A simple question. An obvious question. While the non-debate debate rages on over tax cuts in the American Recovery and Reinvestment Act of 2009, this fundamental question of how many real jobs will go to real American workers needing a job....is not asked.
So, I'm asking it. I do not have an answer.
We have already seen TARP bail out recipients replace Americans with foreign guest workers.
We also know the projections for I.T. jobs created is 1 million. A recent study finds 8% of all I.T. workers currently working in the United States have been displaced by offshore outsourcing.
Alan Blinder in his paper How Many Jobs are Offshorable? estimated 22% to 29% of all jobs, data used from 2004, all other variables static, have the potential to be offshore outsourced. Blinder also gives an occupational ranking of vulnerability to global labor arbitrage. Computer Programmers and related Science, Technology, Mathematics, Engineering jobs are at the top of his list. This includes I.T. jobs.
Literally IBM is suggesting to U.S. laid off workers they offshore outsource themselves to have an income.
Looking over the Stimulus package there are projects which correlate to Blinder's vulnerability estimate for offshore outsourcing.
Yet examining global labor arbitrage is simply not mentioned. Outsourcing expert Ron Hira points to promotion of offshore outsourcing as the agenda by the Obama administration.
Business week lists some of the most offshorable projects in the Stimulus:
The stimulus act also includes another $6 billion to improve broadband Internet access in the U.S. That amount would create or retain 29,892 direct telecom jobs for a year and 8,304 capital equipment jobs, according to the Information Technology & Innovation Foundation. Finally, $11 billion in funds that will go to modernizing the power grid in the U.S. will create or retain 64,509 direct and indirect IT jobs for a year, according to the foundation. "IT did pretty well. There's a real focus on digital infrastructures, there's real money there," says Robert Atkinson, president of the Information Technology and Innovation Foundation. "It basically affirmed the commitment that the country's building out IT networks is important to our future."
Even if the spending doesn't prompt companies to create jobs in house, it may give them extra incentive to choose to send work to domestic firms rather than those outside the U.S., says Jagdish Dalal, managing director of thought leadership at the International Association of Outsourcing Professionals, an industry group of outsourcing leaders from Fortune 500 companies and other organizations. That's because it takes some time to set up an offshore model and the work in this stimulus package is designed to happen immediately. This will ultimately be a challenge for offshore outsourcing destinations like India and China, he says.
Yet the claim by these outsourcers of don't worry, be happy and how they do not have the offshore outsourcing infrastructure already in place is false. IBM, G.E., Cisco, Microsoft as well as Indian offshore outsourcing firms like TCS and Infosys already have federal, state contracts in the billions. These companies are completely set up to offshore outsource jobs created with U.S. taxpayer money.
According to the ITIF, the jobs generated in Technology related areas are half a million. In examining those jobs they do not recognize foreign guest workers in their calculations or offshore outsourcing of jobs, except in terms of foreign capital equipment purchases, which appear to be underestimated.
Even worse, the ITIF may well be a corporate lobbying front group:
They're all too happy to avoid the public spotlight and hide behind independent-sounding analysis, even as their army of lobbyists descends on Capitol Hill to cash in on the fast-moving stimulus bill.
So, how many of these Stimulus generated jobs will actually be going to offshore outsourcing companies through contract awards, to multinational corporations who have as their corporate strategy pure global labor arbitrage?
I would say at this point to assume Blinder's estimates and give a conservative thumb in the air guess of 25%.
If this is true, the stimulus will not stimulate since the Keynesian theory implies income creation must be within the domestic economy that is using the government expenditures, deficit spending.
One thing is certain, we do not have anything in the current Senate Stimulus version to tie the Stimulus to U.S. citizens, permanent residents, who are the United States workforce.
Nor do we have full disclosure of precisely who would get these project contracts, where are they incorporated and who would they hire.