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December 2003 Is there anyone out there who will work for free

Is there anyone out there who will work for free?

These are truly trying times for labor.

In the late 1980's, United States workers were dumbfounded as they sat by and watched General Motors close its plant in Flint, Michigan, to seek cheaper labor for producing its vehicles on the order of 70 cents per hour in Mexico. The resultant labor vacuum ruined the city of Flint and the livelihoods of thousands of skilled autoworkers. But a greater implication was in play, the furthering of a growing trend for major corporations to seek labor contracts overseas.

And now, the Information Technology (IT) sector, once a promising industry for computer professionals in the booming technology renaissance of the late 1990's, is now going through a similar tribulation. With this decade's bursting of the tech bubble, companies have been forced to look comprehensively at their once-lavish expenses and make cuts wherever humanly possible. This partly occurs through trimming the fat off of employee travel and benefits, but is increasingly occurring through the movement of technology jobs out of the country. The buzzword for this new trend is “outsourcing.” Unlike manufacturing jobs, where moving operations overseas might result in high capital expenditure to move and larger shipping expenses to move goods, information is intangible and thus barriers to moving operations (besides linguistic and cultural) really don't exist. It is a highly transferable commodity, and there are literally millions of workers in India, China, and Russia, where most IT outsourcing is taking place, that are receiving these jobs. They can be employed in their native countries or be granted visas to work in the U.S. for lower wages than American workers.

Though the legality of it is certainly not in question, and companies scarcely have a choice if they wish to remain competitive, the overall moral implications of outsourcing IT labor is akin to the rampant large-scale copying of copyrighted digital media by the Chinese. They seek to sidestep paying for the true value of the labor involved in creating merchandise and services to find a cheaper alternative. They can get away with this because they operate in a jurisdiction that does not enforce the rule of enlightened American financial law.

There is a reason we have a Federal Minimum Wage in this country – to prevent the lower classes from having to compete for wages so dismal that they had no financial hope whatsoever. And now, business is seeking out a class even lower than this country's lowest to exploit. So many companies seeking cheaper labor overseas does not mean that this is an evolutionary trend, a progression of our society from one economic base to another, it means that United States economic power is making no apologies for attempting to enslave the world for our corporations' bottom lines.

The United States boasts by far the largest economy in the world. In fact, the state of California alone ranks as the world's fifth largest economy. North America consumes one quarter of the world's resources and only represents about five percent of the population. With such an obvious disparity between our wealth and that of the rest of the world, it is clear that the stable U.S. economy is unprepared to commingle with such smaller scale ones. With the job floodgates now standing firmly open, jobs are flying out of sight faster than most of us can notice.

The capitalism purist would tell you that this is the “Invisible Hand” of economics wending its way through the corridors of history, and that we have no recourse but to find a new profitable path to make our way as individuals. They see this as a good sign – that our less pleasant, menial jobs will be done by others, while more highly skilled jobs will be created as a result of healthier corporations. But the jobs being lost now are the very ones that so many have spent years studying and training for in the last ten years, and now they are disappearing as well. And morale is being destroyed as workers who helped build and fuel the recent unprecedented expansion of technology are being discarded. Even India might be hit by a trickle-town effect as more outsourcing firms begin to look at even cheaper sources of labor in Romania and the Czech Republic. Said a Bangalore, India call center owner, “It's hard to know where it will all end. Is there a country where people will work for free?”

Organized labor and government regulations are supposed to represent a countervailing force to undesirable trends in laissez-faire capitalism, and the time is coming for these issues to be addressed in Washington. Unfortunately, the Bush Administration really has no plans to block companies from outsourcing. If government does not step in, growing unrest will take hold among IT professionals, who may seek to organize against companies that are considering outsourcing.

I truly hope that our economic prophets are correct, and that there will be shining jobs waiting for us at the end of the tech rainbow. But the pessimist in me sees dark clouds gathering; an inevitable collapse of American technology jobs, as the middle class continues to whittle its way out of existence.