Random Thoughts

July 2, 2003

The giant sucking sound grows louder

“Americans should know that jobs are being sent across the world where wages are low and American laws don‘t apply.“
That‘s a quote from Henry Duarte, “Concerned American and IT Professional,“ an information technology specialist who sends me emails every other day or so about the number of U.S. jobs being gobbled up by workers in India.
I don‘t know who Henry is, but lately, he‘s increased his flow to two or three letters a day, attaching articles from the world press. Each article is a variation on the theme of what H. Ross Perot called “the giant sucking sound“ of U.S. jobs disappearing over the border.
It turns out that India has millions of highly educated folks who are willing to work dirt cheap in areas such as data processing and writing computer code, and U.S. companies are rushing to places such as sunny Hyderabad like kids in a candy store.
You see, you can ditch a well-paid U.S. worker by employing a chap over in South India who won‘t complain about mandatory overtime or a lack of benefits. In fact, Hewlitt Packard notes that it can employ a high-end computer programmer in India for $20,000 per year, compared to $80,000 here in the good old U.S. of A., and help in China is even cheaper.
In November, Bill Gates flew to New Delhi with a plan to invest $400 million to expand Microsoft‘s operations in India, including $100 million in a software development facility.
Duarte claims that over one million U.S. jobs have been lost to India so far, that would have employed 600,000 people here.
What‘s this got to do with Northern Michigan? Well, it‘s all part of the same meatball of ongoing job-loss that was sparked by NAFTA in 1991.
NAFTA (North American Free Trade Agreement), and other so-called free trade agreements engineered by the Clinton administration on behalf of corporate interests, have sent numerous once-thriving U.S. industries south of the border to Mexico or overseas to Asia. The cut-flower industry? Uprooted. U.S. shoe industry? Footloose in South Asia. Northern Michigan fruit? Locked in a global market battle with low-paying growers in China and Mexico.
Last week, the Lear Corp. in Traverse City announced that it will lay off up to 200 workers due to the loss of a contract to build electronic switches for Ford Motor Company. I don‘t know who the contract went to, but would anyone be surprised if it was to a factory outside Tijuana?
Obviously, we don‘t have a problem here in our region with the jobs of computer nerds sent to India. That‘s a misery for people in Silicon Valley, Seattle, or Portland, Oregon, who have $500,000 mortgages to pay with no paycheck coming in.
But ultimately, their problem is our problem, because the success of companies putting our fellow workers out on the street is echoed and applauded in the Wall Street Journal and in business magazines such as Fortune and Forbes, encouraging other U.S. companies to think in the same direction.
“The most common theme in these articles is that Americans must accept less wages or be put out of work,“ Henry Duarte writes. “Does anyone still think that our infrastructure is not being compromised?“
Right you are, Henry, because the Mississippi River of jobs leaving America is swelling to an oceanic tide at a time when U.S. corporations are also moving their financial holdings to offshore banks in places such as the Cayman Islands to avoid paying taxes.
Unemployment in America hit 6.1 percent in May, the highest level in 10 years. The Labor Research Association of the UAW predicts that unemployment will remain above 5.5 percent through 2008.
And then? If U.S. jobs keep disappearing to India, Mexico and Asia? Unemployment went over 30 percent in the Great Depression, and similar levels exist in Arab countries today. What will the unemployment rate be here if that giant sucking sound grows louder?
Lets let Henry have the last word here:
“I keep hearing on the news that there are no jobs,“ he writes. “Why don‘t we tell the public that our jobs were killed here due to downsizing and moved to India and any other places where they don‘t have to pay American wages or provide benefits? The media keeps telling people to go to school, get a better education, and for what? The truth is, NOTHING. It‘s still cheaper to export jobs.“