Help Tech – Jail the Poor

By Annalee Newitz, AlterNet. Posted March 15, 2005.

Now that the outsourcing frenzy has inspired a small economic boom in India, tech companies looking for a source of cheap, skilled labor are turning to places like China and Estonia. But this strategy, like all strategies based on exploiting labor in developing nations, is doomed to fail. When those geeks and their countries start dominating the market, U.S. companies will find themselves scrambling to come up with business plans that don't depend on ripping off third-world hackers.

Fact is, you can't just keep moving your outsourcing hot spots from nation to nation – eventually you've got to come home. And that's why the Republicans are working now to create the domestic economy of tomorrow: one that won't require any revamping of business models that depend on underpaid professionals in engineering and the sciences. Nothing brings us closer to this exciting future than last week's passage of the bankruptcy bill, a pernicious piece of federal legislation that destroys financial safety nets for working- and middle-class people while allowing the rich to shield their wealth from debt collectors.

The bill eradicates what are called "clean slate" declarations of bankruptcy under Chapter 7, which allow people who've suffered tremendous financial setbacks to erase most of their debts and start over. Now the majority of people who file for bankruptcy will be forced to do it under Chapter 13, which means they'll have to pay back a portion of their debt no matter how dire their circumstances.

Who wins in this situation? Credit card companies, of course, which have sunk millions into getting the bill passed and whose propagandists argue that it will help the poor. Because the credit industry can now rest assured that it will recoup most losses when debtors go bankrupt, Visa and MasterCard can extend credit lines to people who might previously have been perceived as too risky. In other words, we're replacing a good safety net with a bunch of big, grinning loan sharks.

Here's where things get interesting: the people who will be most affected by the bankruptcy bill are those whose income is above the median in their state but who aren't fabulously wealthy. People who make more than the median – low- and middle-income types – have to file for Chapter 13, while those below it can still file for Chapter 7. Meanwhile, anyone who's making huge payments on houses or cars can deduct those payments from his or her income. So if you own a lot of big-ticket items, under the new bill it's very likely you'll qualify to file for bankruptcy under Chapter 7. The people who get needled are the middle and lower-middle class, precisely the group whose members have the skills for the jobs that recently got outsourced to China.

So what will we do with all those destitute middle-class people wandering around living in their cars because they had to file for bankruptcy under Chapter 13? We can't just let them fall off the grid, because then they'll never repay those credit card companies that wanted so badly to pass the bill in the first place.

So my idea is that, with the help of a Republican Congress, tech outsourcing and credit card companies could create some pretty interesting partnerships in this not-so-distant future of debt-riddled, desperate professionals. First, Visa could set up a series of debtors' prisons to keep those Chapter 13 zombies corralled while they work their way out of bankruptcy. And then Silicon Valley companies could make deals with Visa for cheap IT drones. Tech giants would outsource a bunch of their quality assurance to the debtors, give Visa some kickbacks (which, of course, wouldn't be credited toward the workers' debts), and generously allow their captives to work at substandard wages in order to climb never-endingly out of bankruptcy. It's a perfect system.

And that, kids, is how we'll rescue the tech economy from foreign takeover. With the help of the credit industry, we can outsource to our own debt prisoners. It's a brave new world, and I personally can't wait to live there.

Annalee Newitz (visaprison@techsploitation.com) is a surly media nerd who has finally figured out why cyberpunk reminds her of Dickens' novels. Her column also appears in Metro, Silicon Valley's weekly newspaper.

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