to the Bureau of Labor Statistics.

The Indian tech worker salaries may be low by U.S. standards but they
are significantly higher than the wages of the average worker as well
as salaries for most other professional jobs. The average Indian makes
1,727 rupees a month, or $460 a year, according to the India Watch
Foundation. But the wages, benefits and perks for an average employee
of the automaker Maruti Udyog Ltd., for example, totals 24,000 rupees a
month, or about $6,400 a year, India Watch reported.

American layoffs, particularly those affecting technology, office and
professional workers, set against the backdrop of anemic job creation
has fueled a growing debate over outsourcing. Cambridge-based Forrester
Research predicted the number of U.S. jobs bound for low-wage countries
would approach 600,000 by next year and 3.3 million in 2015.

However, little hard data exist with federal and state agencies
admitting they don't know how many jobs are leaving the country or
where they are going.

In an attempt to measure the potential impact, Ashok Deo Bardhan and
Cynthia A. Kroll of the University of California, Berkeley, devised
rough estimates for nine cities using occupational employment
statistics.

For New York City, which was defined as the five boroughs plus
Westchester, Rockland and Putnam counties, the researchers found
512,759 jobs or 12.64 percent of employment was in white-collar and
service occupations "at-risk" to outsourcing.

Nearly 60 percent of the positions involve data entry, computer
operations, administrative support and other office work, the
researchers said. Many required skills that could be distilled down
into a routine.

Such studies were described as alarmist and unrealistic by some
corporate executives and industry trade groups.

They argued outsourcing represents a tiny fraction of total U.S.
employment. For example, there are an estimated 813,500 software and
technology workers in India today, according to NASSCOM. That's less
than 8 percent of the 10.3 million technology professionals employed in
the United States.

The Bureau of Economic Analysis released a report this month that found
the United States had a trade surplus of $53.64 billion in 2003 when it
came to white-collar service work.

Other benefits are listed

Executives at some area companies said their overseas projects had less
to do with cutting costs than with improving security, workers' skills
and turnaround time.

Three years ago, Verizon Communications Inc. opened its only offshore
data center in India to lessen its dependence on outside consultants,
said spokesman John Bonomo. Verizon has about 500 employees in southern
India, out of the company's technology work force of 7,100.

"By having that [Indian center], we have a real, 24-hour process for on
time-sensitive jobs," Bonomo said.

Other businesses such as Computer Associates International Inc. say
they have invested in foreign locations because that's where their
customers are.

The software giant derived 42 percent of its revenue last year outside
this country and thus maintains 50 development centers around the
globe. However, the U.S. head count still represents 60 percent of the
4,700-person research and development staff.

At CA, chief technology officer Yogesh Gupta said each project is
parceled out among development teams in various countries based on
their respective expertise.

Other companies are using offshore employees for less-critical needs.

J.P. Morgan Chase's investment banking division last year announced the
creation of 50 junior analyst jobs in India to support its research
departments here and in Britain. Spokesman Brian Marchiony said the new
positions, which represent about 5 percent of the total employment in
equity research, were established to boost productivity.

Such tasks often are considered "grunt work" by Americans and Indians,
alike, said Alok Aggarwal, co-founder of Evalueserve Inc., which
provides outsourcing services to stock brokerages, banks and consulting
firms. It currently employs more than 250 people in India. "Even there,
it [the work] won't be the most attractive job," he said.

Still, businesses looking to outsource such as Reuters Group don't
anticipate any problems in luring top talent. As part of an experiment,
the financial news and information company expects to hire a half dozen
journalists in India to write brief reports about earnings and other
developments at 3,000 U.S. public companies -- a service it doesn't now
provide customers.

Separately, Reuters has moved 150 jobs out of 500 at an operations
center in Hauppauge to Manhattan, London and elsewhere; 40 or so went
to Bangkok. It also expects to shed some of the 100 positions at a Lake
Success data center and send them to India as part of a multiyear
cost-cutting program.

"We already had decided to move the majority of our data operations to
Bangalore and we thought there was some synergy to putting several
reporters there," said spokesman Kyle Arteaga. "These are supplemental
journalists, they don't displace any journalism jobs that we have," he
said.

The outsourcing move, believed to be the first among news
organizations, has alarmed the Newspaper Guild/Communications Workers
of America, which represents 500 Reuters employees.

Peter Szekely, a reporter and union chairman, said, "The jobs logically
ought to be in New York because that's where we do the bulk of our
reporting on U.S. companies. How far is this outsourcing going to go?"

Some current and former employees of Arrow Electronics Inc. in Melville
are asking similar questions.

Six weeks ago, Paul Schwartz was told his computer programming job at
the giant distributor of electronic components and computer products
had been eliminated. He suspects the main frame projects he was working
on have been transferred to India.

Schwartz, 59, began searching for a new job only hours after being
terminated on Feb. 12, along with about 50 other workers. He wants to
find something, preferably in main-frame programming. At Arrow for
nearly nine years, he had earned $80,000 a year. "I did a lot of work
and received a lot of commendations ... and the bottom line is I'm out
on the street," he said.

Outsourcer discovers new business opportunity

Electronic Hardware Corp., a seller of instrument knobs, has parlayed
its experience of moving production operations from Farmingdale to
China during the 1990s into a new consulting business, International
Smart Sourcing Inc.

Outsourcing enabled the company to return to profitability last year,
and executives predicted that revenues from consulting contracts would
top $10 million by 2006, surpassing knob sales. "You have a chance to
save the business and lose the manufacturing or lose everything," said
president Dave Hale. "We chose to save our business and then recognized
what we had learned was something of value that was a business unto
itself."

International Smart Sourcing, also based in Farmingdale, has helped
about 40 medium-sized manufacturers in the past three years to move
their production operations to China. "I don't think we will replace
those 50 manufacturing jobs that went out the door," Hale said,
standing in the once-busy factory on Route 110. "But we will replace 25
with jobs that pay double the wages of the ones that were lost."

Such comments infuriate workers such as Chester, the displaced computer
programmer in Manhattan. As interim leader of the New York City chapter
of the Rescue American Jobs Foundation, she attended the first
demonstration of her life in January. "I'm worried about what is
happening to workers like myself and will it happen to my son's
generation. I want him to have options like we did," Chester said. She
also admitted that she might move overseas once her 16-year-old son is
in college -- because that's where jobs in her industry are growing.

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http://www.newsday.com/business/ny-biz-out0331,0,2754889,print.story?col
l=ny-business-headlines

Study: Outsourcing tech creates U.S. jobs

By James T. Madore
Staff Writer

March 31, 2004

Local advocates and opponents of sending work from the United States to
foreign countries clashed yesterday as a new study predicted the
controversial practice of outsourcing would create hundreds of
technology jobs in New York State.

An executive of Marincorp Solutions, which helps companies shift work
to India, Ukraine and elsewhere, said during a panel discussion in
Jericho that he is looking overseas to fill "junior level IT
[information technology] jobs" because of the dearth of domestic
applicants.

"We only offshore grunt work in IT to India ... It's harder to fill
these jobs than people think," said Salvatore A. Magnone, a partner in
Marincorp, which has offices in Manhattan and New Jersey. "We believe
globalization is a positive development. Only five to 10 percent of the
people who lose their jobs to outsourcing aren't immediately rehired by
other companies."

Such comments drew fire from employment counselors and people laid off
from businesses such as J.P. Morgan Chase &Co. Inc. and Arrow
Electronics Inc. that have moved some jobs offshore.

"There are plenty of people here to do these jobs," said Barbara Viola,
president of Viotech Solutions Inc., a staffing firm based in
Farmingdale. "You will get hundreds and hundreds of people who will
apply for the jobs" sent to India.

A woman from Long Island who lost her tech job last year and went back
to school to become a paralegal denounced outsourcing. "I don't know
what to do. I cannot find a job because they tell me I'm
overqualified," said Jill, who declined to give her full name. She had
worked in the computer field for more than 20 years, earning $98,000 in
her last job for a bank in Manhattan.

The exchange occurred during a panel discussion organized by the Long
Island chapter of the Association of Information Technology
Professionals.

Another panelist, Chris Wagner of the software developer NeuLion Corp.
in Plainview, pointed to a new study that found more than 90,000
computer jobs were created last year in the United States because of
outsourcing and 200,000 more are expected by 2008.

For New York State, the study found that 5,058 software jobs were
created domestically last year. The biggest gains were in education and
health services, while the biggest losses were in publishing. By 2008,
the number of positions created here because of offshore activity will
grow to 18,239.

"Far from being an economic tsunami that washes away domestic IT
employment as some believe, global sourcing helps companies become more
productive and competitive," said Harris N. Miller, president of the
Information Technology Association of America, which commissioned the
study.

Separately, Sen. Hillary Clinton (D-N.Y.) blasted Treasury Secretary
John Snow for his praise of outsourcing in a newspaper interview
Monday. He said the movement of work overseas was one aspect of
international trade that ultimately will benefit the United States.

"I don't know what reality the Bush administration is living in,"
Clinton said. "But it's certainly not the reality I represent, from one
end of New York to the other."


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http://www.newsday.com/news/local/wire/ny-bc-ny--snow-outsourcing-0330ma
r30,0,2948211.story?coll=ny-ap-regional-wire

Clinton rips Treasury Secretary over outsourcing comments

By DEVLIN BARRETT
Associated Press Writer

March 30, 2004, 5:37 PM EST


WASHINGTON -- Sen. Hillary Rodham Clinton, responding to remarks by a
top U.S. official that outsourcing can be good for the economy, said
the Bush administration isn't facing reality _ at least reality in
upstate New York.

Clinton, D-N.Y., reacted angrily Tuesday to Treasury Secretary John
Snow's comments that outsourcing is one aspect of trade, and is
ultimately good for the economy.

"I don't know what reality the Bush administration is living in," said
Clinton. "But it's certainly not the reality I represent, from one end
of New York to the other."

Snow made the comments Monday in an interview with The Cincinnati
Enquirer.

Asked in an interview whether he thought outsourcing of jobs to other
countries made the U.S. economy strong, Snow replied, "It's one aspect
of trade and there can't be any doubt about the fact that trade makes
... America strong."

He added: "I think it is defeatist to think we would have to close our
borders. ... What (we) need to do is not build walls, but to tear walls
down."

Snow's comments came about a month after a top White House economic
adviser, N. Gregory Mankiw, raised a public controversy by suggesting
shipping jobs abroad could be good for the economy. Mankiw later
apologized after being accused of being insensitive about millions of
manufacturing jobs lost over the past three years.

Clinton charged Snow's remarks indicate the administration still
doesn't grasp the economic pain being felt in many parts of the
country, including New York.

"I don't understand why the administration persists in making these
statements," she said. "It's like rubbing salt in the wound _ they keep
having these high-level White House cabinet and secretary officials
talking about how outsourcing is good for America. It isn't good for
America."

In recent weeks, Clinton has escalated her criticism of Bush's trade
policies, as Democrats hoping to defeat Bush's re-election effort seek
to discredit the administration's economic record.

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