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[Steve Stone]

http://news.com.com/2100-1011-5175699.html


Tech professionals group wary of offshoring
Last modified: March 18, 2004, 5:07 PM PST
By Ed Frauenheim
Staff Writer, CNET News.com


A major association of technical professionals believes that the outsourcing of high-wage jobs
to low-wage countries poses a serious, long-term challenge to the United States' technological
leadership, economic vitality and military security.

IEEE-USA, the U.S. wing of the Institute of Electrical and Electronics Engineers, said
Thursday that the "offshoring" trend also contributes to high unemployment among U.S. techies.

"We must develop a coordinated national strategy to maintain U.S. technological leadership and
promote job growth in the United States," IEEE-USA President John Steadman said in a
statement. "But it's going to be difficult to remain technologically competitive, if we
continue offshoring the jobs of our innovators at rates currently projected."

In a policy statement, IEEE-USA said U.S. government procurement rules should favor work done
in the country and should "restrict the offshoring of work in any instance where there is not
a clear long-term economic benefit to the nation or where the work supports technologies that
are critical to our national economic or military security."

The group, which boasts more than 225,000 electrical, electronics, computer and software
engineers, also wants the government to collect data on offshoring, create new work force
assistance programs, and reform the controversial H-1B and L-1 guest visa programs.

So-called offshoring has become a hot-button election issue, as white-collar workers--
including computer programmers--worry that their jobs may be shipped to low-wage countries
such as India and China. In a November 2002 report, Forrester Research predicted that 3.3
million U.S. service jobs will move offshore by 2015.

That figure is a small fraction of total U.S. employment. But IEEE-USA said offshoring is
contributing to "unprecedented" unemployment rates for U.S. electrical and electronics
engineers, along with other information technology professionals.

The joblessness rate for electrical and electronics engineers rose in 2003 to a record 6.2
percent, compared with 4.2 percent in 2002, according to IEEE-USA. The 2003 unemployment rate
for computer scientists and systems analysts reached an all-time high of 5.2 percent, the
group said.

Industry leaders and some economists have defended the flow of high-tech work abroad, arguing
that it leads to more competitive U.S. companies and ultimately creates jobs here. N. Gregory
Mankiw, chairman of President Bush's Council of Economic Advisers, backed offshore outsourcing
in a recent report. "When a good or service is produced more cheaply abroad, it makes more
sense to import it than to make or provide it domestically," Mankiw wrote.

Likely Democratic presidential candidate John Kerry has said that federal contracts, when
possible, should be performed by U.S. workers. He has called for an end to tax credits that
give corporations breaks for moving jobs offshore.

Defenders of offshoring, however, say limiting global trade in services could backfire in the
form of a trade war or decreased innovation in the United States. Technology industry leaders
have instead suggested measures such as a permanent tax credit for research and development,
more federal R&D funds related to IT, improved education and expanded efforts to help
displaced workers.

IEEE-USA backs better education and additional worker assistance. For example, it wants to
expand the federal Trade Adjustment Assistance (TAA) program to cover all workers whose jobs
move offshore. The TAA program, which offers income support and training for workers adversely
affected by trade, currently does not apply to all technology professionals.

IEEE-USA also called for both increased federal investments in and a permanent tax credit for
R&D. But the group wants to ensure that the resulting activity generally takes place in the
United States.

"Federal investments and tax credits for research and development should be limited to work
performed in the U.S.," IEEE-USA said.

The professional group also said the H-1B and L-1 visa programs are frequently used to bring
in cheaper labor and can lead to the displacement of U.S. professionals, exploitation of
foreign workers, and "accelerated offshoring of engineering and other high-tech jobs."

Use of guest worker visas by India-based companies has been seen as fueling the shift of
technology work abroad.

Backers of the visa programs say severely restricting them would lead to more work shipped
overseas.

[octo]

Steve, Thanks for the article. I recommend it for reading by class of 2008.

Steve Stone <spfleck@zzcitlinkzz.net> wrote in message news:<MPG.1ac4efdcde5611899898d8@news.frontiernet.net>...