Overseas Trickle of American Jobs Could Become a Torrent

The export of American jobs is no longer restricted to blue-collar workers. While everyone is aware that U.S. corporations have been moving their factories and investments overseas — one Pennsylvania banker accused them of abandoning America — and selling their products back in this country, few people are aware that the next big move could be the export of white-collar jobs.
For some years, American Airlines has been sending ticket stubs to Barbados where clerical workers punch data into computers. There are about a dozen facilities in the Caribbean doing clerical work for U.S. companies. The Congressional Office of Technology Assessment estimated the number of employees at about 2300. But with the lure of low salaries, the growth of English-speaking natives in many countries and the computer-telecommunications revolution, what is now a trickle could become a torrent and include computer programmers, software specialists and systems analysts. These tasks represent among the fastest growing occupations in our country — that is, if they stay here.

Is there any technical or geographical reason why Citicorp has to send you your credit card or installment loan statement from New York or South Dakota? Not at all. It can be done almost as easily and much more cheaply from Bombay or Dublin. Indeed, the government of India has launched a program to attract U.S. companies to set up a white-collar shop there. Hundreds of thousands of English-speaking Indians are graduated from Universities each year with no jobs. They can become the software specialists and computer programmers for U.S. companies to replace graduates of Michigan State or Georgia Tech. These companies have no sense of roots or patriotism; they go where they can make the most profits. Only now, modern technology and capital mobility make it easier for them to transfer operations abroad than ever before.

Insurance companies, data processing firms, engineering design outfits are taking a hard look at the possibilities. After all, with increasingly facilitative global computer and telecommunications hookups and labor costs one fifth to one-tenth that of domestic workers, the temptation grows year by year. Harley Shaiken, a professor at MIT, says that “the capability to locate white-collar work wherever you want it is here.”

For a long time, economists have observed that more and more jobs were being created in the service sector of our economy as manufacturing and mining jobs decline. It was believed axiomatic that service-jobs stayed here; certainly MacDonald’s workers are not going to serve people in Kansas City from Singapore. Yet as the information segment of our economy looms larger and larger as a job producer, the same technologies can be utilized out of Singapore.

It cannot be too long before the export of jobs to produce products and perform services for export back into this country challenges the grip of the traditional theory of comparative advantage which is based on the assumption that both free trading countries become better off. There are far more factors in the formula today than during the 18th or 19th century.

Japan emerged from the wreckage of World War II with an extended policy of free trade for its exports, but a relatively strong economic isolationism toward certain imports and foreign equity investment. Unlike Western Europe where U.S. car companies and other U.S. multinationals established entire subsidiaries and factories following World War II, Japan pursued a go-it-alone strategy. There was no Japanese Ford or GM Opel. Instead, it was Toyota, Nissan and company.

Major countries must control their own economic destiny. Too great a reliance on the global economy in the fashion previously described; too great a dependence on overseas economic fluctuations will lead to a reaction born of desperation by millions of disabled American workers.

In fact, only the absence of a real Opposition Party has postponed the inevitable rethinking of what an America, globally indentured by its own multinational corporations, must start doing.