The Outsource of Confusion - When jobs go, we grow. [Pro-Outsourcing Article]

National Review ^ | 02/04/2004 | Bruce Bartlett

[Mr. Bird]

Absolutely. It's hard not to marvel at the idea that some jobs that were considered (not so long ago) havens for genius and paid accordingly are now being done for (relative) pennies in underdeveloped countries. I think that's incredible, and not a bad thing at all.

[Pentagram]

Every outsourced, unemployed programmer, customer service rep, and/or factory worker is a vote against whatever administration is in power.

Exactly right!

[ex-snook]

"Any jobs saved in the short-run by restrictions on outsourcing will come at the expense of better jobs in the future "

This is a political economy where people vote on today not tomorrow. 'In the future' ends on election day. In accounting terms it's closing day and you can't book future earnings currently.

[Mmmike]

And agitated young men hanging out on street corners and getting into riots because there's nothing worthwhile or character-building left to do.

[Cronos]

Damn IT guys. If they didn't hook up all those printers we'd still have typists.

Yes, loads of stenographers, secretaries, cash-teller clerks etc. etc.

[chimera]

OTOH: Outsourced engineers could, of course, retrain as hair dressers and have a more secure future.

Don't laugh. I know of two engineers who are now running a SuperCuts in Monterey.

Oh now that's real encouraging. Puts us in a good spot when the next Future War comes along. We'll send our people out to fight with nothing useful in the way of weaponry, but they'll have a great-looking GQ hairstyle. They'll get mowed down by whatever high-tech weapon the enemy has developed and built and we haven't, but they'll look damned good while getting killed.

[Cronos]

Forget it, India is as protectionist as can be.

It is opening up -- why Coke and Pepsi dominate the scene there and Ford and GM are selling loads of cars there. Ditto for other white goods manufacturers.

[Cronos]

There's good money to be made in investing in the right funds that invest in the developing world.

[A. Pole]

Patrick Moynihan predicted the collapse of the Soviet Union in 1979.

This is better. And Buchanan predicts the Death of "Gringos" :)

[Condor51]

It's also important to know that when countries outsource work to India or China, they are only doing so for very low-end operations that require little skill or training.

Oh really. Like the telephone tech support for Dell^® Computers?!? THAT type of little skill. Huh, you MORON?

A couple months back I was wondering why I was always getting a tech who COULDN'T SPEAK ENGLISH (and would have to hang up on), it was then reported that they were outsourcing the phone support to Malaysia, or some other god forsaken place. But once they were outed they then vowed to end that practice. Don't know if they did as I haven't called since then.

Next time I'm building my own frickin pc. The heck with them all.

[1rudeboy]

Arthur Laffer predicted that when excessive rates of taxation are reduced, government revenue increases.

[Snuffington]

The unfortunate truth for many IT pros is that their profession has been commodified. Yes, we can go back and forth over quality of work issues, but the market will sort that out. But if a company can pay some Indian $4k/year to do what an American will only do for $50k, you'll see outsourcing.

Very good point. However, it has been commodified quite clumsily, leading to the impression that one Java programmer with three years experience is interchangable with any other. Demonstrably false, and plenty of studies show it. But at the moment, with almost all the attention on quarterly numbers instead of long-term growth, it's an awfully attractive idea.

Incidentally, your comparison bewtween American and Indian wages is way off of reality. Recent studies show about a 1/3 savings at best (and every company jumping into this assumes they'll be one of the best) when work is offshored. Salary is obviously only one factor - and Indian salaries are structured differently than in the U. S. so you can't just look at base salary.

On the other hand those sort of ridiculously large disparities are definitely stuck in the minds of most Americans - and CEO's and Boards of Directors are infected with that same dazzling vision. They think they've finally found a lunch which, if not exactly free, is darn close.

Hindsight will show that the market didn't pay Indian workers so much less on accident. It was a measure of their productivity and subsequent market value. And while it's certainly on the rise, it is not equivalent to U. S. workers.

[1rudeboy]

Ludwig von Mises predicted (in 1920) that command economies will ultimately collapse because only a free market can efficiently allocate resources.

[A. Pole]

We'll send our people out to fight with nothing useful in the way of weaponry, but they'll have a great-looking GQ hairstyle.

This haircut will put Al-Queda on the run.

[chimera]

Ouch!

Looks like GQs standards have slipped a bit. OTOH, it beats a mullet (maybe not)...

[Mr. Bird]

Hindsight will show that the market didn't pay Indian workers so much less on accident. It was a measure of their productivity and subsequent market value.

I'm inclined to agree, if only because of my experience with outsourced call centers. I think we will see some jobs boomerang, especially the service centers. You can teach a young Indian to speak English well, and you can teach him the corporate policies and procedures; but you cannot teach him the cultural nuances necessary for successful customer relations in the U.S.

I was on a customer service line with an Indian worker for AMEX and witnessed (via phone) her complete meltdown. A complete inability to handle the competing interests of the customer and her employer. In America, we understand (generally) the concept that the "customer is always right", even if we know that statement is a literal falsehood. I'm not so sure foreign cultures understand.

[Sender]

I worry that my particular industry (tech support) is being rapidly outsourced to India and other places where there is cheap and computer-literate labor. Oh sure, there will be a backlash due to inferior service and logistics problems and eventually those jobs will migrate back to the US, while CEOs blither 'I had nothing to do with this outsourcing business, I am shocked I tell you'. Meanwhile I will have been retrained as a widget alignment specialist or bagel slicer at half my salary.

I cannot see the bright side for this country in outsourcing at this point in time.

[Orangedog]

In America, we understand (generally) the concept that the "customer is always right", even if we know that statement is a literal falsehood. I'm not so sure foreign cultures understand.

Good point. Most of them don't understand the reality that the customer might not always be right, but it's your job to make them think they are for as long as it takes to fix the problem, or at the very least have a damned good explanation and course of action to correct it. Most call centers everywhere are scripted, but the Indians have gone overboard with it and can't seem to operate on the fly. I have plenty of horror stories from friends that have encountered Dell's customer service.

[Snuffington]

I think we will see some jobs boomerang, especially the service centers.

Service centers are the tip of the iceberg. That's actually one of the simplest tasks in IT, which is why it was one of the earliest offshore candidates. Yet as you have noticed (and so has Dell, who reversed its decision to offshore support for business clients due to complaints similar to yours), the quality just isn't there.

Complex engineering is a far more difficult thing to offshore. The popular notion seems to be that it involves a highly skilled person sitting alone and doing mysterious things with a computer. In fact, it's a highly collaborative, communication intensive process. Some models of doing this lend themselves to better success offshoring, but most do not. And almost none can claim to offshore with no impact to productivity, quality, or timeline. The communication problems you notice in the call centers are amplified many times, even in well run engineering projects, by the simple volume of communication required.

Another thing being ignored is that, like most other countries in the world, the best and the brightest Indian IT workers come to the U. S. and pursue green cards. Assuming that these folks are representative of the average Indian IT worker is a fallacy.

[William Terrell]

Did Mr. Bartlett take into consideration that the new holders of all these jobs Americans used to have don't pay US income taxes, US property taxes, sales taxes, or any US taxes at all?

Did he consider, while he was immersed in all the good these gone jobs do that the new workers in foreign countries don't:

Go to US restaurants
Take their cars to US auto repair shops
Take their clothes to US cleaners
Buy groceries from US supermarkets
But auto parts from US auto parts stores
Buy their clothes in US clothing stores
Buy property form US sellers
Rent housing from US landlords
Buy materials from US building supply stores
Have their furniture rehupostered by US upholsters
Buy their autos from US dealerships and car lots
Pay for licenses and car tags from state offices
Buy gas and oil from US filling stations
Go to movies, and games in US theaters and arenas
Buy US postage stamps/products from US post offices
Ship their packages using US FED Express or UPS?

Surely he didn't forget all this, did he?