While the insourcing of foreign workers with H-1B visas takes center stage
in the current trade debates, the outsourcing of U.S. engineering work remains
an important issue for U.S. engineers. As one engineer put it, "Eliminating
engineering H1-B visas will only accelerate outsourcing to India and China."
In fact, it’s hard to find a more polarizing issue with engineers than
the dispute over whether outsourcing actually contributes to unemployment, depresses
wages, and discourages younger people from joining the profession or whether
it provides relief to overworked staffs, speeds time-to-market, helps avoid
layoffs, taps necessary expertise, and generally benefits the bottom line.
Adding fuel to the discussion was the recent revelation that the Bush administration
buried a government report on outsourcing prior to the 2004 elections for political
reasons—and that the report’s analysis was allegedly doctored by
Bush political appointees in the Commerce Department. The report concluded that
U.S. chipmakers were accelerating the outsourcing of design work to Asia at
the expense of skilled engineering jobs at home.
According to the National Academy of Engineering (NAE), as logistical barriers
to the performance of engineering work at remote locations continue to erode,
the global pool of trained engineers is growing. This means that U.S. engineers
are now in global competition with engineers in developing nations whose wages
are 40% to 80% lower than theirs.
Nearly as important as job displacement is the possibility that offshoring
could create significant downward pressure on engineering salaries, which the
NAE says is likely if engineers in the U.S. are unable to produce significantly
greater value than their lower-paid counterparts abroad.
According to the NAE, there is ample evidence that offshoring combined with
technical changes led to stagnant wages for factory workers during the 1990s,
which means there is a distinct possibility that engineers might experience
a similar situation in the near future.
This year’s Electronic Design survey shows that 40% of engineers
believe that outsourcing will result in lower salaries for new engineering hires.
It also indicates that one in four engineers anticipate salary reductions for
existing employees as a direct result of outsourcing.