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Survey reveals downside of globalization on EEs

Posted: 25 Dec 2008 ?? ?Print Version ?Bookmark and Share

Keywords:salary survey? electronics globalization? electronic engineer?

EE Times' Annual Salary & Opinion Survey found that while globalization has delivered tremendous opportunities to the electronics industry over the past two decades, it has cost many engineers in Europe, North America and other developed regions, a world of pain in terms of fewer job opportunities and lower wages.

As new technologies for mobile devices, the Internet and embedded systems, to name a few, have taken hold during this period, a corresponding growth in outsourcing of design and manufacturing functions to low-wage countries in the Asia-Pacific region, Latin America and Eastern Europe have undermined wages, cut job opportunities and left U.S.-based engineers disgruntled about their job prospects, according to the EE Times survey, conducted by Beacon Technology Partners, a marketing and research firm.

A key finding revealed by 1,158 respondents in North America is that American-born engineers, particularly those over 50 years old, are having a harder time adjusting to the effects of globalization. Many of them have been displaced by foreign-born Indian, Chinese and British counterparts, who have landed jobs at large corporations like Cisco, Dell, HP and IBM.

Income disparity is a key concern. The study revealed that North American-born engineers working in North America have median earnings of $107,000, while foreign-born engineers working in North America enjoy higher wages. Indian-born engineers reported an average salary of $114,000; engineers from China/Taiwan posted an average salary of $113,700, and those born in the United Kingdom earned $131,900.

The study also found that one in every five engineers in North America was born outside the United States. That's one of the largest proportions of non-U.S.-born respondents in the 10 years EE Times has conducted the survey, said Jim McLeod-Warrick, partner at Beacon Technology.

Tough competition
While the United States has gobbled up engineering talent from overseas, U.S. corporations have also expanded their presence abroad; hiring outsourced engineering skills or expanding manufacturing plants where they hire foreign workers for far less than a U.S. counterpart.

Recent reports indicate that expansion into foreign markets is trending upward at a robust rate. In October, Hewlett-Packard Co. said it plans to open a PC plant in China's Chongqing region, expanding its presence in Western China to better serve the local market.

Other leading companies are following suit. In June, Dell Inc. said it plans to boost its software-services business in emerging markets such as Brazil, Russia, India and China. Sun Microsystems Inc. announced earlier this year that it hopes to maintain the pace of doubling its revenue in India every three years, as technology spending by telecoms and financial service firms remain robust.

"What is buried underneath globalization is the fact that you can hire eight Chinese engineers for [the salary of] one American engineer. In Taiwan, you can get four of them for one of us," said a North American source, who requested anonymity because his company is operated by Chinese management.

In addition to salary considerations, the source said U.S. corporations are finding that foreign engineers come with highly recommended skills. "At one point in time I would have said 'I'm an American and they are not as good as our engineers, but what they don't know they'll learn.' I can tell you firsthand many foreign engineers are every bit as good as any of us are," the source said.

As companies continue to employ engineers overseas, as well as hire through the H-1B visa program, many U.S. engineers face difficult times. The experience of Gene Nelson, who holds a Ph.D. in radiation biophysics, demonstrates what a rough and tumble world engineers must navigate today.

After losing his job in the early 1990s, Nelson spent seven years at a company that contracted with Microsoft Corp. to outsource its telephone technical support. Today, Nelson works at the not-for-profit organization, NumbersUSA, which advocates for lower immigration levels in the United States.

"Until about 1990, employers paid for technical training. Now, most of the cost and risk have been shifted to the technology worker. A U.S.-citizen technology worker usually pays $50,000 to $200,000 in college costs to obtain their bachelor's degree. Then, the employer captures a significant part of this investment when employers prematurely declare the technology worker to be 'obsolete' before the worker reaches age 40," Nelson said.

After age 40, the American citizenindependent of their age or originusually finds himself (or herself) to be either unemployed or underemployed in a non-technical field, he added. "Employer abuse of work visa programs facilitates the substitution of fresh, inexpensive, imported, and indentured young blood for American citizens."

The survey also indicated that a majority of older North America-based engineers don't believe globalization has been beneficial to their careers. When asked if they agreed that globalization of the electronics industry over the past 20 years has improved opportunities for U.S. engineers, only 30 percent of engineers who are 50 years and older agreed while 60 percent of respondents under 35 years old concurred.

However, the study found that the number one concern of U.S. engineers was outsourcing and its impact on their job prospects. When asked to rank their concerns about career issues, 36.4 percent of respondents said offshore outsourcing was the number one concern, followed by worries about the job market, job security and unemployment at 34.3 percent. A third concern was balancing work and life issues.

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