News.Com Who wins in offshoring?

"Despite the growing backlash over shipping American IT jobs to less-expensive overseas firms, the practice is necessary to help U.S. companies remain competitive, said a Department of Commerce representative here on Tuesday."

""A lot of analysts' reports about offshore outsourcing are overblown," Miller told panel attendees Tuesday. "They all have their own agenda.""

redux [10.23.03]
Wired News The Case for Coolie Labor

"In this way, offshoring, far from being bad for the United States, creates net value for the economy. It directly recaptures 67 cents of every dollar of spending that goes abroad and indirectly might capture an additional 45 to 47 cents--producing a net gain of 12 cents to 14 cents for every dollar of costs moved offshore.

The total possible wealth creation does not, of course, ease the plight of people who lose their jobs or find lower-wage ones."

redux [10.05.03]
The New York Times A Missing Statistic: U.S. Jobs That Went Overseas
[requires 'free' registration]

"The Labor Department, in its numerous surveys of employers and employees, has never tried to calculate this trade-off. But the "offshoring" of work has become so noticeable lately that experts in the private sector are now trying to quantify it.

By these initial estimates, at least 15 percent of the 2.81 million jobs lost in America since the decline began have reappeared overseas. Productivity improvements at home -- sustaining output with fewer workers -- account for the great bulk of the job loss. But the estimates being made suggest that the work sent overseas has been enough to raise the unemployment rate by four-tenths of a percentage point or more, to the present 6.1 percent."

redux [10.03.03]
The Sydney Morning Herald Blame India for that jobless recovery

"Employment in the US services sector has remained unchanged over the past 21 months as the economy has recovered; usually the services industry headcount has grown 5 per cent by this stage of the cycle. The employment growth is happening in India instead.

It is mostly a labour cost arbitrage play. An Indian PhD costs less than $US10,000 a year - 80 per cent below the starting salary of a similarly qualified person in the US. Indian universities are producing 2 million graduates a year, all of whom can speak perfect English."

CNN Jobs abound in India's tech sector

""The market is booming. I can pick and choose a firm of my choice," said the 28-year-old engineer, who has been in the industry for about five years."

"India's software sector, including the back-office services industry, added 130,000 -- nearly 25 percent -- to its workforce in the year to March, taking the sector to 650,000. Wage costs are rising but are not yet a threat for a nation that churns out about 200,000 engineers per year, analysts say.""

redux [09.17.03]
Wired News Protesters Mourn Tech-Job Drain

"Despite the rhetoric from protesters and initial estimates from analysts, the long-term effects of sending jobs offshore may not be as devastating as they are made out to be. Some proponents believe that IT investments in other countries actually will lead to increased exports of computers and other equipment from the United States to help support other countries' burgeoning IT industries.

Deloitte Consulting's chief economist, Carl Steidtmann, recently released a position paper arguing that U.S. companies that outsource IT work will not only remain competitive, but also will have more money to invest in research and development.

A similar report from the McKinsey Global Institute concluded that the United States eventually captures between $1.12 and $1.14 for every dollar that a domestic company spends abroad."

redux [08.26.03]
USA Today Offshoring fad has a dark side

"The wages that programmers are pulling down in New Delhi won't be paying for any Ford Explorers. Foreign workers often get wages and work in conditions that make America's early 20th-century sweatmills look good.

Instead, U.S. corporations are making lots of short-term cash by dumping larger salaries in favor of lower-paid workers in other countries. In this case, short-term cash couldn't be more shortsighted."

"Politicians in Washington should listen to Robert Perrucci, an author and sociology professor at Purdue University. Perrucci, who along with Earl Wysong wrote The New Class Society: Goodbye American Dream? , says we should tax companies for offshoring."

redux [07.17.03]
ZDNet India group: Outsourcing saves U.S. jobs

"Citing statistics from market research firms such as McKinsey, the body said the United States stands to save over $300 billion over the next six years by shifting some business operations overseas."

""US banks, financial services and insurance companies have saved $6 billion to $8 billion in the past four years owing to IT outsourcing to India," Nasscom claimed. "Helped by these savings, companies have prevented layoffs and instead added 125,000 more jobs.""