Outsourcing Takes a Back Seat

Six months ago I figured jobs outsourcing would play a larger role than it has in this year’s presidential election.

It’s certainly a major issue — especially for Democratic challenger Sen. John Kerry as he campaigns in economically hard-hit battleground states such as Ohio and Pennsylvania. But, overall, the topic has received less attention than Iraq, terrorism or whether President Bush was wired during the first debate.

For Americans out of work, as well as those in legitimate fear of unemployment, however, outsourcing remains at or near the top of their concerns. That’s especailly true in the tech sector, which is predicted to lose up to one quarter of its U.S.-based jobs over the next five years, despite projected growth in the economy.

Indeed, if you’ve sensed apprehension in the technology industry these days, it’s not your imagination. A new study by staffing firm Hudson Highland Group shows confidence among IT workers fell last month, due in large part to job dissatisfaction and tight personal finances.

Even worse, the modest job growth in the U.S. economy over recent months has not spread to the tech sector. Earlier this week, employment firm Challenger, Gray & Christmas announced that 54,701 technology jobs were lost in the third quarter, a 60 percent leap from the second quarter and 14 percent above last year’s third-quarter tech job loss.

No doubt adding to tech workers’ stress is the looming Nov. 2 presidential election. It’s a contest pitting candidates with dramatically different views on security and the economy — including prescriptions for preventing jobs from moving to low-wage countries such as India, Brazil and Hungary.

Sen. Kerry says he will move to cut tax incentives for American companies to outsource jobs overseas. Under current law, U.S. companies don’t have to pay federal taxes on their foreign operations if they show no profit. (Surprisingly enough, so many of those darned foreign operations just can’t make a dime!)

Of course, reducing these tax incentives hardly will eliminate job offshoring. Companies offshore not just for the tax benefits, but to enjoy the ability to pay far lower wages. That competitive challenge to the U.S. will remain no matter what our tax policy.

Further, the truth is that while presidents may be able to nudge the economy here and there, economic cycles largely have a life of their own. President Clinton was in office during the tech-driven economic boom of the ’90s, for example, but that doesn’t mean he caused it.

Still, if I were an unemployed tech worker, I’d feel better about Kerry’s stance than what Bush offered in the third debate. Asked during a debate what he ”would say to someone in this country who has lost his job to someone overseas who’s being paid a fraction of what that job paid here in the United States,” the president replied, ”I’ve got policies to continue to grow our economy and create the jobs of the 21st century. And here’s some help for you to go to get an education. Here’s some help for you to go to a community college.”

To the programmer with a master’s degree and a drawerful of certifications who has been unemployed for 18 months and has no health insurance, I suspect the No Child Left Behind Act is an unlikely savior.

Other Technology Issues

The presidential candidates also have positions regarding a number of technology-related issues, including cyber security, spam, intellectual property and Internet telephony. No one’s ever heard any of them, but the folks at the Computing Technology Industry Association sent a questionnaire to both camps and received detailed replies.

Some brief excerpts: