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Highly skilled jobs get outsourced, too

Western New York business leaders met in Buffalo last week to discuss how to address a shortage of highly skilled manufacturing workers, such as engineers and machinists. There has also recently been a lot of talk about importing skilled workers with H1-B visas to make up for other worker shortages. And of course, we've been hearing about the effects of offshoring jobs for years.

Turns out, companies can save a lot of money by importing skilled workers and outsourcing skilled jobs. So how does that affect us as workers and college graduates?

Here is an excerpt from an interesting New York Times article from guest economist Nancy Folbre:

Since the 1990s, the global supply of skilled labor has greatly expanded and the technology for using this labor wherever it is has greatly improved. Why hire a more expensive employee when a cheaper one is available? Why pay taxes to educate and train highly skilled workers when other countries (and their families and taxpayers) will do that for you?

The disruptive impacts of globalization initially hammered workers without much education. Many workers holding college degrees remained optimistic about the benefits of international trade, celebrating improvements in their own purchasing power.

Now, my students can decide for themselves if lower prices will compensate them for reduced opportunities and lower wages. More than half of recent college graduates in the United States are either unemployed or are working in a job that doesn’t require a bachelor’s degree. Entry-level wages for employed college graduates were lower in 2011 than in 2000.

The current global recession isn’t the only cause. The economist Richard Freeman provides an extraordinarily clear account of what he calls “The Great Doubling” of labor supply resulting from structural changes that brought China and India more directly into the global marketplace.

Rather than relying merely on low-wage competition, China and India, like many developing countries, invested heavily in higher education and scientific training. While college graduates represent a small occupational elite within their large labor force, their absolute numbers are high compared with those homegrown in the United States.

College students in the United States who major in science, technology, engineering and mathematics – often referred to as STEM fields – definitely face better prospects in the labor market than others do. But even they need to be aware of intensified competition down the road.

Many software engineers and others in the information technology field feel particularly aggrieved about the effects of the H1-B visa program. The computer scientist Norman Matloff, who maintains a Web site on the topic, asserts that it enables employers to hire younger and less expensive workers, leaving many highly skilled, older programmers in the lurch.


Economy | Jobs
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