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Why more engineers are losing jobs
An engineer closely examines industrial gear mechanics.
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Kai Ryssdal: Engineers weren't always thought of as the coolest people in the room -- the whole pocket-protector stereotype and all. They did usually have jobs, though, when it was tough for others to find work. The rise of the high-tech economy has finally given engineers a measure of respect. I mean, who doesn't love somebody who can figure out your computer networking problems on the fly?
But now engineers are losing their jobs faster than people in a lot of other professions are. Even graduates of the best schools are getting laid off as companies downsize and outsource or offshore operations to other countries. And the answer is not all about finding cheaper labor, either. Janet Babin has more from the Marketplace Innovation Desk at North Carolina Public Radio.
JANET BABIN: Meet one of the changing economy's recent victims: Josh Oechslin.
JOSH OECHSLIN: Hello, Marketplace listeners, my name is Josh Oechslin. I live in San Jose, Calif.
Oechslin graduated from Stanford University last June with a master's in mechanical engineering. He specialized in electronic gadgets. He quickly landed a job as a systems engineer in the semiconductor industry.
You're probably thinking boring. Actually, Oechslin designed robots. But it didn't last long. His job was soon outsourced to another country.
Oechslin: I didn't think that after four months of employment at my first job out of grad school I would be laid off with 900 other people in the semiconductor industry.
According to industry trade group IEEE, engineers of all stripes are losing their jobs at a faster rate than other professionals. When the economy sours and money's tight, research and development becomes expendable. And so do the engineers that staff R&D.
Hewlett-Packard, Microsoft and IBM have shed thousands of jobs this year, many in technology. And it's not just new hires. Civil engineer Rick Clark spent 11 years at IBM. He had experience in several departments, including real estate and manufacturing. Clark thought his job was secure. Then in January...
Rick Clark: My manager called me into his office. Um, I expected him to say, "You're safe." But he surprised me and said, "You're included in the layoff."
That wasn't the only surprise. Clark's manager handed him a brochure about an IBM program called Project Match. It offers laid-off employees new positions with the company. But there're in emerging markets like India and China. Engineers there typically earn less than half the salary of their U.S. counterparts. IBM transplants like Clark would earn the going rate.
Clark: I considered it an insult. You know it's pretty common knowledge that IBM has been offshoring jobs, so this is sort of like a cold slap in the face.
IBM wouldn't discuss the program. Companies have long outsourced jobs to save money. But that's not the only reason firms are shifting highly skilled workers overseas these days.
Vivek Wadhwa at Duke University's Pratt School of Engineering says globalization has transformed world markets. Wadhwa says firms need top talent where markets are growing the fastest, and that's places like India and China.
Vivek Wadhwa: It used to be about saving cost. Now it's because that's where the opportunities are. That's where they can develop their futuristic technologies, that's where they can bring in lots of revenue. So if you're developing products for foreign markets, you want to understand foreign customers.
And some workers revel in the challenge emerging markets provide. Wim Elfrink is chief globalization officer at Cisco with a background in engineering. He's Dutch born, and spent almost a decade at Cisco in California. Then he agreed to start up the company's site in Bangalore.
Wim Elfrink: Nothing is comparable to India! My boys are 8 and 12 years old. So also for them, a new schooling system, leaving the comforts of California behind them, it was quite a transition.
Cisco's goal is to have 20 percent of its workforce from all levels of the company based in Bangalore. And it's hiring engineers.
Josh Oechslin, the Stanford grad, said he'd consider a move like that. But now it doesn't look like he'll have to. After six months of searching, he landed a new job in his field. He started last week.
I'm Janet Babin for Marketplace.
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So I guess engineering majors need also to have a spirit of adventure in case they get a job in their field and 4-6 months later get offered a pink slip or a "pack-up- and- move" program. And since this relocation opportunity is usually accompanied by a severe cut in pay, should the American employee fight for a comparable salary as the one earned here, or do Americans need to learn how to be more flexible and humble in our lifestyles?
The outsourcing of capital has allowed the US to move to a third world model. Politicians are simply the shadow cast by big business so you will get nothing from them since they are already purchased. They have already been reduced to a purchase by the unelected ruler of money. What you have is class warefare. Look at the Tax code. Billions for Wallstreet bailouts and they pay little taxes. It reminds me of a slave plantation. Your choice is to vote in a two party system which is just two factions of a business class party. You ratify the decision already made by the Elite. The problem with Engineering is that for the most part It's just a wage slave job. You have no power to drive up your price to a good living standard. What does it say when IBM offers you a third world Job ? The market is flooded and the border gates are open. The south of the border Illegals are driving down the price on the lower end. It is no wonder there is no shortage of Army soldiers. The Pro business arguments here is just putting your head in the sand with respect to the slave's situation. I got a niece who makes more waiting tables than a new grad gets. The wishful thinking is simple minded. You can Write Congress but they don't care or you can compete with the slave labor or become a Capitalist if you find a piece of real estate. I'm an EE with 30 years experience and I would not do this if I was young in Today's market.
This story is a utter lie. The TRUTH is that over the past 10 years of recession with zero job creation america was FLOODED with SIX MILLION engineers from Inida with FAKE UNACREDDITED degrees. Even this year over 100,000 indian fraudsters poured into this country. Since there are no new jobs, each one is taking an americans job away
If I've learned nothing after a lifetime of trying to find a job and career in this country, I've learned this:
When high school counselors, and university guidance counselors, and the local/national news 'talk up' opportunities in a given career field, or describe 'shortages' of any particular degree'd graduates - DON'T BELIEVE IT!
In a global economy where India and China crank out 10 times as many graduates as they have jobs for - in any discipline or field - there's no 'shortage' of human assets; just a 'shortage' of people willing to do those jobs for less money than the going rate.
And now that we're part of a 'global' labor market, the same applies here.
So, when your kid's high school counselor tells him or her about what great opportunities there are in 'Biotech' - don't believe it; it's nothing more than "double-speak" for, "we'd really like to bring down the cost of labor by flooding the market with a lot of entry-level people who will work cheap."
This is exactly what happened with 'Computer Science' majors. In the early 1980's, even someone who barely graduated could name his price.
By the early-mid '90s, the market was flooded with graduates, and any entry-level positions that were available were low-end, low-paying and dead-end jobs.
The future is in 'consulting', either through your own company or a consulting firm - and in having a 'security clearance' by way of an employer that needs a technical specialist who can lawfully access sensitive, government information.
This is one of the few areas in which 'Americans' are protected, because a foreign national can't get a security clearance, unless he/she first becomes a citizen - and the background investigation for such a person is laborious and time-consuming.
By comparison, it's much easier for a kid who did a hitch in the Air Force, then went to school, to come out four years later and work for a 'pseudo-government' organization like SPAWAR or STRICOM and get paid a decent salary to read RFP's all day related to some big government acquisition.
He'll get the job, not because he's a great engineer, but because he can have his clearance re-activated by his employer or the federal government with the stroke of a pen.
Jobs like this are hardly 'engineering' in the strictest sense.
But, as our former president-select once said, "...'mericans don't want those jobs..."
Or, as Dr. Steve Kersten is quoted as saying on 'Despair.com':
"A company that will go to the ends of the earth for its employees, will find they can hire them for about 10% of the cost of Americans."
Hey, how about informing the university not to produce a new batch of graduates in the engineering field? its quite awful to think that i might also fall into a unemployed engineer in the future. I have read all the comments above and it discourage me to continue my course.I thought the world needs us....
First, jobs are not only being outsourced, they are being "insourced" as we bring hundreds of thousands of foreign workers into this country on H1B and L1 Visas. I have been looking at several system integrators in Houston and about 80% of the entry level jobs are being done by Indians or Pakistanis. I asked the engineering manager why this was so and he said, "how do you beat $16/hr with no benies?" Indeed. So, we are going to have a pretty thin next generation in Houston because we don't have those entry level jobs anymore. My other complaint about this is that we never really evaluate whether this actually works. I think the Indians really are quite poor due to their lack of experience and lack of language skills. Their training is strictly IT, not engineering. So, they are limited. But, who ever really evaluates that? Unless the blow up is huge (like Boeing's outsourcing the 787 - what a disaster), small blowups are never really documented. Because the only metric we use is the accountants' (i.e. cost per hour, not the much harder to measure productivity).
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