What’s labor going to do about offshoring?

The increasing move of white-collar jobs overseas is inevitable, says one longtime Silicon Valley activist. So the fight for workers' rights has to go global.

Topics: Globalization, Unemployment, The Labor Movement,

What's labor going to do about offshoring?

If your job has been offshored to another country, where someone else will do it for a fraction of your former salary, should you:

(a) Stand outside corporate outsourcing conferences waving a placard that says “WILL CODE FOR FOOD”?

(b) Start a Web movement or e-mail campaign to lobby the government and other shoppers to stop doing business with companies that send jobs overseas?

(c) Hang up your keyboard and learn a new skill, like massage therapy or nursing, that can’t be bought and sold over a phone line with the click of a mouse?

Amy Dean has a more radical, if wonkier, idea.

Hailed as the “Mother Jones of Silicon Valley,” Dean has long been well-known in the region as the executive director of the South Bay AFL-CIO Labor Council.

But after 15 years of organizing in the valley, she’s now living in Chicago, where she’s writing a book — working title: “Towards a More Perfect Union” — about workers in the new economy. With a grant from the Century Foundation, she’s focusing on how public policy and labor unions must change to serve today’s workers.

Dean, who is still the president of the Silicon Valley nonprofit Working Partnerships USA, left her post at the AFL-CIO last July, just as the outsourcing of white-collar tech jobs was becoming a hot topic. But reached at her home by phone, she had plenty to say about what can be done — and what can’t — to meet the threat of offshoring to the American worker.

What response do you think that U.S. technology workers should make to the offshoring of jobs overseas?

I don’t believe that the phenomenon of outsourcing and offshoring will do anything but proliferate over time. As a consequence, employees and their relationship to an employer will increasingly be flexible and volatile.

That means the obligation of the employee is to constantly keep skills upgraded and keep really current in whatever field that you work in. It also means that the social networks that you’re a part of become increasingly important, because they become the vehicle that connects you to employment.



The real question, though, about what is to be done about offshoring is that it is as much the employer’s responsibility as it is the employees’.

If outsourcing continues as a practice, employers should be obligated to increase the amount of funding that they put into training and to look at calling people back based on seniority. But it’s really a public policy question: How do we reform America’s labor market institutions to respond to a very changing work environment?

People increasingly will work on a temporary, part-time, contingent, outsourced basis. As a result, our labor laws and employment laws and overall labor market institutions need to change to provide security for those workers who are working in a very different context today than when those laws were written.

Do you think that government policies would have to be changed in order to get employers to do some of the things that you’re suggesting? Cost isn’t the only reason that companies are offshoring, but it’s one major one. It’s difficult to imagine companies funding programs to help the workers that they’re displacing if the point of displacing them is to save money.

We absolutely have to have labor law reform, employment policy reform, and we even need to look at reform with regard to our trade laws.

We could make some very, very basic changes that wouldn’t require a whole lot of political innovation or political courage to ensure that employees that work on a contingent basis are covered during periods of unemployment.

When we created our unemployment insurance system 60-some years ago, we created it with the assumption that there would only be brief periods of interruption of an employee’s employment. The economy would ebb and flow. There would be moments when people would get disconnected from their jobs. They would be caught by the safety net and then they would return back to that same job eventually. [But] we know that that’s just not the case anymore.

We know that there is a higher incidence of separation for the labor market today than there once was. We know that the majority of people do not return back to the same employer. And as a consequence many of these employees are not eligible for unemployment insurance during the times that they find themselves unemployed.

When we built the National Labor Relations Act, which was a legal agreement that was created 60 years ago, most people had a permanent relationship to one employer over their lifetime. Under those laws, the groups of employees who work for an employer over time can form a community of interest, get together and bargain collectively over terms and conditions of employment.

Well, what’s the group for people who may work in the same occupation but are spread across hundreds of different employers? What’s the group for employees who work for an employer but aren’t housed under one roof, but they’re spread across the globe?

It may be true that unions as constituted previously are a relic of the past. But working people have a common basis for unity when it comes to their economic interests.

That’s not a relic of the past.

So rather than trying to slow down or stop offshoring or outsourcing directly, workers need to lobby for public policy changes that would help protect their interests?

For example, [say] I work for Selectron. And I am one of many people, even though we may have different employers of record, who do contract manufacturing. I realize that I’m in a very volatile industry. But if I had the ability to come together with my co-workers to negotiate with my employer, we may not be able to negotiate the stemming of the tide of outsourcing. But we certainly can negotiate a trust fund that says that a certain amount of wages and healthcare are covered during periods of dislocation.

And if we had reform in laws, we could have those kinds of agreements across multiple employers … I think that essentially is the nexus for the next New Deal in America. Which is, yes, we recognize that flexibility is something that employers need to have, but employees need security. And we can have both.

So you can have flexibility for employers, but you can have some kind of continuity for employees?

To achieve that, we’d also need reform of labor law that says that employees and employers are entitled to bargain over this range of issues.

The other problem with the National Labor Relations Act is that it defines a very narrow scope of issues that can actually be brought up for purposes of collective bargaining between employees and employers. The way it works now is that management makes decisions about the firm, and the employees get to sort of bargain over the crumbs that will get left behind.

The new generation of American unions has to be able to play a much bigger role in the strategic direction of the firm and see itself as a partner with the firm.

Current labor law doesn’t really address the fact that employers can now easily go to a country where people can’t bargain over wages and hours and so on, and have them do the work there for a fraction of the cost.

When it comes to outsourcing, important as it is to have domestic reforms, like labor laws and employment insurance and healthcare reform, we absolutely have to turn our attention to international trade policy as well.

We cannot continue to have trade policy in this country that does not take into account conditions of the workers and the environment. We have all sorts of protections in our trade laws to protect intellectual property. We have all sorts of rules in our trade laws to protect compact discs.

If we had one-quarter of the same rights for a human being as we do for compact discs, we’d see a huge breakthrough in trade policy.

It’s complicated, and I’ll try to oversimplify it. The debate in this country often has been characterized between people who think that trade is a good thing, and people who think that trade is a bad thing.

The real debate isn’t about whether trade is a yes or no, a good prospect or a bad prospect. The real debate in America has to be: Under what conditions do we trade with countries?

[Then] you get into this whole debate where you say: “Well, we should impose an international minimum wage, or we should regulate wages.” Many of the Southern developing countries, they don’t agree with that. They think that’s just America and the First World trying to protect and insulate its workforce. But if you began to have a conversation with the developing world that says, “Let’s just simply make as a condition of trade the right for employees to freely associate with one another,” it becomes a completely different argument and a completely different discussion.

Because if you say to someone who is slogging away in the developing world for a buck an hour, “What’s better? No job or a job for $1 an hour?” the employee is going to tell you that the job for $1 an hour is better. But if you ask that same employee, “What’s better? That job for $1 an hour where the employer tells you, ‘Here are your hours, and here is the money that you’re going to get paid, and here are the conditions under which you work,’ or the job that allows you to get together with your co-workers and determine that with your employer?”

What do you think that employee’s answer is going to be, no matter what part of the world that they come from?

[This would be] very consistent with the foundation of our country. It’s a very Madisonian concept that people should be allowed to freely associate for purposes of advancing their own interests. You couldn’t ask for a more Western or American value.

And to be able to extend those values into our trade agreements, I think, is much more respectful of other countries. On the one hand, it protects our interests, but it also protects the interests of workers in those countries.

It’s a much more respectful approach to harmonizing trade relations from a workers’ rights perspective than creating some kind of international minimum wage, which the developing world sees as a largely American labor strategy to protect and insulate jobs.

So, is there any political movement toward these broader reforms you’re describing? The U.S. Senate passed a bill last week that included a provision that would ban giving government contracts to some firms that outsource or offshore. It seems that one limited way that the federal government, and some state governments, are responding to offshoring is by saying, We’re not going to give our dollars to companies that do this.

Just by saying, “We’re going to create procurement policies that ban doing business with these companies,” at the end of the day, it doesn’t do anything to help workers, because we’re not taking a structural approach to the reform. At the same time, I think those are good moves, because they do begin to thrust the issue into the public debate. It does begin to raise the whole question of values and the economy. What values are important to us as a nation? And I think that’s very, very significant, because for many, many years we stopped pursing economic policies as a means toward achieving political values and political goals, and we just sort of said: “Economic policy has value in and of itself.”

We have severed the relationship between the economy and values. And I think getting back to these kinds of debates, where local and state governments are willing to assert a certain set of values around conducting its business, is a very significant move.

Do you see anybody working for these larger labor law reforms?

I think that the most exciting thing that’s happening in America is that there is a renaissance in the American labor movement. And that for the first time in decades the American labor movement is debating its direction. And it’s struggling with lots of different strategies and trying to figure out what is the best way to go to rebuild its presence.

We don’t get to rationalize the employment system in America and create any kind of parity of influence for American workers — I don’t care if they’re at the high end of the labor market or at the low end of the labor market — without a resurgent labor movement. There is a very broad economic justice movement growing across America, and the labor movement is at the center of it.

Look around the country and there is all sorts of work going on where people are advancing policies, whether its living-wage policies or community-benefit policies or procurement policies where they are trying to say, “Government — because we can affect government as an employer — needs to be able to link its investments to ensuring outcomes for the community.”

Until recently, offshoring has been regarded as a manufacturing issue. But in the last couple of years, white-collar jobs, like computer programming, have started to move overseas. What impact do you think that job losses moving up the corporate ladder is going to have for the labor movement?

I think that anytime a social and economic phenomenon begins to affect a broad cross-section of society, it increases the likelihood that there will be reform. Anytime the lack of rights or the lack of protections begins to affect not just low-income people, but people across the economic spectrum, that is always when the conditions for reform are ripe.

Some companies that have offshored have argued that they sell their products internationally, so what’s wrong with them creating jobs around the world? Do you think that companies founded and headquartered here in the U.S. have any obligation to create good jobs domestically?

I think on the one hand firms do have a certain amount of responsibility to the community that they’re in. If you are Hewlett-Packard or Apple Computers or AMD or Applied Materials, and you’re doing business in Silicon Valley, you have a certain obligation to the community of course, and more than simply just being philanthropic.

You’re a huge consumer of land. You’re a huge consumer of energy. You’re a huge consumer of transportation services. You really depend on the regional infrastructure of an economy, and as a consequence you do have an obligation to give as much as you take.

But I would say that the real debate isn’t whether jobs should or shouldn’t be created offshore. It’s really a question of under what conditions do we terminate jobs, and under what conditions do we create jobs? And when we simply create jobs to save money for a firm, that’s when this whole issue of freedom of association must become a part of our trade policy.

If there are other reasons for creating jobs offshore, that there’s a set of knowledge workers that have a certain set of expertise, or there’s a certain strategic advantage to being in that region, that’s one thing. But when it becomes an issue of saving money because we can employ people for less, if we’ve going to ensure that trade policy meets everybody’s interests in our country, not just industry’s interests, not just capital’s interest, but working people’s interests, that’s when we’ve got to be able to have trade policies that say, “Those workers need to enjoy the same liberties that we do in our country.” Otherwise you really are taking jobs and moving them for the exclusive purpose of being able to undercut labor costs.

But it becomes a different conversation when the workers in those countries have the rights to negotiate with an employer. And I would argue that the moment that we are able to create freedom of association as a condition of trade, we will absolutely be able to stem the tide of offshore outsourcing.

Oh, really?

I absolutely believe so. I don’t think that we will do it wholesale, but I think that we will take away a portion of the incentive.

Would that be hard to regulate? Some people have said, “Oh, well, it’s much easier to regulate steel coming in and out of ports than it is to regulate code being sent over the Internet.”

If we can regulate the intellectual property violations, it sure seems to me that we can ensure that when workers try to organize collectively in another country that they’re not jailed for it.

What do you think that Silicon Valley will be like 20 years from now?

I think that it is very realistic to assume that the economy will become increasingly hollow. In other words, whatever middle is left will continue to be hollowed out.

Silicon Valley may create the next New New Thing. It probably will. But that means that the R&D that’s necessary to create the next new thing will take place in Silicon Valley. That does not mean that the coding of software will take place there. Forget about whether the manufacturing will take place there, because we know that’s not happening.

That doesn’t mean that anything beyond the design of those systems will take place in Silicon Valley. The coding and the testing and the quality assurance of those systems will happen offshore. It’s happening now.

And so while we will continue to have innovation and product development take place in Silicon Valley, more and more of the production — and I don’t mean just manufacturing, I mean the software production — will continue to happen offshore.

So, those people who are working so hard and so diligently to create innovation will need to have their wastebaskets emptied and their toilets scrubbed and get massages and go out to dinner on the weekend. It’s not unrealistic, nor am I being sarcastic or cynical to say that there will be people who are working on the very top end of innovation, and there will be people servicing them, with very little in between.

Now the real challenge that arises is how do you sustain a region where hospital and healthcare workers and firefighters and teachers can continue to live and work in a community? Because as you have that hollowing out of the economy, it’s the high end of the workforce that begins to determine prices for land and other products that the low end has to then pay.

But this trend of the bifurcation of the labor market that’s happening in Silicon Valley is also the trend that’s happening across the rest of the country. It may be more pronounced in Silicon Valley, but Silicon Valley is not an aberration. It’s not unique. This is the way the U.S. economy is growing.

What can be done about it?

To summarize, the solution to that is that we really need labor law reform, and we need fair-trade policies. If we were able to reform our labor laws, if we were able to have fair-trade policies, we would really be able to make a dent in rationalizing the new employment contract.

What’s different today than the post-World War II economy is that in the post-World War II economy, workers were much more insulated by public policies and through collective bargaining to the ebbs and flows of the economy.

The economy inevitably ebbs and flows. The business cycle is something that’s here to stay. But in the post-World War II economy we had a set of legal arrangements and public policies and institutional arrangements that at least ensured that the risk associated with the ebbs and flows of the economy were equally shared between employer and employee.

Today, an employee bears almost exclusively the risk that’s associated with the business cycle. Because our public policies and our legal institutions have not kept up to ensure at least a sharing of those consequences between employer and employee.

What could someone reading this story, just an ordinary employee, actually do to create the kind of major reforms you’re talking about?

I think it’s so important that employees tell their story of what’s happening in the American workplace.

It’s incomprehensible for the majority of American lawmakers to think that workers at the high end of the labor market — white-collar workers — have many of the same challenges and experiences at the low end of the labor market.

And I think it is so critically important for workers to be able to tell their story about what is happening in the workplace: “I went to school. I studied hard. I played by the rules. And I’m not getting the fair end of the deal.”

I spent the last 15 years living in Silicon Valley, and I can’t tell you how many times in a nonprofessional context, just simply in a social context, I would have friends tell me about how they were getting laid off from engineering jobs because jobs were going offshore. And I think when you’re overly educated you tend to think that it’s your fault, it’s not the fault of a set of rules and laws.

I think that people need to expect more from their employer and they need to demand more from their public servants, and not assume that it’s their own shortcomings. There is something very significant going on in the economy today. No one is insulated from it. And the only way that we begin to beat that back and make the system at least fair for employees is that employees begin to increase their expectations and demand more from their public servants. Recognize that no matter how educated you are, no matter how highly skilled you are, you will be able to make a better living and improve your conditions by joining together with your colleagues than trying to go it alone.

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