All jobs, even the most low-skilled, will require higher levels of basic ...
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The Changing Face of the Global Business
3. Those without some specialized knowledge or skill are likely to suffer declining real wages
4. The Digital Divide exists and those on the wrong side will have limited hiring and advancement opportunities
5. Jobs requiring “human touch” will continue to be in demand e.g. health services and nursing, construction…no robot plumbers!
6. Workplace settings and business practices and knowledges will change rapidly, making lifelong learning essential e.g. life after “paving the cow path”
Global Labor Market of the 21st Century and Unfettered Global Capitalism
Creative destruction—The process of simultaneous job creation and job destruction as new skill sets are required and old skills become outdated. The same employers will be both hiring and laying off continually regardless of labor market conditions to enhance productivity and competitive edge. Joseph Schumpeter
Globalization is changing economic theory, business practices and labor supply options
Everybody’s Talking About IT
"By 2004, more than 80 percent of U.S. executive boardrooms will have discussed offshore sourcing, and more than 40 percent of U.S. enterprises will have completed some type of pilot or will be sourcing IT (information technology) services."
Gartner Inc., a technology consulting firm
IBM's top employee relations executives said that
three million service jobs were expected to shift to
foreign workers by 2015 and that IBM should move
some of its jobs now done in the U.S., including
software design jobs, to India and other countries.
"Our competitors are doing it and we have to do it,"
Tom Lynch, IBM Director for Global Employee Relations
"It's a very important, fundamental
transition in the I.T. service industry that's
taking place today," said "It’s a megatrend
in the I.T. services industry."
Digital Technology Makes it Possible
“Companies are moving more service jobs overseas because trade barriers are falling, because India, Russia and many other countries have technology expertise, and because high-speed digital connections and other new technologies made it far easier to communicate from afar.
Bruce P. Mehlman, Commerce Department assistant secretary for technology policy
ITAA Notes Demand Changes
“Failing a dramatic turnaround in the national economy a recovery in the IT sector in 2004 will most likely continue to be a “jobless” one.”
ITAA predicted 1.6 million job openings in 2000
ITAA predicted 1.1 million job openings in 2002
ITAA predicts 493,000 job openings in 2003
In May 2003, ITAA survey says 67% of hiring managers thought demand would stay the same or decline over he next 12 months.
Offshoring Doesn’t Just Affect IT
"Over the next 15 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore to countries like India, Russia, China and the Philippines," Forrester analyst John McCarthy predicted in a report last year. "The IT industry will lead the initial overseas exodus."
Tom Lynch, IBM Director for Global Employee Relations
The American economy is in an "anemic" state, the
difficulties and backlash from relocating jobs could
be greater than in the past.
"The economy is certainly less robust than it was a
decade ago and to move jobs in that environment is
going to create more challenges for the re-
absorption of the people who are displaced." Tom Lynch, IBM
A Slower Growing European Economy
Business Knows the Consequences (part II)
"Once those jobs leave the country, they will never come back."
"If we continue losing these jobs, our schools will stop producing the computer engineers and programmers we need for the future."
Phil Friedman, chief executive of Computer Generated Solutions, a 1,200-employee computer software company
Even When Business Picks up…
“It's a bad thing because high-tech companies like I.B.M., Microsoft, Oracle and Sun, are making the decision to create jobs overseas strictly based on labor costs and cutting positions.” “It can create huge downward wage pressures on the American work force.”
Marcus Courtney, president of an affiliate of the Communications Workers of America.
It’s Largely About the Money…
Another important reason for moving jobs abroad is lower wages. “You can get crackerjack Java programmers in India right out of college for $5,000 a year versus $60,000 here." "The technology is such, why be in New York City when you can be 9,000 miles away with far less expense?"
Stephanie Moore, vice president for outsourcing at Forrester Research
But Also About a New Business Model
“The expansion of operations in India was "additive" and was not resulting in any jobs losses in the United States. Our aim here is not cost-driven, [it’s] to build a 24/7 follow-the-sun model for development and support. When a software engineer goes to bed at night in the U.S., his or her colleague in India picks up development when they get into work. They're able to continually develop products." David Samson, an Oracle spokesman
And Getting Value in Return
A February survey of 145 U.S. companies by consultant Forrester Research found that 88 percent of the firms that look overseas for services claimed to get better value for their money offshore while 71 percent said offshore workers did better quality work.
Employment Services -508,767
Cut and Sew Apparel -151,567
Grocery Stores -150,667
Semiconductor Mfg. -149,267
Motor Vehicle Parts -129,400
Comptr Equip Whlsalrs -84,200
Plastics Products Mfg -81,533
Wired Telecom Carriers -77,467
Aerospace Product Mfg -75,700
Computer Equip Mfg -72,900
Print Publishing -71,400
Others of Note:
Computer System Design
Communications Equip Manufacturing
Electric/Electronic Goods Wholesalers
Local Government 753,000
General Hospitals 239,933
Full-service Restaurant 237,700
Offices of Physicians 211,767
State Government 201,333
Family Social Services 124,667
Limited-service Eatery 105,333
K-12 Schools 90,900
Accounting Services 80,300
Nursing Care Facilities 76,100
Others of Note:
Home Health Care
General Merchandise Stores
Offices of Dentists
Mgmt Consult Srvcs
Expected Job Growth in 2003-2004
Expected Job Losses in 2003-2004
1. Computer Support Specialists
2. Computer Software Engineers, Apps
3. Network & Systems Administrators
4. Desktop Publishers
5. Computer Software Engineers, Systems
6. Network & Data Communications Analysts
7. Computer Specialist, NEC
8. Database Administrators
9. Medical Records Technician
10. Social Services Assistants
11. Special Education Teachers
12. Computer Systems Analysts
13. Medical Assistants
14. Physician Assistants
15. Information Systems Mgrs.
1. Customer Service Representatives
2. Food Prep and Serving Workers, Fast Food
3. Child Care Workers
4. Retail Salespersons
5. Registered Nurses
7. Computer Support Specialists
8. Office Clerks, General
9. Waiters & Waitresses
10. General and Operations Managers
11. Elementary School Teacher
12. Teacher Assistants
13. Secondary School Teacher
14. Janitors and Cleaners
15. Truck Drivers, Heavy and Tractor Trailer