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The New Class War

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The New Class War: It's Investors and Corporate Executives Against Everyone Who Works for a Living

By Chuck Kelly OpeEdNews.com

     Recent articles in Barron's, hardly a member of "the biased liberal news media," suggest that the conservative class war against working Americans has entered a new arena. It's not just factory workers who are losing their livelihoods to globalization, it's everyone who works for a living.

     PhD chemists and physicists, computer specialists and programmers, engineers of all kinds, medical doctors --you name it --used to feel comfortable with globalization. They saw it as a stealth way of driving working-class wages down, and a good way to prevent "wage inflation." They felt immune to its effects.

     Big mistake!

     Investors and corporate executives have clearly demonstrated that they will sacrifice anyone's livelihood, if it means a higher return on investment and a huge bonus for the Chief Executive Officer.

     By exporting corporate units overseas, and importing highly skilled professionals from other countries into this country, corporations have raised the class war against workers to the very top notches in American society.

     Consider this report from Barron's, June 30, 2003: Asia or Bust U.S. Tech firms increasingly move jobs overseas

THREE YEARS AGO, telecom equipment firm ANDA Networks had about 100 engineers in Silicon Valley. Now it has seven.

Where did those jobs go? Wuhan, China, a city of seven million people about 400 miles west of Shanghai. ANDA employs 65 engineers there.

In Wuhan, San Jose-based ANDA Networks pays an engineer about $17,000 per year, including benefits --about one-seventh of what it pays his or her counterpart in Silicon Valley. No surprise, then, that privately held ANDA has slashed operating costs by 90% since 2001.

ANDA's story is becoming more and more common these days as demand for technology remains weak and investors push for stronger earnings growth, forcing tech companies to cut costs.

How? The same way other manufacturing and services companies are doing so --through consolidation and exporting jobs overseas.

In fact, Silicon Valley may well be the epicenter of the restructuring that's transforming all of American business ....

What's more, the personal computer, computer networking and wireless technology --responsible for much of the job growth during the tech bubble --are maturing businesses. And tech companies have to slash costs, just like everybody else.

Increasingly, that means outsourcing jobs to China, India and elsewhere ....

It's no longer just customer service jobs, either, that are migrating abroad, but the whitest of white-collar tech jobs such as computer chip design. "Now they are moving engineering teams, where they had just moved production [before]," says Barry Jaruzelski, managing partner of Booz Allen ....

"Those companies have sucked the manufacturing prowess out of American industry," Michael Moritz, partner at venture-capital firm Sequoia Capital Partners in Cupertino, Calif., told attendees of the Bear Stearns conference earlier this month. "Now they're embedding the design process in their business."

So, even keeping small staffs of white-collar workers may become a memory, since "innovation is starting to happen overseas," says Jadallah ....

Who would have thought it would come to this? Just three and a half years ago, we were in a New Economy whose growth engine was technology, where the U.S.'s competitive advantage appeared well nigh impregnable....

Welcome to the Great Shakeout, Silicon Valley. It's going to be part of the way we do business for quite a while.

     "Who would have thought it would come to this?" Come on, now. Literally millions of critics of globalization who predicted this very thing.

     A week later, Barron's did a follow-up op-ed piece, July 7, 2003.  

Globalization Meets Creative Destruction

...Businesses from private medical practices to large rental car chains to giant corporations like Delta Airlines and Hewlett-Packard are under enormous pressure to keep costs down. And now, with the Internet and the opening up of the world economy called globalization , they have the means to do so.

Globalization allows corporations to scour the world for the highest returns and lets them build a truly international workforce. The Internet makes it easier for managers to monitor that workforce --wherever they are --and integrate them into the global networks that large companies are becoming....

So, where is this all going? Assuming that this is a structural change and not just the outgrowth of a recession and a slow recovery (which some economists argue), we can expect major dislocations in various parts of the U.S. economy over the next few years ....

Industries like U.S.-based call centers and the cities that support them could be hit hard. Many blue-collar workers will have to give up their dream of a steady union job and go into business for themselves or retrain as lower-paid teachers or nurses.

Older, highly compensated information technology professionals may have to take pay cuts, and some of them may never work in IT again at the level to which they're accustomed. MBAs in finance from Harvard or Wharton may not land that first Wall Street associate's job out of school, because increasingly those jobs will be filled, at much lower salaries, by graduates of Beijing University or the Indian Institute of Technology ....

But it's a necessary part of the ebb and flow of our economy, which sacrifices a false "stability" for real dynamism and growth.

Time after time in our history, critics have proclaimed the U.S. had exhausted its potential and time after time the economy has reinvented itself ....

That's why I'm optimistic that though many Americans may be hurt over the next few years, the U.S, economy will emerge from the Great Shakeout more competitive than ever ....

     This article needs some translation:

 

  "Many blue-collar workers will have to give up their dream of a steady union job and go into business for themselves or retrain as lower-paid teachers or nurses." Meaning: investors have successfully destroyed the incomes of working-class Americans.

 

"Older, highly compensated information technology professionals may have to take pay cuts." Meaning: Retraining into more high-skill jobs isn't the road to higher incomes for workers either. Investors, through globalization, can destroy those incomes also.

 

"But it's a necessary part of the ebb and flow of our economy, which sacrifices a false 'stability' for real dynamism and growth." Meaning: Only investors, business owners, and high-level corporate executives should have stable incomes. Incomes of workers should dynamically decline if incomes of the wealthy are to continue grow.

 

"Though many Americans may be hurt over the next few years, the U.S, economy will emerge from the Great Shakeout more competitive than ever." Meaning: Working Americans must be willing to lose their livelihoods if America's investors are to continue dominating the world --and become fabulously rich in the process.

     Now that high-skilled workers and professionals have joined the ranks of the working unemployed, maybe voters can turn this situation around. In the upcoming election, "globalization" should become a pivotal issue.

Chuck Kelly is at http://www.KellySite.net. He holds a Ph.D. in industrial communications from Purdue University, is now a retired management consultant, and author of the books, THE DESTRUCTIVE ACHIEVER, THE GREAT LIMBAUGH CON, and CLASS WAR IN AMERICA. This article is originally published at opednews.com. Copyright Chuck Kelly, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached

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