The new economic revolution has started - outsourcing, H1-B visas and guest workers. Companies will always pursue the lowest-cost structure, which means less skilled work will move out of the US to emerging economies. However, skilled work is now moving out and third world countries are embracing this new phenomenon. When the US and other western countries moved their manufacturing jobs to China and Korea, it was good for the west. The unskilled labor became cheaper and products manufactured were cheaper. It also helped the economies of countries like China and South Korea. Now China has become a powerful economy and a threat to the US. They have many skilled workers who could also replace white-collar jobs in the US. Why not continue to outsource to China? India has become another favorite for cheap labor. The new target for outsourcing and the importation of H1 employees is now India. India has a billion people who can parallel China with its developing economy and military might. It is good for India, but not good for the middle class in the US. All manufacturing jobs went to China, Japan and Korea. What is left now are the other jobs that can enhance India’s economy - white-collar jobs. Outsourcing is a “good” thing, because living standards around the world will rise (specifically in China and India). Workers in developing nations will get new and higher-paying jobs, and consumers in the U.S. will be able to buy products that are cheaper than if they were made at home. That may be good for the world and the political balance in the Far East. However, it comes at the expense of the middle class. Outsourcing and lower wages just increases the gap between America's rich and poor. Outsourcing of white collar jobs will eliminate the middle class.

Wage depression: some studies have found that H-1B workers are paid significantly less than US workers. It is claimed that the H-1B program is primarily used as a source of cheap labor.

Indentured servants: Historically, they owe their employers their stay in the country. They do not need a union or belong to unions and try their best not to lose their possibility of getting permanent residence.

Wage depression: in third world countries workers are paid significantly less than U.S. workers. They do not have any benefits or medical and un-employment insurance as US workers

Indentured servants: They do not have a union or other job prospect. They have less mobility between jobs compared to US workers.

Political Gains: Now it seems the US favors India to counter China’s rise to power.

Competition: Competing between Western countries with the same wage scale and benefits will not make a difference if they all do not outsource. Western countries do not compete with third world countries on the same products (all manufacturing has already gone there). Outsourcing is the only way to increase profits on a short time scale and does not have much to do with competition with third world companies.

If I use some old Marxism theories (http://www.iefd.org/articles/democracy_and_capitalism.php), I can say that in general, Capitalism is controlled by the capitalist class and to a lesser extent by the government. The capitalist class exercises its economic power to gain control of the government and the capitalists are always able to use the government against the workers. Capitalists rule the economy, but they usually do not directly rule in the government - they support the politicians who will protect their interests. The politicians may not themselves be capitalists, but often they are lawyers or other hired hands of the capitalist class. Capitalist wealth is used to influence government by various means. First, capitalists give money to their selected candidates. Second, capitalists give money to parties, either directly or through political action committees. Of course the middle class also contributes money, but the amount of contributions naturally declines as income declines. Third, the capitalist class owns and controls the media. Fourth, the wealthy contribute to schools and universities, so they have some influence over education. Fifth, wealthy capitalists and corporations use lobbyists to influence politicians.

So if capitalist exert so much control on government, then perhaps, they are behind the big move toward outsourcing, with bigger profits as their motive.

Written by: Albert Talker

WASHINGTON -- The movement of U.S. factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said yesterday.

The embrace of foreign "outsourcing," an accelerating trend that has contributed to U.S. job losses in recent years and become an issue in the 2004 elections, is contained in the president's annual report to Congress on the health of the U.S. economy.

"Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."

This is no longer about a few low-wage or manufacturing jobs. Now, one out of three jobs is at risk

Commentary: Outsourcing Jobs: Is It Bad? – Business Week Online
Economic evolution is inevitable. Companies will always pursue the lowest-cost structure, which means less skilled work will move out of the U.S. to emerging economies. And that's a good thing, because living standards around the world will rise. Workers in developing nations will get new and higher-paying jobs, and consumers in the U.S. will be able to buy products that are cheaper than if they were made at home. The shift first occurred in textiles and other manufacturing jobs, followed by low-end services such as telemarketing and data entry. Now, it's moving up the labor food chain, leaving white-collar workers increasingly nervous

‘Where Did They Go?' The Decline of Middle-Income Neighborhoods in Metropolitan America (http://www.brookings.edu/metro/pubs/20060622_middleclass.htm),” Jason Booza, Jackie Cutsinger, and George Galster, Brookings Institution

As the gap between America's rich and poor widens, the number of urban middle-class neighborhoods has steeply declined, a new Brookings Institution paper points out. In 1970, 58 percent of metropolitan neighborhoods enjoyed a middle-class median income; in 2000, just 41 percent of urban neighborhoods were middle class. (Similar trends hold true in the suburbs, the report notes.)

There are still many middle-class urbanites— 22 percent of city dwellers, down from 28 percent in 1970—but the neighborhoods they are living in are increasingly quasi-ghettos or gold coasts. The report warns that as economic diversity diminishes and neighborhoods divide further into rich and poor, cities will have a harder time distributing public services equitably and attracting private investment into places that aren't already hyper-gentrified. As for where you should move if you're looking for a socioeconomic melting pot, the data suggest Seattle, or Harrisburg, Pennsylvania, both of which are among the ten cities with the most middle-class neighborhoods. The two cities most stratified by class, meanwhile, are New York City and Los Angeles—which should come as no surprise to anyone who has taken the subway from the Bronx to the Upper East Side, or driven from Santa Monica to South Central.

Displaced Workers - FactCheck.org - Kerry's Dubious Economics

Whatever the statistics may eventually show about the overall quality of current hiring, Kerry's remarks will still ring true for millions who haven't found jobs as well-paid as those they lost. The day after Kerry spoke, the Bureau of Labor Statistics released results of a "displaced worker" survey conducted every two years.

It found that during the three years ending last January, 5.3 million workers were displaced from jobs they had held for at least 3 years. Of those so-called "long-term displaced workers," 20 percent were still out of work and 15 percent had left the workforce entirely at the time the survey was conducted in January. Only 65% were re-employed.

Most who found new jobs weren't making as much as they did before. Of those who had been in full-time jobs and who were also re-employed in full-time work, 57% were earning less.

Since 1985, over 17 million visas have been issued to allow aliens to work in the United States. These nonimmigrant visas, or NIV, are company sponsored visas that use a variety of different names including H-1B, H-2A, H-2B, J-1, L-1, and TN.

By the end of the year 2001 more than 890,000 H-1B workers were employed in the United States. Special interests have imported more than 17 million noncitizens to glut the labor market between the years 1985-2002.

In the year 2001, 9 out of every 10 new job openings for computer/IT were taken by H-1Bs, and despite record unemployment the INS issued 312,000 visas in 2002.

H-1B is used to import workers for jobs that American employers claim can't be filled in the "tight American labor market". Their claim is a lie because there are more than enough Americans to fill these jobs. L-1 visas have no yearly quota and may one day surpass H-1B as a means of importing skilled workers.

NIVs such as H-2A and H-2B are being used to import blue collar and agricultural workers and J-1 visas are used by educational and governmental institutions to import foreign workers. TN (NAFTA) visas are used import Canadian and Mexican citizens to work in the United States.

The H-1B is a non-immigrant visa category provided for in the Immigration & Nationality Act, section 101(a)(15)(H) that allows American companies and universities to temporarily employ foreign workers who have the equivalent to a US Bachelor's Degree. H-1B employees are employed temporarily in a job category that is considered by the U.S. Citizenship & Immigration Services to be a "specialty occupation". A specialty occupation is one that requires theoretical and practical application of a body of specialized knowledge along with at least a bachelor’s degree or its equivalent. For example, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts may be considered to be specialty occupations.

The H-1B visa category is controversial. Advocates say the program (and similar ones operated by other technologically-advanced countries) helps the host country maintain its technological as well as economic superiority by providing a steady flow of highly skilled professionals who may be short in supply domestically. It also provides an incentive for companies not to move their operations abroad.

The H-1B category has been criticized for displacing substantial numbers of experienced American citizen technical professionals or lowering wages enough to encourage them to abandon volatile careers in targeted fields such as computer technology. Although there are differing views on whether or not the H-1B visa is good for the US economy, economist Milton Friedman has called the program a form of subsidy. It was also blamed for encouraging brain drain in the source countries.

Even though the H-1B visa is a non-immigrant visa, it is one of the few visa categories recognized as dual intent, meaning an H-1B holder can have legal immigration intent (apply for and obtain the green card) while still a holder of the visa. In the past the employment-based green card process used to take only a few years, less than the duration of the H-1B visa itself. However, in recent times the legal employment-based immigration process has backlogged and retrogressed to the extent that it now takes many years for skilled professional applicants from certain countries (like India and China) to obtain their green cards. Since the duration of the H-1B visa hasn't changed, this has meant a lot more H-1B visa holders have to renew their visas in 1 year or 3 year increments to continue to be in legal status while their green card application is in process.

"Democracy must be its own emancipator. But institutions like the Church, Parliament, and the Press, and even the rich, have to make up their minds as to what shall be their attitude toward it. They must decide for themselves whether the demand of the workers for a fairer share of the good things of life is just or unjust. The working classes have already made up their minds. They are convinced that their demand is just, and with a highly intelligent, vigorous working class, stung by a sense of injustice; the future of this country will be full of danger. The stupid attitude of hostility or superior patronage which has been adopted towards the working classes in the past by powerful elements in society has helped to generate the present revolutionary upheaval . . . The worker does not want charity to redress the balance. He knows that charity robs him of his manhood. He feels that he is entitled to a man's share of the wealth he has produced, and he wants it assured to him, not as a charity, but as a citizen's right."

"There is only one way to industrial peace. There is only one way to stave off a class war which may shake civilization to its foundations. It is by a full and frank acknowledgement by society that the claim of the worker to a sufficiency of food and clothing and a fuller life is just, and that it must be made the first charge upon the wealth produced . . . It is the present order of society which is upon its trial. Can it do justice to the worker? If it can, and if it does, then it will have justified its existence. But if it cannot, then its ultimate doom is sealed."

So if capitalist exert so much control on government, then perhaps, they are behind the big move toward outsourcing, with bigger profits as their motive.

Written by: Albert Talker

Displaced Workers - FactCheck.org - Kerry's Dubious Economics

NIVs such as H-2A and H-2B are being used to import blue collar and agricultural workers and J-1 visas are used by educational and governmental institutions to import foreign workers. TN (NAFTA) visas are used import Canadian and Mexican citizens to work in the United States.

Submitted to Web Site by: Albert Talker