Corporations are escalating efforts to ship out jobs that pay well and build the middle class—and now they are aiming their axes at workers in the nation’s fast-growing white-collar sector.

The U.S. recession that began in March 2001 officially ended in November 2001, say the National Bureau of Economic Research and other analysts.

So why are so many workers still out of jobs?

“We’ve declared victory over the recession, and we’re still laying off a couple hundred thousand workers a month,” says Rep. Pete Stark (D-Calif.). “If it weren’t so painful for so many people who are out of work, it would be hilarious. But it isn’t.”

The U.S. economy has 3.2 million fewer jobs today than it did when President George W. Bush took office, including 2.5 million fewer manufacturing jobs. Bush appears headed for the dubious distinction of being the first president since Herbert Hoover to preside over a decline in total employment during his term in office.

In the past three years, nearly one in five U.S. workers was laid off from the job, according to The Disposable Worker: Living in a Job-Loss Economy, a Rutgers University¡V University of Connecticut report released in late July. Among workers laid off from full-time work, roughly one-fourth were earning less than $40,000 annually, the report finds.

In July, a total of 15 million U.S. workers were either unemployed, underemployed or too discouraged to job hunt, according to the Labor Department.

In contrast, within a year after the official end of the last recession in March 1991, the nation had embarked on six straight months of solid job growth.

This time, say economists, there are crucial differences: Companies are sending well-paying manufacturing and service jobs to countries with few, if any, protections for workers and the environment. And these jobs are probably not coming back.

“The movement of jobs and production overseas is handcuffing the recovery,” according to Mark Xandi, chief economist at Economy.com, as quoted in the New York Times.

“With NAFTA, the World Trade Organization and other trade deals of the last decade, American corporations are now tapping into a global supply of workers who can be trained to do everything from design to production, maintenance to marketing,” says Jeff Faux, economist and founding president of the Economic Policy Institute. “And while these workers become more productive, their pay doesn’t rise, because in many of these countries, to be a labor organizer means you risk winding up in a ditch with a bullet in your head.”

American jobs sent out of the country aren’t likely to return anytime soon. “As long as employers can take advantage of much lower labor costs in other countries, there’s no compelling reason to bring back many of these well-paying jobs,” says Ron Hira, an engineer and assistant professor of public policy at Rochester Institute of Technology. “Policymakers seem to be at a loss as to what to do about this problem.”

Meanwhile, the Bush administration directs multimillion-dollar tax cuts to the wealthy while supporting trade laws that encourage offshore outsourcing. And even as Bush opposes unemployment insurance extensions for some 1 million Americans who have exhausted their benefits, his administration refuses to embrace job-creating programs that would repair the nation’s infrastructure and help balance devastated state budgets.

“The Bush administration doesn’t seem to care about jobs,” says Center for Economic and Policy Research co-founder Dean Baker. “To retain and create jobs, there have to be policy changes, and I don’t think this administration is willing to make them.”

Manufacturing: America’s Foundation Is Crumbling

“American taxpayers...do not want their tax dollars subsidizing the export of their jobs.” —USWA President Leo Gerard

Manufacturing jobs traditionally have provided high wages and good benefits that allow workers to care for their families. But 2.5 million manufacturing jobs have disappeared since President Bush took office in early 2001.

Multinational corporations are transferring jobs to countries where workers earn low wages and have few or no protections. And small U.S. businesses are laying off workers or shutting their doors because they can’t meet foreign competitors’ prices.

African American workers have been hit particularly hard. Because of manufacturing job losses, the unemployment rate among African Americans is rising twice as fast as it is for whites and faster than in any downturn since the mid-1970s. “The number of jobs and the types of jobs that have been lost has severely diminished the standing of many blacks in the middle class,” says William Lucy, president of the Coalition of Black Trade Unionists and AFSCME secretary-treasurer.

Manufacturing job loss starts the downward spiral

The loss of good manufacturing jobs has ripped apart communities and permanently lowered living standards for families throughout the United States, including in Rockford, Ill., 70 miles from Chicago. The northern Illinois city is historically second only to Cleveland as a center for machine tooling, the making of tools used in machine manufacturing.

Machine tooling, which traditionally employs the most highly skilled manufacturing workers including members of the Machinists and UAW, is the bedrock of America’s manufacturing industry.

But the bedrock is crumbling. The Rockford area lost more than 20 percent of its manufacturing jobs—about 10,000—between May 2000 and 2003, according to MBG Information Services President and Economist Charles McMillion’s analysis of Department of Labor data.
General manufacturing jobs have been among those lost in Rockford, including jobs held by Steelworkers Local 745 members at the Goodyear tire plant. USWA members at Goodyear now number 750, down from 1,650 in 1999, before the corporation shipped the jobs to Asia and South America.

But most manufacturing jobs lost in Rockford have been in machine tooling. At Greenlee/Textron, which makes drill bits and tools for electrical contractors, about 180 Machinists now represented by IAM Local 1553 are employed today, down from about 900 in the late 1980s. The 112-year-old crown jewel of Rockford machine tooling—Ingersoll International—declared bankruptcy this spring and laid off 300 employees in Rockford and 70 in Michigan, leaving only skeleton crews of managers and a few contract workers.

“The lesson of Rockford,” says Faux, “is it disproves the free traders’ argument that America could afford to lose manufacturing jobs in areas like textiles and steel because we would ultimately triumph in global competition by making the things hardest to make. In fact, those things are machine tools—and we’re losing them.”

A loss of manufacturing jobs reverberates throughout the community—and ultimately the nation. When manufacturing factories aren’t being built, maintained or expanded, jobs disappear in areas such as construction.

“Our union has about 30 percent unemployment,” says Mark Bramble, business agent for Electrical Workers Local 364 in Rockford. “Guys burn through their unemployment, lose all their benefits, get divorced and then go where the grass looks greener or settle for working as a greeter at Wal-Mart.”

A question of national security

There’s a sense of betrayal in Rockford these days. “Free trade was sold to America with the line that it helps us export more goods,” says Eric Anderberg, who manages his family’s 37-year-old machine tool company, Dial Machines Inc. “But what’s happened is the exportation of our jobs and means of production so multinational corporations can exploit foreign labor and sell their goods back to us.”

Today Dial employs 40 workers, down from 75 in the late 1990s. It recently lost work to a lower-bidding Czech Republic manufacturer that nabbed a contract making parts for a supplier of General Electric Wind Energy Corp.

Anderberg and other Rockford employers worry that a Chinese government-owned machine tooling company, which already has bought two divisions of Ingersoll International, may now be poised to buy another—one containing intellectual property, including high-level research and design and military technology. “I cannot understand how our government can justify not only the debasement of our manufacturing industries but also our national security in a time of war,” he says.

The Rockford community and U.S. national security would get a boost from Buy America provisions House Armed Services Committee Chair Rep. Duncan Hunter (R-Calif.) added to legislation authorizing the 2004 Pentagon budget.

Rep. Donald Manzullo (R-Ill.), who represents the Rockford area and helped write the bill, says, “The Pentagon wouldn’t care if everything it buys is made in China.” Joined by armsmakers such as Boeing and Lockheed Martin, the White House says the Buy America provisions are “burdensome, counterproductive and have the potential to degrade U.S. military capabilities.” But the administration does not mention jobs.

“American steelworkers are also American taxpayers, and they do not want their tax dollars subsidizing the export of their jobs,” says USWA President Leo Gerard.

White-Collar Jobs: America’s Growing Export

Ask anyone which sector of the U.S. economy comes to mind as the most likely to be shipped overseas, and chances are he or she will say manufacturing.

But though the United States lost 2.5 million manufacturing jobs since the Bush presidency beginning in 2001, U.S. corporations now are racing to outsource white-collar jobs—including work in computer sciences, engineering, entertainment, financial and medical services—to countries where workers earn far less.

Terry Antisdel was a Chicago-area engineering associate for Lucent Technologies Inc. and its predecessor AT&T for 35 years until his entire 42-member International Federation of Professional and Technical Engineers Local 81 was laid off in July. He figures his job will end up in India or China. “The words management used were a 'less-expensive offshore site,’ ” recalls Antisdel, who estimates Lucent will send a total of about 5,000 U.S. jobs offshore this year. “I feel let down,” he says. “Companies used to provide jobs for people, but now they’re just there to give money to executives, board members and shareholders.”

In late July, the Washington Alliance of Technology Workers (WashTech), a Communications Workers of America affiliated group that helps high-tech workers win a voice at work, released a tape of a conference call in which IBM’s top human relations executives discussed transferring 3 million U.S. service jobs to countries such as China and India by 2015.

Testifying in June before a House Committee on Small Business investigating the globalization of white-collar jobs, AFL-CIO Department for Professional Employees President Paul Almeida said, “If these cost-saving jobs shifts are taken to their logical extreme, even American corporations should be wondering where their future consumers will be located and how they will buy the goods and services.”

A Forrester Research study predicts U.S. employers will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years, up from $4 billion in 2000.

White-collar jobs going and gone

The jobs already are leaving. By the end of this year, General Electric will have sent a total of 20,000 aircraft and medical research and design jobs to India and China, according to Business Week. And the Accenture consulting firm, which incorporated in Bermuda after splitting from Enron accountant Arthur Andersen, plans to send 5,000 accounting and software jobs to the Philippines in 2004, the magazine says.

According to WashTech, Microsoft plans to eliminate at least 800 full-time call-center jobs near Dallas and shift the work to India and Canada in the next fiscal year. It would be the largest one-time firing of full-time Microsoft employees in the company’s history. WashTech says a Microsoft senior vice president recently urged company managers to “pick something to move offshore today,” though Microsoft publicly has repeated it will not lay off U.S. workers and send the jobs offshore.

While the Bush administration remains silent about offshore outsourcing, states such as New Jersey are considering corrective measures. New Jersey legislators acted after the state outsourced the electronic administration of welfare and food stamp benefits to a company that then sent the jobs to India. When New Jersey citizens called to ask about benefits, they were connected with Indian workers who gave Americanized names.

A bill authored by state Assembly member Linda Greenstein (D) would have required such offshore subcontractors to disclose to New Jersey residents their employers’ true names and locations. But even this common- sense measure had no chance in the face
of massive opposition launched by Indian and American corporate interests, such as Verizon.

“We got a copy of an e-mail Verizon sent managers in New Jersey, thanking them for sending 1,800 e-mails opposing the bill,” says Don Rice, CWA’s New Jersey legislative coordinator. Activists and legislators hope to bring the bill to a vote before the legislative session ends this year.

U.S. security at stake

Offshore outsourcing of white-collar work also raises security concerns. U.S. firms are sending mapping and other such work to India, Pakistan, China, the Philippines and other countries with lower labor costs, says John Palatiello, administrator of the Council on Federal Procurement of Architectural and Engineering Services.

“This practice raises issues regarding access to data about the location of¡Kcritical infrastructure by individuals in foreign countries who have not been through any degree of security clearance and where control of access to data simply does not exist.”

Bush’s January 2002 State of the Union address made clear the danger of access to data by unfriendly foreign operatives: “Our discoveries in Afghanistan confirmed our worst fears....We have found diagrams of American nuclear power plants and public water facilities¡Ksurveillance maps of American cities and thorough descriptions of landmarks in America.”

Activists are demanding Congress review trade and tax policies that encourage white-collar offshore outsourcing. Without government intervention, warns Almeida, “short-sighted corporate policy focused on saving a few bucks in the short run will have an enormous deleterious impact on the entire U.S. economy.”

Low-Wage Jobs: Betray America’s Workers

Laid-off U.S. workers thrust into a hostile job market are discovering another ugly part of the American economy: low-wage work that pays too little to keep even a small family out of poverty.

Nearly a quarter of all U.S. workers labor in jobs that pay little but are essential to society. Sixty percent of these workers are female, and many are people of color. They care for nursing home patients and clean offices at night. They prepare food, answer call-center phones and care for our children.

These jobs generally pay less than the $8.85 hourly wage the U.S. government says it takes to keep a family of four out of poverty. Even so, many low-wage jobs offer only part-time hours, with few or no benefits. And workers in low-paying but essential jobs often are treated as disposable, quickly fired if they get sick or stay home with a sick child.

As more good jobs leave the country, the percentage of low-wage jobs keeps growing. By 2010, about 30 percent of working Americans won’t be making even poverty wages, according to the U.S. Department of Labor. A Labor Department list of the 10 occupations likely to show the largest job growth this decade is dominated by jobs that typically pay poorly—food preparation, customer service, office clerking, security and food service.

This world of low-wage jobs and the workers who do them is illuminated in The Betrayal of Work: How Low-Wage Jobs Fail 35 Million Americans, published on Labor Day by the New Press. “Traditionally, there was a promise in this country that if you worked hard, you could take care of your family,” explains author Beth Shulman, an attorney and former United Food and Commercial Workers vice president. “That promise has been broken¡Kand we have built our national prosperity on their backs.”

No job is inherently low wage

To order The Betrayal of Work, which costs $25.95 plus shipping and sales tax where applicable, visit The Union Shop Online.

Workers in low-wage jobs frequently are labeled as lacking skills and in need of training to move into better-paying positions. But while education is a traditional route to higher pay, Shulman contends no job is inherently low wage.
“Take autoworkers, who had horrible jobs that became good ones because of unions and social legislation,” she says. “The same thing must happen with currently low-paying service- sector jobs. In Las Vegas, for example, the housekeeper represented by the Hotel Employees Restaurant Employees has decent wages and benefits thanks to unionization.”

Low-wage jobs tend to imprison the workers who perform them because of what Shulman calls a “piling on” of hardships. Workers in low-wage jobs are unlikely to have sick leave or health insurance or make enough money to afford reliable transportation or child day care. At the same time, they are likely to be in inflexible situations in which being late or missing work can result in a quick firing.

“It’s not just that you make less money in these jobs, but you have none of the basic things many of us take for granted, such as health insurance, time to care for a family member, adequate child care, some kind of retirement security, even a telephone,” Shulman says. “And this applies to one in four U.S. workers.”

Gap is growing between U.S. rich and poor

As low-wage work continues to replace jobs that pay well, the U.S. economy increasingly resembles that of a less-developed nation, with a wide gulf between rich and poor. Among all western industrialized nations, the United States has the greatest income and wage inequalities, with the best-paid 10 percent of workers making 16.6 times the amount made by the lowest-paid 10 percent, according to a 2003 analysis by the United Nations Development Program. “That’s the way we’ve been moving for some time now and continue to move,” says Heather Boushey, a Center for Economic and Policy Research economist.

To reverse this trend, the United States needs to change the rules of the game, according to Shulman. “For starters, we should immediately raise the minimum hourly wage to the poverty guideline for a family of four—$8.85 an hour versus the current $5.15 hourly federal minimum wage—and then have automatic increases so there’s not a big political battle every time it needs raising. Then, all Americans should have access to affordable health care. There are a variety of ways to do this, and we should just get it done.

“Finally, all American workers should be able to care for their children—to have access to affordable child care, and to stay with them when they’re sick or go to a PTA meeting without getting fired. The consequences for the children of today’s low-wage workers are enormous—they’re following their parents into this low-wage world.” @