29
Fri, Nov
0 New Articles

Competing Against Global Neighbors for IT Jobs

Commentary
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

U.S. trade agreements promise to stabilize regions in conflict through capitalism and democracy. They also open up cheap labor markets for multinational corporations. Consequently, U.S. jobs are outsourced to low-waged, third-world skilled workers as American employees face layoffs and small businesses collapse because they are unable to compete on the global stage.

The U.S.-Central American and Dominican Republic Free Trade Agreement (CAFTA) is no different. The trade union includes Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. These six CAFTA nations together represent the second largest Latin American export market outside of Mexico, which isn't saying much. These underdeveloped countries have an average cumulative GDP per capita income of $5,300, according to the CIA World Factbook.

Legal wrangling within each national body over technical provisions has delayed CAFTA, which was to take effect on January 1, 2006. Costa Rica, the nation with the highest per capita income at $10,000, has not ratified the pact because the agreement opens up certain sectors of the nation's existing state telecommunications monopoly, such as cellular services. The opening of these sectors to private competition has created a political debate within the nation. The victors of Costa Rica's presidential and congressional elections held this month will take up the issue in mid-2006, said Mauricio Salas, a partner at law firm Facio & Cañas, Costa Rica.

Opening U.S. markets to poor nations is not a new issue of contention. Heated debate surfaced in 1992 over NAFTA, a similar trade agreement between the U.S. and Mexico. The worry was a significant loss of U.S. jobs to Mexico, where laborers made on average $1 a day. The Economic Policy Institute (EPI), a think tank based in Washington, D.C., reported major U.S. job losses under NAFTA. These numbers are now being used to predict job loss and the outsourcing effect of CAFTA. Under NAFTA, one million job opportunities were lost nationwide among all 50 states and D.C. The hardest-hit state was Michigan, which lost more than 63,000 jobs.

CAFTA invites the same worries, as U.S. manufacturers close their doors and lay off thousands of workers. U.S. laborers are not the only ones losing their jobs, however. White-collar workers, including those working in the technical field, are helpless as their jobs are outsourced to India, China, and other nations under these trade agreements.
An October 2005 report by the Information Technology Association of America (ITAA) states that while global software and IT service outsourcing displaced some IT workers, the economic activity that followed IT outsourcing created about 257,000 new jobs in 2005 and is expected to create over 337,000 new jobs by 2010. Even this lobby group admits that not all of these new opportunities will be in the IT field. "While offshore software and IT services outsourcing has displaced and will continue to displace workers in software and IT services occupations, increased economic activity creates a wide range of new jobs—both IT and non-IT," according to the report.

Daniel Griswold, director of the conservative-minded CATO Institute's Center of Policy Studies, said CAFTA is not about more jobs or fewer jobs but about better jobs. He said certain production facilities and jobs in the United States will likely migrate to Central America, such as those in textile and agricultural fields. But at the same time, CAFTA expands markets for U.S. high-tech merchandise exporters, manufacturers, service providers, and their employees. One example is Intel Corp., which operates a factory in Costa Rica. Griswold said Intel could not only produce more chips at its factory with the help of CAFTA, but also sell more product and provide more services to the Central American market. "If Central America continues its development, they will become better consumers of U.S.-made, high-tech products and services," he said.

Not everyone agrees. Robert E. Scott, a senior international economist with EPI, said a market as small as Central America will not have a major effect on the consumption of U.S. technical goods or the creation of U.S. jobs. "What Intel cares about is their ability to have access to a relatively low-wage worker who is highly skilled," said Scott.

He may be right. The U.S. Business & Industry Council's September 2005 trade analysis report states that U.S. trade and advanced technology goods suffered a major setback last year even before the passage of CAFTA. U.S. exports of tech products plummeted 7.93% in September to $17.07 billion while U.S. imports of advanced technology products increased 3.71% to $22.64 billion, the second highest total on record.

This does not bode well for U.S. workers in technical fields. What CAFTA may result in is a U.S. market focused more on the import, not the export, of high-tech goods. CAFTA countries are capable of becoming major exporters to the U.S. market, said William Hawkins, a senior fellow with the council. In his opinion, CAFTA is little more than an outsourcing agreement—a seemingly unstoppable trend as multinationals look to shave costs from their bottom line.

In 2003, U.S. firms made $119 billion total outsourcing deals, up 44% from the previous year, according to Gartner, a research firm based in Stamford, Connecticut. U.S. companies like Motorola and IBM outsource back-office processing units and other IT services to China and India. Texas-based EDS set up EDS-Africa. There, programmers build human-resource and payroll software, among other projects. An entry-level programmer can earn $18,400 annually but pays for all benefits. A U.S. worker may make $50,000 including benefits. Therein lies the problem: It is ultimately cheaper for multinationals to hire non-U.S. workers.

CAFTA is a trade agreement supported by multinationals that want to gain access to low-waged employees. The agreement will cost American jobs, put downward pressure on American workers' incomes, reduce benefits, and add to the U.S. trade deficit. To protect American jobs, EPI's Robert E. Scott believes U.S. trade policy needs to move away from a focus on multinationals' bottom lines. "The problem is that we have allowed companies to write the rules in corporate interest and not the broader interest of workers and the country as a whole," he said.

As long as this trend continues, U.S. workers are vulnerable to outside competition not from those within their own city, state, or nation—but from low-waged workers around the world.

Mary Rose Roberts is a Chicago-based freelance writer and a masters of science, journalism candidate at Roosevelt University, Chicago. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

BLOG COMMENTS POWERED BY DISQUS

LATEST COMMENTS

Support MC Press Online

$

Book Reviews

Resource Center

  • SB Profound WC 5536 Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application. You can find Part 1 here. In Part 2 of our free Node.js Webinar Series, Brian May teaches you the different tooling options available for writing code, debugging, and using Git for version control. Brian will briefly discuss the different tools available, and demonstrate his preferred setup for Node development on IBM i or any platform. Attend this webinar to learn:

  • SB Profound WP 5539More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.

  • SB HelpSystems ROBOT Generic IBM announced the E1080 servers using the latest Power10 processor in September 2021. The most powerful processor from IBM to date, Power10 is designed to handle the demands of doing business in today’s high-tech atmosphere, including running cloud applications, supporting big data, and managing AI workloads. But what does Power10 mean for your data center? In this recorded webinar, IBMers Dan Sundt and Dylan Boday join IBM Power Champion Tom Huntington for a discussion on why Power10 technology is the right strategic investment if you run IBM i, AIX, or Linux. In this action-packed hour, Tom will share trends from the IBM i and AIX user communities while Dan and Dylan dive into the tech specs for key hardware, including:

  • Magic MarkTRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now!  Request Now.

  • SB HelpSystems ROBOT GenericForms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.

  • SB HelpSystems ROBOT GenericIT security is a top priority for businesses around the world, but most IBM i pros don’t know where to begin—and most cybersecurity experts don’t know IBM i. In this session, Robin Tatam explores the business impact of lax IBM i security, the top vulnerabilities putting IBM i at risk, and the steps you can take to protect your organization. If you’re looking to avoid unexpected downtime or corrupted data, you don’t want to miss this session.

  • SB HelpSystems ROBOT GenericCan you trust all of your users all of the time? A typical end user receives 16 malicious emails each month, but only 17 percent of these phishing campaigns are reported to IT. Once an attack is underway, most organizations won’t discover the breach until six months later. A staggering amount of damage can occur in that time. Despite these risks, 93 percent of organizations are leaving their IBM i systems vulnerable to cybercrime. In this on-demand webinar, IBM i security experts Robin Tatam and Sandi Moore will reveal:

  • FORTRA Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:

  • FORTRAManaging messages on your IBM i can be more than a full-time job if you have to do it manually. Messages need a response and resources must be monitored—often over multiple systems and across platforms. How can you be sure you won’t miss important system events? Automate your message center with the Robot Message Management Solution. Key features include:

  • FORTRAThe thought of printing, distributing, and storing iSeries reports manually may reduce you to tears. Paper and labor costs associated with report generation can spiral out of control. Mountains of paper threaten to swamp your files. Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing. Manage your reports with the Robot Report Management Solution. Key features include:

  • FORTRAFor over 30 years, Robot has been a leader in systems management for IBM i. With batch job creation and scheduling at its core, the Robot Job Scheduling Solution reduces the opportunity for human error and helps you maintain service levels, automating even the biggest, most complex runbooks. Manage your job schedule with the Robot Job Scheduling Solution. Key features include:

  • LANSA Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.

  • LANSAWhen it comes to creating your business applications, there are hundreds of coding platforms and programming languages to choose from. These options range from very complex traditional programming languages to Low-Code platforms where sometimes no traditional coding experience is needed. Download our whitepaper, The Power of Writing Code in a Low-Code Solution, and:

  • LANSASupply Chain is becoming increasingly complex and unpredictable. From raw materials for manufacturing to food supply chains, the journey from source to production to delivery to consumers is marred with inefficiencies, manual processes, shortages, recalls, counterfeits, and scandals. In this webinar, we discuss how:

  • The MC Resource Centers bring you the widest selection of white papers, trial software, and on-demand webcasts for you to choose from. >> Review the list of White Papers, Trial Software or On-Demand Webcast at the MC Press Resource Center. >> Add the items to yru Cart and complet he checkout process and submit

  • Profound Logic Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.

  • SB Profound WC 5536Join us for this hour-long webcast that will explore:

  • Fortra IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn: