With all the recent talks about most computer jobs in the United States being shipped out over seas, I did a little research and found these two very crediable news sources that butt heads.
Endangered species: US programmers
By David R. Francis, The Christian Science Monitor
Say goodbye to the American software programmer. Once the symbols of hope as the nation shifted from manufacturing to service jobs, programmers today are an endangered species. They face a challenge similar to that which shrank the ranks of steelworkers and autoworkers a quarter century ago: competition from foreigners.
Some experts think they’ll become extinct within the next few years, forced into unemployment or new careers by a combination of offshoring of their work to India and other low-wage countries and the arrival of skilled immigrants taking their jobs.
Not everybody agrees programmers will disappear completely. But even the optimists believe that many basic programming jobs will go to foreign nations, leaving behind jobs for Americans to lead and manage software projects. The evidence is already mounting that many computer jobs are endangered, prompting concern about the future of the nation’s high-tech industries.
Since the dotcom bust in 2000-2001, nearly a quarter of California technology workers have taken nontech jobs, according to a study of 1 million workers released last week by Sphere Institute, a San Francisco Bay Area public policy group. The jobs they took often paid less. Software workers were hit especially hard. Another 28% have dropped off California’s job rolls altogether. They fled the state, became unemployed, or decided on self-employment.
The problem is not limited to California.
Although computer-related jobs in the United States increased by 27,000 between 2001 and 2003, about 180,000 new foreign H-1B workers in the computer area entered the nation, calculates John Miano, an expert with the Programmers Guild, a professional society. “This suggests any gain of jobs have been taken by H-1B workers,” he says.
H-1B visas allow skilled foreigners to live and work in the US for up to six years. Many are able to get green cards in a first step to citizenship. Another visa, L-1, allows multinational companies to transfer workers from foreign operations into the US.
The H-1B visa has been highly controversial for years. This fiscal year, Congress set a quota of 65,000 visas, which was snapped up immediately after they became available Oct.1. Now, US business is pleading for Congress to let in more such workers.
The US Chamber of Commerce, for instance, wants Congress to revisit the cap “to ensure American business has access to the talent it needs to help keep our economy strong.”
That rationale makes no sense to the Programmers Guild and other groups that have sprung up to resist the tech visas. Since more than 100,000 American programmers are unemployed - and many more are underemployed - the existing 65,000 quota is inexcusably high, they argue. H-1B and L-1 visas are “American worker replacement programs,” says the National Hire American Citizens Society.
Further, the H-1B program, set up in 1990, is flawed, critics charge. For example, employers are not required to recruit Americans before resorting to hiring H-1Bs, says Norman Matloff, a computer science professor at the University of California, Davis.
And the requirement that employers pay H-1Bs a “prevailing wage” is useless, he adds, because the law is riddled with loopholes. Nor are even any remaining regulations enforced.
The average wage for an American programmer runs about $60,000, says John Bauman, who set up the Organization for the Rights of American Workers. Employers pay H-1Bs an average $53,000.
A programmer, Mr. Bauman was out of work for 20 months before finally taking a job with a 40% pay cut. His experience is common enough that programmers are organizing to fight in Congress against H-1B and L-1 visas.
But they face an uphill battle, says Mr. Miano, as business groups are far better organized and funded than the smattering of programmer groups. “They have the best legislation money can buy,” he says.
Miano sees such a dim future for programmers that he decided to enter law school. “I saw the handwriting on the wall,” he says.
However, News Forge wrote:
Stop worrying about IT offshoring - it’s doing fine
According to the quarterly report [pdf link] we received today from Wipro, India’s largest IT services and business process outsourcing contractor, revenue was up 47% — and profits were up 67% — over last year. Better yet, Wipro claims it has added 34 new clients in the last quarter, and “10 are Fortune 1000/Global 1000 customers.”
From the press release:
- Net Income was Rs. 3.8 billion ($ 84 million), representing an increase of 67% over the same period last year
- Revenue was Rs. 19.8 billion ($ 431 million), representing an increase of 47% year over year
- Global IT Services & Products Segment Revenue was Rs. 15. 0 billion ($ 326 million), representing an increase of 45% over the same period last year
- Global IT Services & Products Earnings Before Interest and Tax (EBIT) was Rs. 4.0 billion ($ 88 million), representing an increase of 90% over the same period last year
- Rs. 4.8 billion ($ 105 million) cash generated from continuing operations
- Global IT Services & Products added 34 new clients in the quarter (including 3 in its IT Enabled Services operations)
- Wipro’s India, Middle East & Asia Pac IT business segment signed a five year AUD 17 million contract with AXA Australia to provide Application Maintenance and Development Services to support their Wealth Management and Financial Protection products.
Outlook for the Quarter ending December 31, 2004
Azim Premji, Chairman of Wipro commenting on the results said “The strong results clearly demonstrate that Wipro is winning in a market where customers are seeking higher value. Our Global IT Services business delivered strong sequential Revenue growth of 13% and improved Operating Margins for the fifth successive quarter. We continue to benefit from the investments made over the last few years. We have good business momentum across our businesses. Coupled with our compelling portfolio of services, this gives us immense confidence on our long term prospects. Looking ahead, for the quarter ending December 2004, we expect our Revenue from our Global IT services business to be approximately $347 million.”
Vivek Paul, Vice Chairman, said “We continue to sustain our growth across all our key verticals and service lines in our Global IT business. Good volume growth and stable pricing environment resulted in Revenues of $327 million, ahead of our guidance of $318 million. Excellent execution and continuing focus on improving productivity helped deliver Operating Margin expansion. In terms of service lines, after a couple of subdued quarters, our Business Process Outsourcing business rebounded strongly with a sequential revenue growth of nearly 20%.”
Suresh Senapaty, Corporate Executive Vice President -Finance said, “Improvement in Operating Margin in our Global IT Services business was driven by better price realization for Onsite projects, an increase in the proportion of Revenues from Offshore projects, and continued operational improvements partially offset by lower utilization primarily due to a net addition of over 5,500 employees to our team, including around 3,300 in our IT Services business. Further, in a move that could significantly improve employee retention and enhance the alignment of employee interests with those of shareholders, we have issued Restricted Stock Units to our key employees.”
The IT sector is obviously rebounding
If these glowing statements are correct, it looks like the recession that has thrown so many IT workers out on the street is now over, and at least someone in the business is hiring like mad.
It’s good to see that President Bush’s plan to stimulate the economy is working so well. For a while it looked like it wasn’t having much effect.
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