Tech firms defend moving U.S. jobs overseas

WASHINGTON -- Leading technology companies urged Congress and the Bush administration Wednesday not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower.

The companies said such policies would do little to resolve long-standing problems more broadly affecting America's global competitiveness, such as low-scoring schools and inadequate research spending. Erecting barriers, they said, "could lead to retaliation from our trading partners and even an all-out trade war."

The effort shows the industry's growing concerns that lawmakers may clamp down on the "offshoring" of U.S. jobs during an election year. Already, some Democratic candidates have criticized the practice.

"There is no job that is America's God-given right anymore," Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday. "We have to compete for jobs."

In a report by a trade group for some leading technology companies, executives argued that moving jobs to countries such as China or India -- where labor costs are cheaper -- helps companies break into lucrative foreign markets and hire skilled and creative employees in countries where students perform far better than U.S. students in math and science.

"Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment," said the Washington-based Computer Systems Policy Project, whose member companies include Intel Corp., IBM, Dell Inc. and Hewlett-Packard.

Intel chief executive Craig Barrett said the United States "now has to compete for every job going forward. That has not been on the table before. It had been assumed we had a lock on white-collar jobs and high-tech jobs. That is no longer the case."

Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.

A vocal critic of moving jobs overseas, Marcus Courtney of Seattle, dismissed the latest report. "This is not a recipe for job creation in this country," said Courtney, president of the Washington Alliance of Technology Workers. "This is a recipe for corporate greed. They're lining up at the public trough to slash their labor costs."

The issue of overseas jobs has emerged as the top debate in technology circles.

Democratic front-runner Howard Dean said during a debate last month that America needs a president "who doesn't think that big corporations who get tax cuts ought to be able to move their headquarters to Bermuda and their jobs offshore."

Sen. John Kerry, D-Mass., introduced a bill in November requiring service representatives to disclose their physical location each time a customer calls to make a purchase, inquire about a transaction or ask for technical support. The proposal targets the increasingly popular decisions by companies to move their call centers overseas to capitalize on low labor costs.

A Commerce Department report last month said increasing numbers of technology jobs are moving from the United States to Canada, India, Ireland, Israel, the Philippines and China -- and predicted that "many U.S. companies that are not already offshoring are planning to do so in the near future."

The subject has been the focus of several congressional hearings, and some lawmakers have asked the General Accounting Office for a study on the economic implications of moving technology jobs offshore.

Even as technology companies lobby against limits on offshore employment, they are urging the Bush administration to approve new tax credits on research and development spending, spend more on university research on physical science and adjust tax depreciation schedules for technology purchases. They said they also want improvements in education, especially in elementary through high schools.

"The problem is not a lack of highly educated workers," said Scott Kirwin, founder of the Information Technology Professionals Association of America. "The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools."

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On the Net:

Computer Systems Policy Project: http://www.cspp.org

Washington Alliance of Technology Workers: http://www.washtech.org

Information Technology Professionals Association of America: http://www.itpaa.org