Offshoring of IT Jobs Only Beginning: Page 2

Posted September 15, 2004

Sharon Gaudin

(Page 2 of 2)

Bauman says people laid off in the hard-hit manufacturing industry received federal coverage -- two years of unemployment benefits, 75 percent of medical benefits and retraining assistance. None of that has been available to high-tech workers.

Bauman says his organization, which has 250 members in 27 states, supports efforts to get these benefits for high-tech workers suffering the local effects of offshoring.

''I know people in our organization who have been unemployed for years,'' adds Bauman, who was out of work for 20 months before finding a job as a full-time consultant. ''We've heard that more IT jobs are opening up. Some of our members have found new employment. But nobody addresses the fact that you might be earning 40 percent to 60 percent less than you used to. It's getting to the point that people are desperate. I know people who are about to lose their homes, or they've declared bankruptcy. It's terrible.''

Pace agrees, adding that even though he is working today as a car salesman, his life is drastically different.

''I went from making $120,000 down to $40,000,'' says Pace. ''It's a hardship. Luckily, my wife is working. We've had to cut back on a lot of different things. I pick up part-time work here and there, working on motorcycles, and I'm learning mortgage originating... I had close to $100,000 in a 401K and we went through that.''

An Answer in Legislation?

Bauman and Pace are laying a good deal of their hopes on some pending legislation. And there's quite a few bills regarding offshoring out there.

Looking to discourage U.S. companies from moving jobs offshore, a Vermont congressman has introduced a bill that would hit companies in the wallet for taking away American jobs.

The Defending American Jobs Act of 2004 would bar companies from receiving federal grants, loans and loan guarantees if they layoff U.S. workers and hire foreign workers in their place. Put into play this past spring, the bill, sponsored by Rep. Bernie Sanders (I-Vt.), is now before the House Committee on Government Reform.

A similar bill was introduced this past winter by Senate Minority Leader Tom Daschle (D-S.D.). Under this bill, companies that plan to move IT jobs overseas may be required to disclose layoff plans three months in advance.

Daschle reportedly was responding to a Bush administration argument defending a free-trade approach to the offshoring of service jobs, including IT jobs.

Sen. Chris Dodd (D-Conn.) recently proposed legislation that would ban offshore outsourcing of federal contract work unless specific conditions are met. For example, if the product or service was only available overseas, then offshore work would be allowed.

''I think the only recourse we have right now is legislation,'' says Bauman. ''But that's only going to slow it down. It's not going to eliminate it.''

Pace agrees that the offshoring trend has too much momentum to actual draw it to a halt. The best they can hope for is to slow it down, giving workers time to prepare and giving the government time to step in and help displaced workers.

''To slow it down, we need to have some kind of protection,'' says Pace, who is president of Rescue American Jobs, a group with about 1,500 members. ''They should raise taxes on these companies. Make it more advantageous to stay in this country... We could slow this down if we cut out all the tax breaks we're giving them. Can you imagine getting a tax break to ship a job to China?''

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