Why more engineers are losing jobs
Even in a recession, a lot of people think tech jobs are a safe bet. But American engineers are losing their jobs faster than any other professional sector. Janet Babin reports.
An engineer closely examines industrial gear mechanics. (iStockPhoto)
More on Jobs, America's Financial Crisis
TEXT OF STORY
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.
Comments
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From AL, 01/25/2010
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
From Philadelphia, PA, 10/14/2009
Let's face it, the thing that discourages people from pursuing tech careers most is the outsourcing of jobs to police states like China and genocidal states like India.
From Jupiter, FL, 09/11/2009
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."
From Ozamiz City, AL, 08/28/2009
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....
From Seattle, WA, 08/07/2009
Yea, i'm an Aerospace Engineer. Offshoring and insourcing H1B visas is lame. I spent 6 years studying Mechanical Engineering for THIS? Let's go to war and kill the bastards.
From Houston, TX, 07/24/2009
Yea NPR is usually promoting all things Indian as if Americans are not open enough . Guess we need a war to see our people as having value.
From Pearland, TX, 06/28/2009
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).
From CA, 06/25/2009
*Dr.* Wilson, thank you for making my point!
From Dallas, TX, 06/24/2009
Whatever it is; the trend in the engineering sector does not encourage younger generation of Americans to study Engineering. Not with my experience. I graduated with Electronics Engineering degree in 2002 but have never had an Engineering job other than work in food operations plant. I will never encourgage my children to get into Engineering but will support them in fields like Medicine, Pharmacy, Nursing and radiology
From San Antonio, TX, 06/23/2009
A R: Two things. First, calling names and being disrespectful and uncivil to Janet merely destroys any credibility you might have had regarding the real world of professional work. Second, I teach university students business communication and professional development skills, and you obviously need to take my course. Your "unprecedentedly cool ways" of using technology are a dime-a-dozen, and will not be a passport for you to obtain and maintain productive and enjoyable employment. I recommend that you exhibit less "attitude" and do more listening to the more civil, mature, and obviously more knowledgeable rest-of-the-world for some useful advice. Respectfully, Dr. Wilson
From Norwood, OH, 06/23/2009
Janet,
Rather than provide one anecdote after another, how about some cold, hard stats? How many engineers have lost their jobs? What is the unemployment rate in this industry? Which areas of engineering have lost the most, which the least? What are the average salaries and to what level are they fallling (if they are indeed falling)? Much as I feel for these individuals, I don't need to hear one sorry story after another in order to get the point. I want an overall picture instead.
From Milwaukee, WI, 06/23/2009
I appreciate the job hunt advice. I have applied for a couple of civil engineering positions during this layoff. The problem is there are so many engineers out of work that having no experience in that field, other than PE exam questions, puts somebody with with my background at a significant disadvantage. I almost need an entry level position to pop up.
I don't want to come across as whining, I just wanted to share personal experience for others going through the same situation. The best thing that could happen in my case is that banks loosen up their corporate construction lending at least a little bit. The projects are out there. They just need the financing.
06/22/2009
The real problem here is that no one knows how many people are being offshored and how that plays into the economic picture and layoffs. The Bureau of Labor statistics needs to start reporting on this figure and it is more than just engineering jobs. For the number of articles Marketplace does on these topics, why is it that they have such a hard time looking into what the actual statistics are for offshoring versus job losses? Some people say that technology is safe, and others say that it is not. You need to stop speculating and get the actual numbers. Also it would be good to interview someone at the BLS to find out why they don't report on the number of outsourced jobs each month. With the amount of job losses it would be good to make sense of this especially given that India still is a growing economy while ours is in decline.
From CA, 06/22/2009
Janet, your opinions and ideas about engineering and technology are stupid and reek of an aging mind. You are obviously not up to date with the young generation that is innovating and using technology in unprecedentedly cool ways. You have a right to your ignorant opinions, what is frightful here is that NPR will allow such nonsensical views to be aired on its channels.
06/20/2009
response to Jon DeBroux from Wisconsin- focus on structural engineering on bridges. This is good right now, especially if you're a PE. My dad miraculously got a job as a bridge inspector- demand for bridge inspectors is really high following the Minneapolis bridge collapse. No state govt wants to preside over the next one of those. Try infrastructure. This is where I'm looking myself in the event of my own axe-ing.
Anyway, I feel very disillusioned and betrayed by the commonly accepted ethic that being an engineer is a safe way to go. I particularly liked Stan Trout's article, linked below in his comment.
06/20/2009
Kate:
IBM's Project Match is a one way ticket to the country you want to apply to. The wage is in local salary and IS NOT based on your current U.S. salary. It is not a one or two year overseas assignment that IBM used to offer with your current U.S. salary and ex-pat benefits.
From MA, 06/20/2009
As a US-born software engineer married to a woman from another country, I see the different and conflicting facets to the issue of outsourcing of engineering. A country's prosperity and competitiveness in the 21st century will be based in large part on the innovations of its engineers. So on the one hand, outsourcing undercuts this strength. On the other hand, US-born engineers need to understand that end-users in other countries, especially developing countries, often use their products in different ways, depending on the needs of the market. (Mobile devices are a prime example, where the US is often far behind developing and Asian countries in innovative uses of mobile technologies.) Thus, international experience is important if not essential. So I'd say that if you can work in India or China, jump at the chance to get the international experience.
From Fishers, IN, 06/19/2009
Engineering is a wonderful profession. It used to be a ticket to a comfortable middle class life, even for people from very humble backgrounds, but that isn't true anymore. Today engineers need to be very careful about managing their own careers. The first point to realize that it is your career is your responsibility and not someone else’s, especially not your employer’s.
I wrote an article for a trade magazine with a strategy for young people, perhaps it will be of interest here. Here's the link
http://spontaneousmaterials.com/Papers/June_July_2008.pdf
I hope that people who think moving jobs around is such a good idea will consider for just a minute about what they will do when the next big technical challenge happens, if it hasn’t already. Will they outsource that, too? The Manhattan Project and putting a man on the Moon were not outsourced, nor were they accomplished by MBA’s. We need engineers in the US for the big challenges we face.
06/19/2009
It's strange how all of the big companies who have raved about diversity in the workforce for decades are so eager to send their jobs offshore to countries that have no diversity at all.
06/18/2009
Just 6 hours before I listened to this news report, the exact thing described happened at my firm. Your timing was impectable, and really got me thinking about moving to Asia or changing professions- The writing is on the wall...
From CA, 06/18/2009
Excessive Capitalism leads to Socialism and Excessive Socialism leads to Capitalism.
From Milwaukee, WI, 06/18/2009
Being a laid off engineer myself, this story piqued my interest. I have been a structural engineer for 14 years. Right now it is a bad place to be if your experience is in buildings. In the past three months I have applied for four positions, one of them a drafting position (considered entry level) and two of them requiring a significant relocation. I have been told by our national media and pundits that engineering is what our children should be focusing on. Engineering is the way to build a better United States. I am beginning to think that the United States doesn't really want that. They are just paying lip service. I went to school to be able to design buildings. Now that has been taken from me.
From Grand Rapids, MI, 06/18/2009
As a licensed professional engineer, this segment obviously caught my attention. I certainly understand the concerns that others have posted in protest to offshoring of engineering and technical work. But the engineering profession is no different than any other service-based profession or industry. For several generations, American engineers have set the global standard for training, expertise and innovation. However, what we failed to recognize was that other nations were investing heavily in education, infrastructure and manufacturing – while we focused on short-term ROI, market share and management efficiencies.
The American Society of Civil Engineers (ASCE) has been wrestling with the challenges facing our profession. In 2008, ASCE released the "Civil Engineering Body of Knowledge for the 21st Century, Second Edition," which outlines recommendations for increased knowledge, skills, and attitudes that have become essential prerequisites for entering today’s professional practice. In addition, Patricia Galloway (Past President of ASCE) authored a book entitled "The 21st-Centuray Engineer," which includes the following statement:
“If engineers are relegated to the role of technician, they will no longer command the levels of responsibility that will enable them to successfully compete in the global economy or assume leadership roles …” (Introduction, page 2).
As American engineers, we can either whine about offshoring of our profession, or invest the time and energy needed to stay in front of the competition. For the benefit of tomorrow’s engineers, it is critical that we raise a national voice to ensure continued investment in education – at least on par with other nations. The choice is ours: engineering leaders or commodity-priced technicians.
From NY, 06/18/2009
American workers have become economic whores. The pimps are American CEO's and senior management whom don't know the first thing about building futures or businesses. They practice the equivalent of "kindergarten management" by simply paying themselves enormous amounts of money by slashing our country's future.
What we as Americans fail to understand is that our present approach to offshoring can have but one end result - poverty for the American working man and woman, and future generations left holding the empty bag that will take many generations to refill, if it ever will be. Our "leaders" are breeding the next generation of whores.
Look at our economy. CEO's, senior managers and investment bankers produce absolutely nothing tangible but make millions, while those that actually produce for the good of society are squashed economically. The current group of "business leaders" have but one mantra - cut costs by cutting workers - offshore, and then LIE about it. They simply are NOT smart enough to BUILD a business, so they resort the moral equivalent of theft to fill their own pockets.
How about this - a NATIONAL LAW that mandates that the top 3 layers of management >$500K receives bonuses only after a 5 year vesting (w/o interest). If the business decisions earned sustained profits - they get it, if not, go away. Let's try it with sports figures too - wow, pay for performance. That's something most of Americans deal with EVERY DAY.
It's time for the word "ACCOUNTABILITY" to actually be used in enforcement of moral standards. Otherwise, I fear there's another revolution coming.
06/18/2009
The argument of building products where the market is - is the biggest lie. I-Phones designed in USA are selling just as well overseas. Networking gear developed here, is used throughout the world.
Its all about maximizing profits.
I never encouraged my kids to go into Engineering. Its a dead-end job - but not boring or dull.
From Dallas, TX, 06/17/2009
All is rubbish about the talent in India and the this Indian guy Vivek always lies about the talent of his countrymen. It is because of the greed of corporate CEOs to make more earnings for themselves. Just like financial regulation there is a need for a tougher regulation for outsourcing if we don't do it now then it would be too late. The only reason because USA is super power is because of its Engineers and Scientists and innovation, now what these greedy CEOs are doing is sending the jobs to India and giving a message to American students that don't study maths, science and engineering and if you do just move to a third world country like India and share few inches of land with 1Billion hungry people.
This will hurt us because in 20 years we won't have no one in the engineering school and we will become like third world India. Real economic threat for USA in next decade would be India not China.
From San Ramon, CA, 06/17/2009
While I understand why Mr. Clark found the offer insulting, given IBM's track record, offers of overseas employment may be more attractive than then initially seem. US citizens working abroad often pay far less in taxes, are subject to a much lower cost of living, and may qualify for many perks, making their salaries go a lot farther than here in the US, and that does not included the intangible benefits of living abroad. My father, a civil engineer, moved my family to Jakarta when I was 4 years old, and the experience was absolutely priceless. Do not count it out.
06/17/2009
Hey, wait a minute! I thought the key to U.S. economic competitiveness was technological innovation! I thought the don't-need-to-know-or-build-stinkin-nothin economy died around Q3 of 2008. Doesn't every politician say that we should goad our kids into becoming math and science wizards? For what?
And this quote: "...So if you're developing products for foreign markets, you want to understand foreign customers..." : Obviously, but do I need to physically sit in that place to understand the market to build stuff for it? That sounds like a very stunted / one-sided notion of globalization to me.
From TX, 06/17/2009
Well, it is about time Marketplace ran a piece on the outsourcing of engineering jobs. I was under the impression your program was a shill for the Indian government.
From Philadelphia, PA, 06/17/2009
Where is the IEEE report referred to in the story? It'd be good if these storied listed their references for interested listeners and readers. I'm a mech-e at a large manufacturer and layoff threats loom heavily.
Also- not all engineering jobs besides robotics, Formula 1 cars, roller coasters, etc are boring. Please stop reinforcing the stereotype of the boring engineer. Reminds me of the snicker and giggle about the "ball bearing recession" discussed on Planet Money recently. This is heavy machinery (ie windmills), folks. Not slingshot ammo for Dennis the Menace.
It's this kind of stereotyping that discourages people from pursuing careers in technical fields and another contributing factor to employers sending jobs overseas- not enough engineers to fill the demand here (in better times).
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