By Catherine Cuellar, KERA 90.1 reporter
Dallas, TX – Catherine Cuellar, KERA 90.1 reporter: In far north Dallas, where the economy depends on telecom jobs, the key word this election year is "offshoring." It's highly charged - conjuring up images of tech service call centers relocated to India, or a middle-aged senior staffer training a replacement half his age and willing to work for a quarter of his salary. But the reality it describes is nothing new, according to economist Bernard Weinstein.
Bernard Weinstein, Director, Center for Economic Development at University of North Texas: The so-called exporting of jobs has been going on for a long time but I don't really like the term "exporting of employment." What we're talking about is the relocation of employment. We're in the global economy whether we like it or not, so resources and investment are going to float to those areas that have either the lowest cost or the most sufficient workforce relative to the job that's being performed.
Cuellar: But for an unemployed software engineer like Tom Zabel, there's a disconnect between economists and workers whose jobs are going away.
Thomas Zabel, software engineer: I know the economists are saying, for example, jobs are being created, but we're seeing a lot of people that are losing jobs that they can live on - that paid maybe $70,000 a year - and those jobs are going away; and a lot of those people are now finding jobs that may pay them $20,000 a year. They'll find two jobs like that. They're making less than they were making before, maybe not enough to live on with two jobs, and that's getting counting as two created, one gone. They're saying we've gained a job, but we really haven't.
Cuellar: Policy makers must balance the anxiety of skilled workers who fear their jobs going overseas with demands from corporations, whose big budgets fuel the north Texas economy and fund campaigns. Offshoring will be a key election issue, especially in the congressional race between Republican Pete Sessions and Democrat Martin Frost. Sessions declined to be interviewed for this story, but Frost has voted against recent free trade agreements with Singapore and Chile.
Martin Frost, U.S. Representative (Democrat, Texas District 24): I think that there is a balance here and that - first we were outsourcing our manufacturing jobs - that was 10 or 15 years ago - and they were saying well, it's cheaper to move the plant someplace else. Now we're outsourcing our information technology white collar jobs. What's gonna be left? Are we going to have a lower standard of living for our country? Sure, some products might ultimately cost less, but people will have less money to buy those products, and I don't believe that's a trade-off that most American workers, whether blue collar or white collar, want.
Cuellar: But businesses that create jobs are dependent on global trade. One major local employer, Texas Instruments, has about one-third of its staff in Texas, and half its total labor force in the U.S. But more than half of TI's clients are elsewhere in the world. Dan Larson lobbies on tax and trade law in Washington, D.C. for the company.
Dan Larson, Director of Government and Media Relations, Texas Instruments: We're competing with companies and countries around the world who have really impressive incentive programs to get companies to move to their country or to encourage companies to send their employees there or create new jobs there. We have to enter those markets if we're going to preserve the company as a global player. You know you will have jobs here, and you will have operations here to serve the markets here, and frankly, serve markets around the world.
Cuellar: As companies get larger and compete globally, American employees are faced with some tough choices. When Enrique Olachea's former telecom company was acquired in a corporate merger, he could have left the state and kept his job. He chose to stay here, and his search for work continues. He doubts politicians can do much to influence the economy.
Enrique Olachea: If the companies are so focused on profitability and shareholder return, then how can government legislation change that? I don't know if there is any direct effect the government can have.
Cuellar: Congress does have one powerful tool to influence corporate behavior - the U.S. tax code. The House Ways and Means Committee, which deals with tax law, includes Republican Representative Sam Johnson from Plano:
Sam Johnson, U.S. Representative (Republican, Texas District 3): The President's tax reductions in the past year and a half have stimulated the economy. The reason he's trying to propose making all those tax cuts permanent is so that the economy will stay on an uptick and not decrease anymore. You raise taxes and people are going to start pulling back their horns and not spending money, and the economy will dump. Big businessmen are not going to expand; they're not going to continue to build new businesses if taxes prohibit them from making a profit.
Cuellar: Texas Democrats, including Dallas Congresswoman Eddie Bernice Johnson, think targeted spending for infrastructure is a better way to stimulate job creation.
Eddie Bernice Johnson, U.S. Representative (Democrat, Texas District 30): What we've gotten into is giving a lot of the money back for the tax breaks for the very wealthy, which has not improved the economy. The jobs have not trickled down because what they're doing is improving their productivity, which means fewer people with more work; and it's improving in there on Wall Street, but it does not improve those people that are still unemployed. Their jobs are not coming back.
Cuellar: But advocates say continued global outsourcing of manufacturing and service-sector jobs promotes future innovation at home. Free-market economists like Weinstein think changing tax laws to be business-friendly is unnecessary, and often plays on fears rather than facts.
Weinstein: In terms of legislation or incentives to keep businesses in the United States who might want to go abroad or expand their operations abroad, I think that would be really bad public policy. If we're going to preach a global trade and investment, if we believe in globalization, then we shouldn't be putting these constraints on the movement of capital or the movement of people; but again, that's a very sensitive political issue when the perception is that foreigners are taking American jobs, either because they come into the United States and compete for jobs or because companies ship employment to other countries.
Cuellar: Businesses feel American employees benefit from multicultural collaboration, and that their bottom line requires hiring skilled foreign-born workers. But American employees often resent the use of visas to bring them here. H1B visas hire full-time engineers and computer scientists. Paula Collins, Texas Instruments' Director of Government Affairs, says the visas make sense, given the state of higher education today.
Paula Collins, Director of Government Affairs, Texas Instruments: More than 50% of the Masters and Ph.D.s that are graduating from U.S. universities are foreign nationals. And so if we want to access that talent at our own schools, we need to utilize the H1B visa in order to bring them into the company. It's counterproductive for the United States to train foreign scientists and engineers, and then send them home to compete against American businesses.
Cuellar: Nevertheless, the tech industry's use of H1B visas declined 75% from 2001 to 2002. And candidates from both parties say they want to keep a tight lid on imported labor until laid-off Americans find jobs. Representative Sam Johnson.
Sam Johnson: Two or three years ago, businesses couldn't find enough skilled workers, so that's the reason that H1B was expanded, and I was for that. I believe that H1Bs have outlived their usefulness today, and we need to work on American workers and American students coming out of colleges getting the technical expertise to work in our businesses, and that's where education comes in.
Cuellar: But the federal budget for retraining and education has been cut since 9/11. The most obvious way for politicians to impact that - and court votes - is to bring home the bacon, designating funds for local projects, and they're doing that. But they also vote globally. Despite passage of new trade agreements with Singapore and Chile in Congress last year, free trade is being debated on the campaign trail. Labor unions and corporations both have a lot at stake. They will throw their resources behind candidates in the 2004 election, and keep offshoring a front burner issue. For KERA 90.1, I'm Catherine Cuellar.
Tomorrow morning, our Voter Follow Up series concludes with a look at healthcare by reporter Bill Zeeble at 6:40 and 8:40 on KERA 90.1.