Offshoring is Major Cause of Technical Unemployment -IEEE 29

[Ron07663]

USA Engineers -- read it and weep!

http://www.ieeeusa.org/careers/pdf/employmentsurvey2004report.pdf

Also checkout

http://www.aea.org

Ron

 

[QCE]

62% unemployment caused by downturn in business
15% caused by offshoring

 

[sms]

From the US BLS:

THE EMPLOYMENT SITUATION: MARCH 2005

Total nonfarm payroll employment increased by 110,000 in March, and the
unemployment rate declined to 5.2 percent, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today. Several industries added jobs
over the month, including construction, mining, health care, and wholesale
trade.

 

[rhodie]

Re: March 2005 employment situation:

One data point is never useful.

If you look at the last 7 years, the US is down an est. 3 million manufacturing jobs. That is considering only manufacturing jobs.

http://www.aflcio.org/yourjobeconomy/jobs/outsourcing_problems.cfm

 

[QCE]

I personnelly don't like to see political propaganda used as facts.

 

[GregLocock]

Thanks QCE, so the heading for this thread should be

"Offshoring is Minor Cause of Technical Unemployment -IEEE"

Oh well, that wouldn't be as exciting and alarmist, would it? Your (generalising) wages are too high. You are lazy, process driven, and complacent. Your bosses are right to outsource your jobs.

Mind you, you don't read the other half of the story

"Australian Automotive Engineers in short supply because they find it so easy to get engineering work that was previously done in the USA because they are cheaper and better"



Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[Ron07663]

23%drop in employed USA electrical engineers since 2000 tells me where engineering is going in the next 5 years- it is going overseas!


"NEWS from IEEE-USA
U.S. Technical Employment Falls by More Than 220,000 Workers from 2000 to 2004
Washington (3 March 2005) - The number of employed U.S. technical workers has fallen by 221,000 in six major computer and engineering job classifications from 2000 to 2004, according to data compiled by the U.S. Department of Labor's Bureau of Labor Statistics (BLS).

The largest drops occurred among computer programmers, followed by electrical and electronics engineers, then computer scientists and systems analysts. These declines were offset by substantial employment increases for computer and information systems managers, computer hardware engineers and computer software engineers.

"The drop in computer programmers and rise in managers reflects the trend toward offshoring of programming jobs and the resulting need for professionals to manage outsourced projects," IEEE-USA President Gerard A. Alphonse said.

According to the BLS, computer programmers have taken the biggest hit, with a drop of more than 24 percent -- from 745,000 in 2000 to 564,000 in 2004. In addition, the number of employed electrical and electronics engineers shrunk by 101,000, from 444,000 in 2000 to 343,000 last year, a decrease of nearly 23 percent. Computer scientists and systems analysts have experienced similar losses, dropping more than 16 percent, from 835,000 in 2000 to 700,000 in 2004.

However, employed computer and information systems managers have jumped from 228,000 in 2000 to 337,000 last year, a dramatic increase of almost 48 percent. Computer hardware engineers rose from 83,000 in 2000 to 96,000 in 2004, a nearly 16 percent increase. Employed computer software engineers have risen by 74,000, from 739,000 in 2000 to 813,000 in 2004, a 10 percent increase.

The table below summarizes the BLS data:



Job Classification
2000
2004
Change
Pct.

Computer Hardware Engineers
83,000
96,000
+13,000


+15.7

Computer & Info. Systems Managers
228,000
337,000
+109,000


+47.8

Computer Programmers
745,000
564,000
-181,000


-24.3

Computer Scientists & Systems Analysts
835,000
700,000
-135,000
-16.2

Computer Software Engineers
739,000
813,000
+74,000
+10.0

Electrical & Electronics Engineers
444,000
343,000
-101,000
-22.7

Total
3,074,000
2,853,000
-221,000
-7.2
"

 

[GregLocock]

OK, so the dinosaur industry engineering jobs (including automotive and computers) are moving overseas. Is this not what you'd expect? Do you really think the world will pay exceptionally high wages (say 20% premium typically) for engineers in mature industries who are not innovating? Why would it?

The USA has traditionally been innovative and productive. This has justified your high wages. So stop whining about the jobs that are disappearing, go and invent another whole new industry and watch that grow. That's how your predecessors created the society you live in and see the benefits of.

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[rhodie]

I am a little confused with your condescending tone, Greg, but you are as sharp as usual. Your posts make me smile.

1. My "high wage" can only be correlated to that of the other wage earners in my country. It should not be compared to that of the rest of the world. Costs are not the same across borders, so why should wages be?

2. The corporate "groupthink" in my country justifies moving jobs overseas through claims that they must in order to remain comptetitive. What a load of bull. I do not pay comparatively lower prices now for my purchases than my parents did 20 years ago. I never demanded the corporations in my country to give me lower prices at the cost of taking jobs away from my neighbors.

I do not think US corporations are doing any favors to Asian countries by sending jobs to them that only pay US$1.20 per day. That is only lending a form of indentured servantcy to those nations. Additionally, those same US corporations are exporting pollution to those countries for lack of proper controls. At the least, it is encouraging foreign equivalents to ignore industry practice of minimizing pollution for the simple ironic reason of being cheaper than the US facilities observing such regulations.

3. I'll pay higher prices any day if I know that 100% of my purchase goes to stregthen the domestic economy by paying domestic wages, buying domestic material, funding domestic R&D, and observing domestic environmental/safety regulations. I'm an American first and foremost, not a just a global "consumer".

4. Your idea of a "Just make something else up!" economy is a little hard to achieve when most of your raw ability to "make something" is somewhere else. Besides, if we do "invent another whole new industry", it'll soon be knocked-off by a foreign trading parter that does nothing to observe intellectual property rights.

I enjoy your posts, but we must agree to disagree here, Mr. Locock.

 

[GregLocock]

I'm not trying to be condescending (it comes naturally) what I'm annoyed by is 'the sky is falling' nature of this sort of report.

1 "Costs are not the same across borders, so why should wages be? " You sell your services globally. The global customer does not care what your local cost of living is. All we see is "hours of productive engineering per dollar spent". Say you choose to live in an expensive neighborhood. Should you be paid more because of that?

2 "I do not pay comparatively lower prices now for my purchases than my parents did 20 years ago" yes you do. Adjusted for inflation (or average wages) you probably pay less for just about everything than they did, with the admitted exceptions of land, housing, medical care and shares. The latter I can explain easily, the first two are due primarily to increased demand, and medical care is an ongoing disaster, primarily driven by some surprisingly socialist practices in the land of the free. Grin.

3 "I'll pay higher prices any day if I know that 100% of my purchase goes to stregthen the domestic economy "
That's fine. All your countrymen buying stuff at walMart are rather working against you though. This is not, however, how the purchasing department of successful big companies work, in any country. Historically those countries with the least barriers to overseas trade have been the most robust economies (although it would be easy to find counterexamples). Protecting inefficient domestic industries is a way of storing up trouble. I agree that in times of transition it may be better to offer some short term relief to a struggling industry, but you'd better make sure that the quid pro quo is that the necessary restructuring takes place.

4 "if we do "invent another whole new industry", it'll soon be knocked-off by a foreign trading parter that does nothing to observe intellectual property rights" Well hang on, why should you get premium wages if you aren't innovating and you aren't doing things that other people can't? The alternative is to wait until somebody else innovates and then you knock it off.

If this generation of Americans is content to sit back and just do the same as everybody else, worldwide, then it is hardly surprising that their pay will fall to the same level as everybody elses. How can it be otherwise?

I think one reason we disagree is that the auto industry is already so far down the track of off shoring that I just accept that as normality, and learn to live with it. In the three cubicles next to mine we have one German, one American and one real Aussie. We recruit worldwide, and work, worldwide, using a worldwide set of suppliers, designing products that will be manufactured anywhere in the world for a worldwide set of customers. It sure beats making buggy whips for the local town.

/rant off/


Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[sms]

First of all thank you Greg.

<rant mode on>
The following is a reality check for all of you that are worried that your job will be off shored and you will find yourself unemployed:

1) If you are worried about that, you are probably in an industry or job category where that is very likely to happen. Stop worrying, and do something about it. Find a job in another industry, find a job in another field, go back to school and get trained in something else. Do something to add value to your skill set, quit worrying and whining about it and do something.

2) We can argue all day long about the morality of off shoring, but it is a fact of life, and is not going away. Market forces are such that certain activities will move to places where it is cheaper to do those activities. It happened to the steel industry; it happened to the call center industry, it is happening to the auto industry and it is and will continue to happen to the chemical industry. The genie has been let out of the global economy bottle. Face it and deal with it.

3) Just because your industry segment or your geographical area is losing jobs, don’t assume that is the case across engineering or across the US. There are segments of engineering where jobs are being added, and there are segments of engineering where jobs are going away. That will always be the case.

4) A nice high paying job in engineering is not a civil right, and no matter how many organizations you form, it is very unlikely to ever be a civil right. If engineering is not making you a decent living, please go find something else to do. In addition, an engineering job in your preferred geographical location is not a civil right. If you are not willing to relocate for an engineering job, you have no right to complain in my opinion. If relocating is not an option, acquire skills that will get you gainful employment in your preferred geographical area. I hear Doctors and Lawyers are in demand everywhere….

5) I find it interesting that there seems to be two opposing views on the future. Many business writers and analysts are spending a lot of ink in trade journals and other publications on their concern about the upcoming exit of engineers from industry as the boomers begin to retire, and then there are all you guys worrying about all the engineering jobs in the US being moved to India. It will be interesting to see how it plays out, but one way or another, the supply and demand curves will set the price for engineers. If that price doesn’t meet your needs, go into something else. That will only help those of us who stay in engineering.

Sorry, but IMHO blaming all your problems on evil industrialists just does not cut it. We are responsible for our own destiny. Unlike the good old days, no one owes you an engineering job at any wage, 5 dollars or 50 dollars an hour. If you really want to improve the value of engineers on the market, vote with your feet and go into something else.

I know, I know, I am extremely insensitive, and don’t understand what it is like, if I had been in your shoes etc, etc….. I really need to stop reading this forum…
<rant mode off>

 

[PSE]

As I have read through some of this thread, I am envisioning lemmings (jobs) going into the sea. Only in this case they are going overseas. Led by a few, the "offshoring is a must to remain competitive" mantra is (in my jaded eye) turning into a flood. If you work here in the US it is a major cause for concern. If you work outside the US it is a potential gold mine. The expressed opinions reflect this polarity.

Some of the "recommendations" include abandoning the industry you are in. If you are a potential recipient of those abandoned jobs, you would push for that all your worth! From the US side, it is frustrating to an engineer who wants to work to improve the efficiency/competitiveness of their industry (and preserve jobs) to have their efforts thwarted by the short term view of CEO's; in turn, responding to the instant gratification demands of shareholders. What would be (and is) truly bothersome is the potential abandonment of strategically important industries.

For US engineers, work to shrug off any defeatist attitude that offshoring may bring less you fall victim to the Pygmalion effect. Prove that you are or are among the best in the world and help keep your industries alive. The better the effectiveness of you efforts, the less attractive offshoring will become. Show this.

Regards,

 

[davefitz]

The news gets more interesting.

In precisely the same areas which show increased unemployment, some hi-tech industries ( as in the blue screen of death) are crying that we need to increase the number of H1B visas, to bring in more foreign engineers and programmers!

 

[epoisses]

Agree with Greg. "No one owes you an engineering job at any wage" - couldn't agree more.

But then again, no need to be overly pessimistic. Distribution of engineering jobs across the oceans is not rope-pulling. Engineering tends to attract and create more engineering. As wealth spreads, job contents change, productivity increases, people get richer, supply creates demand creates supply...

I don't think Americans and Eureopean engineers will ever all be unemployeed while the Chinese and Indians have all the fun (and money). The boat may rock during the next few years or decennia, and some people may want to move overseas to go where the jobs are, but I don't think doom scenarios are realistic. "First world" engineering will never disappear.

 

[makeup]

Taking some previous advice on board. I left engineering about 2 years ago, then I went through the initial panic of trying to get back in. I took a job (not in engineering) just to make ends meet (at the time)and its turned out to be a breath of fresh air. It gives me excellent work life balance and slightly better pay. My advice. Dont be so keen to keep a loss leader, if someone wants to do it for nothing let them. Find something else, its out there and being engineers you can adapt.

 

[arunmrao]

However much one might wish that outsourcing woes would go away will not happen, Business managers love 1$/hour wages,to bolster the bottom lines. Greg has been very sharp (as usual) but are very relevant. I would be happy to receive any member at Bangalore and take them around showing the progress as well as destructions happening. It is not a happy affair.The government does not earn any revenue by way of taxes or duties ,but these industries demand a huge share of government spending for their benefit. This has caused disgruntling among locals. Career plans are made to suit the businesses and not for self improvement.

I once again extend an invitation to anyone willing to come and have a first hand experience.

 

[Slugger926]

Also getting a diverce engineering degree will help you change from one industry that has busted to one that is booming. Changing industries also makes things interesting.

 

[Comcokid]

I think it's interesting that the people posting to this topic have (Electrical), (Mechanical), (Industrial), (Automotive) posted with their names!

It doesn't seem that the Civil, Environmental, and Structural engineers are threatened by off-shore sourcing issues. I wonder how long it will be before businesses and government find a way to get these services elsewhere.

After all, I've seen plenty of products from outside the US stamped FCC, UL, and even copied products listing the copied patent numbers, copied Copyright marks, and with warranty cards listing the copied companies warranty return center address and phone number. On the Civil engineering side, claiming that a highway plan or structural drawing had a properly licensed engineer examine and stamp it when it came from outside the US cannot be too far off. And then finding and prosecuting the guilty party in China or India when things go wrong can prove difficult.

 

[QCE]

Note that a lot of Americain companies do business overseas. Most of the engineering firms I know are involved with engineering work in China and India. How come noone is talking about this work. Are Americains not stealing Chinese and Indian jobs?

 

[BJC]

I think I've said this on other threads that dealt with the same subject.
People have been stealing technology ever since the first person started chipping rock. The people who first smelted copper had the process stolen, same with iron, textile production, silk making and on and on to A-Bombs and H-Bombs. With the process go the jobs.
The only sure bet is to invest in a society that specializes in creating and inovating.
A great education system is one part of that.
I don't think it can be done in a society that doesn't take care of people. You just have to have a society that operates on Maslows 5 th hiearchy.
Did you ever notice that on the Star Treck series there arn't any poor or starving people? Notice that they don't gillotine people for stealing bread anymore? Think Victor Hugo had anything to do with that?