Outsourcing Issues

Outsourcing Issues

Two articles in this one. One by Friedman, one by Bartlett.

For those folks out there who are truly upset about the "outsourcing problem" in America, I have one question for you:

Why do you want me to lose my job?

No, I am not in India. I am in the good ol' US of A.

What I mean is that I an a consultant. That's just a fancy word for contractor which is just a fancy word for long-term temp.

I work because some company decided to oursource some of its jobs. In turn, I make money and support my family, spend it in the community, help lower my company's cost, saving you money, letting you spend it elsewhere, supporting your family, etc. etc. etc.

If outsourcing were not allowed, I would be unemployed until I found a company willing to hire a full-time employee with all of it's related expenses. On the whole, I would rather be working for less money NOW than getting a full-time job in 6 months as the economy improves even more. This way, I can STILL get the full time job in 6 months, but I have made more money AND not been feeding at the public trough in the meantime.

Yep. You're right. Making outsourcing illegal would be better.

Many companies are using outsourcing to increase their output. To raise their profits and, thus, raise the investment value to their stockholders. This helps keep money flowing in and through our economy.

Imagine paying 20% more for every technology-related thing you buy. From diskettes, to CDs, to hard drives, to Microsoft programs, to the myriad other technological things you use every day. Your stereo? Add 30%. Your TV? Ditto.

How about your food? Wanna see meat prices climbing faster than gas prices are currently? Just tell American companies that they cannot use labor and resources from outside the US.

But I see the logic in your position. You're right: Outsourcing is evil.

What about the company that was going to shut it's doors, laying off 50 people in the process, until it learned it could outsource to India and stay afloat? Yes, 20 of the 50 employees lost their jobs, but the 30 that were left are certainly NOT blaming outsourcing for helping them keep their jobs. Not to mention the 10 of the 20 that were rehired within 8 months because the company was able to turn itself around. Not to mention that everyone still at the company started earning more money because htey were doing higher level jobs. Not to mention that after three years, the company actually had a larger workforce than it had initially and had increased revenues by 215%.

Yep. Making outsourcing illegal would have been the better option.

Outsourcing is not the enemy, folks.

The jobs we "lose" to India are made up for. Maybe not immediately, but eventually, in not too long, we end up with more, and higher paying jobs, than before.

The Secret of Our Sauce (Link requires registration)

There is a reason the "next big thing" almost always comes out of America, said Mrs. Narayanan. When she and her husband came back to live in Bangalore and enrolled their son in a good private school, he found himself totally stifled because of the emphasis on rote learning ? rather than the independent thinking he was exposed to in his U.S. school. They had to take him out and look for another, more avant-garde private school. "America allows you to explore your mind," she said. The whole concept of outsourcing was actually invented in America, added her husband, Sean, because no one else figured it out.

The Narayanans are worth listening to at this time of rising insecurity over white-collar job losses to India. America is the greatest engine of innovation that has ever existed, and it can't be duplicated anytime soon, because it is the product of a multitude of factors: extreme freedom of thought, an emphasis on independent thinking, a steady immigration of new minds, a risk-taking culture with no stigma attached to trying and failing, a noncorrupt bureaucracy, and financial markets and a venture capital system that are unrivaled at taking new ideas and turning them into global products. . . .

That is so right. As Robert Hof, a tech writer for Business Week, noted, U.S. tech workers "must keep creating leading edge technologies that make their companies more productive — especially innovations that spark entirely new markets." The same tech innovations that produced outsourcing, he noted, also produced eBay, Amazon.com, Google and thousands of new jobs along with them.

Outsourcing reality

There is a growing backlash against outsourcing--sending domestic work to foreign businesses--that erupted in the Senate last week, where anti-outsourcing legislation was adopted on a 70 to 26 vote. Opponents of outsourcing cheered, but investors are becoming aware that these actions threaten profits and stock prices.

There is very little real evidence that outsourcing has caused significant job losses in the U.S. All of the data showing job losses in the millions come from consulting firms like McKinsey & Company, Forrester Research and others, which make money by helping companies do outsourcing. It is in their interest to make potential clients think that all their competitors are doing it, so they must, too. . . .

On March 4, the Senate adopted a measure that would bar federal contracts to companies that outsource any job previously done by an American. Additionally, it would prevent state and local governments from using federal funds for outsourcing.

While it is unlikely that this amendment will become law and is probably unenforceable even if it does, it sends a bad signal to the rest of the world. U.S. Trade Representative Bob Zoellick has warned that it will endanger relations with India and undermine world trade talks. It would also invite retaliation from other countries and reduce foreign investment in the U.S.

But even if the legislation is defeated this time around, undoubtedly it will be back in some other form shortly. Democrats have decided that pandering to the unemployed by railing against outsourcing is their ticket to success on Election Day. Although their proposals wouldn't do much good--the Washington Post calls them "1 percent solutions"--they get people worked up and put the Bush Administration on the defensive.