Overseas Outsourcing: Anger Rising
By Christopher Kenton
When I set out to explain in my last column why I outsourced a programming job to Argentina, I was naive in thinking I could justify my actions on economic grounds without being challenged -- as naive as I was in explaining the process of small-scale outsourcing in an environment where many technology workers are unemployed (see BW Online, 4/25/03, "Grasping, Greedy, Unpatriotic? Not Me"). Once again, I was flooded by another tidal wave of e-mail, some of it intelligent and provocative, most of it angry. But if any writers thought I would turn on my heels and shrink from the issue, they were wrong. In fact, I'm going to turn up the heat.
First, let me say that I got a much-needed lesson on some important topics. A number of unemployed programmers and engineers educated me about the abuses of H1B and L1 visas. A group of lay economists lectured that "free market" is a term of propaganda in an economic system layered with controls used to manipulate the competitive environment. A succession of writers gave me a detailed history lesson about the exportation of manufacturing jobs, and how the trend might move up the chain into knowledge work. I appreciate every one of those e-mails from people who took the time to engage me with their experiences and perspectives.
However, there was an interesting trend in the overall discussion. While a few readers offered honest suggestions for solving what they saw as a fundamental problem with American trade policy, the majority wanted to burn someone at the stake for our flagging economy. Many of the angriest e-mails blamed foreign workers, whom the writers would apparently like deported en masse and fenced off at the borders. Others blamed corporations for greedily selling out American workers to shave costs and meet short-term financial targets. Still others accused the government of a dark conspiracy against workers on behalf of the politicians' corporate masters.
So what's wrong with these arguments? Well, let's start with the simple hypocrisy. If you want to complain about corporations, I want to see your stock portfolio and mutual funds. If you want to complain about immigration, I want to see your family tree. If you want to complain about the government, I want to know what you've done as an activist. And for tech workers in particular, if you're going to complain about being rendered obsolete by your employers, I'd like to know what you said to all the American workers who complained about losing their jobs to automation.
The truth is, while I'm willing to honestly explore the ramifications of overseas outsourcing, the vast majority of complaints I've heard ring with the hollow sound of disappointment -- disappointment that the economic party is over, and dismay that we must now wallow in the mess we've all made. When times were good, everyone was too flush with cash and optimism to ask tough questions. When times are bad, suddenly everyone's an armchair expert on economic policy.
Well, now it's my turn to ask a few tough questions: Where were you when corporations were raking in profits by building the very infrastructure that enables overseas outsourcing? Were you counting your options and capital gains? How many of those who wrote to complain continue to work for the very same companies you blame for undermining the American technical industry? Just paying the bills, right? And how many of you who complain about foreign labor don't think twice about driving to Walmart to save a few dollars on products made with cheap overseas labor? One writer stubbornly insisted that it was unpatriotic of me to outsource a job overseas, yet insisted that his own habit of shopping for the lowest prices was just plain smart.The e-mails that made me stop and think were the poignant accounts of workers who had trained during the boom for a promising career in technology -- often at great personal expense -- only to have the carpet pulled out from under them as the economy tanked. Believe me, I understand what it means to lie awake staring at the ceiling and wonder where I'll find the next mortgage payment. But is outsourcing really the problem, or is it just an easy target in a bad economy?
A WORLD OF HURT.
I have a good friend who is an IT director at an airline. Although he still has a job, he points to the thousands of pilots who have trained and worked as long as 10 years for the promise of sitting in the captain's seat, only to find themselves out on the street as the airline industry crumbles. They don't have such an easy target to blame as overseas outsourcing, nor do most of the other unemployed workers in America. In fact, according to the Bureau of Labor Statistics, the general rate of unemployment last year, 6.7%, significantly outstripped the rate of unemployment in computer science, which was only 5.3%. What disturbs me isn't the anger that people express over losing their jobs, or even the petty duplicity of lashing out at the easy targets. I understand those responses and sympathize, having lost 95% of my own business in the wake of September 11. What disturbs me is the deeper hypocrisy among those who argue passionately for solutions in ways that mimic the problems they decry.
For example, most writers who complained about corporations cited the cynical slashing of American jobs in order to prop up short-term stock prices on Wall Street. As just one more charge against greedy corporations, that point is hard to argue. But it seems to me an all-too-convenient catharsis to shake our fists at Enron and Worldcom, while we continue gorging ourselves on an orgy of products and petty entertainments, and doing so with no regard for the consequences of our short-term self-gratification -- until, of course, we have to pay the bill. Our culture is a mirror image of the greed at the top, and we worship it too much to ever examine ourselves and our complicity in the system. The main difference I see between us and the CEOs we've come to hate is one of scale and opportunity.
Y2K'S FALSE ALARM.
Another example. The solution readers most commonly proposed to remedy the outsourcing problem is a trade barrier on overseas labor. Why? Because a high tariff on overseas labor would remove the incentive for U.S. companies to send jobs to cheap foreign markets. Some even say such a barrier would be in the entire world's best interests, since foreign markets don't adhere to our standards of employment and environmental regulation. On the short-term surface, that sounds reasonable. But I have to ask, how will propping up domestic costs improve the working environment overseas, or help Americans compete for international projects? And what is the underlying rationale for protecting a cost of labor pegged in large part to our sky-high standard of living? Is it a fundamental tenet of American patriotism that we have the right to consume the vast majority of the world's resources? And if it is, why shouldn't it also be the right of greedy executives to enjoy the same massive advantage over their workers in terms of standard of living that we as a nation enjoy over the rest of the world?
As readers tore into me for outsourcing a job, they not only blamed people like me for causing the current economic crisis, they predict that, as American workers lose their paychecks to foreign workers, consumer confidence will collapse and destroy the American economy for good. Look, they argued, it's already happened in manufacturing.
Not to try and score any easy points, but I have to say that whenever I hear such doomsday scenarios, I can't help thinking about Y2K. The truth is we don't have a good track record at predicting the path of our economy, even when we have what looks like incontrovertible evidence. But doomsday predictions are a favored technique for making political points and influencing policy -- in fact, it's just what those greedy corporations did in setting up the case for the H1B visas.
CHICKEN LITTLE WAS WRONG.
Now before you haul off to write me an angry e-mail, let me state where I stand. H1B and L1 visas need to be reformed to require accountability from corporations that claim a need for foreign workers. But trade barriers for outsourcing overseas seem to me to be problematic -- I think we're trying to protect something that is simply unsustainable. In the throes of an economic collapse that may seem like a bitter pill to swallow, but if you're going to charge corporations with the crime of short-term thinking, you need to look at the long-term impact of artificially sustaining an elevated cost of living. Indian firms have already started citing an increase in wage levels that may threaten their competitive edge, so I'm not going to take doomsday scenarios of terminal job flight as an article of faith.
For my own part, I will continue to explore the opportunities and weigh the ramifications of offshore development. However, I will also continue to provide contract jobs to a top-notch team of local software developers, who all make high wages on projects I bring to them. I won't do that because I'm patriotic, but because, as a team, we provide unique capabilities my clients continue to value. As best as I can tell, that's how business is done.
If you want to flame me this week, let's at least take the discussion another step. If you think overseas outsourcing is evil, tell me precisely what you recommend as a solution, and how you think that solution will play out in the long run. I'm particularly interested in hearing what role you think American business plays in the world economy. Should we also not invest in foreign markets? After all, that money could be spent on projects at home.