Date: Mon, 5 Feb 2007 23:35:17 -0800 From: Norm Matloff To: Norm Matloff Subject: Feb. 2 globalization conference at UCB To: H-1B/L-1/offshoring e-newsletter Last Friday I attended a conference at UC Berkeley titled "Globalization Comes Home." It was actually a three-day conference, held in conjunction with the publication of a three-volume book on the subject. Friday's session was on economic issues. As far as I know, the conference wasn't publicized; I just happened to be on their mailing list, because I had been a speaker in one of the institutes that organized the conference. The first speaker, Dwight Jaffee of UCB's Haas School of Business, gave a pro-offshoring talk. I'll say more about him below, as he is the only one whose talk I attended that spoke on the tech sector. (His research partner Cynthia Kroll spoke later, but I thought I could spend my time better elsewhere than to attend it.) In the talks I attended, the speakers were pretty balanced, about half of them supporting globalization and about half criticizing it. The most engaging talks were by Berch Berberoglu of UNLV and Michael Schulman of NC State. Berberoglu, I take it, is well-known as a sociologist. He's very flamboyant and pretty extreme in his politics, but one need not agree with him to find him interesting. He certainly got in some good zingers against Big Business. Halfway in his talk, though, Alan Rugman of Indiana University's Kelley School of Business, rose and pompously said to Berberoglu, "Everything you're saying is rubbish!" It was incredibly rude, and the audience, whether sympathetic to Berberoglu or not, defended Berberoglu at the end of the talk by giving him a much warmer round of applause than anyone else got. Schulman gave a very touching and well-researched slide show on the adverse effects of globalization on poor black women in NC. During the discussion that ensued, which went well beyond this particular context, Ram Mudambi of Temple University's Fox School of Business and Management, stood up and passionately defended globalism, using GM auto workers as his focus. He raised his voice as he said, "Those auto workers didn't DESERVE to get $18/hour! They had NO RIGHT to make that much!" I'm not saying that the U.S. is necessarily the right place for manufacturing jobs, but to use moral terms like _deserve_ is way over the top, in my opinion. Now, back to Jaffee. Some of you will recall that he, Kroll and Ashok Bardhan, all of the Haas School, caused quite a stir a couple of years ago when they talked about 12 million U.S. jobs being up for grabs because of globalization. Subsequently they released reports in the opposite direction, saying that globalization would probably not be a problem after all. Jaffee said obliquely that his group had been asked to look at these issues, which makes one wonder if the asking was done by the Haas School's corporate sponsors who didn't like the theme of their earlier research. Jaffee basically told the same story that one sees in the ACM globalization study that I've reported on in the past; see http://heather.cs.ucdavis.edu/Archive/ACMStudy.txt (Recall that David Patterson, the ACM president at the time, is a professor at UCB.) The message is that total employment in the "Computer and Math" sector is the same today as in 1999. During the Q&A period, I pointed out that (a) the number of H-1Bs, L-1s etc. increased a lot since 1999, so the number of jobs available to Americans is way down, and (b) the technical jobs are declining while the "talking jobs" (sales, marketing, etc.) are increasing. I also pointed to the many former software engineers I know now working in jobs as real estate appraisers and the like, and I raised the age discrimination issue. He took notes as I was speaking, which I appreciated, but his answers were quite disappointing. The worst was on H-1B; he asked me, "Wait a minute, I don't understand, are you actually saying you OPPOSE the immigration law?" When I said I did, and mentioned the academic and government studies showing that H-1Bs are paid less than Americans, he was incredulous: "This is amazing. Everyone I talk to says we need to INCREASE the number of visas." Again, who is he talking to? He also said that immigration laws prevent underpayment (I asked whether the tax code has loopholes, and he said sure, so I said it's the same with H-1B, which he accepted). On the age issue, he said that the engineers displaced by H-1Bs "obviously don't have the skills." I said, "No, no, they're too expensive." This is the second time in recent months that I've seen an economist make such a statement (the other was my UCD colleague, Giovanni Peri), which is amazing to me--don't economists look at costs anymore? Jaffee gave the usual response--retraining. I asked, "Retraining for WHAT? Do you want them to retrain to be real estate appaisers?" He say, emphatically, "YES." He also said that wages had gone up in the sector. I replied that if all the Assistant Professors at UCB were suddenly to be fired, then mean wage would go up on campus even though no one's salary would go up a penny; the same effect holds when the low-level jobs go abroad. He understood and conceded the point. I might have added that if UCB were to lay him off from his professor job and then rehire him as a Haas recuiter, he would still be employed in the education sector, and thus shouldn't take this coarse data so seriously. Well, now you see why I didn't have the heart to attend Kroll's talk. Norm