TOPICS > Economy

Jobs on the Move

December 16, 2003 at 12:00 AM EST

TRANSCRIPT

JUDY ADELSTEIN: You’re smarter than some people I know. You say, “I won’t work for peanuts. I want real pay.”

PAUL SOLMAN: One morning in early 2001, Judy Adelstein, an $85,000 a year assistant vice president at a major New York Bank, was called into her boss’ office.

JUDY ADELSTEIN: She was kind of like … ( sighs ) … she did one of those. So, I said, “Oh, my goodness, it’s not good news.” And I said to her, “Well, you know, give it to me straight. What’s going on?” She said, “Well, it has nothing to do with your performance.” She said, “I’ll be very honest with you.” She said, “There’s a layoff.”

PAUL SOLMAN: Adelstein was among some 5,000 bank employees being told to pack up and go home.

JUDY ADELSTEIN: And I thought to myself as I’m walking back there, “well, I’m in the middle of a project.” I was so important at 9:00 in the morning on New Year’s Say, but now I’m not important at all. So you get very depressed, because you think, here, I was so indispensable, and now… and then when I, especially when I found out down the road what was going on, it was even more devastating.

PAUL SOLMAN: What she later found out was that her job had been offshored to India. Soon afterward, her husband Scott lost his software job near ground zero for medical reasons related to 9/11.

SCOTT ADELSTEIN: My building was damaged, and being I have an asthma condition I was forced… I couldn’t work downtown. So since then, I’ve been basically, you know, trying to get back into the market.

PAUL SOLMAN: But he hasn’t gotten back in, despite 26 years in the industry and 350 job applications sent out this past year alone. Scott Adelstein, too, blames offshoring.

SCOTT ADELSTEIN: Jobs aren’t being done in this country anymore. I mean, how do you explain 350 resumes and no job? Maybe it’s seeing how much experience I have and my salary and saying, “well, why should we pay him this kind of money when we can get someone for a whole lot cheaper?”

PAUL SOLMAN: What kind of money?

SCOTT ADELSTEIN: $52,000.

PAUL SOLMAN: Judy Adelstein has found a higher-paying job at another major bank; Scott is still looking for a job in his field. But both have become increasingly anxious about an accelerating trend in the U.S. labor market: The offshoring of American service jobs. Judy is worried enough to be organizing a union for high tech-workers, whom she corresponds with by e-mail.

JUDY ADELSTEIN: (reading e-mail) “We’re all in poverty and on welfare, us $100,000-plus programmers. I want to work and I want my job back.”

PAUL SOLMAN: What struck us in the course of our research for this story was just how pervasive offshoring seems to be. Many of you saw evidence of it on the NewsHour a year ago, when Fred de Sam Lazaro visited a call center in Bangalore, India, which answered the phones for American catalog companies.

SPOKESPERSON: The black bra and the C.D. recorder will be delivered by 6 p.m. Friday.

PAUL SOLMAN: But as the trend has broadened from call centers to higher-level work, it’s struck more of a chord. This past spring, Business Week magazine reported that all kinds of high-skill jobs are now migrating to low-wage countries at pay that averages about one-tenth the going rate in the U.S. IBM made headlines last summer when this audio tape of an executive conference call was leaked.

AUDIO TAPE: We don’t want to sit back and say don’t do it because there’s gonna be problems. Our competitors are doing it and we have to do it.

PAUL SOLMAN: Even we ourselves were tempted to send work offshore, when we learned we could transmit audio of our interviews to India via the Internet to be transcribed at a cost of about $6 per hour of tape versus the $100 or more we usually spend. On the other hand, the company we contacted took a week to get back to us to say it’d be another month before they did the work due to an “office move.”

SPOKESMAN: After a doctor dictates by telephone, digital hand-held, or P.C. …

PAUL SOLMAN: But at the production company where we edited this very story, we were shown a P.R. film they’d just made for a Pittsburgh firm that sends doctors’ dictations to India to be transcribed. It has set up shop in four Indian cities for the now-usual reasons.

SPOKESMAN: Its software engineers are among the best in the world. English is the primary language. There’s high computer literacy, excellent Internet connections. And an experienced transcription workforce. The time difference between the United States and India is also an added value.

SPOKESPERSON: While we’re sleeping, they’re working.

SPOKESPERSON: For the first time, medical transcription truly has 24 hour coverage.

PAUL SOLMAN: Finally, of course, there’s the bottom line reason: Transcription in India is saving these health facilities money even after the U.S. company takes its cut. The most striking evidence for the growth of off-shoring though, may be a Web site known as elance.com. Employers post a job on elance, the workers of the world competitively bid for it. Like the software engineers at ctechworld.com, an Indian firm that consults on everything from e-business to biometrics.

Or Sergey Rud of AI Studio, who designs Web sites from the Ukraine. “Elance has become a god for outsourcing industry,” Rud e-mailed us, “just like ebay for auction.” And then there’s Dan Alex, a Romanian who married a Turkish woman and moved to Istanbul. He designs stationery, brochures, Web sites, but started out with corporate logos. “A Romanian living in Turkey designing a logo for a U.S. company. This is how it all started. Since then I designed more than 200 logos for various clients from all over the world. It seems to me this is the global trend, but we are still in the infancy of this phenomenon.”

Management consultant John McCarthy, who’s researched the trend, concurs.

JOHN McCARTHY: I think you’re going to see a steady increase of jobs going offshore from the range of 600,000 over the last couple years to 3.3 million as we look forward ten years. What started as a small drip in the early ’90s has now become significant enough where you can count hundreds of thousands of jobs, and soon will be significant enough where you can look at millions of jobs.

PAUL SOLMAN: And that’s what has workers like Scott and Judy Adelstein worried.

SCOTT ADELSTEIN: The one thing that’s out of this whole equation is something called American pride, and that’s something that no longer exists to corporations. They’re American companies that were built and founded in this country, yet they’re losing their workforce to people that are aren’t even from this country.

JUDY ADELSTEIN: Exactly. We have to temper the corporate greed with a little bit of conscience, a little bit of a piece of American pride, and we can’t say just we’re going to sell everybody down the river because, you know, IBM or Intel or Microsoft wants to make a tons –they’re making tons of money. How much money can Bill Gates spend in one lifetime?

PAUL SOLMAN: But Bill Gates would say, “Hey, I created all these jobs in Redmond, Washington.”

JUDY ADELSTEIN: And he’s outsourcing them now, okay. I’m here. I’m not going anywhere. I need to make a living, and I need to make a living commensurate with where I live.

PAUL SOLMAN: But this is just the story of competition, isn’t it? I mean, the dynamic nature of capitalism.

SCOTT ADELSTEIN: Yeah, but the thing is you’re putting Americans out of work, and you expect Americans also to buy your product.

PAUL SOLMAN: But won’t Indians also buy American products once they’ve the dollars to do so? Rajiv Chaudhry is an Indian born wall street money manager who thinks he knows his former countrymen pretty well.

RAJIV CHAUDHRY: They are going to buy cars that might be made in the United States, they’re going to buy Coca-Cola, they’re going to buy McDonald’s, they’re going to buy Levi’s jeans, they’re going to want to send their kids to school in the United States. They’re only going to –they are going to want to come to New York on vacations. So there is a multiplier that feeds back into the service economy of this country.

PAUL SOLMAN: But people we’ve talked to say it’s simply unfair for them to have to compete with people in India, because the Indians have such an enormous cost advantage.

RAJIV CHAUDHRY: You know, we always tell our kids compete, because competition is good. This is another kind of competition. We as citizens and we as consumers benefit from lower prices, better quality and better service.

PAUL SOLMAN: So American consumers benefit. As to American workers, they will, say economists, find other work.

JOHN McCARTHY: I think what we’ve all learned over the last 20 years is that you can’t take anything for granted regards to employment. The age of full employment, whether it was manufacturing is kind of dispelled and now we’re seeing it being dispelled in services.

RAJIV CHAUDHRY: And the solution for them really is to upgrade their skills and transition to newer opportunities because the reality is in a fast-moving, technology-driven economy, there are new kinds of jobs that are being created all the time.

PAUL SOLMAN: But what if in the long run, most American workers simply can’t compete — given the wages Indians and others, like the Chinese, are willing and able to work for? Leave aside the hundreds of millions of desperately poor Indians, many willing to drive rickshaws for pennies. There are, by some estimates, 150 million educated Indians, a number greater than the entire American workforce. How can we compete with that?

RAJIV CHAUDHRY: I have a lot more faith in the innovation potential of the American economy. The Internet was created in the United States, not in any other country in the world. And as a result, you know, millions of jobs have been created in this country, as well as outside. So I don’t know what the next big thing is going to be, but I can tell you one thing, it’s going to come from this country, and it’s going to create a lot of jobs in the United States.

PAUL SOLMAN: Well, if you’re an American worker, you certainly hope so. Because the kind of job Scott Adelstein’s doing at the moment is not what many of us, and surely not what he, had in mind.

SCOTT ADELSTEIN: I’m doing stock work for a — retailer.

PAUL SOLMAN: Meaning?

SCOTT ADELSTEIN: K-mart. ( Laughter )

PAUL SOLMAN: K-mart.

SCOTT ADELSTEIN: Right.

PAUL SOLMAN: What exactly do you do?

SCOTT ADELSTEIN: Stocking the shelves, you know, pricing goods. You know, working nights. 11 at night to 7 in the morning.

PAUL SOLMAN: What do you earn?

SCOTT ADELSTEIN: $8.50 an hour.

PAUL SOLMAN: Are you embarrassed? I mean, you said retail, stocking. I didn’t know what you meant at first.

SCOTT ADELSTEIN: Yeah, well, you know, it’s not embarrassment, it’s just that, you know…

PAUL SOLMAN: You didn’t want to tell me right away.

SCOTT ADELSTEIN: Right.

JUDY ADELSTEIN: He is embarrassed, I think — with good reason. He’s an educated person.

PAUL SOLMAN: An educated person, who’s competing against more and more educated counterparts who just happen to live in cheaper parts of the world.