It's Cold Out There

As a tight U.S. job market persists, outsourcing and immigration policies are questioned

5 min read

Any career counselor would tell Sandra L. (”Candy”) Robinson she’s done everything right. A software engineer with 23 years’ experience, she holds a BSEE, a master’s in computer science, and an MBA. After each of her four children was born, she returned promptly to work. As chair of IEEE’s Dallas Section and an active member of the Society of Women Engineers (Chicago), she networks constantly. Throughout her career, she deliberately selected projects and positions that seemed the most promising and the most stable.

Until a few years ago, Robinson’s strategy seemed to be paying off: she was happily employed and had moved into a US $89 000-a-year management job. Then, in January 2001, her company merged with Citigroup, she was laid off, and she’s been out of work ever since. ”You figure the more experience, the more education you have, the better. You stay on top of your field, you do all the right things,” Robinson says. ”I never in a zillion years would have seen myself in this position.”

Ed Jacklitch, a San Jose, Calif., specialist in test and measurement, saw his career soar and sink with the dot-com tempest. His wife, Carol, an eighth-grade teacher, suggested he try substitute teaching, but he’s found it’s mostly babysitting.

Robinson is far from alone. According to the U.S. Bureau of Labor Statistics (Washington, D.C.), 7 percent of U.S. electrical engineers were out of work in the first quarter of this year, surpassing the nation’s average of 6 percent. The situation was not much better in fields closely related to electrical and electronics engineering. In past downturns, EE jobless rates typically hovered a percentage point or two below the national average.

Many engineers, like Robinson, have been out of work for well over a year. After exhausting their unemployment benefits, many have taken lower-paying work in other fields, or are struggling as consultants or part-timers. And the longer they remain outside the field, the harder it seems to get back in. In two and a half years, Robinson’s had just three interviews and no offers. ”The job postings are asking for [experience with] specific versions of specific computer platforms that just came out last month,” she says. ”They don’t want to worry about people coming up to speed, and they can hire cheaply.”

$7.50 an hour

What is making the U.S. recession so hard is that it’s unusually long and is affecting workers at all levels across a wide range of industries. Overall, total employment has dropped more in the current downturn than in any other since the Great Depression. Although some signs now point to a mild recovery—industrial production, for example, has picked up since the fall—employers continue to shed jobs.

The tech industry is among the hardest hit. There are pockets of growth to be sure, such as medical electronics and electronic design automation. But major sectors like telecommunications and computers still languish. While many had hoped increased spending on the military and national security would help absorb the unemployed, so far that hasn’t happened.

When Terry Iseri, an out-of-work satellite electronics engineer in Torrance, Calif., heard that a local defense contractor had been awarded a $4 billion contract for a new fleet of orbiting imagers, he immediately called a manager he knew. ”He told me they’ve got the core people in there already and they won’t start hiring until 2006,” Iseri says.

To supplement his wife’s income as a medical technician, Iseri recently took a $7.50-an-hour job at a hardware store. ”I’m getting pretty good at it,” he jokes grimly. ”Now I can tell the difference between a 1/4- and a 5/8-inch galvanized nipple just by looking at it.”

The job market is even tighter in Northern California. Ed Jacklitch of San Jose worked for a dot-com that sold test and measurement equipment over the Internet. Hired as the company’s 14th employee, he saw the staff soar to over a hundred workers, only to collapse by two-thirds in the spring of 2001. Jacklitch’s entire department was axed.

Last summer, his wife, Carol, an eighth-grade teacher, suggested he try substitute teaching. He began in September, and the work has been fairly steady since the beginning of the year. He seldom gets to really teach, though. ”It’s kind of a babysitting operation.”

”I’m 61 years old, and as far as Silicon Valley is concerned, I am a dinosaur,” Jacklitch says. He may take early Social Security when he turns 62 later this year. ”I have a great deal of experience and knowledge to contribute, but it appears as though my professional career is over, and I am resentful and sad about it.”

Because of people like Iseri and Jack-litch, George McClure, chair of the career and workforce policy committee for IEEE-USA (Washington, D.C.), the U.S. lobbying and policy arm of the IEEE, believes the 7 percent jobless figure for EEs understates true unemployment. Official data don’t account for those who involuntarily leave the field—say, an engineer who goes to work as a mortgage adjuster because she can’t find work in her industry.

Even recent grads, who typically fare better because they are cheaper to hire, are getting fewer offers. Recruiting by utilities and by engineering/surveying firms, to take two groups that often hire graduating EEs, was down about 30 percent this year compared to last, according to the National Association of Colleges and Employers (NACE, Bethlehem, Pa.). At the same time, starting salaries have stagnated or declined [see ”EE Salaries: It Could Be Worse,”].

Who’s getting the jobs?

The dire situation is spurring normally apolitical engineers to take action. Much of their attention has focused on the effects of guest-worker visas and outsourcing overseas. In both cases, they contend, companies are replacing U.S. workers with less expensive foreign workers.

In the last two years, the use of H-1B visas, given to skilled foreign professionals, has fallen off, but the lesser-known L-1 visas have jumped, from 41 700 in 1999 to 57 700 in 2002. L-1s are intended to ease transfers within multinational companies, but outsourcing firms also use them to bring workers to the United States, where they are hired out to U.S. companies. In one case that has received national attention, laid-off information technology workers at a Siemens facility in Lake Mary, Fla., claim they had to train their L-1 replacements or risk losing their severance. (The annual cap on H-1Bs is 195 000, but will drop to 65 000 on 1 October. The L-1, by contrast, carries no cap; nor does it require employers to pay prevailing wages or prove that qualified U.S. workers are not being displaced.)

At press time, a Meriden, Conn., group called The Organization for the Rights of American Workers planned a protest at New York City’s Waldorf-Astoria Hotel, where a conference on ”strategic outsourcing” was scheduled. On 14-15 July, IEEE-USA is planning visits to Capitol Hill, to meet with congressional representatives about high-tech unemployment.

Clair Brown, an economics professor at the University of California, Berkeley, who studies engineering employment, agrees that lowering the H-1B cap and closing the L-1 loophole make sense, but also emphasizes the need to discuss the closely related demographics of higher education.

”In electrical engineering, a huge number of H-1Bs are graduates of U.S. universities,” she notes. Indeed, the influx of students from abroad has allowed U.S. graduate programs to thrive even as U.S. students’ interest in science and engineering has waned. ”As long as we’re in the business of educating foreign-born engineers, we can’t really, and I don’t think we want to, ship them back without getting some use of their education.” One fix, she suggests, would be to give U.S.-educated workers preference in the H-1B program.

Exporting jobs?

Outsourcing is a more complex matter, Brown says. In semiconductor design, for example, the assumption has long been that higher-level jobs for engineers would remain in the United States, even as chip manufacturing moved to Taiwan, South Korea, Southeast Asia, and elsewhere.

”As long as the ’good jobs’ stayed in the United States, nobody was too worried,” Brown says. But China and India are now explicitly targeting chip design as an area of growth, and have been expanding design work both within multinationals and in local companies. ”This has raised a lot of red flags here—people are wondering how high up the skill ladder [China and India] can go.”

For those countries, such developments should help in the long run to lift the standard of living closer to that of the industrialized world. For companies, moving operations offshore cuts payroll costs, boosts profits, and provides entry into developing markets. But for U.S. engineers, the outlook is unlikely to improve until domestic business investment and hiring pick up. When that might be is still much debated. In a recent survey, NACE asked employers how soon they expected to see an upturn. While 31 percent thought next year looked promising, over half had no response at all.

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