High-speed outsourcing: jobs, workers and rights in the age of capital flight.

It's a hard issue to wrap one's head around. Free market champions, such as the likes of Microsoft and Dell, tout outsourcing and offshoring as the logical developments of a global economy based on accelerated innovation and technology; the "invisible hand" surfs the net. American trade union leaders have made the issue their cross to bear, portraying it as the ultimate betrayal of the promises made for the overseas flight of manufacturing jobs. And Third World workers don't understand why anyone should be angry in this free market world--after decades under "austerity" measures, this is their just reward for life with neoliberalism.

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There are many players in this puzzle adding their own perspectives, and sometimes their own math, to the national debate on outsourcing. There are two diametrically opposing poles of opinion on this highly political and racially-charged issue. One: end all business outsourcing until every American has had their pick of the jobs. And two: allow companies to be competitive by permitting them a free hand at diminishing labor costs while increasing profit margin. Absolute protectionism vs. absolute liberalization.

For progressives, the issue is knotty because we are being asked to stand up for workers on the basis of nationhood. Do we bash outsourcing when Indian workers at Microsoft in Bangalore are telling us they make three times what they would normally make? Do we support outsourcing when we know American workers have lost high-paying software development jobs and are now working at Wal-Mart? In order for us to decide where we fall on the spectrum of solutions, we first need to understand the underpinning issues affecting this debate.

The Jobless Recovery 

Though no one source can pinpoint the exact number of jobs lost to offshoring, it is estimated that roughly 300,000 to 995,000 jobs have been lost in the U.S. to offshoring to-date. According to Goldman Sachs, up to 6 million white-collar jobs will be lost over 10 years. The United States has a workforce of 140 million workers. Companies are outsourcing to gain a labor cost savings of 70 percent, according to CIO.com, an online magazine for chief information officers of high-tech companies. The top five U.S. employers in India today are General Electric, Hewlett Packard, IBM, American Express and Dell. According to Todd Tollefson of TechsUnite.org, an online community for high-tech workers affiliated with the Communication Workers of America, "The jobs in jeopardy of being outsourced and offshored are basically any job done with a computer."

The first outsourcing of work was in low-level "back office" production--help desk, call center work. Today high-level administrators, program developers and engineers are also being outsourced. The outsourcing of jobs is taking place not just in the high-tech sector, but also in healthcare (where transcription, medical records and radiologic imaging is at risk), as well as in the public sector. Even patent lawyers have been put on notice.

Coupled with news of offshoring, Americans are also bombarded with reports of the jobless recovery. In August, The New York Times reported that the Department of Labor found worker layoffs occurred at the second fastest rate on record during the first three years of the Bush administration. It also found that the layoff rate reached 8.7 percent of all adult job holders. In the same month the Department of Labor reported that only 32,000 new jobs were created in July. The facts may be dizzying, but the end result is an American populace inundated with bad news about jobs and the economy.

The actual number of offshoring jobs lost may seem insignificant compared to the overall size of the U.S. workforce, but the loss becomes more significant as wages and standards for workers in the U.S. continue to decline. Along with the flight of white-collar jobs, Americans contend with another substantial threat to their livelihoods. What has been infamously dubbed the "Wal-Martization" of jobs is a real, accelerated trend among U.S. companies to race to the bottom by rolling back wages and employment standards. A recent UC Berkeley Labor Center study by Arindrajit Dube and Ken Jacobs revealed that taxpayers in California are subsidizing Wal-Mart to the tune of $86 million a year by providing public assistance to thousands of Wal-Mart employees unable to afford healthcare. Wal-Mart employs a million workers in the United States. Even though workers at the giant chain work more than full-time hours, they are still unable to afford healthcare for themselves and their families. Offshoring and the low-waging of America, combined with recent memories of the loss of manufacturing jobs, leave the American electorate incredibly sensitive about protecting jobs in the United States.

Hot Under the White Collar

For many workers, offshoring seems like a new face to an old enemy. In the '70s and '80s the American worker movement experienced incredible hardship when companies began to move operation to the Global South. General Motors went to Mexico, the GAP went to Indonesia, electronics production grew in Taiwan and Japan, while U.S. companies imported steel from Korea and Japan--all resulting in the cost of production reduced and profit margins increased. The deindustrialization of the American manufacturing sector meant many Americans were out of jobs, and their labor organizations were faced with grave reductions to their memberships. "The loss of jobs to foreign countries during the period of the '70s and '80s occurred mostly in the manufacturing sector, which had high union density. Jobs in those sectors were a source of decent incomes for workers with a high school degree. The social basis for a labor response to the loss of jobs was very strong," says Steven Pitts, an economist with the UC Berkeley Center for Labor Research and Education.

What we find today is that the sectors highly affected by outsourcing are mostly unorganized and were, at times, the most resistant to unionization attempts of the past. However, these high-tech service jobs represented the kind of jobs displaced manufacturing workers in the '80s were told to train for--these were the American jobs of the future. "American workers are angry because they were told to accept the loss of blue-collar manufacturing jobs because these jobs will be replaced by better white-collar service jobs," Pitts continues. "Now those jobs are being lost as well."

The anger toward outsourcing among American workers has also revealed racial underpinnings in the national debate. Numbers of chat rooms and websites created by displaced high-tech workers air some of these sentiments. Far from the global unionism expressed by union officials, lie the very nativist and xenophobic sentiments of some of their rank and file members. Some of these sentiments spill into anti-immigrant racism against Indian workers here in the U.S. One website called "Texas Labor Champions" posts messages from displaced tech workers. One such techie wrote, "Being a woman, I would not hire an Indian either, because of their views towards women. Having said all of that, we have to remind ourselves that this isn't a issue of discrimination, it is more an issues of Nationialism ... even if they were the sweetest people on earth and really were smarter/harder working than Americans."

That same website suggests that foreign workers at call centers are potential agents of Osama bin Laden, using their access to sensitive private information of consumers such as social security numbers and bank account information as a means to fund Al Qaeda. Though some of this might seem outrageous, the public has entertained these views by supporting legislation requiring call center workers to identify themselves and the country in which they live. Proponents of this legislation say they want consumers to be able to assess the risk involved with providing foreign workers their private financial information. Presidential hopeful John Kerry supports this measure as well by adding it to his national jobs reform platform. Though the unions that speak for these workers claim to hold a an anti-racist globalist approach to these issues, the reality is that on the cubicle floor, workers are using a racial and nationalist reasoning to define the cause of their displacement.

Why are so many Americans more angered about jobs going to India or China or the Philippines than they are about the super-exploitation of American workers by American companies like Wal-Mart within the borders of their own nation? "Union leaders and rank and file workers are equally hot over both of these trends, offshoring and low-waging of jobs in the U.S. But the question of the attraction to the offshoring issue in the public political domain is definitely caused by national chauvinism," says Pitts.

High-Speed Capital Flight vs. Low-Speed Union Organizing

The majority of the world's high-tech workforce is not unionized. From Mumbai to San Jose, high-tech workers believed the dot.com boom would never end. The bubble popped in 2001.

The Communication Workers of America began organizing high-tech workers in IBM a decade ago. The Alliance@IBM was formed initially to deal with overarching cuts to the pension benefits of IBM employees internationally. Since the formation of the Alliance@IBM, the union has gone on to form other nontraditional union-friendly associations for high-tech workers. Their website, TechsUnite.org, has over 10,000 subscribers and has been a cutting edge tool to bringing workers together in communities around the country. "Our overall long term goal is to level the playing field so that workers in all countries compete equally," says Tollefson. "We need to make our companies pay a large bill for sending jobs overseas. We feel that if companies do bring workers into the United States from abroad, they should have first looked for workers here before hiring from abroad. And we think these companies should tell workers what their rights are in the U.S."

TechsUnite does not support the granting of H1 and L1 visas. (H1 visas are given to workers sponsored by a company to come to the U.S.; L1 visas are given to workers who are already working for a subsidiary of that company in another country.) "There should be a moratorium with such a high unemployment rate with tech workers today," Tollefson says. "Oftentimes we are painted as xenophobes. That's not true. We have seen that H1B workers here get exploited by their employers. We don't think your visa status should be tied to your employer."

It's a difficult issue for progressives in the trade union movement to address. Especially when workers on both sides of the ocean are not organized into unions. The union density levels of this industry pose serious challenges to the trade union movements in both India and the United States. And the growing alienation of U.S. workers from their Indian counterparts due to anti-offshoring campaigns have posed an even greater threat to global union collaboration.

However, there are some initial steps being taken to start breaking the ice. Jobs with Justice in the U.S. and the New Trade Union Initiative of India are jointly organizing a delegation of American high-tech workers to travel to India and meet their Indian counterparts working in American companies. Though this is a bold step in developing relations between these two labor groups, there must be a consistent plan to follow up with a real global strategy based on international trade unionism and not narrow nationalism.

The zero sum theory of the marketplace cannot be the guiding philosophy. Instead, national unions must transform into international unions, linking workers of one corporation across borders, languages and cultures. Trade unions in the global north need to invest real resources to strategies that organize workers into unions worldwide. Alongside organizing, unions in all nations must provide education for their members to deconstruct the racial, national and gender dynamics that pit workers against each other. Until U.S. trade unions take an international approach to outsourcing, workers on either side of the ocean are not going to come out ahead.

Raahi Reddy is a union organizer and labor specialist at the UC Berkeley Center for Labor Research and Education.