White collar job exodus to increase, panelists warn
Press Associates Union News Service
'Short-sighted corporate policy focused on saving a few bucks in the short run will have an enormous deleterious impact on the entire U.S. economy.'
-- Paul Almieda, president, Department
of Professional Employees, AFL-CIO
WASHINGTON -- Information technology workers in Connecticut saw their work sent to Bermuda.
Massachusetts General Hospital transmits CAT scans of patients by computer for examination by radiologists--in Bombay.
Workers in India entered New Jersey's welfare recipients' paperwork into computers, until an uproar brought those jobs to Newark, employing nine people. But New York City's parking tickets are sorted by computer techs in Ghana.
And General Electric engineers, represented by IFPTE Local 147 in Schenectady, N.Y., saw some of their jobs transferred to Mexico--and that's despite the fact that they're unionized.
These and other examples point up a growing trend: An exodus of white collar jobs overseas, just as factory jobs migrated to developing nations in previous decades, witnesses warned a House panel on June 18.
And the transfer abroad of white-collar jobs leaves those jobless workers in the U.S., like their blue-collar colleagues, with few prospects here at home. "How do you retrain a chemical engineer?" one panelist asked the Small Business Committee.
White-collar job migration, as companies shift to highly skilled but cheaper labor abroad, is growing, witnesses said. And it affects not just those workers, but everyone.
"If these jobs leave, who will be left with the money to buy our products?" asked AFL-CIO Department of Professional Employees President Paul Almeida--a question the panel chair said is key.
Almeida said, and other witnesses agreed, that studies show that in the next decade, 3.3 million white-collar jobs and $136 billion in wages could head offshore. By contrast, the nation's factories lost 2.5 million jobs, 15 percent of their workforce, in just the last three years.
The white-collar exodus drew lawmakers' attention when witnesses pointed to policies that encourage the transfers.
Almeida said they include U.S. tax and trade policy. Committee chairman Don Manzullo (R-Ill.), whose district includes the old Rockford arsenal, said the Defense Department aids the transfers.
The Navy decided to service ships in Singapore, costing engineering jobs in the U.S. territory of Guam. That prompted Manzullo to insert a provision in the defense money bill to halt the practice, over the Pentagon's objections.
"Corporations are shifting jobs in call centers, accounting, engineering, and computer and financial services, among others, offshore," said Almeida. "Some state and local governments have even begun to outsource administrative jobs, which is an outrage-ous use of taxpayers' dollars," citing the New Jersey case.
"Short-sighted corporate policy focused on saving a few bucks in the short run will have an enormous deleterious impact on the entire U.S. economy if not checked soon," he warned.
"Now engineers with PhDs and recent college graduates alike are hearing that they are too expensive, that their jobs can be done more cheaply abroad," he added--just like factory workers.
Other than Almeida, witnesses had few solutions. Business witnesses favored stronger visa controls, but no more. The Bush administration advocated training and life-long re-education of workers. But other panelists pointed out that such training is useless if the white-collar jobs have migrated overseas.
Almeida urged "targeted tax relief to companies that support their communities with decent jobs," not just tax breaks "negotiated on the assumption they would support local job creation."
He also backed disclosure by call center workers of their names, employers and call center locations. Delta Airlines' call center, one other witness said, is now in the Philippines.
"Customers have a right to know who is answering their call and where that person is located, just as they have a right to know the ingredients in a box of cereal," Almeida said.
And the migration of white-collar jobs overseas also affects union organizing. That impact, along with the impact on white-collar workers whom it is targeting, led the Communications Workers to take the lead with DPE on the job exodus issue.
For companies, "it's about profit," Almeida adds, citing a DeLoitte Research study predicting a shift of 2 million financial services jobs and $356 billion in operations by 2008, to cut costs by 45 percent. "There's no cost-savings to Americans" from that shift.
"But the bottom line for us is there's nobody to organize if there's no jobs, no anything," Almeida said.