White-collar sweatshops

"Globalization" is becoming a dirty word to U.S. tech workers, increasingly angry and anxious as their jobs disappear overseas, never to return.

By Katharine Mieszkowski

July 2, 2003 | John Napier, 53, a senior software engineer at Massachusetts-based EMC Corp., was laid off two years ago.

Despite his master's degree in engineering and 15 years of experience, Napier has been unable to land a new gig since. "I've never in my adult life seen so many ads looking for gold specs that are practically unachievable," he says. "The interviews are so few and far between. Or they're just fishy interviews. People don't seem serious about interviewing."

Napier says that neither the bursting of the late-'90s tech bubble nor the doldrums of a poky recovery from the recession explain his layoff and ongoing unemployment. He places the blame for his woes on globalization: the double whammy of American companies flooding an already soft job market with foreign workers brought into the United States on H-1B visas while at the same time employing non-U.S. workers still in their home countries to write code or perform other high-tech services.

The latter practice, known as "outsourcing" or "offshoring" or even "near shoring" when it takes place in a neighboring country, is based on a simple economic rationale: Cut costs by sending work overseas to someone who will do it for less money. In the past, such work tended to be relatively low-skilled, such as answering customer service calls, or handling simple forms of tech support. But no longer. Now programmers are feeling the pinch, and the phenomenon may be quickly spreading out of the high-tech sector.

A new study from A.T. Kearney, a management consulting company owned by Electronic Data Systems, predicts that in the next five years U.S. banks, brokerages and other financial service companies will relocate more than 500,000 jobs offshore -- fully 8 percent of their workforce. According to A.T. Kearney's research, the jobs that will move away include "high-end internal functions" such as financial analysis, research, regulatory reporting, accounting and graphic design.

Globalized outsourcing is where the white-collar world meets the sweatshop, and an increasingly thick slice of laid-off workers, like Napier, fear that their jobs haven't just temporarily disappeared in a dip in the economic cycle -- they've gone overseas and are never coming back.

"Globalization is now causing insecurity higher up the food chain," says Josh Bivens, an international economist at the Economic Policy Institute.

For some laid-off employees, like Napier, the trend is nothing less than a betrayal. "The entire American way of life is being mortgaged by a small set of entrepreneurs," he says, "and it's not doing us any good." While he waits for someone to look at his résumé, Napier has found a new salary-free vocation -- as an activist picketing business conferences that train companies how to go offshore.

In January 2003, Napier's theory of the real reasons underlying his continued employment received some direct support. EMC, Napier's former employer, announced the opening of a software-development facility in Bangalore. Initially, the center will do software support and maintenance, but eventually it will contribute to development of the core storage product.

Next page: "These aren't low-level jobs we're talking about. These are America's best-paying jobs"