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A Missing Statistic - U.S. Jobs That Went Overseas

 
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http://www.nytimes.com/2003/10/05/business/05ECON.html?ex=1066536000&en=03fca98caf7b61c1&ei=5004&partner=UNTD
[ October 05, 2003: Message edited by: Natalie Kopple ]
 
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So people estimate anywhere from 500,000-800,000 US jobs lost to overseas workers (although they don't explain how the numbers were derived--the author notes that it is speculative at best) since the recession began. But in all cases the story notes that most jobs in this category are in manufacturing and/or telephone call centers. This suggests that maybe 100,000-200,000 US IT jobs have gone overseas. If you take into account H1Bs, then really not that many US citizens have had IT jobs which have moved overseas.
--Mark
 
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Mr. Mark,
A reality check here. I was like you 3 years ago, not believing these numbers but every big company I worked for offshored the IT work. I personally haven't gotten laid off in my 11 year career which I attribute to my solid experience+education but my salary has gone down by quite a bit in the last 3 years. You'd better belive that this is hitting the IT world pretty hard. BTW, I am of Indian origin even though I did most of my education in the US.
 
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Actually, industry trade publications have been saying more like 1.5 million jobs overseas. I'd have to go back and look up specifics, though.
In truth, it's not easy to track a lot of the offshoring trend, since no official stats are files on jobs moved. You have to look at layoffs and hirings and draw inferences for people to argue over. Almost never do you see a flat-out "Boeing is moving all 250 of their technical writing jobs to India" type headline.
I have been following - and recording - stats over the last several months. So far, just about all the big announcements of hiring and planned hiring were overseas. Almost all of the significant layoffs were in the West. One noteworthy exception was an announcement by Microsoft somewhere around late July/early August, but even there, the bulk of the new positions announced were not in the US.
[ October 06, 2003: Message edited by: Tim Holloway ]
 
Mark Herschberg
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Originally posted by Tim Holloway:
Actually, industry trade publications have been saying more like 1.5 million jobs overseas. I'd have to go back and look up specifics, though.


Please do. I never bought those numbers. Also, as the article pointed out, very often foreign companies hire 2-3 people for every 1 US job (I believe this to be true), and so you need to weight numbers appropriately.
--Mark
 
Tim Holloway
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That's right. Make me work for my vitriol. I knew I shoulda become a political commentator so I wouldn't have to back myself up with objective facts.
Not, of course, that economic "facts" are especially objective. However:
The most-often quoted source appears to be an AEA report from last spring that over 560,000 US tech jobs had been lost since January 2001 (which included mine). I've never heard of anyone attempting to translate US/European jobs lost to third-World jobs gained on anything but a 1-for-1 basis. I'd be inclined to suspect such figures anyway since they smack of the meat-grinder view of software development and don't jibe too well with either Brook's Law or the old adage about adding more women so the baby will be born faster.
The 1.5 million was figure I got was by misapplying forward projections. Forrester and Gartner have both been regaling us for some time now with such cheerful predictions as "By Y/E 2004, one in 10 tech jobs will have moved permanently overseas". Of, if you prefer the shorter word, decimation.
We'll see.
 
Natalie Kopple
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See "Jobs Abound In India's Tech Sector" at http://edition.cnn.com/2003/TECH/biztech/10/04/india.jobs.reut/
 
Mark Herschberg
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Originally posted by Tim Holloway:

The most-often quoted source appears to be an AEA report from last spring that over 560,000 US tech jobs had been lost since January 2001 (which included mine).


I don't deny that fact, but the lost of jobs here do not imply that they've been stolen, merely removed. It could just be the bad economy.
Now, of course, someone will say, "but if we lose jobs here and they gain jobs there, put two and two together." But when the second article natalie posted says the following:


A fall in U.S. employment visas for foreign workers is partly driving the expansion plans of high-tech firms such as IBM, Accenture Ltd and Oracle Corp. in India. Visa curbs discourage Indians from seeking employment abroad and some are returning from a stint overseas.
...
India's call centers have been magnets for job-hunting youth in the past few years, but it is only in the last six months that software jobs are flooding the market after a two-year crunch.


It makes me think it's not so much a clear cut replacement, but rather two trends moving in opposite directions. Heck, if most of the sales are going to foreign countries, then the US has no better claim on those sales than India, it's its effectively like losing the jobs to a competitor. What's upsetting people is that US money is being used to support jobs abroad while those at home are unemployed, but if it's not US dollars driving those jobs, the claim becomes more tenuous.
--Mark
 
Natalie Kopple
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As It tries to Cut Costs, Wall Street Looks to India:
http://www.nytimes.com/2003/10/08/business/worldbusiness/08rese.html?ex=1066881600&en=ae2ea1b930a68f72&ei=5004&partner=UNTD
Now, what is the point of investing so much and working so hard to get a degree from the Harvard Business School, Wharton, ..., etc.?
[ October 08, 2003: Message edited by: Natalie Kopple ]
 
Tim Holloway
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Originally posted by Mark Herschberg:

It makes me think it's not so much a clear cut replacement, but rather two trends moving in opposite directions. Heck, if most of the sales are going to foreign countries, then the US has no better claim on those sales than India, it's its effectively like losing the jobs to a competitor. What's upsetting people is that US money is being used to support jobs abroad while those at home are unemployed, but if it's not US dollars driving those jobs, the claim becomes more tenuous.
--Mark


Well, you can't just blame the economy. There's an old saying among economists that "When the US sneezes, the World catches pneumonia". And that actually IS being seen, even in India. Their job growth is good even as we continue to shed jobs, but it's not nearly as good as it was when the US economy was in better shape, and the reason that their management gives is, in fact, reduced demand for their services from the US and Europe.
The idea that they're winning in world competition is also bogus. At the moment, most of the demand for IT skills is in the West. So it's not like we're going after the same new markets that they are and they're winning. Their markets are our domestic markets, but the reverse is only true in the cases of the large MNCs such as IBM. And part of what makes you an MNC is that you have employees over there as well as over here. Guess which set is most likely to be used?
Do we really care if it's "replacement" or not? There's about as much chance of "proving" replacement as there is in proving Global Warming. Too many factors working in too many different directions mean that all you can do is play with statistics, and the evils of statistics are legendary. By most definitions, when one country's domestic job market dries up and another's increases but the work is still being done for the same people, workers have been "replaced", even though it's more a matter of people being laid off for a recession and when the recession's over, the new people are hired somewhere else.


Hiring inexpensive junior-level researchers in India will free J. P. Morgan's highly paid senior analysts to spend more time with the companies they cover and with investors, a J. P. Morgan spokeswoman, Joanne Shephard, said.


From the NY Times article Natalie was referring to. Case in point. domestic market, but the normal domestic hiring process has been diverted. Not (officially anyhow) "replaced", but now the training ladder is missing its lower rungs. What happens when all the local senior-level researchers have retired or been laid off? Who will you promote?
The closest thing we're going to get to "proof" is to see what happens when the domestic economy finally begins to grow again and see what does - and doesn't - grow with it.
Then again, since the recession "oficially" ended 2 years ago, some would argue that not only is this proven, but the impact was so significant that we remain reluctant to go out and spend again. Which, of course, doesn't help either.
 
Mark Herschberg
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Originally posted by Natalie Kopple:

Now, what is the point of investing so much and working so hard to get a degree from the Harvard Business School, Wharton, ..., etc.?


As someone who is applying to HBS, Wharton, ..., etc the point is that you get good jobs and earn great money. "Smarter" (I admit its an oversimplified term, substitute for it whatever you think gives these schools better rankings) people are less likely to be fired outsourced, or let go. Will some MBAs be outsourced? Sure. In many cases its an even worse idea than with engineers--unless you outsource the MBAs who work with engineers to the same company as the engineers. In any case, the MBAs most likely to be outsourced will come from the lower tier schools.*
*The exception being overpaid MBAs who will be let go no matter what their pedigree. But overall top tier MBAs will still do better at getting and keeping jobs than those from schools which aren't ranked as well.
--Mark
 
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