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Surviving the New Economy

Editor: John Amman, Tris Carpenter, Gina Neff
Publisher: Boulder, CO: Paradigm Publishers, 2007
Review Published: September 2009

 REVIEW 1: Maria Rosales-Sequeiros
 AUTHOR RESPONSE: John Amman, Tris Carpenter, and Gina Neff

Surviving the New Economy, edited by John Amman, Tris Carpenter, and Gina Neff, is a collection of ten chapters which plunge into the difficult problem of the bust of the information technologies (IT) industries. After the boom years of dot-com industries, the blast has been heavy on workers, on either side of the Pacific, American as well as Indian and Chinese workers. Outsourcing and offshoring are two sides of the same coin which could lead to nativist and xenophobic positions among American IT workers and communities. By analyzing IT working cultures in the USA, China, and India, and the evolution of the industry from the dot-com boom to the dot-com bust in the States, the authors try to offer solutions to IT workforce problems -- namely, nonstandard working arrangements, raising unemployment numbers, and lack of benefits -- by considering different options of union associations that the industry could adopt, and in some cases has already adopted.

The entertainment industry is given as an example by John Amman and Tris Carpenter when considering ways of organizing by IT workforce. Danielle van Jaarsveld and Chris Benner present existing unions and new ways of organizing in the industry. All in all, organizing either as union format or otherwise is considered vital to solve many of the problems IT workers are faced with. Resorting to a global form of organizing might even be necessary to protect IT workers on either side of the Pacific since many of the problems of American workers are triggered by outsourcing and offshoring. Chinese and Indian IT workers are played against each other in their own countries as bargaining tool by transnational companies. In this regard, Andrew Ross mentions that such companies should be held accountable for "paying Third World wages and asking First World prices" or force the "race to the bottom" in terms of salaries in the industry.

By reflecting on his personal experience as an employee, an independent consultant, and a subcontractor to consulting companies, Derek W. Schultz, talks about the myths and realities of high tech work in the new economy. He identifies five myths and deconstructs them by presenting the corresponding realities. These five myths are:
  1. Tech workers like working all the time, they don't mind working long hours, and often work from home via the Web;
  2. Loyalty to the company pays off -- as your company does better, you will too.
  3. If you have enough training and motivation you're ensured a job; more training is the answer to unemployed tech workers;
  4. Older tech workers aren't productive, and can't keep up with the rapid pace of change; and
  5. Tech workers are individualists who will never join in a collective action. Unions are obsolete in the 21st century.
Against this, the realities of tech workers are shadowed by the behavior of high-tech companies who in search of greater profits pursued policies that devalued and demoralized workers, such as downsizing merely to inflate stock prices, offshoring to cut short-term costs at the expense of communities, replacing long-term employees with foreign workers on temporary visas, and older employees with newly graduate students. On the other hand, as a result of the breach of the social contract by high-tech companies, tech workers have changed their minds about unions, and several high-tech unions have arisen from grass-roots worker actions aimed at self-preservation.

Co-editor Gina Neff deals with risk and risk-taking as ideology that supports the "ownership society" that was in fashion during the dot-com boom. Freelance and contractor work arrangements have fueled promises of "managing one's own career," acquiring a bigger share of profits and maintaining one's autonomy and creativity. However these very promises have led workers to accept a situation whereby their security has been undermined and loyalty to the company replaced by risk and reward. The investor mentality led to an individualization of the labor process; self-training and building social networks were essential to find new jobs in Internet industries. Neff wonders whether this entrepreneurial behavior can be kept in a collective way of organizing which can offer workers greater security before increased market uncertainty.

Simon Head places the New Economy in the context of the economic history of the USA around two parallel and entwined phenomena: mass production and scientific management. The application of a more advanced version of scientific management -- that is, the Japanese Toyota system to the service economy, which experienced a great IT explosion -- allowed for a reindustrialization of, at first, the retail, wholesale, and distribution sectors. Thanks to this, Wal-Mart experienced an acceleration in productivity through ongoing managerial innovation, which nevertheless did not follow in an increase of wages. The same techniques were applied from the early 1990s and for the rest of the decade to core services, such as, health care and costumer services, in the way of "managed care" and ERP (Enterprise Resource Planning) systems. This meant the de-skilling and panoptic power brought upon the work of highly trained professionals.

Seán Ó Riain talks about the information economy from the Irish perspective which he acknowledges is very similar to that of Silicon Valley. Firms are inserted in a regional economy, which in the Irish case was managed by a "social partnership" of local actors, state agencies, and European Union programs. ICTs make possible and necessary for firms to reorganize into "virtual" corporations and employees into global telecommuters. While work has become more socialized with the rise of teamwork, careers have become more individualized with growing use of individualized performance pay within firms and job insecurity and job hopping across firms. Hence the core typical organization of the software workplace is the autonomous project team controlled by deadlines. There is, then, an "organizational integration deficit" since team members communicate more with customers than with other teams in the firm. Therefore, technical communities have emerged where workers in the same technical occupations swap stories and tips, build contacts leading to their next jobs, and protect themselves from the global corporations that hire them. Riain points out that the culture of these technical communities is often masculine.

Andrew Ross focuses on what euphemistically has been referred to as "knowledge transfer" to China, or the transfer of jobs from US or Singapore to China. The highly valuable and appreciated jobs by American, European, and Japanese employees of multinational corporations are now sought for by especially China which has been able to compete at both the top-end and lower-down slots in the chain. Even if India's IT engineers earn less than their Chinese counterparts, its IT trained workforce was not growing fast enough to keep up with demand for all the back-office, call-center, and IT-enabled services work brought to the subcontinent by the Business Process Outsourcing (BPO). As a result, the major software companies in India have all established offshore offices and development centers in Chinese regions to backup their Indian operations. Despite this employment boom, Chinese engineers show little loyalty to their foreign managers and employing companies since they are aware that these same jobs can be taken away from them as companies are always looking for cheaper environments to settle as a result of the new corporate free trade economy. Hence, a myriad of activist groups that belong to the alternative globalization movement call for better workers' conditions the world over. Principles of fair trade, sustainable economics, and socially conscious investment, which take their cue from the human rights movement and environmental standards habitually left out of free-trade agreements, are being claimed by trade unions and non-governmental organizations against company led short-term profit.

Immanuel Ness focuses on micro-organizing as a form of resistance which takes advantage of the Internet as a medium of communication to influence public policy and to challenge the idea that the US technology workforce is somehow inferior to that in other countries. With the dot-com collapse, companies have used political and economic forces to erode working conditions, exploiting foreign and domestic IT workers alike. Foreign, mainly Indian, workers are brought to the USA on guest workers' visas (H-1B), and are made to work longer hours or paid less, or both. This brings further instability to US workers, a majority of whom are working under non-standard work arrangements like contracting.

Danielle van Jaarsveld talks about the need for collective representation and protection in the workplace for new economy workers as for old economy workers. The characteristics of "new economy" employment relationships -- namely, increased job mobility and shorter job tenure -- challenge the traditional union strategies. IT workforce is heterogeneous with regard to working conditions, employment status, and willingness to participate in collective action. Nevertheless, IT workers, mainly those in contingent employment relationships, have relied on several unions and non-profit labor market intermediaries to gain some employment stability, access to training, benefits, and job advancement opportunities. The writer presents several theoretical models for representing workers with these characteristics which are present in existing unions and workers organizations. They include: occupational unionism, associational unionism, geographical/occupational organizing, and citizenship unionism. Legislative lobbying and coalition building are strategies employed by some of these organizations.

Chris Benner approaches the role of unions in the new economy from the perspective of the regional economy of Silicon Valley. In the context of a highly competitive and innovative economy unions have been paying increased attention to workforce development and sectoral training programs in order to increase the supply and quality of a skilled workforce. Regionalization is becoming increasingly important in structuring economic activity. Moreover, Central Labor Councils are playing a significant role in the labor movement to promote regional development.

John Amman reflects upon old media professionals unions to inform new media professionals. Both groups share common professional goals and concerns, have very high degrees of professional identification, and work primarily on a freelance basis. Within both groups, there are people who are at different times both employer and employee. But while the new media workforce is almost exclusively nonunion, the old media workforce has one of the highest union densities in the US. The latter come to see unions as more than a vehicle to increase wages and handle grievances; union membership in the entertainment industries is also a major career move that will hopefully open doors to more regular freelance employment. Union membership helps to identify the true professional in the motion picture or broadcast community: it is a credential. Health and retirement benefits are among the chief benefits of membership in entertainment unions. The writer points out key lessons for new media professionals:
  1. Organize around the profession not the workplace;
  2. The organization should facilitate the kind of social networking that old media union members use to promote their careers;
  3. Membership can also come to signify professional standing within the industry;
  4. Celebrate the members' accomplishments using magazine and Web sites to reinforce the creation of a wider professional community;
  5. Demonstrate potential employers that the organization is the place to go for the most highly skilled professionals;
  6. Allow for individual negotiations as a way to keep high earners in the organization; and
  7. Be a leader in training and education to maintain the loyalty of a freelance workforce.
Finally, co-editor Tris Carpenter also provides a testimony of entertainment industry unions as example to be followed by high-tech workers due to their similar work conditions. High-tech unions, according to Carpenter, should address what these workers want, which are shorter hours, better pay and benefits, networking opportunities, training assistance, and a chance to celebrate their craft. All these aspects can be found in the entertainment industry, where unions have found the way to improve the working lives of freelancers by using a union structure that recognizes the transient nature of the work. Examples include a portable benefit system that can be carried over during slow times, restrictions on long or unpaid hours, and assistance for people who wish to train on new systems.

Surviving the New Economy is highly recommended for social and political science students and researchers wishing to acquire a grounded knowledge of the present situation among IT workforce and by extension the current crisis that whips worldwide. The informative introduction and conclusion by editors John Amman, Tris Carpenter, and Gina Neff provide a sound historical account of the hype of the New Economy and its adjacent cultural change -- that is, the promises of the "ownership society" and the rhetoric of risk luring IT workers, the backlash of the end of the "old psychological contract" attached to an industrial economy set up against the uncertainties and insecurities of a postindustrial economy, the political economy of American administrations and industry since the 1970s, and the analysis of the labor movement from the industrial era to the present. They contend that union organizing is shaped by the political economic context and the transition of US economy to its later phase should be accompanied by an appropriate form of workers' collective action able to protect their working lives to the best conditions possible.

Maria Rosales-Sequeiros:
Maria Rosales-Sequeiros is a Doctor in Social Anthropology at Universidad Autonoma de Madrid, in Madrid, Spain. She was a visiting scholar at Carleton University, Canada (2002-03), and a Marie Curie Research Fellow at the University of Kent at Canterbury (2003-04). She has carried out research on the mobility of IT professionals in the UK. She reviewed The Internet: An Ethnographic Approach for RCCS.  <mrrss82@hotmail.com>

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