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Expert airs concerns in outsourcing jobs overseas
By LOUISE CONTINELLI
News Staff Reporter
10/3/2005
www.buffalonews.com/editoria...48691.asp
If you've passed those striking workers in downtown Buffalo recently opposing outsourcing of jobs overseas, and think your job is safe, don't be so sure. It can be gone faster than you can say "pink slip."
"Outsourcing seeps into many jobs," warns Ron Hira, a Western New York outsourcing expert, before his appearance on a National Science Board meeting panel at Massachusetts Institute of Technology. "A wide variety of positions - some high-skilled, some low - are vulnerable to outsourcing: computer programming to insurance claims processing to radiology to legal work."
Hira, who has testified several times before Congress on the implications of outsourcing, cited research that up to 14 million, or more than one in 10 of all jobs in this country, could be at risk, including area jobs. There's a glimmer of hope in that Washington policymakers are "at least talking about this," says the researcher, who now teaches public policy classes at Rochester Institute of Technology. But the downside, he adds, is "the subtext - "it's not really serious.' " He then quotes a CEO of a major offshore outsourcing firm who maintains that any task that can be sent down a wire can be outsourced.
"Think about how few jobs require face-to-face interaction with a customer - and you get an idea about how big an impact this is going to have on the U.S.," Hira says.
Even a college degree is no protection any more, as the outsourcing expert added: "It's a lot cheaper to educate people abroad than it is in this country. More education doesn't make you immune to having your job shipped overseas. The higher the skill level of the job, the larger the incentive is to outsource it. There's a greater wage differential between the U.S. and low-cost countries."
Hira points out that some American colleges now have overseas branches, adding, "China has also been increasing its science and engineering human capital at all levels - especially with a rapid increase in the number of doctorate holders."
For three years, Hira researched the exportation of jobs for his new study, "Outsourcing America," penned with his brother Anil, an international economic policy specialist.
The brothers' concerns are many.
"We're concerned about whether, and what types of, jobs are going to be available for our children, and their children in the future," Ron Hira notes. "We're concerned about our national security and economic competitiveness as a nation if we lose our advantages. We're concerned, finally, about the breakdown of cooperation between workers and companies, that made the U.S. the strongest economy and the most desired destination for our immigrants - including our own family."
There are lack of consequences for eliminating jobs in this nation.
"Unfortunately, many policies are actually accelerating outsourcing," Hira says. "It's not simply a natural economic process. We have a guest-worker policy that enables companies to import cheap foreign labor."
And then the ultimate insult: "They force their American workers to train their foreign replacements, transferring know-how, before laying off the American workers. Foreign workers then take this knowledge back to their countries and perform the work from there. It's simply amazing that we have policies that encourage this process of knowledge extraction. During the presidential election last year, Sen. [John F.] Kerry pointed out perverse incentives in the tax code that actually give a company incentive to expand its foreign, rather than U.S., operations.
"So, we have a tax system that actually encourages foreign job growth and penalizes U.S. jobs. And you know what? The U.S. Congress gave its blessing to this perversion by reauthorizing this part of the tax code in November."
Hira recommends reforming visa policies, rethinking worker training, reasserting and sustaining dominance in technology.
"The first step - acknowledge that a problem exists," he suggests. "There are many powerful people ignoring its profound implications on workers - and the U.S. economy."
e-mail: lcontinelli@buffnews.com
By LOUISE CONTINELLI
News Staff Reporter
10/3/2005
www.buffalonews.com/editoria...48691.asp
If you've passed those striking workers in downtown Buffalo recently opposing outsourcing of jobs overseas, and think your job is safe, don't be so sure. It can be gone faster than you can say "pink slip."
"Outsourcing seeps into many jobs," warns Ron Hira, a Western New York outsourcing expert, before his appearance on a National Science Board meeting panel at Massachusetts Institute of Technology. "A wide variety of positions - some high-skilled, some low - are vulnerable to outsourcing: computer programming to insurance claims processing to radiology to legal work."
Hira, who has testified several times before Congress on the implications of outsourcing, cited research that up to 14 million, or more than one in 10 of all jobs in this country, could be at risk, including area jobs. There's a glimmer of hope in that Washington policymakers are "at least talking about this," says the researcher, who now teaches public policy classes at Rochester Institute of Technology. But the downside, he adds, is "the subtext - "it's not really serious.' " He then quotes a CEO of a major offshore outsourcing firm who maintains that any task that can be sent down a wire can be outsourced.
"Think about how few jobs require face-to-face interaction with a customer - and you get an idea about how big an impact this is going to have on the U.S.," Hira says.
Even a college degree is no protection any more, as the outsourcing expert added: "It's a lot cheaper to educate people abroad than it is in this country. More education doesn't make you immune to having your job shipped overseas. The higher the skill level of the job, the larger the incentive is to outsource it. There's a greater wage differential between the U.S. and low-cost countries."
Hira points out that some American colleges now have overseas branches, adding, "China has also been increasing its science and engineering human capital at all levels - especially with a rapid increase in the number of doctorate holders."
For three years, Hira researched the exportation of jobs for his new study, "Outsourcing America," penned with his brother Anil, an international economic policy specialist.
The brothers' concerns are many.
"We're concerned about whether, and what types of, jobs are going to be available for our children, and their children in the future," Ron Hira notes. "We're concerned about our national security and economic competitiveness as a nation if we lose our advantages. We're concerned, finally, about the breakdown of cooperation between workers and companies, that made the U.S. the strongest economy and the most desired destination for our immigrants - including our own family."
There are lack of consequences for eliminating jobs in this nation.
"Unfortunately, many policies are actually accelerating outsourcing," Hira says. "It's not simply a natural economic process. We have a guest-worker policy that enables companies to import cheap foreign labor."
And then the ultimate insult: "They force their American workers to train their foreign replacements, transferring know-how, before laying off the American workers. Foreign workers then take this knowledge back to their countries and perform the work from there. It's simply amazing that we have policies that encourage this process of knowledge extraction. During the presidential election last year, Sen. [John F.] Kerry pointed out perverse incentives in the tax code that actually give a company incentive to expand its foreign, rather than U.S., operations.
"So, we have a tax system that actually encourages foreign job growth and penalizes U.S. jobs. And you know what? The U.S. Congress gave its blessing to this perversion by reauthorizing this part of the tax code in November."
Hira recommends reforming visa policies, rethinking worker training, reasserting and sustaining dominance in technology.
"The first step - acknowledge that a problem exists," he suggests. "There are many powerful people ignoring its profound implications on workers - and the U.S. economy."
e-mail: lcontinelli@buffnews.com
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