even giant corporations, such as IBM, which have converted to mostly
service type product offerings, are now contracting even these jobs
overseas to India, again for cost-cutting considerations.
Where does this leave the American worker?"
WILL THAT EASE THE TRADE DEFICIT?
Posted March 8, 2004 thepeoplesvoice.org
By: Ted Lang
My father and mother both emigrated from Germany in the 1920's. My
dad began his employment career working as an unskilled laborer in low
paying jobs. He enrolled in night school and trained to become a
machinist. This included mathematical computation, reading
blueprints and measuring with and reading a micrometer, dial indicator
and calipers. He learned to operate turret lathes, milling
machines, shapers and punch and drill presses.
His training was timely. War economics necessitated by Hitler
richly rewarded those employed in war work in the late 30's and early
40's, especially machinists. The overtime and the low income tax
rate provided him enough savings in less than two years to buy a
single-family house in New York City, and for cash!
As a skilled machinist, he worked for giant defense firms. After
the war he opened up his own photographic accessory factory, which
eventually failed in the early 1950's. He returned to machine shop
work. Because of the failed business, my parents had incurred debt
and my mother started working as a wirer-solderer in an electronics
The need to reflect personally here should become readily apparent.
My parents were immigrants. My father went to school at night and
learned a good trade. He even did well enough to open a business.
My parents were proud people, and even during layoffs and bad economic
times, refused to collect unemployment or other forms of government aid.
And both had factory jobs inside the city limits of New York.
But in 1954, my father's company relocated to Mineola in Nassau County
on Long Island. Although I have no specifics as regards the
decision on the part of management to relocate to Long Island, I
strongly suspect the motive was the bottom line as opposed to more
manufacturing space. Of course, it could have been both. But
both escalating rents and New York City real estate taxes were probably
the primary reason.
As can be imagined, having a well-paying job, especially for a skilled
laborer within the city limits, was a terrific advantage. Because
of public transportation, my parents didn't need a car. That
changed in 1955, when my father had to buy a car to commute to Mineola.
My mother's company had a huge building and an enormous parcel of land
in Whitestone, Queens, also New York City. No space problems
there. And she could catch the Q-15 bus only three blocks from our
home and it would drop her off at the front gate of the plant. But
her company moved out of the city and also relocated to Long Island.
It should be clear what was happening even back then. Companies
with good-paying jobs served by public transportation were leaving the
city primarily to lower operating costs. Companies my mother and
father worked for that abandoned the city included Reeves, FXR,
Hazeltine and Electrospace. In fact, the latter moved my mother's
entire operation to the Dominican Republic, right after a radical
transition of corporate ownership. The pattern was obvious even thirty
years ago -- companies were consolidating and also moving out of high
cost/high population centers as well as completely out of the country!
As concerns my own employment as an accountant and financial analyst for
IBM over twenty years, periodic employee opinion surveys that included
questions on the effectiveness of all departments and services within
the company always produced the same results as regarded the most
consistently dependable and efficient support services. My
division of IBM was the Office Products Division [OPD], which
manufactured typewriters, word
copiers and eventually personal computers. Obviously, it was a
manufacturing division with a large customer service support function.
Repeatedly, employee opinion surveys showed that the best run and most
efficient department within the Division was the Reproduction and
Reprographics Department. It provided mass photocopying, printing,
binding and publication support. The manufacturing division was
also supported by other ancillary service support functions, such as
security, cafeteria, maintenance and a medical staff and health
monitoring service. In order to cut costs, when IBM lost market
share due to changing market dynamics, the ancillary service support
functions were "contracted out" or "outsourced."
The thought was that New Jersey-headquartered IBM - OPD was primarily a
manufacturing concern, with plants in Texas, Kentucky, and Colorado, and
support services were not central to the organization's mission.
In fact, IBM was supported by a Real Estate and Construction Division as
well. It acquired property for future plant and headquarters sites
to support its thriving markets. But loss of market share and
economic downturns motivated the management to cut costs and displace
these former IBM employees and outsource their former jobs.
IBM had a policy against layoffs - they didn't believe in them.
The displaced workers were not released but placed in other jobs within
either the division or elsewhere in the corporation. What is
important to note, however, is that originally mere high school
graduates were employable in these positions, with the exception of the
healthcare functions. It was once possible for a high school
graduate to work at IBM, earn a living, go to school at night, and
transfer to a professional field within the company. IBM even helped
generously with the tuition, and all the benefits available from the
company were second to none.
What has happened? While still a manufacturing organization, IBM
began outsourcing its internal service support organizations to outside
vendors starting in the 1980s. Cafeteria and security personnel
are now employees of outside vendors, and healthcare, employee benefits
and pension functions are being contracted out as well. And the
Office Products Division has transitioned to the Customer Service
Division, and then finally to the National Service Division. The
manufacturing division itself transitioned to a service division, and
now even the recently created service divisions have been consolidated.
Think of the disappearance of clear-cut corporate functions identifiable
to corresponding divisions after the government disassembled Bell
Our country has transitioned from an agrarian, to a manufacturing, to a
service economy. Technology has transformed product offerings and
manufactured goods as well as their methods of production. Skilled
labor positions, such as highly skilled machinists and tool and die
makers, have all but disappeared. The small remaining machinist
positions have been simplified via CNC [computer numerically calculated]
lathes and millers. Manufacturing operations have moved out of the
cities and eventually the country. But even giant corporations,
such as IBM, which have converted to mostly service type product
offerings, are now contracting even these jobs overseas to India, again
for cost-cutting considerations. Where does this leave the
Is America in the throes of a job crisis, or is this a transitional
stage of global economics that will eventually benefit everyone?
Will this emerging global economy really transition all the peoples and
nations of the planet to wealth, so that no rogue nation will view one
nation as superior in wealth and personal freedom in such a light as to
inspire terrorist plotting and activism? And if this transition of
jobs to the global economy benefits all of Mankind, will the transition
be easy for the American worker, or yet another cross to bear along with
disappearing Social Security benefits and the eventual required tax
increases to support neoconservative warmongering imperialism?
© Copyright THEODORE E. LANG 3/07/04 All
rights reserved. Ted Lang is a political analyst and a freelance writer.