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White-Collar Anger

By off-shoring high-tech and service jobs, American businesses are sowing the seeds of a populist backlash that could redraw the political map.
 
 
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Pete Bennett is fed up, and he's not going to take it anymore.

"People are tired and angry and upset," says the 47-year-old unemployed worker from Danville, California, frustration noticeable in his voice. "People are hurting, losing their homes. If we keep pulling jobs out of the country, how is the economy going to stay up?"

Coming from an autoworker or a steelworker, these would be familiar words. But Bennett isn't a laid off Ford or GM employee. He used to work for companies such as Bank of America and Wells Fargo, where, as a contract database programmer, he earned between $80,000 and $90,000 a year. But in the last year, he says, he hasn't been able to find any programming work -- such jobs, he is told, are moving overseas.

Bennett is not alone. In recent years, hundreds of thousands of highly skilled, well-paid positions have been sent abroad.

These days architects in the Philippines are producing blueprints for Fluor; electronic engineers in India are designing cell phone chips for Texas Instruments; and computer programmers in the Czech Republic are building software for Kodak. The stream of job loss is set to become a torrent; a November 2002 study by the consulting firm Forrester Research estimated that over the next 15 years some 3.3 million US service sector jobs would be sent abroad. A more recent report by economists at UC Berkeley says as many as 14 million programming, accounting, paralegal and other service jobs are at risk of being "off-shored."

The off-shoring of service jobs is déjà vu all over again. In the 1970s, U.S. corporations started shipping manufacturing jobs to low-wage countries such as Mexico, China and Indonesia in an effort to cut labor costs. Now, that same drive to reduce labor costs is hitting more highly skilled workers as service jobs go to well-educated workers in New Delhi and Prague and Singapore. As skilled workers are painfully starting to learn, the logic of cost cutting doesn't distinguish between blue collar and white collar.

While the economics of sending manufacturing jobs and service positions abroad may be the same, the political consequences promise to be different. In American politics it's one thing to attack the working class, but quite another to undermine the middle class, which votes in higher percentages. As any political consultant will tell you, as the middle class goes, so goes the nation. By cutting white collar positions, American businesses are sowing the seeds of a populist backlash that could redraw the political map.

One political topic that is bound to be influenced by the off-shoring of service jobs is the hot-button issue of trade policy. Surveys by the Pew Center show that support for free trade policies splits sharply along income lines. Among families earning more than $75,000 a year, 63 percent of people see globalization as positive; among families earning less than $50,000 a year, support drops to 37 percent.

In effect, better paid workers have supported free trade policies so long as they aren't impacted by them. But now many of those people are suffering the same cold fate that manufacturing workers have grappled with for decades. As more and more skilled jobs go abroad, supporters of free trade are almost certain to reassess whether corporate globalization is in their best interests.

The loss of high skilled jobs could also have a significant impact on next year's presidential election. Voters' job anxiety is shaping up as the number one election issue, with President Bush struggling against the loss of more than 2 million jobs on his watch and a so far "jobless economic recovery."

Off-shoring skilled positions is only going to make the anemic job market worse: According to the industry consulting firm Gartner Inc., one in 10 U.S. technology jobs will move overseas by the end of 2004. The disappearance of those good-paying jobs gives Democrats a chance to reach out to more affluent voters whose natural sympathies may lie with Republicans -- but whose anger could translate into Democratic gains.

Winning elections is in large measure about managing expectations -- and it's the newly unemployed skilled workers whose expectations are being downsized furthest. As Pete Bennett puts it: "These people have never experienced this before. ... What are we going to replace these jobs with? Flipping burgers?"

The long-term political effects of the off-shoring of skilled jobs promise to be larger than one single issue or one election. The export of skilled jobs could very likely cause an anti-corporate backlash that will reverse the decades-long drive toward deregulation and the weakening of organized labor.

During the heady days of the late 1990s, America's high tech class by and large supported the push for deregulation and laissez-faire economics. Now, the software designers and tech engineers who didn't think the government needed to play a role in overseeing the economy are the victims of uncontrolled economic forces. The once comfortable are becoming the insecure. The shift from being a winner to a loser is bound to prompt some serious rethinking about whether corporations should be given free rein to do whatever they like.

The first signs of this are already evident. Newly vulnerable high tech workers -- traditionally not big union supporters -- are starting to listen to the entreaties of organized labor. The Communication Workers of America says it is seeing increasing enthusiasm for unionization among off-shored high tech workers. Calls are also increasing for government regulation to staunch the hemorrhage of jobs. In response, state and federal legislators are considering laws to keep service jobs in the United States. The laissez-faire mentality of the 1990s is being replaced by demands that government act to restrain corporations' basic instincts. The political pendulum between dislike of big government and dislike of big business is swinging in a new direction.

Those businesses shipping high skilled jobs overseas should beware: Short-term profits may come at the cost of future political peril.

Kevin Danaher and Jason Mark are authors of the new book, "Insurrection: Citizen Challenges to Corporate Power" (Routledge Press). They work for the human rights group Global Exchange.