Tech Workers' Losing Fight to Match Overseas Wages

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Sun, 23 Nov 2003 22:05:14 -0800
From: Dewayne Hendricks <dewayne () warpspeed com>


Tech Workers' Losing Fight to Match Overseas Wages
By DAVID KOEPPEL
<<http://www.nytimes.com/2003/11/23/jobs/23jmar.html>http://www.nytimes.com/2003/11/23/jobs/23jmar.html>

STOCKING shelves and hauling boxes on the graveyard shift at Target was
something Ed Marx never imagined he would be doing. After 27 years as a
computer programmer, Mr. Marx said, he thought his technology skills
ensured he would be employed in that field for many years.

It has not turned out that way. In August 2002, Mr. Marx, 49, lost his job
at the Computer Sciences Corporation, a technology contractor and services
company in Moorestown, N.J. Mr. Marx and his company say he was a victim
of offshore outsourcing, known as offshoring. Unable, so far, to find a
full-time job in his field, he has been working at Target since September.

Seeing examples like Mr. Marx, many technology workers have become
increasingly concerned and angry about offshore contracts, which can cause
certain jobs or whole departments to be moved to countries like India and
China, where technology workers are paid lower wages.

Information technology industries have "led the initial overseas exodus,"
according to a study by Forrester Research, published in November 2002. In
a survey of 400 hiring managers in May, the Information Technology
Association found that 12 percent of the information technology companies
in the survey had moved jobs offshore, compared with 6 percent of the
nontechnology companies.

"I feel to some extent the train has already left, and I'm not sure how it
can be reversed," Mr. Marx said. "The layoff has had a profound effect on
me. It's difficult walking away from something you've been doing for 27
years. There used to be two pages of tech jobs in the classified section.
Now there's maybe one column."

Many American technology workers whose jobs have not been moved offshore
say that they are being offered lower salaries than in the past. "It's a
total deflation period" for information technology workers, said John C.
McCarthy, a Forrester Research group director who led the firm's
offshoring study. Many technology workers "can expect to make at least 20
percent less than they did during the boom," he said.

Many experts are stressing that technology workers must upgrade their
skills and are advising them to shift their sights to sectors that are
still hiring.

Wireless technology, broadband and security technology are all growing
fields, according to John Challenger, chief executive of Challenger, Gray
& Christmas, an international outplacement consulting firm. Mr. Challenger
also recommends that tech workers consider looking into government and
military technology, health care and pharmaceuticals.

"When the dot-com bubble burst it was the end of skyrocketing I.T.
salaries," Mr. Challenger said. "It's important for I.T. workers to make
sure their skills are not outdated."

The proponents of offshoring see it as an effective solution to rapidly
rising costs. An August report by the McKinsey Global Institute, a
research group that is part of McKinsey & Company, called offshoring a
win-win situation for the global economy and asserted that it allowed
American companies to not only reduce their costs but also reap larger
profits by investing in new businesses at home.

That study said that an Indian software developer could make as little as
$6 an hour, compared with $60 an hour for an American.

Atul Vashistha, the chief executive of neoIT, a California-based company
that specializes in advising companies on moving work overseas, and whose
clients include Siemens and Lucent Technologies, said that most of the
jobs being outsourced overseas are "lower end" positions in data
processing and programming.

But Marcus Courtney, president of the Washington Alliance of Technology
Workers, a union affiliated with the Communications Workers of America,
said high-level white-collar workers were just as endangered as anyone
else.

"Any job can be exported, irrespective of skills," he said. "This goes
beyond training and education. Employees shouldn't snow themselves into
believing that if they have an advanced certification or an M.B.A., their
job can't be sent overseas."

Mr. Courtney's organization opposes the growing offshoring tide by trying
to promote public awareness and political action. He said that his group
was fighting for legislation like the bill being considered in the New
Jersey Legislature that would allow only United States citizens to work on
certain state contracts.

But Joseph Stubblebine, the chief executive of JobCircle.com, an online
job board geared to technology professionals in the Northeast, said tech
workers should focus on learning in-demand skills like Java and Linux
programming. Mr. Stubblebine said that well-rounded tech workers who could
strike a balance between business, social and technology skills would best
survive the upheaval.

"Tech folks that understand what a business needs will survive," he said.
"Someone who just writes codes and sits in the corner will not.''

Bill Beck, a 50-year-old unemployed programmer, has developed new skills
but also said he had a contingency plan. Mr. Beck, a native of Tyrone,
Ga., has been laid off twice since 2001, but he has taken courses in HTML
and advanced Java.

Although he is reluctant to give up on a career that has lasted 20 years,
he recently enrolled in a six-week class in real estate appraisal, a field
he plans to enter if he cannot find work in technology. He said that his
former employer began outsourcing programming jobs to India several years
ago.

Mr. Beck contemplated a move for a job in Pennsylvania but learned that
the position would pay 40 percent less than his previous salary.

Mark Higby of Granby, Conn., said he planned to upgrade his credentials.
He is looking into certification programs in security technology and is
considering studying for an M.B.A.

While he does not attribute the loss of his position in infrastructure
maintenance and design last year to work contracted overseas, he said he
did believe that offshoring had made his job search tougher. After his
layoff, Mr. Higby said, he was forced to declare bankruptcy so he could
retain his home for his wife and 2-year-old son.

After nine months of looking for work, Mr. Higby landed a part-time
consulting job with Pepperidge Farm and recently interviewed for a
full-time technology position in Rhode Island. His wife started working
part time at Starbucks so that the family could afford health insurance.

But Mr. Higby, 49, does not express bitterness about offshoring. "It's all
about being as competitive as you can be," he said. "I'm not going to get
depressed. I'm not going to give up. I want to be a big-picture guy. I
don't want to go after jobs that are moving offshore, I don't want to
chase after something that's running away."

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