Date: Tue, 24 Feb 2004 22:13:56 -0800 From: Norm Matloff To: Norm Matloff Subject: don't forget to read the small print in that contract To: H-1B/L-1/offshoring e-newsletter A week ago, I posted a message titled, "The Hypocrisy of Hillary Clinton." Clinton had been quoted on the Lou Dobbs Show as castigating Bush for supporting the offshoring of jobs. I pointed out the sheer hypocrisy of Clinton's remarks, since she has been a major player in helping Tata Consultancy Services, the Indian software giant, entrench itself in the state of New York. See http://heather.cs.ucdavis.edu/Hillary2.txt After I posted that message, a reader sent me the first enclosure below, from the Indian press. The key passage is If at all there is a silver lining here for India, it is that Clinton has stressed the loss of manufacturing jobs and not service jobs. To state the obvious, Clinton's advocacy of tax breaks and favourable policy framework for the US manufacturing sector obviously is targetted at China as outsourcing to India is mainly from the services sector. In the amendment she is introducing, Clinton has taken exception to the chairman of the Council of Economic Advisors describing the outsourcing of American jobs overseas ''as a good thing "and to outsourcing being "just a new way of doing international trade". According to her, "The President's economic policies have either failed to address or exacerbated the loss of manufacturing jobs that our country has experienced over the last three years; American families are facing an economy with the fewest jobs created since the Great Depression." So, Clinton didn't betray Tata after all. The key word was "manufacturing." So, when the same reader sent me the second enclosure below on John Kerry, I knew exactly what word to look for. And there it was, right there in the headline: Kerry, Our Ally Against BPO Backlash He knows manufacturing unemployment's the issue Recall that I have criticized Kerry as putting forth a false front, using "Benedict Arnold" rhetoric about offshoring while having policies which do nothing more than mild tweaking on the edges of the issue (e.g. proposing a "truth in call center accents" law). In other words, Kerry seems to have a strategy of combining the worst of both worlds--demonizing India while having no intention of doing anything to help U.S. programmers and engineers hurt by offshoring (let alone H-1B/L-1, which Kerry has not said a word about). Well, now thanks to the Indian press, we get more evidence that Kerry, "India's Ally," is all talk and no action. Norm http://economictimes.indiatimes.com/articleshow/493334.cms Hillary too hits anti-BPO button ASHA RAI TIMES NEWS NETWORK [ FRIDAY, FEBRUARY 13, 2004 01:34:16 AM ] BANGALORE: Just as India was taking heart from the recent Bush administration's endorsement of offshoring in the annual report by the President's Council of Economic Advisors, the first salvo against it has being fired. And, by a person no less than Senator Hillary Clinton. With the Presidential elections drawing close, 'offshoring' with its inherent connotation of 'job loss' in the US is attracting the attention of the big guns on Capitol Hill and the topic is no longer the preserve of governors and senators of states like Colarado and Ohio, who initially steered down this course, mainly to cater to their domestic constituency. Clinton is introducing a 'Sense of the Senate' amendment to the Highway Bill (which authorises funds for highways, highway safety, transit programmes and others) to express her opposition to the President's Council of Economic Advisors highlighting the benefits of outsourcing, according to sources. Quoting job loss figures, she wants policies that favour outsourcing of jobs overseas to be opposed and wants the government to provide tax incentives to keep manufacturing jobs within the United States If at all there is a silver lining here for India, it is that Clinton has stressed the loss of manufacturing jobs and not service jobs. To state the obvious, Clinton's advocacy of tax breaks and favourable policy framework for the US manufacturing sector obviously is targetted at China as outsourcing to India is mainly from the services sector. In the amendment she is introducing, Clinton has taken exception to the chairman of the Council of Economic Advisors describing the outsourcing of American jobs overseas ''as a good thing "and to outsourcing being "just a new way of doing international trade". According to her, "The President's economic policies have either failed to address or exacerbated the loss of manufacturing jobs that our country has experienced over the last three years; American families are facing an economy with the fewest jobs created since the Great Depression." Using figures to substantiate her argument, she has said that 2.9 million private sector jobs have been lost since January 2001, including 2.8 million manufacturing jobs and "on several occasions, the Senate has supported reforming our tax laws to eliminate policies that make it cheaper to move jobs overseas". She, therefore, wants to "oppose any efforts to encourage the outsourcing of American jobs overseas" and to "adopt legislation providing for a manufacturing tax incentive to encourage job creation in the United States and oppose efforts to make it cheaper to send jobs overseas". http://www.financialexpress.com/fe_full_story.php?content_id=53248 Kerry, Our Ally Against BPO Backlash He knows manufacturing unemployment's the issue by BHANOJI RAO The election fever is on in the US. TV channels are all agog with the news about the winners and losers at the Democratic Party primaries and caucuses. By the 12th of this month, primaries were completed in 10 states (New Hampshire, South Carolina, Arizona, Missouri, Delaware, Oklahoma, Michigan, Washington, Tennessee and Virginia) and caucuses in four (Iowa, New Mexico, North Dakota and Maine). Senator John Kerry won in 12 of the 14 states and could well be nominated in July at the Democratic Party National Convention to challenge President Bush in the November presidential election. Senator Kerry, who turned 60 in December, graduated from Yale, served on a gunboat in Vietnam, received honours for service in combat, founded Vietnam Veterans of America and was a spokesperson for the Vietnam Veterans Against the War. In 1984, he was elected to the US Senate and is currently serving his fourth term. The website of the senator has pages and pages on policy issues - on health care, fiscal deficits, domestic economy, external trade, homeland security and so on. Going by the press and electronic media focus in recent months, however, the single most important problem facing the American people is that of growing unemployment, and Senator Kerry has the right focus and emphasis on the crucial issue - as the following facts indicate. The overall unemployment rate increased from 4.1 per cent in January 2001 to 6.3 per cent in June 2003 and since, declined marginally to 5.7 per cent in December. The African-American unemployment rate rose from 8.2 per cent in January 2001 to 11.2 in September 2003, while the Hispanic unemployment rate increased from 5.8 per cent to 7.8 per cent. How did it all happen? The Economic Report of the President issued just a few days ago says it all, if one has the patience to look into the data. Manufacturing employment declined marginally from 17.7 million in 1990 to 17.3 million in 2000. By December 2003, the figure plummeted to 14.5 million. In contrast, services absorbed 85.8 million in 1990, 107.1 million in 2000 and 108.2 million in December 2003. Where have the manufacturing jobs gone? No economic expertise is needed to get to the answer. A visit to any popular superstore anywhere in the US will tell you: to China, of course. The above numbers speak well about where the emphasis should be. Unlike Mr Bush who seems to worry about outsourced call centre jobs, Senator Kerry has the right priority - bringing back manufacturing jobs. "Of the more than three million jobs lost since this (Bush) Administration took office, two and a half million have been in manufacturing", reads one of the numerous press releases issued by the Senator. His job creation agenda includes the revitalisation of the American manufacturing sector, effective utilisation of the work force, investment in research and development and better trade enforcement. In regard to enforcing fair trading practices, the senator hopes to use the full force of the WTO to take on countries which are manipulating their currency to undermine US exports. The proposals also include enforcement and strengthening of intellectual property rights and ensuring the inclusion of labour and environmental standards in revised/new trade agreements. Mr Kerry has the right rhetoric too: "The Bush Administration has not cracked down on countries that violate trade agreements or undermine American exports by manipulating their currencies...Japan and China are now the largest holders of US debt, giving them more leverage over our economy." Of course, it is easy to brand statements such as these as protectionist and anti-free trade. The truth, however, is the incompatibility of free trade with the rock-like stability of the Chinese currency against the US dollar despite the latter's southward movement over a period of time. Democratic governments all over the world should hope for Mr Kerry to win and should even begin talking to him on how they could work to strengthen his jobs agenda, instead of leaving it for the pro-China lobby in the US to gain ground and turn the job losses issue once again towards the countries providing low-end services for Uncle Sam. The author, an economist and an academic, worked with the National University of Singapore and the World Bank. He can be contacted at bhanoji@vsnl.net ----- End forwarded message -----