Who Stole the American Dream? (69 page)
Read Who Stole the American Dream? Online
Authors: Hedrick Smith
66
On track for a reasonable retirement
Mike Kendall, interview, June 19, 2010; Ron Wright, interview, June 24, 2010.
67
“They brought us groceries, paid our electric”
Sylvian Greene, interview, June 27, 2010.
68
“It’s the unpredictability that gets to you”
Don and Ginny Lingle, interview, July 4, 2010.
69
“After I lost my Rubbermaid job”
Pam Constantino, interview, July 11, 2010.
70
Most were making less than before
“Working Displacement: 2007–2009,” Bureau of Labor Statistics, August 26, 2010,
http://www.bls.gov
, table 7.
71
Added 2.4 million employees to their overseas workforces
U.S. Bureau of Economic Analysis, “Summary Estimates for Multinational Companies: Employment, Sales, and Capital Expenditures for 2009,” April 18, 2011, table 1 shows that overseas employment by U.S. multinationals rose from 7.9 million to 10.3 million and their domestic employment fell from 24.0 million to 21.1 million from 1999 to 2009,
http://www.commerce.gov
.
72
Very different track records since 1990
Michael Spence and Sandile Hlatshwayo, “The Evolving Structure of the American Economy and the Employment Challenge,” working paper, Council on Foreign Relations, March 2011,
http://www.cfr.org
.
73
“You could say, as many do”
Andy Grove, “How America Can Create Jobs,”
Bloomberg BusinessWeek
, July 1, 2010,
http://www.businesweek.com
.
1
“Merchants have no country”
Thomas Jefferson to Horatio G. Spafford, March 17, 1814, in
The Writings of Thomas Jefferson
(Washington, DC: Taylor & Maury, 1854), 334.
2
“What we are trying to do”
Prestowitz,
Betrayal of American Prosperity
, (NY: Free Press, 2010) 213.
3
“In this new era of globalization”
Gomory, testimony, House Committee on Science and Technology.
4
Masses of high-skill, high-wage, high-tech jobs
President Bill Clinton, “Technology for America’s Economic Growth,” press release, White House Briefing Room, February 22, 1993; Clinton in campaign debate, “Transcript of First TV Debate Among Bush, Clinton and Perot: The 1992 Campaign,”
The New York Times
, October 12, 1992.
5
“Going digital”
William A. Niskanen and Robert E. Litan,
Going Digital! A Guide to Policy in the Digital Age
(Washington, DC: Brookings Institution Press, 1998).
6
Americans’ increasing dependence
Bhagwati, “Why Your Job Isn’t Moving to Bangalore.”
7
“You could think of it”
“Know What? Knowledge Will Power Nations in the New World Order,” Associated Press, July 23, 1989.
8
This category was set up
Clyde Prestowitz, email, December 10, 2011.
9
America’s deficit in advanced technology trade
U.S. Census Bureau, Bureau of Economic Analysis, “U.S. International Trade in Goods and Services, December 2011,” Exhibit 16 and Exhibit 16a, February 10, January 13, 2012,
http://www.census.gov/foreigntrade/Press-Release/current_press_release/ft900.pdf
.
10
$94.2 billion high-tech trade deficit
Ibid.
11
China’s steep upward leap
Alan Tonelson, interview excerpt from
Frontline
, “Is Wal-Mart Good for America?”
12
“It is a fallacy”
Prestowitz,
Betrayal of American Prosperity
, 11.
13
The Chinese had shown their mastery
Tonelson, interview excerpt from
Frontline
, “Is Wal-Mart Good for America?”
14
Hardest-hit sector was computers
Robert Scott, “Unfair China Trade Costs Local Jobs,” EPI Briefing Paper, March 23, 2010, Economic Policy Institute,
http://www.epi.org
; TechAmerica, “Cyberstates 2010,”
http://www.techamericafoundation.org
.
15
“We’re now calling it
Skeletal Valley
” Scott, interview, January 21, 2011.
16
Even the service sector
Scott, “Unfair China Trade Costs Local Jobs.”
17
Roughly 2.8 million jobs in finance, IT, HR
“Offshoring of Back Office Jobs Is Accelerating,” Hackett Group, January 6, 2009,
http://www.thehackettgroup.com
; and “How Offshoring Could Prolong the Jobless Recovery,” Hackett Group, ThomasNet News, January 18, 2011,
http://www.news.thomasnet
.
18
“Millions of skilled workers”
Alan Blinder, testimony, House Committee on Science and Technology, June 12, 2007,
http://science.house.gov
.
19
“U.S. high-tech industry is
coming unglued
” Prestowitz,
Betrayal of American Prosperity
, 30–31; Richard McCormack, “The Plight of Manufacturing,” in
Manufacturing a Better Future for America
, ed. Richard McCormack
(Washington, DC: Alliance for American Manufacturing, 2009); President’s Council of Advisors on Science and Technology, “Sustaining the Nation’s Innovation Ecosystems, Information Technology Manufacturing and Competitiveness,” January 16, 2004,
http://www.whitehouse.gov
.
20
At least 1,160 high-end research installations
Prestowitz,
Betrayal of American Prosperity
, 36.
21
“China was much more clever”
Steve Lohr, “Maybe Japan Was Just a Warm-Up,”
The New York Times
, January 23, 2011.
22
By 2005, GE had twenty-seven labs in China
Jeffrey Garten, “The High-Tech Threat from China-America Inc. Is Rushing Beijing Ahead by Sharing R&D Treasures,”
BusinessWeek
, January 31, 2005.
23
GE disclosed a joint venture
General Electric, “GE to Invest More than $2 Billion in R&D, Technology and Financial Services Partnerships in China,” Business Wire, November 9, 2010,
http://www.businesswire/com
; “GE Venture Will Share Jet Technology with China,”
The New York Times
, January 17, 2011.
24
General Motors broke ground
General Motors, “GM Breaks Ground on Advanced Technical Center in Shanghai,” July 7, 2010,
http://media.gm.com
.
25
Microsoft, already spending $300 million
“Microsoft to Spend $1 Bn on R&D in China,” Reuters, November 13, 2008; Microsoft, “Microsoft Opens World-Class Innovation and Technology Service Park in Shanghai,” March 31, 2010,
http://www.microsoft.com
.
26
Applied Materials of Silicon Valley
Keith Bradsher, “China Drawing High-Tech Research from U.S.,”
The New York Times
, March 17, 2010.
27
“China has a carrot and stick strategy”
Clyde Prestowitz, email, December 10, 2011.
28
“A blueprint for technology theft”
James McGregor, “China’s Drive for ‘Indigenous Innovation,’ ” U.S. Chamber of Commerce, July 28, 2010,
http://www.uschamber.com
.
29
“Indigenous innovation”
“Obama Pushes Hu on Rights, but Stresses Ties to China,”
The New York Times
, January 20, 2011.
30
“A technology powerhouse”
McGregor, “China’s Drive for ‘Indigenous Innovation.’ ”
31
U.S. companies have become integrated
U.S. International Trade Commission, “Certain Passenger Vehicle and Light Truck Tires from China,” Publication 4085, July 2009,
http://www.usitc.gov
.
32
“That kind of thing is”
Prestowitz, interview, January 11, 2011.
33
“It costs $1 billion more per factory”
“Intel Chief: Obama (Still) Driving US off Cliff,”
The Register
, August 25, 2010,
http://www.theregister.co.uk
.
34
“U.S. companies are understandably seeking”
Garten, “The High-Tech Threat from China-America Inc.”
35
Described his firm as “agnostic”
“EDS CEO Says No Problem,” ITBusiness, April 23, 2008,
http://www.itbusiness.ca
.
36
“Intel can be a totally successful company”
Friedman, “Tuning In.”
37
“Strategy of becoming a Chinese company”
Prestowitz,
Betrayal of American Prosperity
, 213.
38
“What’s good for our country”
“Armed Forces: Engine Charlie,”
Time
, October 6, 1961.
39
“The interests of companies and countries have diverged”
Gomory, testimony, House Committee on Science and Technology.
40
Summarizing the impact
James Hagerty, “U.S. Loses High-Tech Jobs as R&D Shifts Toward Asia,”
The Wall Street Journal
, January 18, 2012.
41
IBM cut its American workforce by 30 percent
Lee Conrad, Alliance@ IBM/CWA Local 2071, interview, January 25, 2011.
42
Close behind IBM
“U.S. Tech Firms Continue to Grow in India,” Live
mint.com
, September 10, 2010,
http://www.livemint.com
.
43
Computer giant Hewlett-Packard
Dan Rather Reports, “Help Wanted! (Not Here),” HDNet, January 18, 2011,
http://www.hd.net/programs/danrather
.
44
Accounting firm Deloitte
“Deloitte to Treble Headcount in India,” Diligent Media Corp., November 28, 2009,
http://www.dnaindia.com
.
45
American IT outsourcing firms
Ron Hira, interview, January 7, 2011.
46
Even Perot Systems
“Perot Systems, Founded by an Offshoring Foe, Increases Offshoring,”
Computer World
, February 12, 2009,
http://www.computerworld.com
.
47
India has burst upon
“The Other Elephant,”
The Economist
, November 4, 2010,
http://www.economist.com
.
48
India has largely leapfrogged over manufacturing
“Information Economy Report 2010,” United Nations Conference on Trade and Development, October 14, 2010,
http://unctad.org
, 49–40, figures III.4 and III.5. The report estimated global exports in IT services and business processing at $92 billion to $96 billion and India’s share at 35 percent, but it said these figures underestimate the overall global IT offshoring market. NASSCOM, India’s National Association of Software and Service Companies, put India’s exports in this field at $50 billion in the executive summary of its Strategic Review 2010, “Global Sourcing Trends,”
http://epi.nasscom.in/upload/SR10/ExecutiveSummary.pdf
.
49
“The Indian firms had a disruptive business model”
Hira, interview, January 7, 2011.
50
“Cross border job shifting”
IBM Directors’ Presentations on Offshoring, internal IBM document, March 13, 2003.
51
“Hiring over There”
“Cutting Here, Hiring over There,”
The New York Times
, June 24, 2005.
52
Job reductions would save IBM $1.8 billion
“Amid Layoffs, IBM Scours the Globe for IT Talent,” CRN TechWeb, September 23, 2005,
http://www.crn.com
.
53
The cuts were being rolled out in modest batches
“IBM Quietly Cuts Thousands of Jobs,” CBS, January 27, 2009.
54
IBM had fired another five thousand employees
Steve Lohr, “Piecemeal Layoffs Avoid Warning Laws,”
The New York Times
, March 6, 2009;
Steve Lohr, “Tallying I.B.M.’s Layoff Numbers,”
The New York Times
, March 30, 2009; William Bulkeley, “IBM to Cut U.S. Jobs, Expand in India,”
The Wall Street Journal
, March 26, 2009.
55
“They used to bring the people”
Tom Midgley, interview, January 30, 2011.
56
“I was responsible”
Kristine Serrano, interview, January 29, 2011.
57
Serrano was offended
Ibid.
58
Cutting-edge R&D
“IBM and Globalisation: Hungry Tiger, Dancing Elephant—How India Is Changing IBM’s World,”
The Economist
, April 4, 2007,
http://www.economist.com
.
59
“We will triple our investment in India”
Samuel J. Palmisano, remarks, IBM press release and speech text, June 6, 2006.
60
“New levels of cost competitiveness”
IBM Global Services paper, IBM Global Briefing, Bangalore, India, June 6, 2006.
61
“It’s like a slap in the face”
“NYC Hit by Nerd Job Rob; City $$ for Indian Hires,”
New York Post
, June 28, 2009.
62
IBM decided to patent its offshoring blueprint
U.S. patent application no. 11/324,958 for “Outsourcing of Services” from Bryan L. Behrman et al., patent assignee: International Business Machines Corp., Armonk, NY, publication date July 12, 2007.
63
Help clients achieve “50% of resources in China”
U.S. patent application no. 11/860,336 for “Method and System for Strategic Global Resource Sourcing,” from Ching-Hua Chen-Ritzo et al., patent assignee: International Business Machines Corp., Armonk, NY, publication date March 26, 2009.
64
“Downright unpatriotic”
“IBM Files for Patent on Offshoring Jobs,”
Times Herald-Record
, March 30, 2009; “IBM Drops Patent Application for Outsourcing Offshore Jobs,”
Times Herald-Record
, March 31, 2009.
65
“Task by task, function by function”
David Streitfield, “Office of Tomorrow Has an Address in India,”
Los Angeles Times
, August 29, 2004.
66
Offshoring today involves brainpower jobs
Marla Dickerson, “Offshoring Trend Casting a Wider Net,”
Los Angeles Times
, January 4, 2004.
67
Shot up exponentially since 1990
“Information Economy Report 2010,” United Nations Conference on Trade and Development,
http://www.unctad.org
.
68
“They told all the workers”
Lee Conrad, interview, January 24, 2011.
69
83
percent cited outsourcing
“Americans Sour on Trade,”
The Wall Street Journal
, October 2, 2010.
70
“Job cuts at home, big hiring overseas”
Hackett Group, “Offshoring of Back Office Jobs Is Accelerating,” January 6, 2009; “New Data: 2.8 Million Business-Support Jobs Eliminated Since 2000,” November 15, 2010, and “How Offshoring Could Prolong the Jobless Recovery,” January, 18, 2011,
http://news.thomasnet.com/IMT/archives/2011/01/how-offshoring-trend-could-prolong-jobless-recovery-hackett-group.html
.
71
The big Wall Street banks
Pankaj Mishra & Shruti Sabharwal, “Citi, Bofa & JPMorgan to Outsource $5 Bn of IT and Back Office Projects to
India,”
Economic Times
, Times of India Group, February 14, 2011,
http://economictimes.indiatimes.com
.