OUTSOURCING OUR FUTURE JOB EXODUS FOR THE SAKE OF PROFITS WILL HAVE DIRE CONSEQUENCES IN U.S.

Byline: George J. Bryjak

CHECKING your credit card statement, a friendly voice greets you with: ``Hi, ma name's Debbie, kin I hep ya?''

But this young woman, trained to sound like a Texan, resides in India. The original worker from Dallas whose job was sent to Asia is a victim of ``outsourcing,'' the euphemism for transferring work to offshore locations.

Few people realize the magnitude and implications of this hemorrhaging of U.S. jobs. Economists Ashok Bardhan and Cynthia Kroll of the University of California at Berkeley estimate that in July 2003, between 25,000 and 30,000 information technology positions were outsourced to India alone.

These staggering figures are just the beginning.

A study of 400 of the nation's top 1,000 companies concluded that by 2006, between 35 percent and 45 percent of current full-time IT jobs will be sent to India, China and elsewhere overseas. IT positions will follow the millions of manufacturing jobs already lost, only at a more rapid pace.

Significantly lower labor costs (which translate into higher stock dividends and ever increasing executive salaries) is the primary rationale for this job exodus. While telephone operators in the U.S. earn an average of $12.57 an hour, in India they make less than a dollar. Indian payroll clerks take home less than $2 an hour, whereas their counterparts here average $15.17 an hour.

What will happen to American workers sacrificed to outsourcing?

Job-slashing corporations argue that displaced workers will secure employment in the next wave of economic development. They claim that just as agriculture was supplanted by manufacturing, which in turn gave way to the computer-information revolution, today's corporate casualties will find employment in the coming stage of economic progression.

Unfortunately, it's far from clear what that next economic phase will be, and when it will occur. Few experts anticipate the materialization of a ``white knight'' industry to save the day. And if such an enterprise does become reality, how long before newly created positions themselves are sent abroad, the cycle repeating itself?

For too many outsourced workers, ``retraining'' for future employment will be a simple matter of learning to say ``Would you like to super-size that order?''

Bardhan and Kroll speculate that surviving outsourced occupations could face a ``downward adjustment of salary and wages,'' making them internationally competitive once again. In this scenario, the domestic IT industry would bounce back, but at a significant loss of purchasing power for workers.

The ramifications of outsourcing are staggering not only for individuals whose positions are terminated, but for the larger society. Unemployment and ``underemployment'' (working below one's level of skill and training) will contribute to a shrinking tax base, as already financially burdened city, county and state governments cut back additional personnel and services.

Fewer well-paying jobs will await college and technical-school graduates as the societal opportunity structure is diminished. The upward mobility of African-Americans, Latinos and other minority groups playing ``catch-up'' will be slowed.

High-tech cities such as New York, Boston, San Jose and Los Angeles are certain to be the big losers, while rural areas crippled by the loss of family farms have little chance of economic improvement. Suburbs with an employment base of ``back office'' activities (customer service personnel and medical transcribers, for example) can expect to see their labor force shrink. Why create jobs in Anytown, USA, when companies can employ people in Malaysia at a fraction of the cost?

What are the chances of checking this employment exodus? In a word, nil.

While manufacturing jobs were leaving in droves, union membership and power has declined steadily. There is no reason to believe that white-collar workers, the vast majority of whom have little if any history of collective organization, will create a viable movement to halt this trend.

At the national level, neither Republicans nor Democrats have shown any inclination to deal with this problem - if in fact they even consider outsourcing troublesome. Both parties are more or less committed to ``economic globalization'' and job outsourcing is but one aspect of this phenomenon. In a recent government report, the chairman of the president's Council of Economic Advisers, N. Gregory Mankiw, stated: ``Outsourcing is just a new way of doing international trade.''

The ``American dream'' became a reality for millions of families in the post-World War II era as a consequence of the rise of a middle class. However, the financial well-being of this socioeconomic category is seriously threatened by the loss of manufacturing jobs, an expanding ``temporary'' work force (low-pay, no benefits, no job security), the ``Wal- Martinization'' of American labor (minimum wage, minimum benefits) and, as of late, outsourcing.

The current group of late teens and twenty-somethings is likely to be the first generation of Americans that will not equal or surpass their parents' financial status. At the current rate of middle-class job erosion, their children will be the second.