Film Review: American Jobs
Outsourcing and offshoring have become major issues for those of us in information development. More and more, technical writing jobs are being shipped off to low-wage foreign competitors in India and China. Companies continue to search for new partners in such locations as Israel, Russia, and Uruguay.
At this year’s Best Practices conference in Cape Cod, we screened a documentary film by former television producer, Greg Spotts, entitled American Jobs. Greg set out to create a nonpartisan film, using funding from his own pocket, in an effort to explain why so many of his friends were losing their jobs to foreign competition. During the first 6 months of 2004, he traveled to 19 cities across the US, talking to people from the textile, aviation, and technology industries.
Kannapolis, North Carolina, was the first stop-a town that was once owned and operated by the Fieldcrest/Cannon Mills textile factory. In Kannapolis, Fieldcrest owned the town-they ran the police department and the fire department and had the baseball stadium named after them. Fieldcrest laid off 7,650 workers across 9 states on July 30, 2003, and the plant was closed. Workers who had put over 30 years into the textile industry were now without jobs. The Chinese are now bidding for the right to produce these textiles in China, where the average worker is paid 69 cents per hour.
Prior to the ratification of NAFTA in 1993, proponents of the bill urged that moving jobs to Mexico would strengthen the American economy, creating stronger and more skilled positions for American workers. The opponents argued that it would destroy more jobs than it would create. “If NAFTA threatened the jobs of editorial writers, network news anchors, and Wall Street bankers, this bill wouldn’t have a prayer, but it doesn’t; it threatens the jobs of non-college educated workers, so it will pass” (Rep David Obey, Wisconsin). The predictions made by NAFTA opponents have proven to be true; now the jobs of those in more skilled areas, such as engineering, software and information development, and IT are going to under-skilled and under-paid offshore workers.
Despite the promises of NAFTA, Mexico’s economy has struggled to grow. What was projected to be a 25 percent growth rate in Mexico’s economy in the 10 years after NAFTA has only proven to show a 3 percent growth rate. Companies moved their operations across the border, but the infrastructure to support the influx of jobs was never put into place. Now, border towns like Juarez, Mexico, are suffering. Shanty towns cover the grounds surrounding the factories. Mexican workers labor for $30 or $40 per day and now face the same fears as the American workers once did-their jobs are threatened due to outsourcing to the Chinese.
Between the signing of NAFTA in 1993 and 2002, more then 879,000 jobs have been lost in the US. Prior to NAFTA, manufacturing jobs that accounted for over 25 percent of the gross domestic product have dipped to 13 percent in 2003. American companies cannot compete with the Chinese and Indians when conglomerates like Wal-Mart vow to decrease their costs by 5 percent each year by paying their suppliers less and less.
Prior to September 11, Boeing, located in Seattle, Washington, was the largest manufacturer of commercial airliners in the US and abroad and one of America’s biggest exporters. After September 11, the airline industry plummeted, and orders worth millions of dollars were pulled from Boeing. Boeing laid off half its workers while the airlines received a $5 billion bailout from Congress. Northwest received $400,000,000 from the government and then purchased 26 jets from Airbus, a European government-subsidized airline manufacturer. For the first time ever, Boeing is second in sales to Airbus. Now, to keep costs down, Boeing outsources much of its engineering to Russia and manufacturing to Japan.
Manufacturing hasn’t been the only industry hit. On March 21, 2003, the software testing department at Watchmark Corporation found out their jobs were going to be outsourced to India-and they would be training replacements who were to arrive the next week. Indian workers were paid around $5,000 per year-about 6 percent of what the typical worker in the software testing department was paid. American workers can’t compete with that.
The L1 Visa, available to employees working at companies that operate in the US and abroad, has no annual cap and no minimum wage is required for individuals entering under this provision. Now, companies are bringing Indian workers to the US in droves. These workers can stay for up to seven years and are brought in on the premise that they are assimilating into American culture and getting more comfortable with the user community. In some organizations, Indian workers are paid $3,000 annually, nearly 67 percent of that reimbursing the worker for their lodging, leaving only $1,000 for the worker.
Best practices start at home. How are we able to maintain US jobs when even the presidential helicopter, which has been manufactured in the US for years, is the object of a bidding war for production rights with an Italian/British consortium? How is the US military able to gain solidarity as a unit when their uniforms are made in China or when the border patrol wears uniforms that are made in Mexico? What’s good for the company is no longer what’s good for the country.
What does this mean for information developers? In July and August, 2004, the Center for Information-Development Management surveyed members on organizational structure. We received more than 263 responses from Center members and non-members alike. From that survey, we learned that nearly half of the respondents outsource many of their major functions, including writing, editing, graphics, and publishing. Many departments are becoming increasingly spread out due to outsourcing and offshoring. Nearly 26 percent of respondents reported that they have department members in other countries.
The future of American jobs isn’t getting any brighter. With President Bush’s reelection in 2004, he intends to present CAFTA to Congress which would open up free trade to five Central American countries, outsourcing more jobs to foreign competitors.