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Slide-Lok Garage Storage Cabinets Storage cabinets for the garage, pantry, or basement. The original name in garage storage. Find a dealer near you or apply to become a distributor. Locate a Dealer | Become a Dealer | Storage Solutions | Design Center The New York Times > Technology > Send Jobs to India? Some Find It's Not Always Best Send Jobs to India? Some Find It's Not Always Best April 28, 2004 By EDUARDO PORTER Some entrepreneurs are finding that India's vaunted high-technology work force is not always as effective as advertised. From Motorola to nursing school From Motorola to nursing school Jonathan J. Higuera The Arizona Republic Apr. 25, 2004 12:00 AM "The frustrating thing is having to consider $10-an-hour jobs," said Carol Martin, 37, a former business analyst with Motorola Inc. "I never would have before. Now it sounds pretty good." Moving off shore • Phoenix-area jobs in jeopardy • No IT job, no spot at Home Depot • Less is more in aftermath of lost job • Technology hits white-collar jobs • 65 percent of local firm's employees work in India • Company likes having manuals written abroad • From Motorola to nursing school The married mother of one child went from making $70,000 in her last year with the company's Semiconductor Products Sector to virtually nothing since being laid off in February 2002. The family now lives off the income of her husband, who works for the state, while Martin studies to become a nurse. She estimates the family income has dropped two-thirds. Technology hits white-collar jobs Jonathan J. Higuera and Jon Kamman The Arizona Republic Apr. 25, 2004 12:00 AM If your job relies on Internet and telephone connections, it can be done from far, far away. For several years, the phenomenon seemed to affect only low-level work, such as staffing a call center. But today, thousands of jobs fleeing to low-wage countries at the speed of electronic data transfer are no longer grunt work. U.S. workers have global competition - and often are losing. Moving off shore • Phoenix-area jobs in jeopardy • No IT job, no spot at Home Depot • Less is more in aftermath of lost job • Technology hits white-collar jobs • 65 percent of local firm's employees work in India • Company likes having manuals written abroad • From Motorola to nursing school "The problem is this happens very fast and you ask people to make these adjustments very fast, and a lot of people can't," said Frank Levy, an urban economics professor at the Massachusetts Institute for Technology. No IT job, no spot at Home Depot No IT job, no spot at Home Depot Jonathan J. Higuera The Arizona Republic Apr. 25, 2004 12:00 AM Joel Wigman, a former computer programmer, now spends his days hoping that his application at a pest-control company gets picked up. Moving off shore • Phoenix-area jobs in jeopardy • No IT job, no spot at Home Depot • Less is more in aftermath of lost job • Technology hits white-collar jobs • 65 percent of local firm's employees work in India • Company likes having manuals written abroad • From Motorola to nursing school Home Depot, among others, already has turned down Wigman in his job search. It's a far cry from the salad days of making $161,000 a year, when his employer, Affiliated Computer Services, had contracts with ON Semiconductor and Motorola and he ran an IBM mainframe computer system for them. http://www.azcentral.com/12news/news/articles/0425offshore-main-CP.html Phoenix-area jobs in jeopardy Offshoring risk higher in Valley than in other areas Jane Larson The Arizona Republic Apr. 25, 2004 12:00 AM Cheaper to do business here than in California? Sure. Cheaper to do business here than India or other international sites? Not exactly. Metro Phoenix appears more vulnerable to jobs moving offshore than much of the nation because of its base of office support work and high number of computer professionals. Off shore By the numbers Indian workers on average are paid only one-fourth what U.S. workers earn in the same type of job, according to the National Association of Software and Services Companies. Quotes "I would like to say I'd keep American jobs. But if it came down to my business succeeding or not, I'd look for some kind of balance. It really comes down to how socially responsible you want to be." - Carol Martin, laid-off Motorola business analyst studying to become a nurse "We need to look in the mirror. We can't simply say, 'I deserve to be paid higher because I was born in the U.S.' Now the competition is global." - Buck Pei, associate dean for Asian Pacific programs at Arizona State University's W.P. Carey School of Business "It's had a significant downward pressure on wages. I don't think it's the major culprit (of wage stagnation), but it's a significant factor." - Robert Scott, an economist with the Economic Policy Institute in Washington "Some of it is necessary. But they've overdone the downsizing locally and cut out innovation, which you need to get the next product into the pipeline." - Bill Austin, a laid-off Motorola engineer who recently took a job as a sales manager for a start-up magazine Related stories • Phoenix-area jobs in jeopardy • No IT job, no spot at Home Depot • Less is more in aftermath of lost job • Technology hits white-collar jobs • 65 percent of local firm's employees work in India • Company likes having manuals written abroad • From Motorola to nursing school "Phoenix has been a back office to California, and it's back-office jobs that are pretty vulnerable," said Cynthia Kroll, senior regional economist at the University of California-Berkeley. A job lost means pain, upheaval and a period of readjustment, often at a lower salary. Carol Martin has traded a Motorola analyst job for nursing school, and trips to a hair salon have turned into visits to a franchise haircutter. After two years looking for work, Denise Finn took a job with a contractor doing business for American Express, her former employer - at a 30 percent pay cut. Almost 230,000 metro Phoenix jobs ranging from payroll clerk to computer programmer theoretically could be done overseas, though only 23,000, or one-tenth of them, are likely to move offshore in the coming years, according to the Greater Phoenix Economic Council and researchers at UC-Berkeley. The loss of jobs in Arizona and the rest of America has put workers on edge and corporations on the defensive, and it has become a highly charged topic in the presidential election. Economists warn that our increasingly global economy is in the midst of an uncertain transition, and even if the United States prospers in the long run, inevitably some workers and industries will lose along the way. White-collar workers Manufacturing jobs have been moving from the United States to other countries for decades, economists note, and companies say global competition puts them under tremendous pressure to cut costs and be more efficient. What is different about the newest wave is that it includes white-collar jobs that can be done with a computer, a telephone and little face-to-face customer contact. The new wave started with lower-paying, more routine jobs but has spread into information technology and software. Engineers worry that they are next. "As a professor, there is nothing more depressing than to run into a former student who is unemployed," said Jami Shah, a mechanical and aerospace engineering professor at Arizona State University's Ira A. Fulton School of Engineering. "You hear from everyone that if you work hard, go to college and do something high-tech, you are assured of a good job and a good life. Yet these people don't have it." UC-Berkeley researchers estimated that some 16.4 million U.S. jobs, or 12.8 percent of the total, fall into six broad categories that could be done overseas. But they said a higher share of California jobs, 13.6 percent, fall into those categories, and GPEC found that an even higher share, 14.4 percent, of metro Phoenix's jobs do. "It does not mean all those jobs will be offshored," said Kroll, co-author of the California report. "At risk does not mean en route." Other studies suggest that just 10 percent, or 1.6 million, of the nation's jobs at risk would actually move overseas, Kroll said. That would mean nearly 23,000 jobs, or about 1.4 percent of metro Phoenix's 1.6 million jobs, are likely candidates for off- shoring. That's a small share, but it comes on top of years of big layoffs at metro Phoenix tech giants like Motorola Inc. and Honeywell International. And because many vulnerable jobs are lower-paying office positions, workers would need extra education to stay even or would sink into the Valley's greater pool of even lower paying jobs. Collectively, jobs lost jolt the economy if other positions aren't created quickly. Officials at the Greater Phoenix Economic Council were "a bit shocked" at the extent of the Valley's exposure to the newest threat. "There is a raging debate whether (offshoring) is good for the economy long term," GPEC President Rick Weddle said. "My sense is it's inevitable. It's been going on in manufacturing for years. . . . Over the short term, there will be serious consequences to local economies we will have to deal with." The GPEC study, based on the work from UC-Berkeley, identified 228,300 metro Phoenix jobs in the affected categories in 2002. That includes some 160,800 Valley residents employed as customer service representatives, computer operators and similar support jobs, which paid a below-Valley average of $26,700 a year. About 900 medical transcriptionists, averaging $29,080 a year, also would be vulnerable. Though fewer in number, the remaining 66,500 metro Phoenix jobs deemed vulnerable pay above-average wages. They include: • Computer and math professionals, averaging $57,650 a year. • Business and financial support jobs, such as accountants, tax preparers and budget analysts, averaging $46,000 a year. • Paralegals and legal assistants, averaging $39,210 a year. • Radiologic technologists and technicians, averaging $38,490 a year. But Kroll said if companies move jobs from high-wage California regions like San Francisco, San Jose or Orange County, they could move them to Phoenix or overseas. Global competition The U.S. Bureau of Labor Statistics predicts that high-tech industries will add 1 million net jobs by 2012, mainly in communications and software services. And the recent growth in U.S. jobs should help balance the offshoring trend, Kroll said. But other countries, particularly India and China, have caught up to the United States in education levels and in telecommunications infrastructure. "We need to look in the mirror. We can't simply say, 'I deserve to be paid higher because I was born in the U.S.' Now the competition is global," said Buck Pei, associate dean for Asian Pacific programs at ASU's W.P. Carey School of Business. Shah, the ASU engineering professor, recently coordinated a National Science Foundation conference to pin down a future for American engineering. Final recommendations aren't out yet, he said, but they could include suggestions that U.S. engineers switch from simple tasks like designing gears to higher-level ones like integrating systems. Another strategy would be to focus on innovating products rather than manufacturing them, Shah said. Bill Austin, an engineer laid off from Motorola in 2002, thinks offshoring will come back to haunt firms. "Some of it is necessary," said Austin, who now works as a sales manager for a startup magazine. "But they've overdone the downsizing locally and cut out innovation, which you need to get the next product into the pipeline." Despite the uproar, there are few hard numbers to quantify how bad a problem offshoring might be. Government agencies that monitor job gains and losses don't track the reasons why a company laid off workers. Offshoring is behind some of it, experts say, but it just as likely that the recession, the bursting of the tech bubble and productivity improvements have forced job cuts over the past three years. Solutions proposed Think tanks and economists have proposed a variety of solutions. Many say services workers should be eligible for the same federal retraining programs that manufacturing workers received. Some propose insurance-like programs that would pay workers the difference between the salary of their offshored job and the salary of a new job during retraining. There are calls for increased funding for research and development. Others say there is plenty of room for more information technology in health services, construction and small to mid-size businesses. Long term, some say, the United States must stay ahead of its competition and improve students' performance in math and science. "It's never good if you are trying to pay your mortgage and your job gets offshored," said Bill Youngdahyl, an associate professor of operations management at Thunderbird, the Garvin School of International Management. "The question is how do we make this good for Arizona. What new opportunities can be created from this?" Reach the reporter at jane.larson@arizonarepublic.com or (602) 444-8280. Staff reporters Jonathan Higuera and Jon Kamman contributed to this article. ~ Sunday, May 02, 2004
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