President:
Fight outsourcing with education
He discusses delicate issue in
India, now a magnet for U.S. jobs
Saturday, March 04, 2006 • BY JEANNINE AVERSA
• Associated Press
WASHINGTON -- You lost your job. That's
probably one of the most dreaded things you'll ever hear
from your boss. Then you find out that your white-collar
position moved to the other side of the globe -- to India.
President Bush says he feels your pain and that education --
not trade protectionism -- is the answer to deal with the
increasing globalized world in which we live and
work.
Bush discussed the politically sensitive
issue in New Delhi yesterday, wrapping up a three-day stay
in India. The country's rapid growth has created anxiety
among Americans, especially as they have seen call-center
jobs, back-office administrative work, software programming
and other white collar jobs move there.
"It's painful for those who lose jobs,"
Bush said. "But the fundamental question is, how does a
government or society react to that. And it's basically one
of two ways. One is to say, losing jobs is painful,
therefore, let's throw up protectionist walls. And the other
is to say, losing jobs is painful, so let's make sure people
are educated so they can find -- fill the jobs of the 21st
century," he said.
Rep. George Miller of California, the
highest-ranking Democrat on the House Education and
Workforce Committee, argued that Bush's failed trade
policies and his lack of vision are hurting U.S. workers.
"American workers all over the country are watching as their
jobs disappear and their paychecks shrink while their
government sits by and does nothing," Miller
said.
Last year, 11,375 U.S. workers were laid
off because their jobs were moved overseas, according to the
Bureau of Labor Statistics. In many of those cases, Mexico
and China were cited as the place where the jobs were going,
a bureau official said.
In 2004, 16,197 workers were laid off
because their job was moved overseas. The figures don't
capture all layoffs -- only the bigger ones, the official
said.
For American companies seeking to compete
on a global scale, India is a magnet -- especially for
white-collar, service-sector employees --because of the lure
of lower-wage, highly educated workers who also are fluent
in English, experts say.
India's outsourcing industry alone is
expected to bring in $22 billion in revenue this fiscal
year, much of that generated by U.S. companies.
Blue-collar factory jobs in the United
States, meanwhile, have been more likely to be moved to
China or Mexico, experts say.
Although many Indians live on less than
$2 a day, the country's middle class has swelled to more
than 300 million -- which represents an attractive market
for U.S. companies to sell their goods and
services.
The United States should see this rapidly
growing nation as a land of opportunity instead of a threat,
Bush said. America's best response to globalization is not
to erect economic barriers to protect workers, but to
educate them to make sure they can compete on any stage,
Bush said.
Economists and other experts agree that
education -- especially in math and science -- is a critical
way for workers to stay competitive.
"The United States has a lot of catching
up to do," said Jacob Kirkegaard, an economist at the
Institute for International Economics.
In 2004, China graduated about 500,000
engineers, India, 200,000 and the United States, 70,000,
according to a report called "Rising Above the Gathering
Storm" issued last fall by an advisory panel of the National
Academies.
The report also found that 12th-graders
in America performed below the international average on a
test of general knowledge in math and science.
Even with an emphasis on education,
workers can't be guaranteed that their jobs will stay in
this country, some economists said.
Moreover, U.S. workers also face the
challenge of trying to figure out what the jobs landscape
will look like in the future.
"Any attempt to forecast what skills will
be needed 10 years from now is just folly," said Josh
Bivens, economist at the Economic Policy Institute, a
liberal leaning group. "If 10 years ago someone told you
financial analysts were a job that was going to be exposed
to intense global competition, a lot of people probably
would not believe it but that definitely seems to be a
possibility today."
Thus there's much risk on the shoulders
of individual workers, he said.
Global competition-- while painful to
people who lose jobs -- has economics benefits, economists
said.
As the global market grows, there are
opportunities for U.S. companies to create new
jobs.
The addition of millions of lower-wage
workers from China, India and Eastern Europe has helped to
hold down labor costs and thus make inflation lower than it
otherwise would be in the United States and
elsewhere.
For Americans, that has meant the Federal
Reserve hasn't had to be more aggressive in raising interest
rates to keep inflation in check.
Depending on the job, an Indian worker's
wage will be 10 percent to 15 percent lower than what he or
she would make for the same job in the United States, said
Kirkegaard. "But they are not going to remain that cheap for
very long," he said. "That's something that companies have
to factor into their equation when they are thinking about
whether they should outsource a particular task."
© 2006 The Star-Ledger. Used by NJ.com with
permission.
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