Rage against off-shoring is very real
By David Kirkpatrick
(FORTUNE.COM) -- To rephrase my opening sentence of last week: Seldom have so many been so angry at a writer they felt understood so little.
My column on the off-shoring of jobs (online last week) elicited the biggest outpouring of letters ever. While a reasonable number of readers commended my view that the trend may not be damaging to the economy, far more called me an idiot or worse.
I've been given a sudden and bracing education in just how angry Americans are about what's happening with jobs. Regardless of whether they understand or agree with the economics, they are hurting and they wanted me to know it.
Most of America's unemployed seem to think their situation is due to off-shoring. I was disturbed to see a barely concealed racism embedded in some angry replies, directed at Indian workers in particular. And it's clear that the widespread corruption recently revealed in corporate executive suites and on Wall Street is taking its toll -- people are getting fed up with business. In the letters I sense the rumblings of an incipient anti-corporate revolt.
Here are excerpts from a few e-mails:
• "I don't give a hoot how much you and other pseudo-intellectuals write about paradigm shifts or globalization or off-shoring or whatever tired cliché you're recycling this week: American white-collar workers are going to fight against off-shoring with their votes. A jobless, highly educated, and angry voter doesn't give a rat's ass what you and the other windbags at consultancies like McKinsey or Gartner have to say...This is not an intellectual exercise, Dave: off-shoring takes a real human toll...Who knows, FORTUNE might decide to quite paying for your boondoggles to Switzerland and off-shore [your] column. Chances are, it'll be a better read."
• "I am a network engineer. I have worked as hard as I could to gain my education, and then earn my certifications. Now, due to outsourcing I have lost my job...What do you say to my family when their dad/husband has worked hard and achieved something not many people can attain, yet fails to provide for them?...I want you to think about us over here, waking up scared, living scared, searching for work terrified."
• This from a computer engineer laid off from a government agency in late 2002: "I want to find a political party or movement that will try to save American jobs. I am ready to vote for the Communist Party, the Nazi Party, or whatever it takes. The system we have now is a disaster. The system we have now is KILLING ME...If an enraged laid-off American engineer were to go up to his Indian replacement, and shoot him dead -- if I were on the jury the verdict would be NOT GUILTY."
• "I have been unemployed for two years after 25+ years in the workforce as a hard-working, productive team member of many companies...When I have a list of companies who have turned their backs on Americans, I will no longer do business with them."
• A large number of readers said something like this: "Maybe it is time for FORTUNE to off-shore their writers and perhaps put Lou Dobbs in charge of your magazine. He gets it. You don't."
• Another: "The working stiff is not a white-collar writer rubbing elbows with a covey of billionaires. Do take care. Writing is not beyond the capacity of talented Indians, Malays, and Chinese."
• Or the tersest letter of all, which said simply: "I wish they outsource your job."
When I asked my colleague Justin Fox what he thought about my column, he said it was sometimes too easy for people like us to talk about how "we" all will benefit from the macroeconomic outcomes of off-shoring and other disruptive economic changes, when the reality is that the changes are felt personally and painfully by real people.
"It's inaccurate to say we all benefit," says Justin. "In aggregate, the economy probably benefits but within that upward trajectory a lot of people are permanently hurt while many others gain."
In retrospect I wish I hadn't taken such a stern tone in the column, though I still hold that off-shoring is unstoppable and not, in itself, disastrous.
Several readers who addressed the policy challenges posed by off-shoring noted, as have several Democratic presidential candidates, that tax policy currently treats off-shoring benignly. It may make sense at least to create tax incentives that encourage companies to keep workers here as the economic pressure to outsource continues to grow.
Another good proposal, advocated by McKinsey's Diana Farrell, whose economic analyses in the column were so roundly rejected by many readers, is legislation to make pensions and health-care benefits portable. That way workers displaced by off-shoring or the other rapid-fire changes of technologized society at least will have a better chance of staying in the game.
Make no mistake, this is the issue of the year. President Bush's chief economic adviser Greg Mankiw said recently that "outsourcing...is something that we should realize is probably a plus for the economy in the long run." It was a milder version of what I wrote in this column. Like me, he was immediately under siege. He had to publicly back down. And Democrat John Kerry didn't take long to respond. While I doubt that he really disagrees with Mankiw in his heart, he condemned "Benedict Arnold CEOs" who ship U.S. jobs overseas.
The economist Jagdish Bhagwati, who wrote "In Defense of Globalization," replied to Kerry on the New York Times op-ed page. "In a world economy," he wrote, "firms that forgo cheaper suppliers of services are doomed to lose markets, and hence production. And companies that die out, of course, do not employ people."
A similar point was made in a recent interview by Lee Kuan Yew, Singapore's founder and senior minister. Speaking of the competition between nations, he said, "If you deprive yourself of outsourcing and your competitors do not, you're putting yourself out of business."
Like many readers, I fear that the impact of globalization could easily pull us down toward the level of the world's poorer economies rather than pull them up to our currently prosperous level. But my friend Joe Schoendorf, a venture capitalist at Accel Partners, makes a good point.
He notes that if you had asked Americans in 1900 how they felt that almost all the farmers would lose their jobs over the coming century, they would have been just as outraged as today's workers are when they think about outsourcing.
Yet Americans are still well-fed while only about 2 percent of the population works in agriculture. And the people of the U.S. found jobs doing other tasks, most of which didn't even exist until recently. It's at least a mildly reassuring thought.
E-mail David Kirkpatrick at email@example.com.