IBM just announced that it would be reducing its workforce in the U.S. and “Old Europe.” Just as it reduces its employment levels in the high labor costs countries, IBM intends to expand the number of workers in India. For each engineering job reduced in the U.S. (and Western Europe), and added in India, IBM increases it bottom line by roughly $60,000.
Don’t blame IBM for seeking to cut costs and maximize shareholder return. Instead of attempting to save jobs via trade restrictions, the U.S. must attack the source of job losses---an education system that does not produce workers that can compete. Science and engineering education in the U.S. is dominated by foreigners. In economics it is much the same. A student of mine here at Creighton recently entered the Ph.D. program in economics at Columbia University. She was one of only 5 U.S. students among the 25 students that entered the program with her. It is not uncommon to see 20 percent or less of graduate (and undergraduate) students in engineering/scientific/mathematics fields coming from the U.S. American students tend to favor “soft” fields such as marketing, art history, and psychology. I recently gave an exam that contained a fair share of challenging mathematical problems. One of my students asked, “What does this have to do with leadership.” While U.S. students are being educated for leadership, foreign students are preparing themselves by taking more demanding courses in science, mathematics and engineering.
As a result of the failure of the U.S. to produce well-educated workers, companies across the globe are looking to nations other than the U.S. to fill their technical labor requirements. Critics have charged that the U.S. government must take action to prevent companies such as IBM from off-shoring jobs. However, this is the wrong approach. Globalization will continue to increase the level of job off-shoring as long as U.S. workers are ill-educated. Blue-collar workers have long faced this challenge. Now we white-collar workers are feeling the pressure and are beginning to squeal for protection. Producing well-educated workers in demanding technical fields will provide the only “real” protection for the American economy.