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Twin Evils Plague the Economy:
Tax cuts won't fix job loss due to outsourcing and excessive immigration
By Brenda Walker  

The war is over now and President Bush has returned to concerns about the economy. His solution to the economic doldrums has been a tax cut and the only debate has been over how large.

However, the simplistic idea of economic stimulus as cure-all overlooks the structural difficulties that have accumulated with decades of globalization. Applying a stimulant to this sick economy makes as much sense as giving a double cappuccino to perk up an accident victim bleeding profusely.

To quote the elder Bush, the real problem is jobs, jobs, jobs — we are losing them by the millions. Employers have tired of American workers who want a middle class paycheck for a skilled white-collar job. Instead, business is turning to India, which offers English-speaking college graduates for a pittance. Improved communications enable corporations to "outsource" all kinds of tasks that were thought safe American jobs just a few years ago, from bookkeeping to telemarketing and many others. The Newshour recently reported that phone service jobs were being relocated to India at the rate of one company per week. The person taking your catalog order may well be located in Bangalore, though employees learn American accents and slang to disguise that fact.

Worse, the job-loss hemorrhage will continue, because CEOs have much more outsourcing planned. It's estimated that employers will move about 3.3 million white-collar jobs and $136 billion in wages overseas in the next 15 years. In mid-February, Motorola announced plans to outsource all of its information technology to India.

In the early 1990s, proponents of NAFTA and other globalization schemes promised that millions of lost manufacturing jobs would be replaced by employment in the new technology sector. Now those jobs are leaving too, after only a decade.

In fact, a computer business leader recently stated, "Software development in the U.S. will be extinct by mid-2006, with gradual job losses much like the U.S. textile industry experienced in the last quarter of the 20th century."

Another major threat to American workers is exploding immigration. Permitting millions of immigrant workers to enter the nation might have made sense during the late 90's boom, but the immigration flow continues today as if nothing has changed even though nearly nine million Americans are unemployed. In the technology field, thousands of American workers have been dumped for cheap immigrants under the H-1b visa program, created by industry to lower wages. Any safeguards against this practice are imaginary, and it's not unusual for Americans to be forced to train their immigrant replacements. Remarkably, 79,100 new H-1b visas were granted in fiscal 2002 alone and Congress will soon consider raising the number to 195,000 annually. According to the Bureau of Labor Statistics, 212,000 American computer and mathematical professionals were unemployed as of March, so the need for any foreign workers is doubtful indeed.

Unregulated immigration has been devastating for blue-collar workers also. Immigrants don't just perform "jobs Americans won't do" — a contemptible myth propagated by business — but want good paying employment in fields like house building. In Clark County Nevada, illegal aliens make up 70 percent of the construction work force, with predictable effects on Americans. Unemployed house framer William Ennis reported, "I started out making $800 to $1,200 a week here for a 40-hour week. It got to where I was having to work seven days a week, 12 hours a day, just to make $600 a week. And that's just in the past three or four years."

In California, the state most impacted by immigration, professional people who made six figures a few years ago now struggle to survive. An April Field poll revealed that in the hard-hit San Francisco Bay Area, which includes Silicon Valley, 26 percent of those surveyed said they or someone in their household had lost their job within the past year. The San Jose area lost 149,000 jobs over 2001-02.

America has been foolishly frittering away its productive capacity, earlier with industry-exporting boondoggles like NAFTA, and now with the twin evils of outsourcing and excessive immigration. Businesses may save money through cheaper labor costs, but the survival of the American middle class is threatened by short-term economic thinking: we've forgotten about preserving our national engine of productivity, both human and industrial. We surely cannot remain a democratic first-world nation while eradicating the middle class. In addition, economic contraction that is both structural and permanent would severely weaken America at a time when this nation needs to be particularly productive to support an expanded military.

President Bush has repeatedly said that he wants the nation to "create more jobs." Shouldn't we first act to save the ones we have? What's to stop newly created jobs from being quickly outsourced or given to foreign workers? A doctor stops the bleeding of a hemorrhaging patient before beginning a transfusion.

Furthermore, why is there almost no discussion of these problems in the press? Other than an excellent series about outsourcing on the CNN Lou Dobbs Show ("Exporting America") in mid-May, the media has had nothing to say except to report the size of the tax cuts. The productive capacity of this nation is being sold off like old shoes at a garage sale, and no one in the press appears to notice or care.

 

Brenda Walker is a writer living in California. She is the Project Director of www.ImmigrationsHumanCost.org, a website that highlights how individual Americans have been harmed by unenforced borders.

© 2003 Brenda Walker All rights reserved.