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News :: Labor |
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Unemployed Prepare For Jobless Benefits To Dry Up May 31; Admin. Silent As Workers Face Toughest Labor Market In Nearly 20 Years |
Current rating: 0 |
by National Employment Law Project
(No verified email address) |
03 May 2003
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Over 2.8 million workers have completely run out of federal jobless benefits. During the last recession when President George H.W. Bush was in office, the federal program provided 26 weeks of federal extended benefits at its peak, with workers in many states receiving 33 weeks. With long-term unemployment now just as severe as it was during the last recession (and still growing), the 13 weeks of benefits available today are just not enough for most families. |
WASHINGTON - May 2 - As the Labor Department announced that unemployment rose to 6.0 percent in April, millions of unemployed Americans are bracing for the end of federal emergency jobless benefits for the second time in five months. In January, Congress re-authorized a program that offers 13 weeks of federal benefits. After May 31, no new workers will qualify for the added benefits.
As the deadline looms large, more than 1.9 million workers (or 21.8 percent of all unemployed-the highest figure in a decade) were officially counted as unemployed and still looking for work after six months in April. And today's data reveal that jobless workers have been looking for work an average of 19.6 weeks, the longest duration in 19 years (January 1984). There are 580,000 more long-term unemployed Americans than when Congress passed the extension program in 2002. Since then, the federal program has helped more than 4.6 million get by in the persistently beleaguered labor market.
Over 2.8 million workers have completely run out of federal jobless benefits. During the last recession when President George H.W. Bush was in office, the federal program provided 26 weeks of federal extended benefits at its peak, with workers in many states receiving 33 weeks. With long-term unemployment now just as severe as it was during the last recession (and still growing), the 13 weeks of benefits available today are just not enough for most families. The time has come for Congress and the President to expand the current program to provide no less in aid than what was available during the previous recession.
"For the last two years, stubbornly high long term unemployment has been the most consistent feature of the sputtering economy. Workers continue to bear the brunt of the prolonged slowdown, as the clock runs out on their unemployment benefits," said Maurice Emsellem, Director of Public Policy at the National Employment Law Project. "At the same time, President Bush and Congressional leaders are talking non-stop about tax cuts, while remaining entirely silent when it comes to protecting and strengthening the federal extension of unemployment benefits."
To make matters worse, this week's round of labor reports revealed that the economy lost 48,000 more jobs in April, bringing the total private sector job loss over the last two years to 3.2 million. "America's workers deserve better," said Emsellem. "They need jobs as soon as they can get them, but they need unemployment benefits now."
The National Employment Law Project has launched a new initiative calling attention to plight of the long-term jobless. The "Laid Off & Left Out" initiative has just launched its official Web site: http://www.unemployedworkers.org. In the coming days, NELP will also announce the results of a groundbreaking national survey of unemployed workers. For more information, please contact Jason Dring at 202-518-8047 or Jason (at) publicinterestpr.com |
See also:
http://www.unemployedworkers.org
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It's Only Getting Worse: Job Exports -- They're Not Just For Blue-Collar Workers Anymore |
by Mark Gongloff via repost
(No verified email address) |
Current rating: 0
03 May 2003
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U.S. jobs jumping ship
Cheap offshore labor is not just for manufacturing any more -- is your job heading overseas, too?
May 2, 2003: 2:55 PM EDT
By Mark Gongloff, CNN/Money Staff Writer
http://money.cnn.com/2003/05/01/new...shore/index.htm
NEW YORK (CNN/Money) - As painful as this year's big job cuts have been, what's even more painful is that many of those jobs are never coming back, as U.S. employers in a wide range of industries move more and more jobs overseas.
That's old news for manufacturers, who have been cutting jobs and moving them offshore for decades, but it's a trend that's also starting to gather steam in a number of service industries, especially information technology, formerly one of America's best-paying industries.
"By 2004, more than 80 percent of U.S. executive boardrooms will have discussed offshore sourcing, and more than 40 percent of U.S. enterprises will have completed some type of pilot or will be sourcing IT (information technology) services," Gartner Inc. (IT: Research, Estimates), a technology consulting firm, said in a study late last year.
U.S. businesses, battered by a three-year bear market in stocks and an economy that can't seem to find its footing, are developing a taste for super-cheap overseas labor in developing countries, where workers are increasingly better-trained, especially if they've spent significant time working in the United States on temporary visas.
A survey of 145 U.S. companies by consultant Forrester Research found that 88 percent of the firms that look overseas for services claimed to get better value for their money offshore than from U.S. providers, while 71 percent said offshore workers did better quality work.
That's news that can't stay quiet for long, and companies like Microsoft (MSFT: Research, Estimates), Intel (INTC: Research, Estimates) and CNN/Money parent company AOL Time Warner (AOL: Research, Estimates) already are responding.
"Over the next 15 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore to countries like India, Russia, China and the Philippines," Forrester analyst John McCarthy predicted in a report last year. "The IT industry will lead the initial overseas exodus."
What spending slump?
While tech spending by U.S. businesses has been underwater since the tech bubble of the late 1990s popped in 2000, countries such as India, China, Ireland, Israel and the Philippines all are experiencing a boom in exporting IT services.
"Analysts who predicted India's software exports to the United States would drop on account of shrinking IT spending in that country were surprised to see exports actually rise to this region," the National Association of Software and Services Company, an IT industry association in India, said recently.
“ I bought my first house in 1999 -- that was a very big deal for me -- and now I have to sell it, only because they won't hire Americans. It's devastating. ” -- Donna Bradley, Unemployed IT specialist in Mesa, Ariz.
NASSCOM predicts that the Indian "business process outsourcing" industry -- a narrow category that includes customer-support call centers -- will export $21 billion to $24 billion worth of services by 2008 and employ more than 1.1 million Indian workers.
Those workers -- in one narrow segment of the outsourcing industry in just one country -- would replace about 1 million U.S. workers, according to consulting firm Gartner.
"This is not counting the offshore services provided by other countries such as the Philippines, Ireland and Jamaica, or the other IT services that are likely to [use] offshore resources," a Gartner study said. "The scale of job migration potential is quite significant."
To be sure, these countries all compete with each other for business -- in its 2002 annual report, Indian outsourcing firm Wipro Ltd. (WIT: Research, Estimates) warned "wage increases in India may prevent us from sustaining [our] competitive advantage and may" hurt profits -- but they all provide cheaper labor than the United States.
The Contact Center Association of the Philippines, an industry group for suppliers of customer support call centers, boasts that Filipino workers' salaries are just a quarter to a fifth of those in the United States, with programmers earning $250 to $700 a month, compared with $1,600 to $3,600 in the U.S., and project managers making $700 to $1,150 a month, compared with $3,600 to $7,100.
Irresistibly lured by such rock-bottom costs, a wide array of companies -- including Microsoft, Intel, Citigroup (C: Research, Estimates), Hewlett-Packard (HPQ: Research, Estimates), Procter & Gamble (PG: Research, Estimates), AT&T (T: Research, Estimates) and AIG (AIG: Research, Estimates) -- all have turned to Filipino companies for call center and other IT services.
In one call center in Pampanga province, 850 Filipinos answer customer service calls for Internet service provider America Online, a member of the AOL Time Warner family.
Broader impact still distant
Most economists believe the offshore outsourcing trend is not substantial enough yet to have a big impact on the broader U.S. economy -- imports of business services account for less than 1/20 of 1 percent of gross domestic product, the broadest measure of the nation's economy.
But economists are starting to take note of the trend.
"If it's not a big story yet, it could become one," said Josh Bivens, a labor economist at the Economic Policy Institute, a Washington think tank that focuses on labor issues.
At the least, it's not making the weak job market in the United States any better. The worst month for job cuts so far this year was February. Employers cut 357,000 jobs, the biggest one-month loss since October 2001, when employers slashed 405,000 jobs in response to the Sept. 11 terrorist attacks.
Now more than 8.4 million people are unemployed, which gives workers who do have jobs less leverage when asking for a raise; as a result, wage and salary growth has begun to slow, and that in turn is threatening consumer spending, which fuels more than two-thirds of the economy.
IT workers feel the pain
In few areas has the competition for jobs had a bigger impact on wage growth than in the IT industry. In the 1990s, it seemed all one had to do to buy a ticket to Easy Street was learn a programming language or how to manage corporate computer networks.
Those good old days are long gone, with unemployment rising, IT spending in a deep slump and software services moving offshore.
What's more, some IT professionals and immigrant groups complain that U.S. employers manipulate the H-1B visa system, which allows college-educated people from overseas to work in the United States for up to six years. They're supposed to be paid a "prevailing wage," but many employers pay them as little as possible. With such cheap labor available right here in the United States, there's even less reason for IT wages to rise.
"I talked about salary with a company last week (in March), and they were paying between $30 and $35 an hour," said Donna Bradley, an IT specialist in Mesa, Ariz., who's been out of work since August 2002. "In August I was making $45 an hour."
It didn't matter; Bradley, 49, didn't get the job and is selling her house and moving to Maryland to live with her daughter while she continues to look for work.
"The irony is that I was a single mother, and I raised five kids by myself and put myself through school," Bradley said. "I bought my first house in 1999 -- that was a very big deal for me -- and now I have to sell it, only because they won't hire Americans. It's devastating."
Still, Bradley's experience is not yet the norm in this country. Many firms have found that there are difficulties -- including the risk of inspiring anger among their U.S. workers -- in moving white-collar jobs offshore. For that reason, most U.S. companies are still just dipping their toes in the water.
"We saw this in manufacturing -- firms started off slow and stayed close to home," said labor economist Heather Boushey of the Center for Economic and Policy Research, another Washington think tank. "But then it hit a 'moment,' and many more firms started doing it because it became impossible to compete without workers overseas.
"We're not there yet in the non-manufacturing sector, by any stretch of the imagination," she said. |
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