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Lawmakers discuss IT offshoring

By
RYAN HOLEYWELL

WASHINGTON, June 27 (UPI) -- Democrats on the House Science Committee said American science and technology jobs are being lost to workers overseas, but more research needs to be done to learn just how pervasive the practice may be.

Rep. Jerry Costello, D - Ill, said that during the first quarter of 2004, the U.S. Labor Department reported 4,633 jobs science and tech jobs had been moved abroad. But a report from an Indian trade group called the National Association of Software and Service Companies indicates 50,000 technology jobs are going from the U.S. to India every quarter.

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"In order to address the issue, we have to get reliable data," Costello said at the discussion. "The first thing is to acknowledge the problem. The second is to gather the data."

The event, characterized by leaders as a task force rather than a formal hearing, came a day after Wachovia Corporation, the country's fourth largest bank, announced it would be outsourcing some of its technology jobs to India. The move could affect up to 3,000 employees who work for Wachovia, Reuters reports.

Rep. Bart Gordon, D - Tenn, said he notices a "disturbing" trend of US. companies increasing their off-shore science jobs, largely the fields of IT and programming, to countries such as India and China that have an increasing number of well-trained scientists.

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"Although many reports have been issued and many recommendations have been made, we really have little data on the state of our science and engineering workforce - both nationally and internationally," Gordon said at the meeting.

Dr. Ronil Hira, a professor at Rochester Institute of Technology, pointed out that two Indian IT service companies - Infosys and Wipro - had profit margins far exceeding those of the American companies including Electronic Data Services and Computer Services Corporation. He said it is "not simply coincidence" that India's IT job market is hot while America's languishes.

"Executives should not be vilified for offshoring, since they are pursuing what they believe is in the best interest of their shareholders," Hira said at the meeting.

He went on to cite figures from the Bureau of Labor Statistics indicating that more than a third of workers who were displaced between 2001 and 2003 still had not found jobs by January of 2004; of those who did find work, 60 percent had to take a pay cut at their new jobs. Michael Teitelbaum, a demographer at the Alfred P. Sloan foundation, said the unemployment rate of computer programmers is at or exceeding the national unemployment level, which is unique.

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In addition to unemployment and wage depression, another problem facing American workers, Hira explained, is that offshoring will change the mix of U.S. jobs. Exactly what that new mix will be is unknown, leaving some wondering how exactly they should train for the future.

"Since companies have no self-interested reason to reveal their offshoring plans, we are all left to speculate on what will go and what will stay," Hira said.

There is currently a surplus of "highly qualified" workers with postgraduate educations in the field of technology, telecommunications, computing and software in America, Teitelbaum said. He also said the problem in furthered by the increase in federal H-1B visas given by the federal government to foreign workers from 2001 to 2003. "The timing could not have been worse," Teitelbaum said, noting this was the same time the IT industry began tanking.

Hira said the problems facing American workers could be alleviated by offering trade adjustment assistance for programmers who have lost their jobs, but he stressed workers must adapt to a changing environment. Americans need to develop skills that can't be exported to other countries, said Dave McCurdy, a former congressman and current president of Electronic Industries Alliance.

"We have to be tech-friendly; we have to be innovative," McCurdy said. "That's a skill set that's not exactly transferable."

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McCurdy also said the World Trade Organization should enforce rules about trade barriers and intellectual property protection. He also encouraged leaders to fund workforce assistance and training programs as well as research and development in technological field, but Costello said that might be difficult given the current budget deficit. Several scientists and congressmen said America needs to provide more opportunities to students studying science at all educational levels.

"We were 43rd out of 45 industrial nations in our scores," Gordon said, citing a recent study of American students' knowledge of science. "We did beat out Cyprus and South Africa."

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