Outsourcing Hits a Fault Line in Tech

Opinion: Moving U.S. jobs overseas makes sense to tech businesspeople eyeing the bottom line. But while popular in Silicon Valley, such thinking can feel like betrayal for tech workers who aren't surrounded by constant chaos and innovation.

Outsourcing—the catchall phrase for the movement of U.S. jobs overseas—ebbs and flows as a touchstone issue within this presidential campaign. Thats a measure of the ambivalence it creates.

The myriad of reasons for outsourcings popularity resist sound bite-style campaigning. So do solutions to the problem. And the issue splits both political parties. Republicans who might normally be in full-throated support of free trade are beating the drums about the loss of U.S. jobs. Democrats who traditionally would be expected to support protections for U.S. workers are taking a pass this time around.

Not surprisingly, outsourcing is dividing the tech industry. It hits a fault line between those who can and do move easily from one phase of innovation to the other—patent-holders, creative code workers—and those who dont. In tech, where jobs have been paying very well, this is a class issue between those who are salaried and those who have equity.

Outsourcing highlights the differences between those who can and will make enough—in salary, but usually in stock—to survive the downturns, and those who are now only beginning to realize that technological innovation can have dramatic consequences even for those who think they can control it.

Kerry has released a long and tech-heavy list of businesspeople who support his candidacy; its filled with CEOs, bankers, inventors and innovators.

The Bush campaign has retaliated by combing Kerrys list for the names of people who have made CNN anchor Lou Dobbs "Exporting America" list. The result? Forty executives who Dobbs claims are in favor of sending jobs overseas appear on Kerrys list of supporters. (No comment from Kerry; his press aides did not return phone calls).

Many of those on Dobbs list—Adobe Systems Chuck Geschke, Sun Microsystems John Gage, Oracles Chuck Phillips and Googles Eric Schmidt—are tech celebrities. They are bottom line-oriented, and they know how important it is to keep labor costs as low as possible. They are, they will tell you, following the market. Thats accepted and popular thinking in Silicon Valley. But for tech workers who arent surrounded by constant chaos and innovation, it feels like a kind of betrayal.

"It has been a very frustrating experience," says John Pardon, 42, a former database administrator at NCR in Dayton, Ohio. Pardon left NCR in January 2003 after 10 years with the company. Most recently, he has been working in Dayton as a volunteer policy analyst with Rescue American Jobs, an anti-outsourcing group.

Listing Sun, Microsoft and his former employer as companies that support outsourcing, Pardon doesnt hold back. "These companies are run by people who have the mentality of traitors," he says. "They have no respect for the values of this country."

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Pardon says he worries that jobs like the one he had are disappearing and that with them goes an entire economic group: middle-class, white-collar workers. "This sort of class of people in this country—professional people—is under attack," he says. "This is a threat to my children."

Pardon is clearly upset about losing his job—one that he trained for believing that by doing so and joining NCR, he was moving to a new and growing industry. His outrage over seeing his job exported overseas is directed at both political parties. The Bush administration favors shipping jobs overseas, Pardon says, and thats shortsighted and wrong, a sop to its corporate supporters. So, folks such as Pardon, lifelong Republicans, are upset with their own party.

Democrats are no better, he says. Kerry wants to sound—particularly to Ohio swing voters —as if the Democrats are doing something, but thats just lip service, Pardon says.

"Senator Kerry fails to address the concerns of white-collar workers regarding the issues of most concern to them, making him less an opponent of Bush administration policies and more a candidate of the status quo," Pardon writes in a long e-mail detailing his position. He and his group have been lobbying both campaigns to make their positions on outsourcing clearer and more aggressively opposed.

So, perhaps workers such as Pardon should unionize? After all, its the unions—the AFL-CIO in particular—that are pushing Kerry on the outsourcing issue.

Not so fast, Pardon says. "Unions in this country have long had a bad reputation," he says. "In the information age, we need to redefine our relationships." And, he notes, tech workers are particularly resistant to joining groups, even if they hold the promise of some sort of economic security.

Pardon may not be right about the current state of affairs; he and other outsourcing opponents could be using their personal experience to generalize wildly. But if hes right in predicting a future with more job loss and more erosion of his and his fellow managers way of life, changes are definitely in the works. And tech—not to mention politicians—better be ready.

"Free trade has become global labor arbitrage," Pardon says. "The U.S. doesnt exist for the benefit of the business world. It exists for the benefit of the American people."

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