The High Tech
Sector: Conditions & Opportunities (page 1 of
2)
By the High Tech Committee of the National Organizing Committee
Introduction
This report
began as an internal discussion document of the High Tech Committee
of the National Organizing Committee. Philosophically, the NOC
tries to begin with an assessment of the world as it is. So this
report attempts to summarize the objective situation in key areas
of the high tech arena, including employment, the National Information
Infrastructure (NII), intellectual property, and the high tech
police state. The objective situation reveals opportunities for
our work, which are also discussed below.
The
High Tech Sector of the Economy
High tech
is a key sector of the economy. According to the Bureau of Labor
Statistics, more workers in the U.S. are employed in electronics
than in automobile production. Much of the growth in electronics
employment and related industries over the past three decades
has been at the expense of traditional industries, as companies
replaced workers with electronics and the requisite software to
control electronic-based machinery. However, the same forces affecting
other industries have affected the electronics industry itself,
in the past four years. This is an expected development, as electronics
permeates the economy, and the industries mature.
These forces
can be summed up as:
-
A glut
in the market, with a corresponding crisis in profitability
(or, the extraordinary profits of the previous period begin
to come in line with overall profitability). For example,
software companies are facing the saturation of the business
software market, forcing companies to cut into their fat
profit margins -- "$500" software packages being
dumped at "introductory" prices of $50 or $100.
(That is, the price of technology, especially software,
is sinking to its value).
-
Waves
of new technology making older architectures obsolete, and
jeopardizing the companies that championed them. The mainframe
and mini-computer companies are the primary victims here
(IBM, DEC, Amdahl, Groupe Bull, etc.), where less labor
is necessary to produce state-of-the-art systems (these
computers are smaller, and require fewer resources to manufacture).
-
In a
related move, a shift from complexity in manufacture (expensive
to replicate) to complexity in software (inexpensive to
replicate). "Massively parallel processing" computers,
where hundreds of relatively simple processors work in tandem,
are replacing the old model of larger chips and larger systems.
Another example is the move to "reduced instruction
set computing" or RISC, away from the trend to larger
and more complex chips -- the designs tend to get simpler
and faster, and the software to coordinate and run them
gets more complex.
-
Cuts
in military spending. There are several reasons for this
-- the end of the Cold War has undermined the rationale
for a heavily subsidized military-industrial complex (or
at least for particular types of weapons systems). Forces
of a technology sector without ties to the Pentagon have
emerged which have pushed for more research and spending
in non-military areas (these forces, identified with John
Sculley, then with Apple, and John Young, then with Hewlett-
-Packard were instrumental in Clinton's election). Military
spending cuts can be seen as a retraction of the social
bribe (defense spending as a public works project) as international
capitalist competition increases, and public sector spending
must be cut -- a parallel move to cuts in welfare, health
care, etc. While military production-related employment
cuts continue, however, the Clinton administration has retreated
from more cuts in the military budget; at the same time
we are seeing military technology bolstering police forces.
Companies
have responded in traditional ways:
-
Companies
are cutting labor costs through "smarter technology"
-- in the case of High Tech, this has been through such
developments as object-oriented software, computer-aided
software engineering (CASE), and faster and cheaper computers.
(As the head of Radius, a company that makes computer
equipment, told the San Francisco Examiner recently, "We
turn out (custom computer chips) with four engineers and
a giant computer. That used to get done with 100 engineers.
That's 96 engineers you don't need any more."
-
Companies
are cutting labor costs by exploiting cheaper
labor markets (made possible by high- -speed telecommunications).
Emerging new low-wage high-skill labor markets
include the former socialist countries of Eastern
Europe, and India, Ireland and Mexico. Particularly
in the case of companies caught in the shift to
new architectures, tighter profit margins, and
shrinking government subsidies, companies are
dumping workers as sales drop or as profitability
fails to live up to investors' expectations.
-
Companies
are consolidating through mergers and buyouts
(Aldus+Adobe and Novell+ Word- Perfect most recently,
as well as various other partnerships). Companies
realize savings by cutting unproductive (sales
& marketing) labor costs especially, but also
tech support workers, engineers, and the relatively
few production workers where overlap occurs.
The
cuts have been substantial. Domestic employment in the U.S.
electronics industry fell for the fourth consecutive year
in 1992. December, 1992 electronics employment was 2,291M
or 99,000 (4.1%) less than the 2.39M reported for December,
1991. "The only industry segment that experienced growth
in 1992 was Prepackaged Software, with a modest 2,270 new
jobs. On the other hand, Defense/ Commercial Guidance Systems
lost 30,000 jobs last year. With one exception, U.S. electronics
employment showed no month-to-month growth for 30 consecutive
months. Since August 1989, our industry has lost 309,000
jobs. And, when the industry's healthy software segment
is removed from the total, domestic electronics employment
dropped by more than 380,000 in the same period.[1]
That
"healthy sector", prepackaged software, only employs
about 150,000 workers -- about as many people who work in
cement production.
One
aspect of the shrinkage in the high tech labor force is
the shift from full-time regular employment to contingent
work -- temporary; contract and "consulting" work.
This parallels trends in other industries (Manpower is supposedly
the largest employer now), and is an integral aspect of
the new "virtual corporation", where production
is organized on a temporary, ad hoc basis, with workers
being pulled together by capital as needed, and dispersed
when projects are complete. The shock of economic contraction
is shifted from the capitalist to the worker, as the worker
must absorb training expenses, health insurance, and bear
the cost of periods when no work is available.
The
high tech workforce, especially in the weapons industry,
has historically been a conservative bloc, consistent
with maintaining their livelihood through inflated military
spending. With the enormous job losses in that industry
(an expected 1.2 million jobs in the 1992-1996 period,
according to the Federal Office of Technology Assessment),
there is a real danger of those workers drifting towards
a fascist solution to the economic crisis. One example
of this danger are the efforts of the Coalition for Visa
Reform, founded last January. "Its goal is to reform
the H1 visa program (and any other visa) so that technical
professionals will not lose their jobs or see their pay
reduced because of the cheap foreign labor being brought
to this country."[2] The legitimate issue of pay
equity for non-citizen workers is instead raised in the
context of a nativist solution. CFVR focuses the problem
on foreign workers taking jobs, instead of challenging
a system that cannot provide productive the world's engineers.
As more high tech work is exported to cheaper labor markets,
and mobile lower-paid workers are brought in as temporary
workers, "Buy American Labor" could become a
popular rallying cry among unemployed engineers.
The
communications sector, which overlaps with high tech work,
has also been hit hard over the past three years. At the
same time the "information super highway" is
touted as a jobs savior, some 44,000 jobs were cut last
year among the companies who have laid claim to building
the "infobahn." According to the Communications
Workers of America, the phone companies in particular
have been eliminating union positions through automation
(particularly among phone installers and operators), and
transferring capital to non- union sectors of the industry,
through acquisitions of related concerns (e.g., cable
companies).
The
privatization of information has resulted in the decimation
of the public library system and the closing of library
schools. The reality of trends in public librarianship
belies government and corporate assertions of concern
for equitable access to information.
Layoffs
and other labor cutbacks especially affect workers over
40. As technical workers get older, their salaries rise,
their skills age (Sun Microsystems expects 20 percent
of its engineers skills to become obsolete each year [3]),
and their willingness to sacrifice family and community
for work ebbs. So these workers tend to bear the brunt
of "restructuring", "downsizing",
etc.
The
job market for recent college graduates is also drying
up. CFVR concluded, "[t] here are at least 50% more
people entering the software programming labor market
than new jobs being created. This amounts to an over supply
of 22,000 workers or about 4.3% of the overall labor force."[4]
These figures have been challenged, but the Institute
of Electrical and Electronics Engineers (IEEE) recently
found unemployment among electronic engineers to be the
highest in more than a quarter century, and some 200,000
engineers were removed from U.S. employment rolls between
1991 and 1993.[5] IEEE also describes the jobs crisis
as an international phenomenon. In addition, youth considering
engineering or other high tech careers face the problem
of getting into college in the first place, with state
colleges raising tuition and closing down programs. [6]
The
Digital Convergence
As
electronics permeates production, the product of production
assumes a digital format, a form that can be easily stored
and transported electronically. "Digital format"
means the symbolic representation of information as 1s
and 0s, which can be converted into electrical or light
pulses, and transmitted over wires and fiber optic cable;
or through air and space as electromagnetic waves. Electronics-based
machinery at either end of the transport system encodes
and decodes the symbolic traffic, and renders it into
material use values. There are numerous enormous cost
savings achieved by the digitalization of products: savings
in storage space required, in transmission time and cost,
and in the application of computers to completely automate
the processing and routing of the digital rendering. [7]
Just as railroads and trucks were needed to carry the
product of production in the industrial era, digital carriers
are required to haul the product of electronic production
in the electro
Every
stage of technical development demands both transportation
and a communication system that corresponds to that level
of the productive forces. The Industrial Revolution was
also a transportation and communications revolution, that
is, one could not have happened without the other, as
capital demanded better and faster means of coordinating
production and circulating commodities and capital; and
the manufacture of new communication and transportation
systems, especially railroads, spurred industrial production
to more and more sophisticated levels. [8]
The
ubiquitous debate over the so-called National Information
Infrastructure" (NII), also known as the "information
super highway", must be examined in this context.
As modern production increasingly shifts to a digital
basis, as a natural consequence of electronics spreading
through production, modern production demands a commensurate
means of transportation and communication. Or to put it
another way, to paraphrase Marx, the old means of communication
and transport handed down from the industrial period have
become unbearable trammels on Modern [i.e., electronics-
based] Industry.
This
process is most intensely affecting the information industries
-- especially communications, entertainment (music, film,
television and the hybrid "multimedia"), publishing,
education, scientific research, financial services, and
advertising. But the shift to "information-based"
or "knowledge- intensive" production affects
traditional manufacturing as well. Just-in-time production
requires sophisticated information networks to work. Modern
robotics-based production requires not so much assembly
workers as computer operators to monitor the workflow.
Designs and orders enter into the machinery through digital
ports: "‘retooling' with the new "flexible
manufacturing systems", simply means changing the
software that guides the machines. The assembly line (hardware)
remains unchanged. The robots, hardly pausing, begin exercising
different actions in obeyance of the newly-loaded programs."[9]
The production and circulation of goods is increasingly
an information processing function.
The
terminal phase in capitalism is being driven by the expulsion
of labor from commodity production. Objectively, this
manifests itself as rising global unemployment, and for
those able to find a market for their labor power, falling
wages. The increasing use of information technology in
the context of intense global economic competition is
rapidly eroding wages. In 1979, 12 percent of the full
time workforce earned less than the "poverty wage",
so-called because it is the amount necessary to support
a family of four above the official poverty level ($13,000
in 1992 dollars). By 1992, 18 percent of the full time
workforce was earning less than the poverty wage, an increase
of 50 percent. Thus, of those workers able to find full
time employment, one in five is not earning enough to
support a family. [10] More >>
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