Lower wages may help slow job losses

WASHINGTON -- As U.S. companies send more high-tech work overseas, they are creating a "downward pressure on salaries" that may help stem American job losses, a technology industry leader told Congress yesterday.

Indeed, U.S. workers may have to get used to lower wages, said Harris Miller, president of the Information Technology Association of America. Unlike the late 1990s, when the tech sector was booming, U.S. workers no longer can expect employers to offer "six-figure incomes to technical people with little or no actual on-the-job training," Miller told the House Committee on Small Business.

Americans must face the "hard truth" that offshore companies not only offer information technology services for "a fraction of the cost," but they also can "compete for increasingly more sophisticated and complex IT work," he said.

The silver lining of this wage pressure, Miller said, is that "a more competitive payroll picture may undercut (U.S. employers') need to move jobs offshore."

Miller said cutting wages is not the only strategy for staying competitive.

He said a key step is to provide greater value, which means raising the skills of U.S. workers and the creativity of U.S. companies.

"The U.S. cannot legislate or regulate its way out of this perplexing situation," he said. "At the same time, however, to do nothing -- as Bobby McFerrin sang, 'Don't Worry, Be Happy' -- is to risk an ever-increasing number of knowledge worker jobs disappearing overseas.

Miller called on Congress to boost funding for tech education, approve trade agreements to open more markets to U.S. goods and services, and make the tax credit for research and development permanent.

At the same time, "companies must do their part by providing internships, mentorships and other mechanisms" to help young people pursue high-tech careers, he said.

He also called for the creation of a "National Center for IT Workforce Competitiveness" to study industry trends and analyze work force skills to make sure U.S. employees are staying ahead of competitors.

However, another witness, Natasha Humphries of Santa Clara, Calif., said that despite her efforts to boost her value through greater education, she still lost her job this year.

A 1996 graduate from Stanford University, Humphries pursued a tech career in California's Silicon Valley in the late 1990s.

She focused on acquiring "new skills through classes, seminars and self study" to become a senior software quality assurance engineer at Palm Inc., which makes handheld computing devices.

Despite having a well-educated work force in this country, Palm recently "began an aggressive campaign to outsource all testing assignments to India and China," she said.

Workers in those countries accepted contracts paying $2 to $5 an hour, compared with wages of $30 to $60 an hour in California, she said.

In August, she was fired. The reason "was pretty much the bottom line" on her paycheck, not her lack of skills, she said.

Miller said he recognizes that the job losses have been very difficult for tech workers.

"Thousands of IT professionals have played by the rules: studied hard in school, worked long hours, made a sweat equity investment in the future of their companies, only to find themselves now unemployed or underemployed," he said.

But he said that passing laws to stop global flows of services and skills would only hurt the U.S. economy in the long run.

"While it may be emotionally satisfying to try to protect jobs by throwing up barriers, free trade and global markets spark investment, trade and job creation," he said.

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