Football Season

As this issue goes to press, we're coming up on the two-year anniversary of the Sept. 11 terrorist attacks. Although national security has increased markedly since then, it hasn't protected us from threats that are vastly different from those we faced back in 2001.

Paranoia about foreigners stealing American jobs has always been a subject of national debate, but until a couple of years ago it stayed in the background. Now, as the economy flounders and U.S. firms send jobs abroad in droves, both to save costs and benefit from what they perceive as higher-quality labor and output, the use of offshore resources is sparking a public outcry and push toward legislation to protect domestic workers (see “Short Takes,” p. 8).

The frightening thing is that this time, the paranoia may be justified. Back in July, research firm Gartner released a study stating that 10% of U.S. technology jobs will move offshore by 2004, and that jobs in other sectors are expected to follow suit. Although India is the largest recipient of business process outsourcing, with 66% of the world's total and nearly 90% of the IT work sent from the U.S., countries such as China, the Philippines, and Russia aren't far behind.

Two factors make offshore outsourcing ominous: It's profitable for U.S. companies, and it's permanent. The first means that no matter how unpopular their move overseas, businesses will defend their choice despite the growing backlash from labor unions and politicians. The second means that American employees can't — as they could in previous recessions — count on getting their jobs back when the economy turns around. According to an article in CIO magazine, “even economists who support globalization agree that the transition for white-collar workers in the coming years will be difficult until new industries arise to take the place of ones with jobs being sent overseas” (Sept. 1, 2003).

Caught unprepared, legislators face a tough battle in the upcoming election year. “This issue is a political football,” says Frank J. Casale, president of The Outsourcing Institute, an industry group. “Jobs are always a hot topic. Whoever supports jobs gets votes.”