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BizJournal Outsourcing Article
The Biz Journal folks have an interesting article about outsourcing. Some Congress people have introduced a bill to stop L-1 abuse
I wonder is any major corporation taken him out on dinner or weekend retreat?
More regulations is good, stop is not so wise.
"We want to keep the doors open"
US lobbies oppose outsourcing to India
IANS[ FRIDAY, JULY 04, 2003 11:13:42 AM ]
SAN JOSE: The growing clout of Indian companies as the chosen business processing centres for US corporations has provoked serious ire among American workers and prompted sobriquets such as "white-collar sweatshops".
Although the IT industry remains divided over the extent of disaffection among the American workforce and its likely political fallout, labour pressure groups have begun to make considerable noises against the trend.
At least one pressure group, the Seattle based WashTech, says there is a growing movement against outsourcing jobs to India and other countries.
According to WashTech, a majority of US voters believe that the highest-paying best-skilled jobs should remain at home.
"There is a growing movement that is gaining steam reaching out to our political issues to make this case known," WashTech president Marcus Courtney told IANS in an interview.
Asked if he believed ruthless American corporations bent upon cutting costs would be really influenced by any popular movement against outsourcing, Courtney said, "A critical link in curbing the abuses of corporations is through workplace organising and collective action among employees through trade unions.
"This is one of the few proven ways that can stop corrupt workplace abuses. That also ties into political action in that the government needs to pass policies that promote investment in the US and requires that companies make commitments on keeping jobs here," he maintained.
In a report headlined "White-collar sweatshops", news and current affairs website Salon.com says, "Globalisation is becoming a dirty word to US tech workers, increasingly angry and anxious as their jobs disappear overseas never to return."
Fuelling labour anger is a combination of factors, including a weak US economy, mounting lay-offs and many studies claiming that jobs are moving out of America faster than what is good for the domestic workforce.
A new study by management consulting company A T Kearney forecasts that more than half a million jobs, or eight percent of the total workforce, will be outsourced offshore over the next five years by US banks, brokerage firms and other financial services companies.
The study, conducted on the basis of inputs from some 100 financial services companies, says the strategy would be to have a global footprint rather than restrict outsourcing to a single country.
Nevertheless it ranks India as the "preferred country over all" for offshore business processing followed by Canada, Brazil, Mexico, the Philippines, Hungary, Ireland, Czech Republic, Australia, Russia and China.
"Although India will likely maintain its lead for the next several years, China is expected to become an increasingly popular location once US financial services firms have the necessary confidence that their intellectual property rights will be safeguarded," the company said.
While the forecast may be music to Indian corporate ears, it is striking some jarring notes within the US.
It is a measure of the response that at least in three states - New Jersey, Maryland and Connecticut - legislatures are already considering banning outsourcing jobs offshore.
However, Representative Jay Inslee from Washington state, the home to Microsoft and Boeing, has said the bills seeking to ban outsourcing will not anywhere.
"I don't think it (a ban on offshore outsourcing) is going to happen," Inslee was quoted as saying during his May visit to India.
"We want to keep the doors open. I believe any effort to restrict market access will adversely impact the US economy. The policy of protectionism will not take us anywhere," he maintained.
Well-known technology and management guru Sam Pitroda takes a different view of the subject.
"For centuries, jobs have moved around. The only difference because of globalisation is that they now move globally. This is a trend you just cannot prevent. That is the very nature of information technology driven globalization. One has to just accept it," Pitroda held.
He argued though that even now jobs going outside the US "are sort of factory jobs within the white-collar category.
"There may be some important design jobs going out but by and large they are still not at the upper end of the job pyramid.
"The trick is for the US to create high paying jobs at the upper end."
Pitroda also pointed out that fewer and fewer American-born students were getting into engineering and science which in turn had led to labour shortages for IT and other related jobs.
Inevitably tying into the outsourcing debate is the issue of the H1B work visas that have brought in hundreds of thousands of guest workers into the US economy, a majority from India.
With the economic downturn, that visa regime is coming under strain and there are fears that it could create a xenophobic fringe among the American workforce.
Courtney says: "WashTech has been very concerned that an outgrowth of people's economic anxieties could turn against Indian employees in the US and in India.
"We want the focus of the debate to be around the issue of the corporations that are implementing these policies and not blame workers in other countries. I believe that the companies are trying to pit nationality against nationality to try and create xenophobic tensions."
He maintained the visa programme was "abused" by US employers.
"It is not an immigration programme. Guest workers do not have the same legal rights as other immigrants, which is a very serious problem."
The resentment of the programme comes from the employer abuse. H-1B visa workers are paid less, which undercuts wages in this country.
Guest workers had also been brought in to replace employees currently doing the job but that was not the intention of the programme and that was wrong, he said.
According to Courtney, there was no longer a labour shortage and the H-1B visa workers were no longer needed.
He says he would blame the US Congress and the corporations "for creating an abusive programme for both guest workers and US employees".
"White-collar sweatshop". Definitely a loaded term. I know very little about the average Indian workweek, though I seem to recall it sounded a lot like the average American IT work week (10-hour days, 6 days a week, no overtime). The main difference is in job security. US workers got none. Latest figure I saw was 1 in 3 Americans is concerned about losing their job within 365 days.
The difference between U.S. and Third World wages in the IT industry is such that the income tax I paid (not witheld, but paid) my last year of full employment would pay the base gross salaries of two Indian IT workers plus their computers. It's not entirely unlikely that the income I disposed of in that year (exclusive of transportation, utilities and housing) would have equalled or even exceeded the salary of one Chinese factory worker. Of course we supposedly let most of our manufacturing go offshore because we're now an "Information Society", so I don't begrudge the idea that very likely a lot of my disposable income that year literally did just that. An awful lot of my electronics and crockery say "Made In China" on them. Even the Beanie Babies do.
So now I've been let go. Does this mean that 8 Indian IT workers will be hired using the salary money that was freed up by not paying me?
Or do you think that most of it simply landed in the pockets of people whose basic expenses were met in the first month of the year and are simply using the rest of it as scoring tokens in the who-gets-paid-most-outlandishly game?
Jay Inslee, if you log into his website and study the issues there, he is a flip-flop. But how may politicians are not?
When is Boeing decided to go back Washington State from Illinois?
[ July 07, 2003: Message edited by: Matt Cao ]
Interesting that he claims that employee organizing via unions is what's needed; unions certainly were not very successful in keeping manufacturing jobs at home. (If anything, unions accelarated the exodus.)
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