IBM’s Strategy? Send Jobs Elsewhere

I have very mixed feelings about news like this.

IN A RECORDING of a conference call given to The New York Times by a labor union, top employee relations executives said IBM needed to make the same moves its competitors made to save money by shifting service jobs away from the United States.
The article cited Forrester Research as estimating 450,000 U.S. computer industry jobs could be transferred overseas in the next 12 years, representing eight percent of U.S. computer jobs.

If I was an IBM shareholder, which I am not, I would be pleased. Outsourcing labor to countries that have a comparative advantage of cheaper workers is usually a good idea and can improve the bottom line. Of course, losing jobs hurts the US economy, and sending white collar jobs overseas has only begun recently, as countries such as India have built up a base of educated workers who can handle the positions. I wonder what these laid off workers will do, and what will happen as more and more jobs (and increasingly complex ones at that) leave the US.

Despite the loss, I think it is a good thing because I believe in free trade and I believe that in the long-run we will be better off by losing these jobs. This is easy to say when it's not my job that is affected. But, I can tell you that I used to belong to the IEEE, and they were against increasing HB-1 visas because it would hurt engineering salaries. I always disagreed with them on principle (though I agreed it would hurt salaries). So I do practice what I preach. Of course, I was also smart enough to diversify and get my MBA so that I wouldn't have to depend on chip design for the rest of my life.

Whether I am right or wrong won't be obvious for years to come. Until then all we can do is watch, and hope that the innovative entrepreneurial American spirit can find new industries where Americans have the advantage, and the jobs.

Thanks to Walter at Idols of the Marketplace for the link.

  • Sandra Mizel

    This is why I’m upset at the President for backpedaling on the question about sending jobs overseas. He said during the campaign that he would close up the tax loopholes for businesses that do that, but he didn’t say anything about that in his answer. He just said that we need to make better jobs here. Doesn’t he realize that computer jobs are good jobs? That people have to go to college to learn that. I love the President I have done everything I could to get him elected. Ny car is nothing but Obama bummer stickers. He has done well by keeping his promises but this 1 is and important 1. I live in CA near Simi Valley and I see what has happened since these compianies started doing this. I hope he gos back on his word and I’m going to keep talking about this. I’m just a concerned citzen but together our voices can be heard.