"Offshoring" of high-tech jobs defended
Leading technology companies urged Congress and the Bush administration not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower.
Jan 12, 2004
WASHINGTON - Leading technology companies urged Congress and the Bush administration not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower.
The companies said such policies would do little to resolve long-standing problems more broadly affecting America's global competitiveness, such as inadequate research spending and schools that produce students with low test scores.
Erecting barriers, they said, "could lead to retaliation from our trading partners and even an all-out trade war."
The effort shows the industry's growing concerns that lawmakers may clamp down on the "offshoring" of U.S. jobs during an election year. Already, some Democratic candidates have criticized the practice.
"There is no job that is America's God-given right anymore," Carly Fiorina, chief executive officer for Hewlett-Packard Co., said yesterday. "We have to compete for jobs."
In a report by a trade group for some leading technology companies, executives argued that moving jobs to countries such as China or India - where labor costs are cheaper - helped businesses break into lucrative foreign markets and hire skilled and creative employees in countries where students perform far better than U.S. students in math and science.
"Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment," said the Computer Systems Policy Project, a Washington group whose members include Intel Corp., International Business Machines Corp., Dell Inc., and Hewlett-Packard.
Intel CEO Craig Barrett said the United States "now has to compete for every job going forward. That has not been on the table before. It had been assumed we had a lock on white-collar jobs and high-tech jobs. That is no longer the case."
Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.
Marcus Courtney, a vocal critic of moving jobs overseas, dismissed the new report.
"This is not a recipe for job creation in this country," said Courtney, president of the Washington Alliance of Technology Workers, of Seattle. "This is a recipe for corporate greed. They're lining up at the public trough to slash their labor costs."
A Commerce Department report last month said increasing numbers of technology jobs were moving from the United States to Canada, India, Ireland, Israel, the Philippines and China - and predicted that "many U.S. companies that are not already offshoring are planning to do so in the near future."
The subject has been the focus of several congressional hearings, and some lawmakers have asked the General Accounting Office for a study on the economic implications of moving technology jobs offshore.
Even as technology companies lobby against limits on offshore employment, they are urging the Bush administration to approve new tax credits on research and development spending, spend more on university research on physical science, and adjust tax depreciation schedules for technology purchases. They also want improvements in education.
The companies said such policies would do little to resolve long-standing problems more broadly affecting America's global competitiveness, such as inadequate research spending and schools that produce students with low test scores.
Erecting barriers, they said, "could lead to retaliation from our trading partners and even an all-out trade war."
The effort shows the industry's growing concerns that lawmakers may clamp down on the "offshoring" of U.S. jobs during an election year. Already, some Democratic candidates have criticized the practice.
"There is no job that is America's God-given right anymore," Carly Fiorina, chief executive officer for Hewlett-Packard Co., said yesterday. "We have to compete for jobs."
In a report by a trade group for some leading technology companies, executives argued that moving jobs to countries such as China or India - where labor costs are cheaper - helped businesses break into lucrative foreign markets and hire skilled and creative employees in countries where students perform far better than U.S. students in math and science.
"Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment," said the Computer Systems Policy Project, a Washington group whose members include Intel Corp., International Business Machines Corp., Dell Inc., and Hewlett-Packard.
Intel CEO Craig Barrett said the United States "now has to compete for every job going forward. That has not been on the table before. It had been assumed we had a lock on white-collar jobs and high-tech jobs. That is no longer the case."
Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.
Marcus Courtney, a vocal critic of moving jobs overseas, dismissed the new report.
"This is not a recipe for job creation in this country," said Courtney, president of the Washington Alliance of Technology Workers, of Seattle. "This is a recipe for corporate greed. They're lining up at the public trough to slash their labor costs."
A Commerce Department report last month said increasing numbers of technology jobs were moving from the United States to Canada, India, Ireland, Israel, the Philippines and China - and predicted that "many U.S. companies that are not already offshoring are planning to do so in the near future."
The subject has been the focus of several congressional hearings, and some lawmakers have asked the General Accounting Office for a study on the economic implications of moving technology jobs offshore.
Even as technology companies lobby against limits on offshore employment, they are urging the Bush administration to approve new tax credits on research and development spending, spend more on university research on physical science, and adjust tax depreciation schedules for technology purchases. They also want improvements in education.