White-Collar Blues. American Firms are Hiring
Highly Skilled People Abroad, for Lower Pay
Walter Kruz is more than qualified to work at Intel Corp.s newest chipmaking plant. He has a masters degree in electrical engineering, a bachelors in physics and 20 years experience in the booming semiconductor industry. Moreover, he lives only a short drive from the home office in Santa Clara, California.
But Mr. Kruz, who last summer was laid off from his $75,000-a-year position at a Lockheed Corp. unit, has no hope of a job at the new Intel plant. Thats because it is in Ireland and is hiring only Irish engineers - at Irish wages.
Intels interest in bargain-priced engineers reflects a little-noticed but ominous trend: the professional class in America is facing the same kind of job erosion from global competition as the working class, though it is not yet as severe.
U.S. companies are increasingly hiring highly skilled workers in Asia, the former Soviet bloc and Europe to perform jobs once reserved for American professionals. Or they are temporarily importing these foreign professionals to tackle demanding tasks in the U.S. Texas Instruments Inc., Chase Manhattan Corp., International Business Machines Corp. and scores of other companies have contracted with Indians, Israelis and other foreign companies to write computer programs. Films and television producers increasingly bring in foreign film professionals to keep costs down. And American Telephone & Telegraph Co., Du Pont Co., Hewlett- Packard Co. and others have moved business units abroad, along with hundreds of high-paying managerial and research jobs.
The hiring of foreign professionals isnt always a money-saving move. For U.S. companies wanting to expand abroad just as for foreign companies wanting to enter the U.S. it is often considered good strategy to hire people native to the target market.
%# Feeling Threatened
But in a growing number of cases, money is the issue, and some find this alarming. The survival of the [American] professional is at stake, says Stewart Personick, an active member of the Institute of Electrical and Electronics Engineering and an assistant vice president at BellCore, the research arm of the regional telephone companies. Already, some people are having trouble finding work, or they are receiving less pay or working harder for the same money.
The availability of low-paid professionals in Malaysia, Hungary, China, India and elsewhere calls into question the idea, popular in the Clinton administration, that U.S. workers can raise their own wages or job prospects by acquiring more skills. A professional can have his skills moved around the world very easily today, so he ought to feel even less complacent than a low-skilled person, whose job may be tied to a locate, says William J. Schroeder, vice chairman of Conner Peripherals Inc., a maker of computer disk drives.
Its scary, says Hilary Pennington, who has advised President Bill Clinton on labor issues and heads Job for the future, a Massachusetts firm that promotes training and apprenticeship programs. The fact that professional status increasingly doesnt offer clear protection against, foreign competition is something that has to haunt the administration says Ms. Penington. Still, she says U.S. workers must acquire higher skills, even without any guarantees.
The foreign competition doesnt affect all types of professionals. And, to be sure, professionals, as a group, certainly do remain a privileged part of the U.S. work force. The number of high-skills jobs lost overseas is still small compared with those lost in blue-collar and routine service work, while Americans of high skill usually stand the best chance of getting and keeping good jobs.
Komag, a Milpitas, California, maker of exotic materials used in computer storage devices, has decided to open a plant in Malaysia rather than expand its California factory, expressly because wages for both professionals and production workers are lower there. Indeed, Willard Kaufman, chief financial officer, says that if demand for Komags products werent growing, its U.S. professionals might be getting pink slips even as others are added overseas.
All of the 40 Malaysian managers and engineers Komag has hired to run its plant (scheduled to open this year) speak English and hold academic degrees, among them two doctorates. No U.S. supervisor or engineers
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will assist at the plant. The Komag executive in charge of it is a Malaysian native who has spent the past two decades with U.S. companies.
We can solve all the engineering problems well face on our own, says the executive Thian Hoo Tan. And the Malaysians will do it for one third the pay of their U.S. counterparts.
The Irish Edge
Foreign professionals have no illusions about why U.S. companies find them so appealing. Were cheaper, says Leonard Hobbs, one of Intels Irish engineers. In America, your standard of living is just getting too high. In Ireland, the unemployment rate is higher and people are hungry to do the job. Irelands unemployment rate exceeds 20%.
Besides hiring professionals offshore, U. S. take foreign professionals to work temporarily in the U.S.
It is relatively easy for U.S. companies to bring them in for periods of as long as a few years. Few limits are placed on a companys ability to employ a foreigner in the U.S. provided he or she has specialized skills, whether in nursing or cinematography or science. A company simply files a petition with us and just says they want to bring them in, explains Larry Weinig, an official of the Immigration and Naturalization Service. The number of applications to bring in foreign professionals has nearly doubled to more than 100,000 annually over the past five years.
U.S. employers are hiring a growing number of foreign professionals who enter the U.S. as business travellers and receive payment in their home country for temporary work here-an illegal practice, says Mr. Weinig. He says he hopes that through better screening around the world, U. S embassies can at least hold the line on this abuse.
Foreign professionals also come to the U.S. to get training. Hewlett- Packard brings an undisclosed number of Chinese engineers in each year for training. But the trainees do work to ease the crunch at peak times. Often foreign trainees find that their experience is a prelude to full-time employment in their native country.
Then there are the Hollywood people displaced by foreigners. U.S. cinematographers, the people who shoot movies, typically earn high six- figure salaries. But lately, all the movies I want to shoot are staffed by foreigners, says Robbie Greenberg, a Los Angeles cinematographer, who estimates his income has fallen 50% because of the influx.
U.S. employers arent always the initiators of these arrangements. Some foreign professionals price their services directly to U.S. customers. Our
%% argument [to a U.S. company] is that you can continue to use U.S. programmers, but your business may end up being uncompetitive, says Cheepun Wong of Computer Systems Advisers Group, a Singaporean company that started bidding on U.S. business two years ago.
Mostly, foreign computer consultants work on older systems, where programming is routine. But even the loss of these unglamorous projects hurts, notes F. William Guerin, who heads Marathon Systems, a San Francisco consultancy recently aced out of such work by an Indian Contractor.
Practical Assignments
1. Choose the right answer.
U.S. companies want to expend overseas to a) hire people native to the target market b) economize money
c) hire people native to the target market and to economize money At a newly opened computor plant in Malasia
a) only American specialists work
b) Malaysian specialists do only low-skilled jobs
c) many trained, high-skilled Malaysian specialists, among them two doctorates, work
American professionals as a group
a) lost a principal part of the U.S. work force because of the foreign competition affect
b) do not remain a principal part of the U. S. work force because professional status does not offer clear protection against foreign competition
c) have a privileged part of the U.S. work force
In the Clinton administration an idea was popular that U.S. workers a) can raise their own wages or job prospects by acquiring more skills b) cannot raise their own wages by acquiring more skills because
they ought to feel less complacent than low-skilled workers c) can raise their own wages or job prospects working harder 2. Answer the following questions.
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do you think about it? Write down words or ideas as they come into your mind. Then discuss your ideas with your classmates. 2. Have you (or your friend or a relative) ever worked in a foreign company? Describe the job. How did you (he / she) get it? What skills were required? 3. What do you think: why do companies hire foreign workers (both: Blue-Collars and White-Collars)? 4. Name the multinational corporations having their branches in Latvia. 5. Say what pluses and minuses of their expansion Latvian economics may have? Discuss your thoughts with a person next to you.