Outsourcing and Offshoring: Fairness and Personal Responsibility

 My own information technology career came to a sudden halt at the end of 2001. I have written a lot about this at other pages (below).  I had ventured off into political writing as my passion, and had become less interested in pursuing geeky technology for its own sake. Therefore, I found it difficult to keep up with younger “techies” who were learning non-linearly out of mere curiosity. And, because of my intention to draw attention to myself with respect to various social and political controversies, I could not ethically move into management or leadership in a conventional business environment, so the “Peter Principle” could not work for me. And it is interesting that the jobs recession this time (compared even to the early 1990s, when middle managers were expendable fat) seems to leave managers in a better situation than “peons” who haven’t competed successfully for advancement.

 I had, however, noticed that the newer technology was creating new opportunities for me to make myself noticed for what I could do on my own. At the same time, the technology associated with older systems in large companies was coming to seem pedantic and boring. Or maybe it was not the technology itself, but the way businesses were using it. 

In the mid 1990s, the insurance company that employed me started working with a technology company in India about converting all of its old mainframe applications (largely COBOL and Assembler) for Y2K.  At the time, I had what I perceived as a possible business conflict of interest within my employment, and I at least considered outsourcing as a possible opportunity for moving on. I did not do that, but the point was made. Overseas companies could get us through the narrows for getting ready for Y2K, and afterwards they could take care of many of the routine maintenance and programming duties in systems that seemed routine. This came as no surprise. I moved laterally twice in my own company at my last employer during the last few years, and both times the position that I left was not replaced, because productivity had made the position unnecessary. A more subtle observation concerns night support. In India, about twelve hours around the globe, workers can support our nightly batch cycles while we sleep. Nightcall had sometimes been a source of division among employees: it was not paid (we were salaried), and sometimes employees without families took up more of the burden. Outsourcing got rid of this problem, even if the night support here was not paid. Companies might have thought they were doing some associates a favor by offshoring incidental support.

This gets me to what I see as a main point. Most of the time, skilled workers who get displaced when their jobs are outsourced or are eliminated because of productivity gains bear some personal responsibility for their situation. Because of my outside activities, I had led my certifications slide, I had not kept up technologically with the most geeky stuff, and I had not advanced in a conventional manner. I had not competed. I did get a good separation package that helped me do what I want. But I realize that a lot of other people were much worse off. Now as a freelance writer, I have seen angry discussion of the issue of outsourcing of technical writing jobs, as well as concerns over the way employers write up contracts (as “work for hire.”)   Job loss results from a variety of causes, including outsourcing, productivity gains, and reduced or postponed economic uncertainty in times of economic stress and, to be frank, instability caused by corporate scandals or external threats like 9-11.  It is not necessarily bad if some of us, who have been “salaried professionals,” take our turns “paying our dues” with more menial jobs. In fact, a system that holds people like me who have had prosperity before accountable for our professionalism, ability to advance, and ability to take our turn at menial work that we depend on others to do, is not such a bad thing. We could call it a “free market cultural revolution.” More than the case for any previous occurrence of job displacement with technological change, this one has a lot to do with the professional merit of those displaced. At the same time, when better jobs are offshored to countries with lower labor costs, workers in those countries may have an increase in standard of living, a fact which restores moral balance to the result. That does not hold, however, for "sweatshop" jobs offshored into slave labor live conditions, as noted below.

The tone of this discussion must turn, however, on the head of a needle. 

Many people debate this problem in terms of group or class oppression or solidarity. Politically, it seems more likely we can solve our problems if we stick together rather than compete with one another and lowball each other in the workplace. In fact, labor union organizing and collective bargaining are rights protected by statutory law, and they are implied by the First Amendment under the right of expressive association (now famous by the Supreme Court’s treatment of the Boy Scout case!)   

Computer programmers and writers generally are individualists who get turned off by ideas like “solidarity” and organizing, and this may indeed have hurt us. In 1976, I was working at my first large job as a business applications COBOL programmer working on general ledger systems at NBC, the National Broadcasting Company, which has the Today Show, and Donald Trump’s notorious “The Apprentice.” What goes around comes around. The network to a strike from one of its unions, NABET, then, and the non-union and salaried workers were invited to fill in with strike duty on the sets of the soap opera productions then in Brooklyn.  I worked as a “scab” boom operator for the show Somerset, now no longer on the air. Some of my coworkers, as I recall, worked on Days of our Lives, now notorious for villains like Marlena (who, by the way, is intentionally made up to look like Martha Stewart), Nicole, and Jan. Boom operator work was not difficult, and I actually got to help film a murder scene once. Now we, as “scabs”, did cross picket lines and were slightly threatened a couple of times. We were paid double salary for that time, which lasted 11 weeks until the strike was settled. The strike taught a couple of lessons: first, that some union work, well paid, is not difficult to learn, but also that salaried workers can also be done without for long periods. So taking a strike can be bad news for everybody. 

 However corporate America embarked on a long period of systematic expansion of basic information technology infrastructure that would be more or less steady through Y2K, after which the combination of recession, cheating scandals, stock market dot-com bubble burst, terrorism, cultural change towards extreme capitalism, and broadband technology would flip the entire market for the field.  The mechanization of job searching on the Internet would tend to reduce job hunting to matching “barrelfulls” of specific programming skills, although this is somewhat driven by the desire of employers to bullet-proof themselves from discrimination complaints.  

So the “truth about outsourcing” is pretty complex. The most vulnerable jobs are those with repeatable, predictable and easily reproduced or automated processes. Workers who have enjoyed the good life and been part of the salaried “class” ought to take a lot of responsibility for paying their dues now.  Besides accepting the possibility of more personal regimentation in employment, former technical or content-creating professionals may have to entertain the idea of work that requires assertiveness, competitiveness and salesmanship (even hucksterism) in terms of working with others. But for years, however, manufacturing jobs have been bleeding away, and typically workers in these industries, often located in small cities that are devastated when plants close, have less opportunity to expand themselves proactively than professionals have had. 

I am particularly concerned about outsourcing to countries that do not have good human rights records. Wal-Mart’s management of the  Chinese supplier market (in lockstep with our behavior as consumers) comes to mind.  

On March 16, 2004 the AFL-CIO filed and unfair-trade petition, concerning China’s own towards workers. What was once the Maoist cultural revolution now has led to a feudal caste system in which rural workers become indentured to employers (in comparison to urban workers). We argue about equal protection in our own law, but China’s system of hukou, or household registration, is a real abomination. At some point we are going to have to think about the morality of our use of work done this way, work that is essentially slave labor, let alone work by peasants who do not have the legal right to organize. One way that private interests could show concern about this is to discourage employees or stakeholders from entering their premises with clothing that they know was manufactured under slave-like, abusive conditions. One could view possession of the "fruits" of "slavery" as morally similar to possessing child pornography.

On the other hand, the Information Technology Association of America released a report around March 30, 2004, maintaining that productivity gains from outsourcing actually increased domestic employment by 90000 in 2003 (Michael Schroeder, "Outsourcing May Create U.S. Jobs," The Wall Street Journal, March 30, 2004, p. A2). This finding supports the notion that individual job loss is also related to an individual's allowing himself to become marginalized.

Now, to some extent, outsourcing really has some moral justification if it does not exploit societies without human rights. Capital or business owners should be free to use their property as they please (that is the libertarian argument), and they will tend now to invest overseas in societies where there are legitimate profits to me made in raising the standard of living of these societies so they become better markets. A worker in India has rights just like a displaced worker in the United States, who whose needs come first? That sounds like just a matter of blood or political loyalty, not morality. But business owners (from Wal-Mart to the smallest companies) have no right to take advantage of “slavery” or involuntary servitude. That could be said of migrant workers in this country. 

Many jobs that get outsourced offshore are jobs that are not first career choices for a lot of Americans. Yet the same jobseekers who need paychecks, especially for families, will take these jobs if they are still available here.

So we have a problem with many facets. We need to think out of the box, and, for example, consider whether a Canadian style universal health care system would relieve employers in our country of a major burden in employing our own workers, without compromising the best care and, indirectly, individual freedom in lifestyle choice and privacy. But we also need to think about our own morality in the way we consume and maintain our own level of skill in the workplace, and also how we park our loyalties. 

References: 

Harold Meyerson. “China’s Workers—and Ours,” The Washington Post, March 17, 2004, p. A25. 

Sarah Anderson, John Cavanaugh; Jeff Madrick; Doug Henwood. “Towards a Progressive View of Outsourcing,” The Nation. March 22, 2004, p. 22. 

Peter Coy. “The Future of Work. Flexible, Creative and Good With People? You Should Do Fine in Tomorrow’s Job Market.” Business Week, March 22, 2004, p. 50. 

Paul Craig Roberts. “The Harsh Truth About Outsourcing. It’s not a mutually beneficial trade practice—it’s outright labor arbitrage.”  Business Week, March 22, 2004 p. 48. 

Michael J. Mandel. “Productivity: Who Wins, Who Loses: The U.S. is reaping big—but uneven—gains from its highly efficient workplace.” Business Week, March22, 2004, p. 44. 

James C. Cooper. “The Price of Efficiency. Stop Blaming Outsourcing. The drive for productivity is the real culprit behind anemic job growth.” Business Week, March22, 2004, p. 44. 

An alternative point of view is presented by Senator Ernest F. Hollings (Dem SC) in the op-ed "Protectionism Happens to Be Congress's Job," The Washington Post, March 21, 2004, p. B3. "But in global competition, what matters is not the comparative advantage of our ability so much as the comparative disadvantage of our living standard.To really level the playing field in trade would require lowering our living standard, which is not going to happen. We value our clean air and water, our safe factories and machinery, our rights and benefits." Hollings criticizes tax benefits for offshore production and actual assistance by the Commerce Department to companies moving jobs offshore.

Nell Henderson, "A Difficult Lesson: Job Retraining, Though Touted, Often Fails the Test," The Washington Post, Apr 16. 2004.

Spring 2004 issue of American Writer (the entire issue) from the National Writers Union. The cover has a maze, "enjoy your new job!": Professional dog-walker, Live with mom, Medical test subject, flip burgers, spammer, telemarketer, sell pencils, deliver pizzas, become a street person, accordionist, asbestos remover, crash test dummy.

Michelle Conlin and Aaron Bernstein, "Working and Poor: In today's cutthroat job market, the bottom rung is as high as most workers will ever get. But the political will to help them seems a long way off."  Business Week, May 31, 2004, p. 58.

Andrea Kopkins, "Outsourcing Causes 9 Pct of U.S. Layoffs,: Reuters, June 10, 2004 (apparently only 1/3 of these jobs really go overseas). http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=13&u=/nm/20040610/bs_nm/economy_outsourcing_dc

Paul Blustein, "Implored to 'Offshore' More: U.S. Firms Are Too Reluctant to Outsource Jobs, Report Says," The Washington Post, July 2, 2004, page E1. The report is from the Boston Consulting Group and warns that American workers are often failing to remain competitive with workers in other parts of the world (no kidding!), even in terms of keeping new skills and workplace agility up.

Frank Levy and Richard J. Munrane, "Got a Routine Job? Not for Long,"  The Washington Post, Outlook, P B3, July 4, 2004. The authors compare "rules-based" jobs to "face-to-face" jobs and it is important to add that "face-to-face" jobs require, besides education and training, some commitment to working with others and often becoming somewhat publicly committed to the causes of others, an observation that impacts freedom and self-expression, as widely discussed elsewhere on my domains.

Jonathan Krim and Griff White, "$17 an Hour/The Future: Average-Wage Earners Fall Behind," The Washington Post, Dec. 31, 2004, p. A1.

Bob Weinstein, :Tech Watch," The Washington Times, Aug. 22, 2004, p. D3, summarizes the sentiments of Umesh Ramakrishnan, who recommends that high-tech workers seriously pursue moving offshore themselves especially for opportunities in Ireland, Australia, and Singapore. "Do you have a choice?"  My own reaction would be to look offshore if you have a specific skill or specific problem solving approach that would attract a specific company that you know about. There still are legal, political and cultural hurdles to working overseas.

©Copyright 2004 by Bill Boushka, subject to fair use

My discussion of the I.T. job market.

My discussion of self-publishing

My other labor reference

Review of Barbara Ehrenreich's Nickel and Dimed

My own resume