IBM Sending Skilled Jobs to China and India

Politicians, pundits and perhaps even some economists that write about globalization simply don't understand how the dynamic has changed. 

The promise when so-called free markets and globalization were sold to the American public in the 1990s was that, while we would lose low-paying low-skilled jobs, we could migrate upstream to better jobs. It was a win-win for the developing countries and for Western countries. 

Problem is that promise has been broken. What advocates of globalization either didn't understand, or perhaps didn't want us to realize, is that the higher-skilled jobs are, in fact, the most portable of all. The shipping costs for IP aren't from large freighters slowly crossing the Pacific; all it takes to send America's intellectual property abroad is an Internet connection. 

I've written about this over the years, including "Exporting Our Secret Sauce", where I criticized the New York Times' Thomas Friedman for claiming our country's financial system was our main strength (Now, there's an opinion that seems timely. How is that working for you now, Tom?), in "U.S. Conglomerates Helping China Catch the U.S." and "Outsourcing: Attention Growing". 

Latest evidence comes from the reported lay-offs of 10,000 IBM employees. Here is how one of the victims described the carnage, from Alliance@IBM via Ziff Davis: 

So far this year, it is approaching 10K (5K in Jan; 5K today) with rumors of more to come in June and in the Fall. This is not a story about moving unskilled work to another country. The layoffs have included highly-skilled and experienced professionals - scientists with PhDs, MBAs, seasoned software developers, marketing experts, consultants, project managers and manufacturing workers. This is a story about throwing near-retirement workers into the layoff pool - and using some of the savings (not sent overseas) to hire lower cost & unsuspecting new college grads. Then IBM can say "See, we're hiring," and continue the relentless march to reduce investment in American workers.

Let me reprise a quote I used when I wrote on this topic back in 2004. Craig Barrett, then CEO of Intel, is one of the few multinational heads to speak honestly about what is happening: 

"As an American citizen, I would have to be worried about ... jobs ... outside the U.S. ... As a citizen, I see all these resources and I think this puts my country in danger." 

               —Craig Barrett, Intel CEO

Barrett gave that warning while opening a multi-billion semiconductor manufacturing facility in China. This effectively transferred technology, paid for by your tax dollars through R&D tax credits given to Intel, to Communist China. 

But that's OK because now we can all build windmills.