Tuesday, April 25, 2006

DOL: Programmers Approved for Trade Adjustment Act Protections

InformationWeek reports that...

In a turnabout from earlier decisions, the Department of Labor—in a note published this month in the Federal Register—said that four employees of IT services vendor Computer Sciences Corp. that were laid off in 2003 from a facility in East Hartford, Conn., are eligible to apply for benefits under the Trade Adjustment Act. The act provides a number of relief measures for workers who've lost their jobs to cut-rate foreign competition, including extended unemployment payments, federally funded retraining, and relocation allowances.

My Analysis...

This is long awaited news from the Department of Labor. This move does two things: first it offers a safety net for programmers who lose their jobs to offshoring, second and perhaps most importantly it is an acknowledgement from our government that offshoring is harmful for American technology workers.

The U.S. Court of International Trade did not agree with prior rulings that software is not an imported "article" as defined by the act, overruling the prior DOL view that software code must be embodied on a physical medium to be an article under the Trade Act calling it "arbitrary and capricious." In short, the programmers (from Computer Sciences Corporation) won this round. Their jobs had been offshored to India through CSC India.

Tax payers will be required to pay for retraining of those who file for TAA protections. My view is that companies who shift jobs offshore to companies where salaries are much lower should be required to foot the bill when it comes to retraining American programmers and not tax payers, most of whom don't engage or benefit from this practice. After all, companies are the ones directly benefiting from offshoring while most tax payers lose. Doing so would cause the total cost of offshoring to rise and perhaps help save American more jobs.

Additionally, I am hopeful that this ruling could be used as precedence (I am no lawyer mind you) so that we could file complaints in the trade unions, like the WTO, against companies who unfairly dump cheap software services on our markets, which are harming American companies and workers.

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