Outsourcing: Where’s Uncle Sam?

The U.S. government should safeguard the interests of its citizens and do more to stop companies from sending jobs abroad. Corporations have framed the debate for too long

Pro: Good for Corporatons, Bad for U.S. Workers

No one likes the idea of American jobs moving overseas. But in recent years, the U.S. has accepted the outsourcing of tens of thousands of jobs, in everything from technology support to Wall Street research. Many prominent corporate executives, politicians, and academics have argued that we have no choice, that with globalization it’s critical to tap the lower costs and unique skills of labor abroad to remain competitive. Samuel Palmisano, the chief executive of IBM (IBM), made this point last year when he hosted IBM’s investor conference in Bangalore, India, the first ever held outside the U.S. He pointed out that IBM now has 43,000 people working in India who are part of "a new kind of organization," one that’s designed not around a single country, "but on a truly planet-wide model."

Yet a critical point has been lost in the debate: The interests of U.S. corporations are often not the same as those of the country and its citizens. Hiring staff in India may help companies like IBM, Dell (DELL), Microsoft (MSFT), Accenture (ACN), and others lower their costs and boost their profits, but it hurts the workers who lose jobs and those who lose the prospect of jobs.

Economist Paul Samuelson, a Nobel Prize winner, wrote in a 2004 paper that the economic effect of outsourcing is similar to allowing mass immigration of workers willing to compete for service jobs at extremely low wages. They can drive down the income for huge swaths of the middle class, even if they benefit their employers. "Mainstream trade economists have insufficiently noticed the drastic change in mean U.S. incomes and in inequalities among different U.S. classes," he wrote.

There’s no question that the American people would like their government to take a stand against companies that send jobs overseas. A Zogby International poll found that 71% of Americans believe that outsourcing jobs overseas hurts the U.S. economy, and 62% say the U.S. government should tax or legislate to try to stop the job loss.

Yet virtually nothing has been done. "We need some creative solutions here," says Ron Hira, a public policy professor at the Rochester Institute of Technology who is now on leave at the progressive Economic Policy Institute. While some outsourcing opponents advocate taxes on companies that send jobs overseas, that’s controversial because it could end up handicapping U.S. companies and becoming counterproductive.

Still, there are other steps that government officials could take. Hira points out that decoupling health-care plans from the employer and making the plans more portable would be an important step, since U.S. companies now bear the costs of health care while rivals in countries with government-sponsored care don’t. U.S. visa programs could be modified too. He says that some of the most active users of visas for visiting workers are Indian outsourcing firms, which appear to be training workers in the U.S. and then sending them home to be more effective at taking U.S. jobs. The most important point perhaps is to reexamine the costs of letting American jobs go abroad. "The CEOs of international companies have been dominating the debate and the current situation serves their interests," Hira says.

Con: Free Trade Is Always Best

The debate over outsourcing is full of misnomers, miscommunications, and misleading assertions. Government should stay out of the way and let markets determine where companies hire their employees. If politicians preening for the public try to make public policy around outsourcing, they’re likely to make things worse instead of better.

Start with the central idea of the controversy, that U.S. companies are "sending jobs overseas." The phrase itself is almost meaningless. Companies hire abroad and fire in the U.S. for a variety of constantly changing reasons; jobs are almost never moved from one location in the U.S. to India or China or the Czech Republic. Taxing IBM, Microsoft, or Dell because they hire people in India or in other countries is one way to ensure they’ll stumble in foreign markets.

Increasingly, the reason companies are hiring overseas is because of the talent they find there. In a joint study last year from Duke University’s Fuqua School of Business and consulting firm Booz Allen Hamilton, the number of companies that said they were hiring overseas because of "access to qualified personnel" increased 75% over the previous two years. "The business case for offshoring is evolving beyond a pure cost play," the authors wrote. "Companies are leveraging offshoring strategically to create competitive advantage."

Plus, there is no way to reverse the laws of economics. Free trade benefits countries, whether that trade is in goods or services. Almost 200 years ago, David Ricardo established the case for free trade by laying out the idea of comparative advantage. If one country is better at making wine and the other bread, both countries come out ahead if they specialize their skills and then trade with each other. Outsourcing is nothing more than trading services, instead of goods, across international borders.

Countries that embrace global workforces will benefit economically. Those that try to block international trade in services will suffer serious consequences. "If a society attempts…to shut down economic changes, like those from outsourcing, international trade, and new technology, it can avoid some economic disruption in the short run, but at a cost of blocking overall economic gains," wrote Timothy Taylor, managing editor of the Journal of Economic Perspectives, in an article in the Cato Journal, entitled "In Defense of Outsourcing."

Reader Comments

Warren McDonald

Outsourcing is fine if countries can develop a universally agreed upon free trade system. This, of course, is impossible as long as we live under this guise that as residents of one country, we should support and respect one another as one unit known as America. It is understood that as Americans, we will bond as one in order to trade with the rest of the world -- much like a household works as one unit and is most effective when all willingly participate. Outsourcing removes almost all responsibility to fellow Americans.

Yes, the corporations still pay their "taxes," but I often wonder if Michael Dell et al could look his own son in the eye and say, "Son,I am going to fill your job with someone in East India, and you will have to work elsewhere." With no government intervention, we will have the same results that we have seen with these self-governed boards of directors that award themselves with lavish and obscene pay packages. Guaranteed.

Outsourcing is downright un-American. I think we can learn from controlled outsourcing, but giving corporations carte blanche is a recipe for further fragmentation in a country that is less and less dedicated to the welfare of fellow Americans. And if we don't have strength as a collective unit, we are doomed as a country.

Mant

I think outsourcing has very little to do with competitive advantage and a lot to do with corporate greed. CEOs want to maximize the profit at any cost, no matter what happens to communities and the country in the process. Tapping the talent pool overseas is just a fancy excuse to cover the real reasons. There are enough talented people in America will would be more than happy to oblige if companies want to hire them at a decent wage.

Wesley Frederick

Who do you want to make choices for you? Yourself or some politician? Asking the government to regulate outsourcing is taking the freedom of choice from billions of individuals and putting that power into the hands of a relatively few politicians.

Yes, it is awful when people lose their jobs because of outsourcing. But instead of asking the government to limit corporations, we should instead ask the government to support these newly unemployed workers. Retrain these workers and let them take advantage of burgeoning markets and opportunities. Some of these workers might need to move to different areas of the country to capitalize on these opportunities. Let the government provide assistance in this way instead of regulating business.

Yes, some corporations are maximizing short-term profits by hiring cheaper labor. Rest assured, these practices are not sustainable in the long run. Some other smart business owner is going to move in and take advantage of the resources that the short-run corps are forfeiting. American Apparel designs and manufactures its clothes in LA. This gives them better quality assurance and a quicker response to trends than those stores that outsource their manufacturing. A smaller business will always be around to take advantage of a larger business' inefficiencies.

Finally, if our government regulates outsourcing, we can expect other governments to do the same. Foreign car manufacturers are expanding their operations in the southern states and hiring new workers. Outsourcing trade wars could prevent this type of economic expansion.

Let the markets figure out the best way to hire workers. A politician's regulation is inefficient and slow to change. Instead, the politician should pass laws that provide support that will allow the newly unemployed to get the skills they need to compete in the marketplace.

Jordan

Remember the 1910s and 1920s? The U.S. government let go of virtually all control and responsibilities on the economy to the "market." Fat-cat robber barons reaped huge wealth while ordinary people were barely surviving. What followed was the Great Depression. We are halfway there already by pushing unregulated "free trade" and job outsourcing to the extreme.

tom elkins

CEOs (Crooked Executive Officers) love to outsource. That adds to the bottom line for Meg A Buck retirement packages. And do not forget that the workers in other countries are not paying U.S. income tax. The money they receive from our multinational corporations goes untaxed in the U.S.

What amount of untaxed wages are leaving the country to outsource people in other countries?

When you hear corporate talk about qualified people, they are generally talking about low-wage people.

William

This is definitely still a touchy subject. Sure, CEOs want to maximize profits. That's because they have shareholders to please. I agree that the huge bonuses some CEOs pay themselves are uncalled for. For the most part, however, outsourcing is in fact being used to create a competitive advantage. (You only hear of the grossly absurd paychecks in the news, not of the succesful outsourcing projects.) No longer is Dell competing against companies down the block, but also the Lenovos (IBM Thinkpad) of the world who aren't U.S.-based and have the luxury to source labor from anywhere in the world. Imagine if Dell was taxed or not allowed to offshore outsource its labor. It wouldn't be able to compete with Lenovo, so instead of losing a few thousand call center jobs, the whole Dell Corp. would have to shut down. It's obvious which scenario is better.

Second, calling outsourcing Un-American is absolutely absurd. Let's look at the facts. First, the U.S. unemployment rate is at its lowest (not including the misleading .com years) since the 1960s. There are jobs out there. Last time I checked, our economy has been running full speed ahead, and corporations have been offshore outsourcing services since the early 1990s. Second, the U.S. is the biggest exporter of outsourcing services. It would be extremely hypocritical to tell ourselves not to outsource when in fact nations around the world use our services the most. Industries such as entertainment -- U.S. movies, music, and TV shows are all over Europe and Asia. Education -- it's not surprising to see that 30% of students of many major universities are international, and even a higher percentage for graduate students. And the biggest of them all: financial services. These are billion dollar industries that create thousands, if not millions, of jobs here in the U.S. Outsourcing is as American as it gets!

There is a reason we are the biggest economy in the world with only 300 million people! Let's not fight outsourcing, but use it to our advantage!

Joe

In the short term, there will be people that are hurt... but we are in this for the long term! Things change in the world and we have to be able to adjust quickly. The internet has drastically changed how we do business today. Because it created efficiencies, many people have lost their jobs due to the internet... does that mean we should not embrace the internet?? of course not!

Offshore Outsourcing started in the 1970s with manufacturing. Services started being outsourced in the 1990s. Our economy recovered from the .com bust and 9/11. Two major events that most economies don't recover from. Our economy is as strong as ever and offshore outsourcing has been an integral part of it.

Jordan

I used to wonder why do businesses get to write off all of their expenses, including wages to employees, and other tax breaks that ordinary working Americans can only dream of. The answer was that businesses take on great risks to provide jobs for the country. Fair enough. But wait a minute, they are creating jobs in foreign countries, while getting the tax breaks, financial bail-outs, research grants, and law enforcement provided by American taxpayers. If this is not the largest loophole in history then I don't know what is. American taxpayers are paying to get their jobs taken away from them.

Sundar

People vs. Corporate, this debate will continue, for ever and ever and ever. Let's all understand one simple truth: "The business of business is to provide profit." Let us flip the coin for a second. All these major companies do sell their products in all the outsourced nations. No government has imposed any rule that if-you-sell-here-spend-your-profit-here. Any American who has invested in companies such as IBM and Accenture does reap the benefit whereever he/she is from. When we all want to globalize our investment, globalize our profits, globalize our product reach, why should we stop from globalizing how thse investment opportunities, profits, and products are created?

Mark

If we allow American companies to outsource to countries that don't have laws (or don't enforce laws) for environmental protection, worker safety, and child labor, American workers simply cannot compete. It's not a level playing field. And if we continue to allow unrestricted outsourcing, the playing field WILL be leveled by the degradation of the American worker and American society.

Rich D'Andrea

Outsourcing just helps the rich do what they do best: crush the middle class.

Jordan

Sundar, do Americans who have invested in companies such as IBM and Accenture reap the benefits? Take a look at their stock prices. Over the past 5 years, IBM went from $110 to $100 today. Accenture went from $30 to $38. If outsourcing is doing so well, how come investors are getting -1% to 1% annual return? Guess where the profits have gone: into the corporate executives' pockets.

Aravind

The PRO section beefs up its argument with this number, that percentage, and a research study. Where's something like that to substantiate the CON?

Vishnu

A World in Which the U.S. Bans Outsourcing: A Case Study

The current picture: Almost all electronic appliances, toys, tools, and other essentials sold in the U.S. are manufactured outside the U.S. Many companies have their projects, call centers, and research facilities outside the U.S.

Scenario:
1. Let us say the U.S. passes a law asking companies to stop outsourcing. U.S.-based manufacturers raise the price of basic notebooks to $2,000 against the competition's (Lenovo, Toshiba, etc.), under $1,000. Cars from Ford and GM are priced $30,000 against competition (Toyota and Honda) priced $20,000. When the shakeup is through, the forecast says the only commercially viable U.S. industries are banking, finance, and arms, unless the U.S. government helps.

2. Government's options:
Either subsidize all businesses or impose heavy duty on all imports. U.S. Government opts for the second.

3. International reaction
All countries in Asia or Europe Ban U.S. imports. They have freed trade within themselves but oust the U.S. from the group.

4. Within the U.S.: The marketplace has suddenly shrunk. All industries scale down production. Automate heavily to remain somewhat competitive. Lay off many employees.

5. After a couple of years the U.S. options: Kick-start World War III or go back to World Trade Organization now as the outsider and get back into the game as an also-ran and not the leader.

I am not an analyst, but my opinion is that what the U.S. needs now is not cancelling outsourcing but subsidizing education for U.S. citizens. Have $500 billion of Bush's proposed $3 trillion budget routed to subsidizing education, revamp the education system. Make schools places of learning instead of places for social get-togethers. That is going to level the field for U.S. workers; banning outsourcing won't.

Note: What this debate against outsourcing reminds me of is a strike/march in the early 1990s in my home state in India. The strike was organized by students against a government directive to computerize all government establishments. The reason given was that computerization will cause unemployment. It is ironic that more than 50% who participated in that strike, including me, are now employed in the IT field.

Kiran

It is interesting to see the developed Western countries being more protective about their economy than the developing countries. Outsourcing has helped many middle class families in the Western world lose their jobs—similarly when large Western corporations enter developing markets, they crush the domestic competition because of their low cost and superior products, helping millions of domestic companies go bankrupt. So in the end, few people lose and few people win. It is wise to accept realities and adapt and develop strategies in one's life or business to overcome these phenomena.

Jordan

We should not ban outsourcing, just as we should not ban big corporate mergers or even some monopolies. But unregulated outsourcing is a beast of its own that can do a lot of damage to the U.S. and therefore the world economy. U.S. workers have nowhere to hide once good-paying high tech jobs are taken away. An economy with only senior corporate executives and chefs and waiters cannot sustain itself. Eventually, the U.S. economy will collapse without a middle class, and so will the global economy. The government should create incentives for businesses to hire Americans instead of encouraging them to outsource jobs. How about reserving the tax breaks and financial assistance for those who hire Americans?

Piyush

The article started with a quote from IBM Chief Executive Samuel Palmisano, stating that 43,000 Indian employees are part of a planet-wide organization. This doesn't mean they have taken the jobs of 43,000 U.S. citizens. Had the U.S. had this many skilled people to serve the needs of IBM anywhere in the world (not only in the U.S.), probably IBM would have hired them from the U.S.

Consider different scenarios as well. Eastern IT companies are now hiring in the West to serve Western clients. It is not right to say that outsourcing is harmful. It has to be balanced.

Dave Armstrong

I think the United States is getting a taste of what it started initially—free trade. India was a closed economy until the 1990s, and it was forced to open itself or go down. India obliged, and now we can't complain if we're losing our jobs. It's a global economy, and the whole world is a marketplace. Time to get out of the U.S. if you can't find a job here.

Reality

Let us see when outsourcing will not be an issue. Let a child in Africa or any other corner of the world have the same opportunities/ privileges to life, health, education, etc. as any kid in America. How is that for a level playing field, huh? Then, we can talk about fair competition and letting the best person/company win.

The knee-jerk protectionist measures are not going to work. Why is the U.S. an economic world leader? Not because Americans are more intelligent than the rest of the humans on the planet but because America lets people create their destinies by allowing free market policies that attract the best of the talent, create innovations, and thus help American companies stay competitive. If the U.S. closes the economic borders or tries to regulate tham (ban outsourcing and invite tit-for-tat bans from other governments), we can go back to old times when there was no collective growth in the world.

For years, the developed countries pushed the developing countries to open up their markets so they could get access to half of the world market (India, China, and Africa have a combined population close to 3 billion). The developing countries heed the call, open up, and compete in the free market with their strengths (human capital, skills, low cost, good quality, etc.). We now are scared!

Well, welcome to globalization. Companies have to respond to market realities or perish. As markets open up, the fundamental business principle is to do business where it makes sense. Why should I get a service that costs 10 times more when I can get the same service elsewhere? If American companies don't go there, forget about being global; they won't even be a competitive American company. India and China are the current flavor, but we will move beyond those, and it will be a different set of countries. The sooner we accept this new reality, the better off we all will we be.

There is no denying that globalization hurts people in the short term; it always has. But we all should stop griping about it and find new opportunities in a brave new world.

Jordan

Congress today announced that the Office of the President of the United States of America will be outsourced to India as of June 30, 2007.

The move is being made to save the President's $400,000 yearly salary, and also a record $521 trillion in deficit expenditures and related overhead the office has incurred during the last six years

Gurvinder Singh of Indus Teleservices, Mumbai, India, will be assuming the Office of President as of November 1, 2006. Mr. Singh was born in the United States while his Indian parents were vacationing at Niagara Falls, thus making him eligible for the position.

He will receive a salary of $320 (USD) a month with no health coverage or other benefits. It is believed that Mr. Singh will be able to handle his job responsibilities without a support staff due to the time difference between the U.S. and India. He will be working primarily at night, when few offices of the U.S. Government will be open.

A Congressional spokesperson noted that while Mr. Singh may not be fully aware of all the issues involved in the office of the President, this should not be a problem because Bush was not familiar with the issues either.

Using canned responses, he can address common concerns without having to understand the underlying issues at all. "We know these scripting tools work," stated the spokesperson. "President Bush has used them successfully for years."

Bush will receive health coverage, expenses, and salary until his final day of employment. Following a two-week waiting period, he will be eligible for $140 a week unemployment for 13 weeks. Unfortunately, he will not be eligible for Medicaid, as his unemployment benefits will exceed the allowed limit.

Mr. Bush has been provided the outplacement services of Manpower Inc. to help him write a resume and prepare for his upcoming job transition. According to Manpower, Mr. Bush may have difficulties in securing a new position due to limited practical work experience.

A "greeter" position at Wal-Mart was suggested due to Bush's extensive experience shaking hands.

Unfortunately, Wal-Mart does not have a "decider" position, job description available at this time.

Trendstar

Ford is a great example of losing out in the global playing field. Due to a bad reputation for laying off workers at home, they are simply confounded when American consumers would rather buy an American made Toyota Camry. We don't care that the profits go to a foreign company where the CEOs only make four times the salary of a regular employee, because it denies the Ford CEO who makes 400 times the salary of a recently layed off worker, and justifies the purchase of a Japan owned product.

Hotdogg

Nothing will ever change in this country unless the American people take a stand. We will eventually become a Third World country, because all we manage to do is sit back and let someone else handle the country's problems. We need a labor force modeled exactly like France's. When the people feel threatened, they take immediate action and go on strike, and it's supported by all. They block every road, train, bus, and truck route until their demands are met. We can debate all we want, but it will never change unless the people all over the U.S. are willing to help make it happen—and the corporations know it will never happen.

By the way, Bush has more money than he knows what to do with and will never have to take unemployment.

Riya

The U.S. was the one that started on the issue of free trade. Well, everyone, welcome to globalization. It doesn't mean free trade as long as America is the only one benefiting. It's supposed to help the developing countries also.

Pankaj

Outsourcing is the only option U.S. companies have to compete globally and also keep tabs on growing costs. We cannot stop outsourcing, but what the U.S. can do is provide subsidized education for its citizens. Increase the number of graduates coming out of universities. Generate more math and science graduates to compete with global workers. It is high time we take some action.

jim

Textiles, consumer electronics, computer programming.

Once we did 'em here. No more.

What's next?

Peter, I

We are buying cheaper products because of outsourcing, and the cheaper product will prevail in time whether we like it or not. Even the people opposed to outsourcing have a significant percentage of their goods made in another country. If you doubt it, look around.

As the big picture tells us, if we don't strive to look for those sectors that are bringing the most profit, our economy will tumble very fast. Empires came and go, and it is up to us to keep ours for as long as we can, and the only way I see this happening, is not through crying for the things that we cannot change (price is king regardless of our personal feelings) but through accepting things the way they are, looking for the future by educating our workforce. (I mean higher education. A guy in China can do a factory job for $10 week as well as a U.S. worker does for $10 an hour.) As long as the profitable businesses are owned by American corporations, everything will came back. It is just a matter of time.

Calufrax

Corporations have never told the truth about why they pursue the H-1B visa. They use terms like "global sourcing," "global competitiveness," and "access to the world's best and brightest."
But the reality that everyone in the IT profession knows is that they are pursuing cheap labor.

Corporations will not openly debate the issue with the American people but rather try to achieve their ends by lobbying Congress. Has anyone heard a CEO respond directly to IT professionals who claim there is no shortage? Of course not, and we never will hear it.

CEOs will visit the occasional college campus and give a speach about the need for more Americans to study the sciences, but those efforts are flaccid in comparison to the efforts they exert in Washington to expand the H-1B visa.

Corporations own the H-1B visa, not the person who comes to the U.S. to work under it. As many here have rightly pointed out, this creates a class of indentured servants and distorts the free market by creating a class of worker the free market cannot compete against.

A better solution would be to convert existing H-1B visas to green cards and do away with the H-1B and L-1 visa programs altogether. Increase the number of green cards issued every year and let individuals who want to emigrate to America do so. People who come to America to live permanently are the ones who contribute the most, start businesses, pay taxes, etc. The only way H-1B workers can do any of that is to get a green card before their visa expires.

There are plenty of loopholes in the H-1B visa cap. I believe the cap does not apply to nonprofit organizations or governmental agencies. Also, Congress has restricted the funding for enforcement of the law, and little of any meaningful statistics are compiled about this visa.

It is easy to manipulate the requirement to pay the prevailing wage by setting up a small office in a state that has a low wage rate, bringing workers into that state, and sending them right off to work in states that have a higher prevailing wage.

Finally, we are routinely demonized for objecting to the use of this visa and are called names like "isolationist," "xenophobe," and "protectionist," but think about this: If we are the real protectionists, then why does the corporate lobby have so many people in Washington trying to convince our representatives to expand the pool of cheap foreign labor.

Abhishek Gupta

H-1B program's intent was never to "bring skilled workers to the U.S. from foreign lands." That was just the means. The intent was—and remains—to keep the U.S. economy (not U.S. companies) more competitive and agile. A decade ago, the U.S. economy and U.S. companies meant the same thing (for the most part), and that could lead one to question whether issuance of H1B is fulfilling its original intent. However, globalization has since picked up on a massive scale. If non-U.S. companies are benefiting from H-1B at the "expense" of the good of the U.S. economy, then that is yet to be established. Outsourcing allows the American economy to remain competitive internationally and also creates room for more high-end jobs in the U.S. If H-1B experience enables a foreign employee to serve the needs of the U.S. client better, that can only be good for the U.S. economy. We must be prudent in deciphering the underlying causes of discontent lest we hang an innocent victim in the name of quick justice.

Street Smart

The article offers great insight into how companies from abroad are abusing the loopholes in the current system. I would like to advise the author to pursue all the associated visas to highlight the evidence (H1 is only one channel). There are other visas like L1 and B1 that are being abused undercover (with no limits associated with them). I am surprised at how some companies like Cognizant (CTSH) are abusing visas in the U.S. They bring more than 80% of their workforce on L1 (intracompany transfer), but they work like H1's at client locations. It is quite unbelievable the company stock trades at a high premium irrespective of its malpractices. The question is, "Is somebody policing the system?" Why are such companies given the opportunity to trade and do business in U.S.? It is very unfortunate to learn that people who follow the law are being abused by the system.

Atlee

It's a capitalist world. Companies—U.S. or non-U.S.—try to make profits for their shareholders and do not necessarily think about the workforce. One can discuss this issue forever, but the reality is that international trade knows no boundaries. H-1B has become a controversial topic because it relates to white-collar jobs. The manufacturing jobs in the U.S. have been outsourced to China for decades now, but nobody talks about it because those are blue-collar jobs. But if you look from a capitalist point of view, which doesn't see blue or white, it's all about competitive advantage. It's all about who can do the same amount of work for the lowest price.

Somebody gave the example of Dell, trying to argue the U.S. workforce is not benefiting from it. Well, the workforce is not, but the U.S. shareholders are definitely benefiting. If Dell doesn't set up operations in India and employ Indian engineers for much lower salaries, it loses the competitive advantage against Lenovo (Chinese company that bought IBM's PC business) and ultimately its U.S. shareholders who lose money. So those who think that H-1B program is misused and that the workforce is being affected should also ask for all manufacturing and technology jobs outsourced by U.S. companies to be brought back to the U.S. If one thinks rationally, the U.S. has always maintained a technological edge over other countries, and it has always encouraged the entrepreneurial spirit, due to which it's a world power, it attracts talent from all over the world, and it is called the land of opportunity. As long as the U.S. keeps doing this, its population will always benefit.

Todd

I gotta tell you, this is a very unsettling prospect for those of us who have to pay child support and provide health care coverage to dependants. I really love the idea of planning for a future and having a budget to work with. Not only do I have to pay taxes for any wages I receive but also I have to pay for others who come into this country illegally and have children who are most often placed on Medicaid. I can't stand the thought of working for a temporary agency again, since there is no job security thanks to outsourcing. Most basic labor laws are violated with this type of employment, and there are normally no benefits. I can't support the business owners in my own community, not to mention my kids without a reasonable income on a regular basis. The government has no program set up to help fathers who want to go back to school. All of my money goes to child support and leaves me without a way to pay for additional training. Sending jobs overseas in this manner and staggering numbers is a critical economic blunder. There is a lack of pride and craftsmanship, with no real quality control and awful consumer relations.

At 45 years old, I find it difficult to get hired when companies want younger workers, most of whom I can work circles around. I've tried several careers in my lifetime and have found myself laid off on numerous occasions, only to be hired at a lower-wage job even though I have an associates degree. I see corporate greed as a very big problem, and the "dollar as the bottom line" approach is nothing more than Americans being sold out for the lowest bidder. Accountants are to thank for that. The gap is widening, and the cupboard is getting bare.

It's bad enough that due to bad credit issues that were brought on by lack of steady income and bad investment advise, I'm considered unsuitable to hire at some jobs.

I applied to go overseas and work in Iraq for Haliburton and possibly make $100k or more a year for what I do, but since I was behind on child support I was not allowed to take the job. I was behind because of a medical bill that I had been making payments on and have since then finished paying. I guess what it all amounts to is the lack of investment in American citizens' interest may be a signal that we should no longer support companies that do not support us.

It also appears that even our government has abandoned us. By the way, quite a few politicians and lawmakers have some sort of financial interest in big corporations. Can't get the fox to guard the henhouse, can we?

H1b holder

The H-1B visa is no doubt abused, but there is no other legal way to immigrate to U.S. How would a U.S.-educated foreign student who wants to live and work or even start a business in the U.S. immigrate without an H-1B visa?

Regina

If the U.S. had enough skilled people, do you think the government would have the provision of H-1B? Instead of wallowing in self-pity because we are losing jobs to Indians and Chinese, let us educate our children in math and physics and let us provide an environment in which they can innovate and compete with the best.

As far as the work being outsourced to different countries: Why not? We don't think twice when we buy cheap stuff at Wal-Mart. What would you rather have, well-secured jobs but not enough money to buy stuff (because the prices of all products would shoot up if there were no outsourcing) or a highly competitive environment in which a few jobs may be lost but most people have enough money to buy stuff?

If outsourcing stops, sure enough we will retain our jobs, but will they be sufficient to provide all that we need for a better living?

Steve Laws

Todd has stated it very simply. Even top CEOs should be able to understand his comments.

Our lifestyle in the U.S. costs money; other countries don't have the same lifestyle. Maybe all Americans should be happy to eat fish heads and rice. Then we could accept less money from top corporations, and they could eat all the lobster.

I think the global economy issue is mainly happening because of greed. A lot of people feel you must have the most toys to be the winner. I believe that because an average American just wants a happy life without all the toys, it makes him or her appear to lack motivation. What really makes people happy? Can anyone address that for me?

flybee.com

The problem with H-1Bs from India and China is that they cannot get a green card because of retrogression for at least six to eight years of their stay in the U.S. and of their stay in the same company. This allows for the big companies (U.S. or Indian) to take advantage of these intelligent laborers. If we ease the process of getting a green card based on certain merits and qualifications, the brain-drain of the trained professionals would stop from the U.S.

Consider my case: I have a PhD in computer science from a reputable U.S. university, and I still don't have a green card after living legally in the U.S. for 13 years. At present, my only option if I loose the job I have held for seven years is to go back to my country and work for outsourcing companies. When I lived in India, there were tons of articles on the brain-drain of intelligent Indians to the U.S. It is funny to see the reverse process in less than 15 years.

Rajeev Shrivastava

I think many of the participants in this discussion are still living in the 90s, when the mantra was cheap manpower. U.S. companies have realized that it is not just about cheap manpower. Quality has become of primary importance. Just look at all the top technology companies: Why are they moving their R&D to India? Intel, Cisco, Microsoft, and you name it have either moved or plan to move their R&D centers to India.

I am assuming the discussion here is about H-1B visas. The engineers who come here on H-1B through TCS, Infosys, etc. generally have three to five years of experience and the minimum they are paid is $65,000 by law. Here, if you exclude some top U.S. universities, the rest don't expect this much compensation. They are ready to work at $50,000. Even if they ask for $85,000, it is cheaper for the U.S. companies. So I don't think cost is the factor.

Recently I read that around 50 small-scale glass factories were closed in Firozabad, India, due to cheap Chinese imports. When Coca-Cola and Pepsi entered India 15 years back, all the top Indian drink-makers were either acquired or closed down. We were very afraid at that time of how we would compete with foreign giants. But now we are very confident. With a population of 1 billion and a 300-million-strong middle class, we will be the biggest market in the next 15 years along with Chinese.

My suggestion is to better understand the rules of global trade rather than cribbing and suggesting trade barriers. Already 50% of U.S. companies' revenue is coming from outside the U.S., with a major contribution from Asia.

ICC (IT Consulting Company) hoax

The brief summary of the story is: Many fake IT consulting companies (located in the U.S.) "sponsor" H-1B, but the employees need to pay the money to the company, or the company pays a very low salary to the employees. These fake companies are aggressively "hiring" people through e-mail and phone calls, regardless of the candidates' backgrounds and experience. More accurately, they are selling an H-1B to whoever would like to get it (but could not get it due to skills or knowledge).

Want to verify this? Very easy. Put a resume (with some IT-related buzz words) on monster.com or dice.com with some kind of Chinese or Indian name, pretending you are a student due to graduate soon. You will receive e-mails and phone calls from many "consulting" companies. They will say you are the right candidate, no real interview required, and you will get an offer letter soon and sign a contract with a company that agrees it will sponsor your H-1B visa. Then you may pay some fee ($3,000 to $5,000)to the company, get 30 days' boot camp training from them on some popular IT topics—it doesn't matter if your major is civil engineer or history.

Then they will send you to work on a client's site—of course your resume will be changed with years of experience. Sometimes you have to find yourself a client to work with; otherwise no paycheck! Even if you get a paycheck, it would be terribly low compared to the fair market value. Here's a sample e-mail you may get:

"I came across your details online and I am interested in reviewing your resume and having a conversation to see if we can potentially work together on the position that we are presently working on. We do process H-1B's and green cards [for those] who need one."

These are skills we are looking for for our client for their immediate needs and we also provide training...

I would appreciate it if you would send a Word version of your resume and a number to reach you by during the day."

Weaver

"H-1B does not harm U.S. workers because employers must pay H-1B workers the same wage as U.S. workers; employers would not go through all the expense to hire an H-1B if U.S. workers were available."

This pro-guest-worker sentiment would be true if there were no financial incentives for personnel specialists to disqualify U.S. IT worker resumes at a much higher rate.

The evolution of the personnel-outsourcing specialty has added an ugly element to the industry: Qualifications are not the primary "placement" concern—profit for the personnel firm is the primary "placement" motivator. Furthermore, as far as guest workers are concerned, the "employer" is rarely the sponsor of the guest worker. Personnel firms now specialize in importing workers, and sponsor the majority of H-1B visas.

The expense of sponsoring a guest worker is below $3,000 and requires a promise to repatriate, which is a simple one-way plane ticket. Many guest-worker applicants are required to pay substantial application fees simply to have their qualifications examined.

The personnel firm often speculates that a position will become available for the guest worker. If the personnel firm is not able to find immediate employment for the H-1B, the firm is free to place the guest worker on administrative leave—keeping the visa status without employment for the guest worker. These guest workers compete directly against the domestic workers, because the job listed on the LCA (Labor Condition Application) never existed.

These personnel firms are now financially motivated to "place" guest workers instead of domestic workers. The domestic employee is free to accept a better offer, or accept a direct offer with the employer when the employer's customary six-month obligation to the personnel firm has expired.

The guest worker, on the other hand, is somewhat indentured to the sponsoring personnel firm and may be under a contractual agreement in the U.S. or country of origin. In some cases, a personal service agreement indentures the guest worker under the threat of litigation for perceived "administrative fees." Subsequently, the guest worker is obliged for various reasons to renew with the personnel firm to ensure second round H-1B/EB (employment-based) permanent sponsorship and/or to avoid litigation.

The personnel firm is financially motivated to "place" the guest worker and enjoy a three- to six-year commission, instead of the six-month commission that the domestic worker placement normally realizes.

An unscrupulous personnel firm might take an exclusive employment listing and refuse to submit qualified domestic applicants until a reasonably qualified guest worker becomes available.

Passive-aggressive personnel firms may allow exclusive job listings to languish, and/or present obviously unqualified candidates, creating the illusion of a labor shortage and encouraging the employer to hire the quasi-qualified guest worker.

Several public sector and private sector solutions could alleviate this perceived problem.
For one, an American IT professionals resume database which has the following assets:

• Unique fields for e-mail address, and partial telephone number relative to zip code

• Monthly parsing of candidate resumes, via renewal notices, which would help ensure the candidate is available

• A free "skills" query interface for employers to check the honesty of personnel firms and government agencies to refute labor shortage claims

• Requirement that the IRS flag all guest worker tax returns

If the guest workers is not earning 80% of the prevailing wage for the year as promised by the sponsor, the IRS should be required to notify the USCIS (U.S. Citizenship and Immigration Services) of the personnel firm's inability to perform on legal mandates. And noncompliant personnel firms would be subject to USCIS probation.

Rima Gupta

The great U.S. companies will not compromise on the quality of service they receive from Indians just to save on their cost. Clearly, they must be getting good service at a low wage from Indians. If this bothers some U.S. citizens, why don't they reduce their salary demands instead of blaming Indians? The fact is that they cannot give up their lavish lifestyles.

Elizabeth

Rima Gupta: "Lavish lifestyles"? You mean electricity and indoor plumbing? (80% of India's population has neither.)

Rima Gupta

I am talking about the Indians living in the U.S. Read and understand before you speak. Taking your words to be true, if only electricity and plumbing comes into your lavish lifestyles, then how much do you need for other luxuries; that might add to the remuneration you are earning currently.:)

AR

I work for a tech company engaged in outsourcing, and to keep our business going, we need to hire more and more local workers here in the U.S. And guess what—we can't find them. We pay top $$ and give the best benefits (this is a U.S. company) and are still short staffed.

You can't find anyone in the U.S. today that has the right technology qualifications (by that I don't mean going to universities mid-stream, but just keeping themselves updated on things rather than stuck on the technology of the 1980s), is unemployed, willing to adapt to newer ways of working, and move to a different location where the opportunities are.

I can challenge you—find anyone that is unemployed with the right skills, and there will be something else that is holding him or her back from going to a newer job elsewhere. That, unfortunately, is the global reality: Workforce dynamics change and people will have to move and painfully uproot their ties to local communities, but there are still plenty of great, high-paying technology jobs here in the U.S. for sure.

Rima Gupta

AR I agree with you. If you want a job, you need to prove you are the best. Being better will again put you in competition. If you have the skills prove it. A war is not won on an army of fools. Similarly a company cannot survive by hiring just cheap labor. Surely skill is the main factor. Low cost is another factor but not the main. After all business means profit and if one gets better service at low cost then what is wrong with that? Every other human will do the same.

ps

If there is anyone to "blame" for starting the outsourcing debacle, it's our supposed representatives in Congress. The restriction of immigrants with actual marketable skills on the technology side distorted the marketplace in the 1990s and provided an opportunity for the subcontinent to fill the gap. While from the technology side there have been benefits to both India and the U.S., the outsourcing of our industrial base to China is another issue altogether. At least India is a somewhat ally and a democracy with a functional legal system while China continues to steal intellectual property, abuse its citizens, and rattle its sabre at anyone who dares take it to task.

Startup Owner

In my opinion, the salient issue in the ongoing H-1B debate is the principle of representative government, the bedrock upon which the United States was founded. In order for the people of the United States to have representative government, there must be transparency, and the H-1B program fails miserably in this regard.

Ever since its inception in 1990, the H-1B visa program has been characterized by a consistent pattern of concealment, as evidenced by the following:

1) The Dept. of Labor can't (or won't) divulge exactly how many H-1B visa holders are currently working in the United States.

2) The Dept. of Homeland Security apparently can't (or won't) reveal how many H-1B visa holders have overstayed their visas.

3) The Dept. of Labor usually does not list which companies have filed Labor Condition Applications (LCAs) to hire H-1B workers for open positions until long after the LCAs have been filed and the foreign workers have actually been hired. This delay can sometimes be from six to 12 months. This time lag is puzzling, because it exists in spite of an e-filing system (implemented in 2002), which was supposed to speed up the H-1B application and reporting process.

4) The attempts (in Congress) to expand the H-1B program usually come at the end of the year or in lame duck sessions after elections, when the general public is less likely to be paying attention to political matters. Often the attempts come in the form of underreported stealth amendments to "must-pass" bills.

If the H-1B program is really so vital to America's competitiveness and so beneficial to the American economy, then why has the Federal Government operated it under such a veil of secrecy for more than 16 years?

I have repeatedly raised these concerns (in writing) to my representative in the U.S. House of Representatives as well as to my two Senators. All I ever get in response are generic form letters that do not address my specific concerns. Not coincidentally, all three of these elected officials (and many others in Congress) receive generous campaign contributions from corporations who hire foreign workers under the H-1B visa program.

nanda

Outsourcing is not increasing unemployment in the U.S.

Vikram Ahuja

Jim says: "Textiles, consumer electronics, computer programming. Once we did 'em here. No more. What's next?"

Don't tell me, Jim, that that America has run out of the very resources of innovation and inventiveness that powered a century of American business domination of the globe. The whole point of the highly successful system of competition (which is not yet perfect in the world, as I'd be the first to concede) is that it forces entrepreneurs to find things that they can do better than others, when others start to do the things that they once did better. And I am sure Americans have the wits to invent and innovate themselves out of the perceived 'corner' that they find themselves in.

However, when the rise of global competition scares you out of your wits instead, and you try to wrap the cocoon of a falsely comforting economic 'protection' around yourselves, it will inevitably unravel in a few years' time. And everyone will be the loser&the US of A most of all.

Joe Polimeni

A college education costs more than $100K plus time lost in school. The money I invested in my education and my experience is being lost to India and China. If I were a small company, the government would go out of its way to help me.

Don't expect companies to look at these social or broad-based economic issues. Their job is to make money in the short run, no matter who gets hurt.

Outsourcing of nonskilled labor makes sense. The people affected did not make huge financial and personal sacrifices. Outsourcing for professionals is hurting millions of men and women who worked hard in school, spent thousands of dollars, and worked years in a profession. Perhaps the government and business would understand the cost if they paid to reeducate those who lost their jobs.

I think it is reasonable to assume that each engineering job we lose to outsourcing will cost someone $250K (education and lost wages). However, even if someone paid to retrain the engineers, what would they be retrained to do?

Dave Gagnon

Would those who want to stop outsourcing also stop insourcing?

Vijay

Let's stop outsourcing all jobs right now! Outsourcing is evil, because it causes Americans to lose jobs.

In fact, I will not buy any Chinese-made electronics or any Japanese car, since buying American means jobs for Americans. So what if Honda and Toyota make much better-quality cars that are also fuel efficient? I will buy only American, even if it is lower quality and expensive.

I will support jobs. I'll buy all my stuff from a lousy shop nearby and not from an efficient and professionally run big chain that sources the best materials from all over the world. I need to support the jobs in the lousy shop even if it provides me bad service and sells me stuff at a higher price due to its inefficiencies.

I will hire only Americans in my IT department—no foreigners taking up American jobs allowed here. Sure, it will deprive me of the opportunity to hire the best talent, but that's a small price to pay for patriotism. And I will not set up my call center in India. That might cause poor or delayed service to my customers, but I am sure they will put up with it because they love America. Keeping all jobs here will drive up the cost of my products and cost of supporting the customers. I will not be able to introduce new products quickly into the market. But that's nothing to worry about, since we will have jobs!

Eventually, foreign companies will go far ahead of me with their innovation and wider talent pool. But I don't have to care about them, since we can always pressure the government to keep the better foreign companies out of the U.S. and support American people. Perhaps the other countries will retaliate by throwing out Coke and McD, which cause job losses in those counties, but we are capable of consuming all the soda and chips they can make.

When foreign companies are thrown out, we won't get the best products or services here. And everything will be lower quality and higher price. But who's afraid of that? We are just afraid of competition. If capitalism doesn't suit us anymore, we will embrace socialism or communism.

We are Americans, we love America, and we can live with poor service and shoddy products as long as we have our beloved jobs. Right?

Rodney W.H.Tan

America has taken the lead in many fields. The outsourcing started way back in the 1970s, but it has been more pronounced over recent years.

In my personal experience, when U.S. companies started coming to Singapore, it provided work opportunities to many Singaporeans. Singapore flourished. In return, U.S. products were able to continue to compete worldwide.

Now Singapore is able to continue to contribute to the U.S. in many ways. If some perceive that outsourcing has robbed them of their jobs, maybe it is time for them to upgrade themselves and contribute positively to its economy with high value services.

It is only a matter of time; China and India will buy enormously from the U.S.

ash

The main problem with the West is scare-mongering by conceited self-centered politicians and rest of the majority of the public who follows them with hardly any connection to realities. Countries like India have been exploited for decades by the multinational monopolies and still are being used for goods for America and other developed countries—and have brought in billions. They have enjoyed the benefit of the poor and exploited labor for centuries.

Mukund

The U.S. has been the main cheerleader for free trade for years now, if not for decades. But free trade implies benefits not just for the U.S. but also for the country on the other side of that equation. It's unfortunate that Americans want to roll back the clock just when other countries have finally started to benefit.

Nikki Nolan

I wonder if anyone has done an unbiased study on long-term effects of outsourcing.

When manufacturing jobs went to China 20-odd years ago, who was the consumer paying for those goods? Americans! And they could do that with the money they earned here at home through the service sector. But now that the service sector has gone, too, where will that once-rich American consumer come from?

As jobs leave America, average Americans will have diminished buying power, hence not be able to pay for the services and goods from Third World countries such as China and India. So who will these outsourcing companies eventually sell to?

And moreover, the so-called free trade argument never opened those markets and benefited Americans the way they were once touted to do. The reason perhaps is the lack of a level playing field in these Third World countries as they still have protectionist policies at home, protecting their homegrown companies.

Seems to me like the downward spiral of a lose-lose situation.

Nikki Nolan

All the people here in favor of blind outsourcing are people from India, when the debate should be among Americans. Now that we are used to shoddy goods from China, let's get used to shoddy services and software form India.

Today if you call any company's help line you get a very polite ("Yes, Ma'am" and "No, Ma'am") Indian or Pakistani at the other end, but the poor person takes double the usual time to resolve the issue, if at all. It is not Indian workers' fault and it is not American companies' greed but rather it is more of a failure to understand the dynamics before getting sucked into this outsourcing game on American companies' part.

John C. Campbell III

I think that management of the international corporations, oil conglomerates, etc. should be obliged to register under the Foreign Agents Registration Act, as should any marketers or advertising firms that produce their commercials—and any elected legislator who goes to bat for them. As Benito Mussolini said; "Fascism should rightly be called corporatism as it is a merger of state and corporate power."

These companies, which are not socially or politically "inert," manipulate the people in our society, most of whom still think of them as "American corporations."

As Theodore Roosevelt said in 1906: "Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day."

BOK

- We have been using offshore labor for more than 30 years now.
- The unemployment rate in the U.S. is at its lowest since the 1960s (not including the .com years).
- The U.S. is actually the largest exporter of outsourcing services in the world.
-I have to reiterate: There is a reason the United States is the biggest economy in the world (by far), with only 300 million people.

Let's stop complaining about outsourcing and instead, find ways to use it to our advantage.

Bob Walters

My company outsourced a part of a project I was working on to reach completion sooner. It would have taken me one week to accomplish the work. We had an Indian programmer working on it six weeks, and he still couldn't get it right. I finally took it on myself and spent 2.5 days fixing his mess. Accounting for the 1.5 days I had spent e-mailing and testing his interim code, the total savings came to one day of my time at a cost of six weeks for the Indian programmer. I only wish I could make as much in one day as he did in six weeks. Did someone say outsourcing is saving American companies money?

Saul Korn

When our country was founded, the primary source of income for the federal government was...tariffs on imports. Seems like our Founding Fathers were ahead of their time.

Rima Gupta

Well, Bob, if as you suggested, American companies are not saving money by hiring Indians, why don't you talk to your company's CEO as I suppose you have all the data available with you? I would suggest you take the CEO job yourself as they haven't had their figures right since the time outsourcing began, and they have been making the mistake of outsourcing for years and years. I think it is racism that is causing Americans to dislike our products and services—on the basis of which America is booming.

YOGA

In response to Bob Walters' comments:

Yeah sure, it would have taken one week for you since you are more familiar. As any reasonable IT guy would know, you cannot expect [a new person] to finish an assignment in a week even with the "complete" requirements—mockups, testing, etc. Think about the long run: Once trained on your system, he might even take less than a week. "Fixing his mess" is what resulted from giving him too little time to finish. Not surprising.

Arvind Sinha

I have been seeing some very interesting comments in this column. I am Indian, and this very fact prompts me to write.

After World War II, the industrialized nations created an amazing benchmark through improved processes, high productivity, and low cost by way of industrialization and social engineering. That was an amazing feat, given that most of the world was unable to rebound from the shock of WW2. There was a high trade barrier and an even higher social barrier.

There was enough of a market to absorb all the production, and most of Asia could not afford to pay the price for quality. Beyond industrialized nations, markets could not expand.

The opening up of China in the 1980s started changing the rules of the game, and it started beating advanced nations at their own game. The world started moving to China. In order to compete, industrialized nations wanted more of the market, and there came the Dunkel Draft. All the theories of "advantage of free market" were aimed at creating new markets, not free markets. That was a big doublespeak by industrialized nations. But the opening of India in the early 1990s changed everything.

To cut costs, America imported people at much lower wages. Thus came the ingenuity of Indian companies, who started the offshoring of services to cut costs. Now once the big corporations started seeing the advantage of low cost and comparable quality, the story of offshoring started. No one can afford to pay 10 times to have the same level of services or products, certainly not in the developed world.

So the people who wanted to expand the market for their products are losing on the employment front ultimately. And it is to be seen whether the market for their products really expanded or not.

The success stories of Asia continues, and this is adding to the problem in Europe and America. The value of Asian companies is much higher than that of European or American companies. Asian companies are taking control of companies located in other continents. Corus, the British steel company, was bought out by Tata of India, and another one in the race was Brazil's CSN. No European or American company was in the race. Similarly, Canadian aluminum company Novalis was bought by Birlas of India.

Now India and China have certain competencies that the world can admire. Let us play a fair game. Collaborate or compete; the choice is yours. We are brought up the hard way, and we can compete till the end.

Rudy H

Let's face it, to all those who think that "exporting jobs" hurts the American Worker: You could not support your standard of living if the things you consume were all produced in the U.S. No examples needed. America has for a long time now exported its inflationary pressures and is continuing to do so. No one, of course, is willing to admit this, but let's call a spade a spade—the goods produced in the U.S. are cost-prohibitive for a number of reasons, which is why the Japanese car manufacturers were so successful. But now the game has shifted to China and others. Want another example? People already go to India for major health problems, because they can obtain the same excellent service for a lot less money. We will outsource health care one of these days as well—or decrease its quality.

Bhawar

Look at it this way: The U.S. sends outsourcing job to India. Who is the boss here? The U.S., because a new company is dependent on the U.S. company. So if the U.S. company cuts down on expenses or goes bust, the company in India has to find a new customer to sustain itself. Therefore the impact is not in the U.S.

However, knowledge growth is hampered in both India and the U.S. In India, they are not researching new things, and in the U.S., fresh grads are not learning the basics of the job that is outsource.

It's win-win for shareholders and lose-lose for employees.

Kate

Why don't people state the true meaning of outsourcing? It's getting a cheap workforce to maximize profits. In other words, we as a country have reverted to the days when there were rich land owners who owned slaves. I don't see the difference between then and now. To try and call it globalization is just another fancy word for slave labor.

M.T. Paige

The outsourcing of manufacturing and related industries are not only the fault of greedy corporations. While some corporations may be greedy, the greed of labor unions certainly also played a role in this phenomenon. Did those who have lost their jobs because of this get a raw deal? Sure, many of them did. Because not only the corporation they worked for wanted to make an extra buck but also they were led astray by poor leadership in organized labor.

The outsourcing of call centers is, however, perhaps the biggest misstep a company can make. There is no faster way to alienate customers than to provide them with customer service representatives they cannot communicate with. You get only apathetic, monotone, canned answers. Companies that have made this choice will see the effect on their balance sheets eventually.

None of this is President Bush's fault, nor is it the fault of the legislature. In keeping with the principles the United States was founded on, they should stay out of it and let the market work.

Capitalism creates the best economic ecosystem for several reasons. Sure, the rich have more power than the poor. It is like that everywhere, especially in so-called classless socialist and Communist economies. Under these failed theories, one group ends up with the power to control the wealth. Because of the immense power of the government, most of the powerful people have the same beliefs and ideals. This is not the case in capitalist economies. Again, I will concede that the wealthy are more powerful; every wealthy person in the U.S. does not have the same basic belief structure. This evens things out better. Bottom line: There are haves and have-nots everywhere. At least people in a free market capitalist society have the ability to change their situation.

Michael Tuchman

Developed countries don't take jobs from one another—they trade. But when there is a huge gap in development, jobs flow like rivers from the high ground to the low. In essence, the poorer countries can do comparable work for much lower wages. But why is the cost structure so much lower? Part of the reason is that they don't have to pay for environmental protection or social benefits.

Scott

Stopping outsourcing won't fix the problem. It's not the corporations in control; it's the consumer. Stop outsourcing without changing the consumers' behavior, and what we will have is American corporations out of business, i.e. no jobs. You can't compete with foreign companies that have lower costs. American consumers want that cheap gadget no matter where it's made. There's little doubt that if Americans started walking into stores, demanding American-made goods, and backing it up by not buying foreign goods, you'd see lots of manufacturing return to the U.S. That's not likely to happen. We like to moan and groan, but we don't want to be the first to put our money where our mouth is. We want union wages and Third World prices. And tariffs would just cause other countries to put up counter tariffs. What's left?:

1. Do everything to raise the living standards in other countries. It'll help force up the wages. Get a pen pal and encourage him or her to form a union and demand better wages.

2. Don't panic. Look at Europe: It's got some employment issues, but overall living is good there, and its cost of manufacturing is worse than the U.S.'s. However, they are much more likely to buy locally made goods than the typical American. They seem willing to buy less stuff, at a higher price. But they have plenty of comforts anyway.

3. Stop feeling so entitled. Go to school for a hard subject, not a major where the BS stands for bull stuff. And stop expecting to have the world handed to you on a silver platter. We'll need to work for it.

4. Use your American ingenuity to create a business based on cheap foreign labor. Glutonous consumers will pay a lot for crap if you market it right. If you succeed, no worries; you'll be set for life.

5. It's a long list, so smile. It could be worse.

Marcia McLean

As a consumer, I would like to be offered a choice by corporations: Give me the option to pay the difference between a product or service provided by a U.S. worker vs. an overseas worker. For example, let me pay extra for a tech support contract if I am guaranteed my calls will be answered by a worker in the U.S. I would bet the difference is trivial (10 percent?) compared to the cost of the hardware.

I question the assertion that workers from overseas are willing to accept a more abstemious lifestyle than workers here, long term. H-1B workers are only here for a short time and plan to bring their know how back to their own countries. Their willingness to live a temporarily bohemian lifestyle is something we all went through during our apprenticeships. The difference is that U.S. workers have continued to pay taxes and contribute to their communities when their apprenticeships were over.

"Profitability" is not an acceptable rationale. And let's consider the impact of illegal aliens on wages in skilled trades: The word is that vocational school enrollments are down because of wage pressure. Of course it's cheaper to hire a worker illegally; an employer can get away without paying Social Security, unemployment insurance, and liability insurance on such workers. In other words, breaking the law is profitable.

Warren

I question William's statements above. The "lowest unemployment rate in years" does not translate into "there are jobs out there." Not the kind of jobs one would expect when armed with an MBA. It would be one thing to say that people need to adapt to the changing marketplace, which I agree with—when forces like supply and demand are controlling the marketplace. When a corporation decides that it will replace William with a worker outside of our borders not because of supply and demand but to increase profits, then I would expect that your argument would be different. It's a matter of time before any job can be outsourced. And there is no way you will compete when you are so expensive. Try paying off the MBA now. Maybe that is supply and demand for the workers of the U.S. As an owner of a small business, I feel an obligation to support our local economy and feel empowered to supply a decent living to someone who wants to work hard. I could easily farm out my work to a shop in Shanghai. Many say that outsourcing in interstate commerce provides a competitive economy, but at least it is within our borders. Either we compete as a country or we don't. Economists talk all the time about the U.S.'s ability to compete in a global marketplace. When 80% of employees are overseas, is that really an American company? Outsourcing is basically tearing down borders, with no interest in any kind of patriotism. Patriotism is dedication to your neighbor and your country. Maybe this idea is obsolete. What many people of today forget is what this country was built on and how much was given to these people who outsource without a shred of guilt. I ask again, would you fire your daughter for doing a great job when you can get the work done for half the cost in another country? "Of course not, when it's my family." Then why should we not care about others in our community? Outsourcing is less about offering opportunity to the lower classes in Second World nations and more about the bottom line. The $200 million dollar paydays from Home Depot are what many CEOs seem to be interested in these days, not the welfare of their employees. Are the employees looked upon as an expensive scourge? I'm hoping that Karma and God's good grace bring this trend to an end.

Matt

There is almost no limit to the type of job that can be offshored. If your job does not require that you be present, and you use a computer for even a modicum of your daily job activities, you are vulnerable to offshoring. Radiology, insurance claims adjusting, legal research, graphic design, all other kinds of creative work, innovation, and back office work are now up for grabs to people who'll make $2,500 a year. If you're digital, you're in trouble.

Chris (Texas, USA)

Don't sit back in your chairs and let them take your jobs: Take your game to the next level! "The World is Flat" now, and you'd better do all you can to differentiate yourself. If you really want to control your own destiny, get into sales, work hard, and you will stand above your competition. People buy from outsourcers because of a perception of value. It's up to you to buff up your skills and push yourself to the next level. Develop your people skills, and you will find your feelings of job insecurity disappear.

Andrew

Stop whining. When the U.S. was the only powerhouse around, free trade was just great. Don't be ridiculous; just try to be competitive.

Jack

Those unaffected by outsourcing are quite comfortable when others lose their jobs.

Owen

If you're against outsourcing, then you'd better be buying a U.S. car constructed of entirely U.S.-made parts (including electronics), and assembled here as well. Oh wait, both GM and Ford source parts from all over the globe and have manufacturing plants in dozens of countries. And you'd better get all of your clothing from the few remaining expensive brands that source all of their cotton, wool, buttons, thread, and dye from within the U.S., and weave all material here in the U.S. and sew and assemble the clothing here as well. What? You'd prefer jeans that don't cost $150? You'd like a shirt for less than $100? Hmm, time to make choices. What about the computer you're reading this on? Where was the CPU manufactured? Oh wait, Intel fabs its chips in Malaysia. So does AMD. You've already chosen to outsource jobs by voting with your wallet.

Jacqui

Having worked in the "immigration industry," I am aware of all of the loopholes intentionally written into the H-1B and employment-based green card regulations to allow employers to discriminate against Americans. The vast majority of the H-1B and green card workers I have seen could not even be remotely considered "the best and the brightest." Companies choose to hire these mediocre foreign applicants because either they can exploit the system by paying significantly lower wages or there is a foreign manager who wants to bring a family member over to the U.S. Let's face it; the U.S. is not the same place it was during the immigrant influx of the 19th century. We do not need any more immigrants. Our country is overloaded as it is.

Phil

Why don't we try to get more of the world's highly educated to move here to the U.S. and start their companies right here? Why don't we find ways to reduce barriers and costs to businesses here to make us more competitive? Why don't we worry less about terrorists and more about our own stupidity? There is no intrinsic reason America can't compete in manufacturing and science. None except political.

Venkat

Outsourcing is the way to go. Let's outsource all American business processes to India.

Paul Tjia

Offshoring is threatening jobs and is prominent in the news. However, whether one is for it or afraid of it, managing offshoring is a competency that tomorrow’s IT managers will have to learn. I would like to recommend a new management book which covers the advantages and disadvantages of offshoring openly and honestly: Offshoring Information Technology—Sourcing and Outsourcing to a Global Workforce (Cambridge University Press).

GOPeople

For heaven's sake, the government is still working on Katrina and Rita. It can't do everything, you know. Be patient. The century is young yet.

US Manufacturer

The U.S. labor force and labor unions need to wake up. U.S. workers get big bucks and produce less than Chinese and Indian laborers, forcing manufacturers to move overseas and outsource. I manage a plant, and I see U.S. union laborers working just five hours a day, getting paid for eight, and dragging their feet like an old cart. And they earn $28 per hour and receive great benefits. What will I do for my next plant? I will set it up in somewhere other than the U.S.

Claudio

Outsourcing brings profits in the short run to the biggest companies, mainly thanks to the low-wage workers in Asia and Eastern Europe. However, in the long run, these workers in developing countries will stand up for their rights (Social Security, decent wages). I am sure we will see an about-face as soon as the advantages of outsourcing amount to less than the management costs of sending responsibilities and know-how abroad.

Murali Bopparaju

Legislating to stop outsourcing seems to me a very superficial treatment of a deeper problem. India, China, and other southeast Asian nations have a huge talent pool available, and businesses will use that to their maximum advantage, no matter what the U.S. government legislates. Even if the costs are not cheaper, talent pool availability is still a big question mark in the U.S.A. This has also been repeatedly brought to the public's attention by every big name in the industry. A better way to solve this would be to focus on significantly increasing the volume of students graduating in the high-tech areas from our schools and universities. Unless this is done, isn't it only a matter of time before the center of gravity shifts to India and China?

Gerry

Time for a revolution. Let's overthrow a government that doesn't look out for the welfare of its constituents.

Gerry

Let's cut our own country's costs by cutting all foreign aid, and let these so-called emerging economies foot the bill for foreign aid.

Richard

Outsourcing was started many years ago and will not stop. It is an opportunity for the government to stand up for the people of this country. They could impose a tax on each new job a company creates through outsourcing. The result would be fully funded Social Security for generations and a net cash increase for the government instead of a loss. In these times of war, the money is needed by our government.

Personal information is sold

I'm a programmer and know first hand that it is not only jobs that are lost but also the personal information that is given away for free. Programmers all over the word have access to real data. They can download it with ease, and no one would even know.

Iyengar Y S

Americans wanted free trade, to export their goods and services as long as it worked one way. America owes a large part of its growth to immigrants. The same argument can also be put forth that America was prospering at the expense of the best brains from Indian educational institutions. At the end of day, it has to balance somewhere; it cannot always be one-sided. It would be almost impossible to stop this through legislation. American companies cannot afford to go without the benefits of this trend. The world is getting globalized in many ways, but somehow the human mind does not seem to.

Antonio

I just want to know what India has ever done for America that we are handing our future to it. And if India is loyal to America, can we outsource the war in Iraq to it also? This outsourcing mess is killing middle-class America. Some people say it will balance out, but not for the computer programer who lost his job when it was outsourced to India. The bottom line is all profit. Consulting companies are still charging the same or higher rates for their services even if they use Indian consultants as cheap labor.

Jayne

I can tell you from personal experience that people from India are not smarter, more dedicated, or more reliable than workers in the U.S. My company outsourced certain departments to India. After we'd worked with them for five months (when I was let go), they still could not process the payroll or do the HR jobs or the IT jobs that they were hired to do. I have now been out of a job for four weeks, and I understand that the problems are not any better. So do not tell me the reason for outsourcing is to tap superior intellect. It is not so. Money, money, money is the only reason for it, and the U.S. government should put a stop to this immediately.

In the meantime, I am searching for another job at the age of 59. I can assure you it will not be with a company that has any intention of outsourcing any part of its business to another country.

Nina Y~

Stop the outsourcing. I am sick and tired of talking to customer service reps that I can't understand—that's not racist, it's a fact.

frank

We are to blame. We have dumbed down and coddled our kids. Britney and Skyler are getting trashed on spring break while Sammy Chang and Andy Patel are getting their business degrees. Our kids will clean their toilets and swimming pools. Think twice before telling your kids, "Don't work too hard."

Keith

It's all about corporate greed. If they can save money by hiring illegals, they will. If they can't, they outsource the job. If they can't do that, then they lay off their full-time workers and replace them with part-timers so they don't have to pay for benefits.

I used to work at a bank's service center. We had 200 full-time employees. Then they laid off 10 people for no reason. The next week, they hired 20 part-timers and gave them to us to train. After they were trained, another 10 full-timers were laid off and replaced with another 20 part-timers. By the time they were done, the only full-time employees were management, and there were 400 part-timers. Profits went up, because they didn't have to pay for medical, dental, retirement, or even vacation time.

If Corporate America has its way, everyone will work two part-time jobs instead of one full-time. That way, corporations will save money, but two part-time jobs mean twice as much commuting time. That means twice as much gas used, twice the traffic, twice the auto emissions, and twice the wear and tear on the roads. It also means that the government(meaning the taxpayers) bear more of the burden of providing health care. With everyone working two part-time jobs instead of one full-time job, fewer people will be able to take their families on vacation. Paid vacations will be a thing of the past, because part of the reason for replacing full-time workers with part-timers is avoiding the cost of providing pay checks to employees while they are not generating any income. That hurts our tourism industry, because people aren't able to take their families to theme parks and other places that depend on vacationing families for their survival. That forces them to lay off workers in one of the few jobs that can't be outsourced.

But hey, the CEOs make more money and can afford to take their families for longer vacations in France, Greece, Tahiti, or wherever. So all is good, right?

Sure, outsourcing means lower retail prices. But if you don't have a job or have a burger-flipping job that you competed with a high school student to get, you don't have the money to spend. I'd rather make a few more dollars per hour and pay a little more at the store.

Larry Brown

I think companies sending work off shore should be drastically penalized. Everyone talks a good game about supporting workers at home, but the bottom line is we are selling America away. If we do not put a halt to this soon, even the middle class will have no place to work. Companies should be rewarded for keeping the work in the United States. It boils down to the almighty buck.

cherie

I do not pretend to be an expert on this subject, but I would like to comment on a few points others have raised. By all means if you can answer my questions or counter my statements, please do.

As a young person just starting to make my way in life, I haven't even decided what to major in yet. I am very concerned about the job market I will soon be entering. I do not see job security or working all of your life for one company that repays you with a retirement.

* "Bringing in the best and brightest."
Oh? I can see the value of having highly specialized computer field superstars, but how is a call center with scripted responses qualify as such?

* "Lack of local qualified workers"
Don't you mean lack of workers who are under 30? I have read that the "too old" age for IT workers is around 35 and that companies are unwilling to update the training, opting to hire 20 somethings with the latest skills (laying off the older and much more qualified worker). Even though I am not going into the computer field, this still makes me a bit nervous. What ever happened to becoming a master in your field? A degree relating to computers is one of the hottest things to have now. How else can you become a millionaire before 30? There are tons of qualified people, but the new ones are expecting ridiculous pay and the old ones are still more expensive than hiring someone for starvation wages. I thought the more skilled you were, the more you got in your pay check. School is expensive; that's why we go (to get a better job). I guess corporations would much rather fill the void with cheaper, even more disposable workers.

I don't know much about economics, but here are a few things I would suggest looking into:

Perhaps if we were required to pay at least a competitive wage to employees wherever they happen to live or be from, we would truly only hire the best and brightest. It's pretty sad that large corporations will put people in virtual slavery and abuse them as they see fit, because the worker has no other choice. American workers do enjoy a lot of legal protection, and we can complain without being sent out of the country if they are abusing us.

I whole-heartedly believe that a poor person can rise to be the richest man/woman in the country by hard work or sheer luck. But we ought to make it easier to get a living wage, medical insurance, and enough to eat, but a little harder to become a billionaire. If you want to become rich, and that is your life goal, great, you go right ahead and make it happen. But do you really need to add another billion to your hundreds of billions? Frankly, we could all do with a bit of rethinking on what's important in life. Consumerism runs rampant here, well beyond enjoying the finer things in life. If we can help other developing countries enjoy the same basic rights we have and raise up their standard of living to—gasp—indoor plumbing and electricity just by giving up a few of the nonessentials, how can we not? Do we really need a McMansion or 4 cars for 2 people? I am not saying we should take away the option to have it, and I do think we should be free to spend our money on what we like. I just don't think it should become the new standard of living.

Many young people expect to be making top dollar right out of college. My best friend's sister who is my age (22) just bought a house. I was shocked. I was fully expecting to be broke until I proved myself in the field that I chose. If people expected to make less money out of college, wouldn't that keep more jobs here? I think Americans have gotten fat and complacent. We need to up our game a little, lower our expectations in some areas, and tighten our belts just a little so we can help suffering worldwide. There are no black and white answers; outsourcing shouldn't be stopped or allowed free reign. Toss a little stability into the mix, and I think we will be OK. We need to spend more on education, and up the standards instead of lowering them to protect everyone's precious self-esteem. I remember those games in grade school where no one won: "You are all winners." It sure took the fun out of it.

l miller

My husband is losing his job to outsourcing. He has worked as a journeyman pressman for 31 years and was getting close to retirement. His employer is bringing Mexican immigrants to Kansas and making existing employees train them. The next week they ship the equipment to Mexico. We will be losing our health insurance, too. I am disabled but haven't filed for disability. I'm working on that now. The plant manager stood in front of the workers and laughed when he said they can hire Vietnamese for 35 cents an hour. This is what the existing workers get for being dedicated hard-working employees. We'll probably be outsourced soon ourselves, maybe to China or Vietnam for our health care and nursing care. Good luck to all the middle class; we are going to be a burden and your worst nightmare.

Diane Maloney

How would you feel knowing that your bank has outsourced its customer service to Costa Rica or India? Just think: All of your personal data is just a keystroke away, waiting for someone to take. They talk about personal info being stolen off the Internet. I think a lot has to do with outsourcing.

Concerned American

The fact of the matter is that we have elected officials in our nation's capital and all through the U.S. who represent only one segment of our beloved country. That segment is business, big business, small business—business. Additionally, we have Corporate America and small business America, which do not want to pay a living wage to the American people. Hence, we have opened borders, and cheap labor has spread throughout this land. I read not long ago that the U.S., in perhaps a short a period of time as 20 years, will no longer be the top economic power in this world. China is expected to climb to that position. What will our future hold? What will be the future of our children, our nieces, our nephews, our brothers, our sisters? To make our country strong is to make each American strong, earning a good living in his or her own land. We will become like other nations where the powerful and rich will have the entire country to step on. Our elected officials are self-serving and greedy. I don't believe they even care for their own children and grandchildren. For the country they now tear down will be the country their children will have to live in also. Because they are rich today does not mean they will be rich tomorrow. Sound a bit dramatic? Well, think again. Why are our brave, courageous, and strong men and women fighting in Iraq, Afghanistan, and other places around the world, so they can come home to a country where their jobs will eventually be outsourced? And the worst sin, no one—except for perhaps Lou Dobbs—seems to really give a damn. May God or the Buddha or whatever one might believe in protect our country and us.

Fred Barnes

Why is it acceptable for Chinese and Indians and Pakistanis to travel to America for work, but Americans are not willing to even think of moving to China for a job?

Michie

Yes, Virginia, it is a real economic jungle out there. We must get over this myopia and understand we have to compete worldwide in every way. We can look at history in the U.S. alone to see that the "outsourcing" of jobs from the northeastern U.S. in the 1950s, 1960s, and 1970s resulted in major job dislocations in the Northeast and great job growth in the South. In fact, this allowed the South to develop a middle class of its own for the first time. Those areas of the Northeast hit hardest had many challenges in recovery, but most have done so with great success. Some have yet to figure it out. We must educate, educate, educate, and convince our educators that competition is a natural and necessary factor in survival on both an individual and societal basis. As a former Southerner who benefited greatly from the migration of jobs to the South, I must now understand and support that the economic processes by which I benefited are still alive and well. I must still compete to survive. Quit complaining, and start competing again. And remember, the playing field is never level, so don't wait for it.

Sarbajit Deb

Year 1991: America Power Conversion (APC) comes to India to sell its products and services. (I'm an Indian citizen and was part of the initial launch as a distributor for the products for the Indian market.)

Indian-based companies making similar products cried foul, complaining it would close down local industry and make a lot of people jobless and cause an inability to manufacture products in India with its own developed technology. A lot of barriers of entry were created, including customs duty, tender specs, etc.

APC prevailed as customers and companies wanted the best products available. Today, APC has significant market share in India.

Year 2000 and beyond: Professionals from India and other "poor" countries are in high demand around the world in IT, telecom, finance, and energy—not because they are cost competitive but rather because they are just doing a better job.

Visa restrictions, loss of jobs, and low pay are brought on the table to make laws to prevent better and competitive services from getting access to organizations and consumers around the world.

Why is it that the products and capital are allowed free flow from "developed" countries and not services from other "Third World countries"?

Ron

The 5 major consequences of outsourcing software development in the USA:

1. Programmers today make half what they did 10 years ago.

2. Selection of computer science as a college major by high school students is ¼ what it was 10 years ago

3. Most critical infrastructure and financial software for the USA today is built overseas, putting our digital security in the hands of people who make little more that $5 a day. A digital attack on Wall Street and large corporations could devastate our economy far worse than 9/11 did and cause trillions of dollars to be directed elsewhere with no possible tracing of its original owners.

4. Every single person reading this on a Microsoft machine should realize you are running software made overseas by poorly paid and exploited workers who had millions of opportunities to plant viruses, spyware, or malware on it. There are billions of lines of source code on your computer, and hiding a dormant, timed virus in it would be child's play for one of the programmers. Now think about the fact that your entire financial and medical history is not only exposed to this nightmare on your home PC but also at your bank, broker, hospital, and doctor's office.

5. The "brain drain" of technical talent is affecting our military advantage in the world. The Chinese already have a fighter jet that is faster, stealthier, and more agile than anything we have. As we export our technical advantage, what do we have left?

Random responses

I would like to see H1-B reform, too. I don't like to be tethered to one company. Visas should be issued to people, not companies, in my opinion. That way, I would be free to work here in the U.S. if it makes economic sense. People should be free to peddle their services globally if they so please, a privilege most Americans enjoy but either don't realize or choose not to use.

Some people have pointed out that outsourcing has been going on for decades. What is net job loss from all of this outsourcing? People complain about Dell, but have they been following news apart from the local broadcast channels on TV, which give me the feeling that the end of the world is near? Dell has been lobbying the Indian government to reduce tariffs so it can sell more computers and be the world leader again.

Tariffs are coming down in the underdeveloped world. Why do people think that change should happen in the blink of an eye when the reality is that even bringing a phone from concept to market takes months to years?

Random responses

Antonio,
Is America doing a favor for India? Why don't you try imagining zero American presence in the Indian marketplace? Explain loyalty. What is the context for this word?

Businesses on either side are free to trade with one another.

Shantanu Chatterjee

Outsourcing is a fact of life. But as a guy who works in an IT company, I actually do empathize with Americans who lost their jobs. (Honest!)

But outsourcing is not unique to America. I have also been to Sweden, where, as in all Scandinavian countries, the workers get retrained in other jobs at a cost to the government, which also helps them look for other jobs. This obviously costs money, but don't tell me the U.S. government doesn't have money. It just spends it in places like Iraq and on contract for the kleptocratic elites.

But still, guys, we are not responsible for your job losses. If a U.S. company comes to me and offers me a job that pays 10 times the national wage, what am I supposed to do? What would you do in my position? This still works out to $10,000 vs. $60,000 that a U.S. person earns. So can you actually blame IBM? I mean, what would you do if you had a business to run?

The only way out of this is a massive expansion of higher education in the U.S. GI Bill II, anyone?

German engineers are still in demand despite being the most expensive, and are actually exporting more than anyone else, U.S. included.Why? It is a high-cost unionized country, but its engineering education system is the best in the world. Period.

logic

A really good book to read on this overall topic is International Trade and Payments by Caves and Frankel (a Harvard/Berkeley duo). Basically, free trade is nice in theory, but there has to be a framework of compensation for skilled workers who lose their jobs. In a very advanced economy (U.S., Germany, Japan), most workers are very specialized, and under complete free trade, most of them will be undercut as their specialty migrates to one of the other 200 countries in the world. So compensating those who lose under free trade is a key, I repeat key part of free trade theory. Without that, the benefits of free trade are net negative due to dropping incomes among the majority of workers whose special skills are no longer needed here. This is something that is often overlooked in the free-trade debate. One really has to have a good theoretical understanding of this stuff to understand the pros and cons. Again, the Caves and Frankel book is probably the most approachable for the layman. Free trade has advantages, but only if you apply the whole theory (which includes compensation), and that's something we're not doing. Read the book, do the exercises, and then you'll understand.

Veeren

Well, I work for an American company not originally interested in outsourcing. It was looking to hire tech workers, but after two months of search, HR agreed to hire someone with an H1-B visa.

I got employed thus. After hiring me, my company hired a few more IT workers, half of them immigrants on work visas. And what about paying taxes? Yes, we H1-B workers have to pay taxes just as others have to pay. We also pay for Social Security, the benefits of which we are surely not going to get, since to get a green card and settle permanently is a big hassle here. The green card process itself takes around 6 to 7 years of waiting (if you are lucky). Who wants to slave for 6 years when I can go and pursue my career somewhere else—Canada, New Zealand, Australia, etc.

RG

Too many foreigners (non-Americans) feel they have some God-given right to "migrate" to the USA, believing the emotional spin that "we're a nation of immigrants." Many nations are made up of immigrants and 5th-generation natives, the USA included.

The extremes are usually wrong at both ends of an argument. While some outsourcing is fine and free trade is fine, too, much is detrimental to the USA.

No question that many firms and more than a few H1-B'ers from India, China, etc. have abused the visa program and used it for salary suppression and also as an immigration program—which the H1-B program is not supposed to be.

A balance will come. The American people are not going to let our nation dissolve for the sake of the holy crusade of globalism. The U.S. needs to get back some engineering and even manufacturing for our economic and national security welfare.

Tom

Encouraging unrestrained immigration is causing wages in America to stagnate for the middle class at the same time we (not Corporate America) have to pick up the tab for the health care, education, and law enforcement costs associated with illegal immigration. As for "immigration enforcement," that term is simply an oxymoron these days. If America did the following five things, wages would go up dramatically and crime would go down:
1) Free tuition to all public colleges for American citizens.
2) End the H1-B and L-1 visa programs.
3) Repeal the 1965 Immigration Act.
4) Send all illegal immigrants back to their home countries to wait on line to become citizens.
5) Build a 3,000-mile wall on the border with Mexico.

If we don't do these five things, America will become a Balkanized low-wage nation. Please write your Congressional representatives and tell them to end the H1-B and L-1 visa programs, repeal the 1965 Immigration Act, and oppose amnesty for illegal immigrants.

Here's an example of how the H1-B program has caused wages to go down: A company has about 1,000 workers in a specific department with an average age of 45, making an average salary of $85,000 with health benefits and a 401(k). Say this costs the company $100,000 per employee per year, which totals about $100 million per year for the department.

But what if the company can replace all 1,000 of these workers with a group of 800 workers from India and China who have an average age of 25, do not get benefits, work 60 hours per week, and get paid an average salary of $50,000 per year. This group of employees will cost the company about $40 Million per year.

The company saves $60 million per year for this department alone. The cost savings is phenomenal when extrapolated to future years, even when one factors in the costs associated with laying off the original 1,000 employees. In my opinion, the only reason corporations are for the H1-B visa program is to save money.

Random responses

RG,
Who constitutes an "American"? Are you referring to Europeans? Why don't you make yourself clear? I believe every human being has the right to live and work anywhere.

max

I won't be surprised that the term outsourcing is being bashed partly as a result of racism and myopic nationalism. For the U.S., a self-stated champion of free trade to even consider such protectionist measures is an indication of its hypocrisy. And to point the finger at the government and supposed greedy corporations is a convenient way to shift the blame when market forces themselves dictate that consumers want cheaper or different products that another country can produce better than the U.S. As another reader pointed out, U.S. consumers have already voted with their wallets that they do want to consume products produced overseas.

george

Outsourcing has benefited U.S. consumers by holding costs down and making U.S. goods and services more competitive globally. But the cost has been to displaced workers, initially factory workers and now knowledge workers. It is imperative that displaced workers be placed or retrained to fill jobs of equal or greater pay. Otherwise the pressure on the Administration to restrict outsourcing could be overwhelming.

Brij

I think it's a full life cycle we are seeing here. Nations that were at the top centuries ago are coming up again, and this cycle will continue.

Andrew

Stop whining. When the U.S. was the only powerhouse around, other countries outsourcing into the U.S. was pretty much OK. Be competitive, or shut up.

Mac Daddy

My right to a job in the U.S. was purchased with the blood of my relatives. U.S. companies have a privilege to do business in the U.S. The jobs they offer are my birthright. Stop whining, and throw tea in your own harbor and overthrow your own banana republic.

Gregg

"... the number of companies that said they were hiring overseas because of 'access to qualified personnel' increased 75% over the previous two years."

If that's the case, then reform immigration policy to bring them here and keep the money in our economy. It's like Wal-Mart grinding Main Street America into the dirt in thousands of communities, then shipping the proceeds back to Arkansas, to support the exploitation of workers in Asia who make products for pennies without the benefits of our system.

"If one country is better at making wine and the other bread, both countries come out ahead if they specialize their skills and then trade with each other. Outsourcing is nothing more than trading services, instead of goods, across international borders."

That's a BS analogy that's relevant only if the rules are the same on both sides, if even then. Agricultural subsidies in the U.S. and Europe are flattening the Third World farmers.

Outsourcing benefits corporations, not nations.

Vince

It is a tough situation. Until last year, I was siding with the No Outsourcing movement. However, I have changed my mind in the last year. I decided to start an Internet-based company. When bids for software development topped $225,000, it jeopardized my dream; I did not have that kind of capital. Through contacts, I was get in touch with a company overseas that accomplished my goals for a fraction of the cost. So today, I have nine people currently employed, am preparing add to more management level positions, have a law firm, accounting firm, and marketing agency retained, office space rented, utilities paid, payroll taxes paid, etc. And it's all because I was able to outsource. So what was better for the U.S. economy in my case? As I said above, a tough situation.

Naveen

The American economy is based on capitalism. Capitalists like outsourcing, because the return on investment is greater for now. But any economic change that results in a huge job loss in a short period of time cannot be good--for the simple reason that it is just too quick for people to adapt and find other things to do or for the system to evolve into something different where people can find jobs. Capitalists have to remember that employees in an economy are consumers, too. I mean employees and consumers are not two different sets of people. They are one and the same. By causing a deluge of job losses, they are indirectly affecting their own existing markets--which is stupidity and will hit them very badly in the near future.

Curt

Many workers today have been overpaid for years or even decades. Born and raised in Detroit, I have seen my fair share of automotive workers who make ten times what they should and do half the work required of them. This is because unions, which are now unnecessary since OSHA and other organizations have come about, have pushed for higher wages, shorter hours, and less work for years.

You want to point a finger at someone for outsourcing? Point it at your local union representative. They are the ones sucking money out of the company for workers that can do no wrong because of union protection.

Outsourcing is a way that companies can side-step the landmine of paying inflated wages. It is another form of competition and if companies aren't adapting and growing then they are dying.

Welcome to the world of business. It is all about money. We wouldn't even have an economy if everyone got paid what they think they should and never feared losing their job if they don't DO their job.

Jerry

The comments above are all interesting, but while government regulation is no good, neither are corporate CEOs. I process claims for people unemployed all day long in a high-tech region. There are too many high-tech professionals having to take low-pay service jobs & loosing their homes in the process. One last thing. We have a big problem with ID theft. Something's wrong when I get a call from India from an American Bank wanting to give me a loan and they already have my social security number. I wonder who they are selling it to. We know they don't like America anyway.

Jeff

I confess I have not read every comment up there, but there is one point that seems to be missing. For years, as far as I'm aware, our bought-and-paid-for government has given tax breaks to corporations for moving jobs off shore. Do not tell me that this policy is in the best interest of the folks who are taking up the slack for the resulting tax shortfalls.

Just for the record, in inflation-adjusted dollars, my best earning year was 1981, the year a sellout by the name of Reagan came to office. There has been less and less trickling down to me ever since.

To Andrew, I would ask: Does being competitive mean living with raw sewage in the dirt roads? That's who we are competing with. People who live well and benefit from this country's ever-growing disparity between haves and have-nots, find all of this just great, but the arguments used are extremely disingenuous. If the trend does not reverse, this will not be a decent place to live even for the very rich.

Curt, you scare me. Jealousy, I suspect. Unions became irrelevant in this argument long ago. Yes, their legacy is still hurting Ford and GM, but they are not why I can't understand the person on the other end of so many of the marketing, support, and tech calls I'm involved in today. Unions played a large part in your way of life, whatever it may be. They drove wages and benefits in most every legitimate business sector for generations, and their decline coincides with the decline of the middle class in this country.

Fixing the tax structure in this country would probably solve more problems than trying to reverse this trend. Oh, and it would help to move into the current century with all other industrialized nations to offer nationalized health care.

Gordon

By outsourcing working-class jobs, American business is impoverishing its customers.

Patrick

I do not know how to fix the tax structure in this country. U.S. corporations have a conundrum when their R&D is done domestically, and they have foreign subsidiaries with increasing sales. If some of the jobs are not outsourced, how would one suggest reconciling domestic expenses to foreign revenues? I am not smart enough to figure out how to split the baby.

shiva

http://en.wikipedia.org/wiki/Comparative_advantage
http://internationalecon.com/Trade/Tch40/Tch40.php

The solution for this issue is not binary. Check out these two links, and read about some reasons for outsourcing.

Mant

Response to the comment by Rima Gupta:

Her comment: "If this bothers some U.S. citizens, why don't they reduce their salary demands instead of blaming Indians? The fact is that they cannot give up their lavish lifestyles."

I am Indian, but feel this comment is just outrageous. Coming to the U.S. on an H-1B or other visa is a privilege and not a right for Indians and people from other countries. Imagine what would happen if India allowed an influx of Bangladeshi workers who would do the same job you are doing at 1/5th the wage, and then advise you to demand lower wages and give up your "lavish" Indian lifestyle? Anything, including outsourcing, is OK to an extent. In extreme capitalism, people will roam around with arms in hand, and you will have to fight to save your life. Don't kick around people when it's your day--tomorrow you could find yourself on the other side of the fence.

bert

The immigration of different races to America opened peoples' eyes and provided a great leveler of the human race. The outsourcing of jobs to other countries will open American eyes and provide a great leveler of the human paycheck. For far too long this country has seen overpaid executives, with little or no academic qualifications.

Shiv Ram

I live in India. Almost every week take my family to either Mcdonalds, Pizza Hut, Dominos. Buy American music, read books written by American authors, wear Levis, watch American movies like 300, watch CNI live in India. Almost every week I take my family to either Mcdonald's, Pizza Hut, or Domino's. I buy American music, read books written by American authors, wear Levis, watch American movies like 300, watch CNN. Look at the number of Ford cars on our roads. We use Microsoft in our office, work on IBM machines, use Oracle software. We invest our money in mutual funds run by Fidelity, Templeton, and very soon, JP Morgan. We hold company conferences in a Hyatt or Hilton. So on and so forth. It's a globalized world. We move up hand in hand. America benefits, we benefit. Don't stop the movement. N. Look at the number of Ford cards on our roads (though japanese and koreans are more). Use Microsoft in our office, work on IBM machines, use Oracle software. Invest our money in mutual funds run by Fidelity, Templeton and very soon JP Morgan. Hold company conferences in Hyatt or Hilton. So on and so forth. It's a globalized world. We move up hand in hand. America benefits, we benefit. Don't stop the movement.

Steven Perkins

One Question: If outsourcing is so great for the economy, why is everything so expensive in the U.S.?

bill clinton

It's unavoidable. However, it will attract the best talent in technology.

Texas

If the world were a level playing field, outsourcing would make sense. The reality is we open our doors to other countries, but they do not reciprocate equally. Consequently, we are giving away much more than we are receiving.

The gap between the wealthy (who promote outsourcing) and the poor rises yearly in the U.S. The middle class is rapidly vanishing. The U.S. dollar's value against foreign currencies is plumeting like the proverbial rock.

Before long, the U.S. won't have to outsource. American workers will be living in slums and scraping by on the same low wages the people in the countries we outsource to do. This is the equality evangelized by pro-outsourcers. Outsourcing only works when trade barriers in both countries are equal. The assimilation of countries in the EU has a chance for sucess. Unilaterally opening the borders to the U.S. while China, India, etc. bar their own is doomed to failure. The people who will pay the price are the American working class.

Sal

"U.S. movies, music, and TV shows are all over Europe and Asia."
--William, February 5, 2007, in this debate thread.

William's statement is true, but incomplete. To have been a more accurate statement, it should have been preceded by "counterfeit and pirated..."

The Biology of Relative Economies

I have long used what I consider to be a pretty good analogy for visualizing the natural functioning of an economic entity.

I like to think of any particular economic unit as a biological cell that carries out its survival functions pretty much on its own, as a closed system, extracting what it needs from its environment in order to sustain itself, ingesting sustenance from the outside through a semi-permeable membrane (trade policies/laws/agreements) that holds the cell together and protects the whole thing from falling apart or being otherwise invaded by foreign bodies.

A cell's semi-permeable membrane, among other functions, serves to maintain a certain biased equilibrium--biased in effect to suit its own interests (e.g., keeps the saltwater out, absorbs oxygen and nutrients).

When a cell's membrane fails or is otherwise defeated, bad things happen. For one, the cell falls apart, its innards spilling out into the surrounding environment, where unbiased, unhindered equilibrium takes place (i.e. the good stuff spills out into the void, until it is evenly dispersed throughout the cell's surrounding environment).

While I am no biologist, and the expression of my analogy needs quite a bit of working out, the result is this: Right now, in the U.S., we enjoy a well-above-average quality of life and have come to expect and even demand a higher standard of living than many (most) other countries in the world. Inevitably, the only reason we are able to continue to enjoy this benefit is that we still have a "semi-permeable membrane." We have "the goods."

At the same time, there are millions of others on this planet who have become aware of what we enjoy, thanks to the advent of efficient communication. These parties want to share what we have--and will do so at any cost and by any means.

The only parties who stand to benefit are Crooked Executive Officers (CEOs), to use a term someone coined earlier, politicians, and to a lesser extent, workers in countries who are trying to achieve and take a part of what we now have.

In the meantime, the middle class is being bled from both ends, losing to the rich and supporting the poor. In the end, I am sure that even at this rate and under the current system, an equilibrium will be reached, but it will be an equilibrium where Americans lose much of what we have come to know and love, while the foreign bodies will relish in their newfound scraps.

As we regress toward this new equilibrium, we continue to fall farther into a murky abyss where the only equilibrium is that of complete and utter hopelessness.

I say it's time to take a serious look at outsourcing and related issues now, before all the proverbial sand gets washed out from under our feet.

Kunst

The fundamental problem is that Americans have for decades been paid more than people in/from other countries for the same work. It is natural to want to maintain this advantage, but the various access barriers that made it possible have mostly fallen down. As others have pointed out, if you protect high American wages, American products will not be competitive, producing the same result in the end.

A major part of the "solution" will come when the U.S. devalues the dollar far enough that American wages are competitive. That will entail a reduced standard of living in the U.S., but it's been unsustainably high for a long time. We have been colonial masters of the world since WW2, and that era is over. Only our dominance of the financial system keeps us on top a little longer, and the benefits of that don't penetrate very far into the population. Our military "dominance" is part of the problem.

The problem is that during this transition time, we are losing/giving away our future competitiveness. Manufacturing is a largely gone. Now we are losing our technology edge, as Indians, Singaporeans, Chinese, and others develop skills while they develop products. This is the biggest danger. When the dollar becomes competitive, we will have to dig ourselves out of a huge hole, and other countries are not going to just step aside when we decide we want "our" jobs back.

Our lying "American" corporations say they can't find American talent. That is a flat-out lie. They hire foreigners and outsource because it is cheaper, period. While that makes sense from a purely capitalistic point of view, it does not take U.S. national interests into account at all. University students see engineering and computer science as less desirable careers precisely because of this policy, thus creating over time a real shortage of skill technology workers.

This is a wrenching but unavoidable transition. The U.S. has led a privileged life for decades. The sooner we realize that this is over, the better. We need a national program to develop the kind of talent we will need in the future. Subsidize the kind of education we need; students have way too much debt. Encourage employment of U.S. citizens in technology through tax incentives/penalties. And enforce the laws that require U.S. companies to sincerely try to hire Americans before importing a boatload of foreigners. All of this is just to buy time and smooth the transition.

No offense to non-Americans—I have worked with people from many countries. This is an American problem, but you can't expect us to just give up our future without trying. In the end, we need equality between nations.

Ananth Shankar

Americans should stop whining and start competing. According to one economist, they are getting "fat, lazy, and frankly do not know a lot." So deal with the real issues: guns in school, a broken health-care system, and insufficient mathematics skills. Outsourcing is not a zero sum game; every country benefits. Besides, get the facts correct; there are more jobs affected in the U.S. every month due to bankruptcies, mergers, acquisitions, and fraud than jobs offshored in a year. America will have to give up leadership in some fields, and that is a good thing. The more engines that pull the world economy, the better.

Yat

What is "outsourcing"? It's import of services. Just like importing cars or clothes. Whoever said importing and exporting are wrong.? Whoever says "stop outsourcing" effectively is saying stop the imports. Stopping outsourcing only means you are stalling the future of the U.S.A.

M.M.Yussouf

In this techno-oriented century of globalization, outsourcing is a free trade and works on its own economic theory for the competitive edge of its practitioners. Nothing can be enforced against natural laws. Let us allow it to play its own role in the business world, and encourage outsourcing in countries like Bangladesh through joint ventures to develop growth and utilize human potential.

Sameer

American companies want to sell in emerging markets as that is the only way to grow. They want to sell freely. Foreign countries tell the U.S., we agree with free trade of goods and services (humans with skills). The U.S. says, we do not want your people to come here to U.S. OK, put up a percentage of jobs in our countries and we will reduce import tariff, but not zero tariff. American companies realize this is a win-win situation, solving labor shortage to an extent, reducing labor cost, and stimulating demand for IT/Consumer products.

There are reports that even outsourcing cannot fill all the jobs available due to an aging work force in developed countries.

K P D

We live in very hostile times. Who cares if most Americans are going hungry and living at much lower standards? The businesses will be strong and powerful, and the top dogs will be fat and happy. Freedom for big business—freedom is what is important, not the well-being of the average citizen.

TT

I work for IBM, and I am currently working on a large project for a major U.S. retailer where we are replacing all of the U.S. developers with Indian developers just to cut costs. It's not because of lack of skilled workers in the U.S. The resumes I've been seeing are mediocre at best.

This isn't what bothers me the most. What really bothers me, and I didn't know this before, is that IBM is rapidly hiring Indians in India and "landing" them (as they call it) in the U.S. This is set up to look like an inter-company transfer, so there is no trouble or limit on getting them a visa to work in the U.S. for up to three years.

This is where the real injustice and theft of U.S. jobs is coming from.

Xpressions

Wow--this has been quite a discussion on outsourcing. What stands out to me is that a lot of people think those who come to the U.S. on H1-B and L visas do not pay U.S. taxes, which is so wrong. They pay taxes as any other people, depending on their tax bracket, and surprisingly, nobody realizes they also pay Social Security taxes from every single pay--and get no benefits.

And people have been harping about low wages that Indians work for. Recent statistics show that Indians are the second-richest immigrant population in the U.S. Wonder how they manage to do that with such low wages.

Cedric Chin

We're already "outsourcing" manufacturing to countries like China, and let's see the results: dead pets and lead in children's toys. Oh, and let's not forget the working conditions at Chinese sweatshops. I'd hardly put the blame solely on corporate greed--no one forces you to buy junk you don't need at low, low, prices. But seriously, there's something wrong going on.

Kyle

Just so I am clear, I want to verify what I am hearing.

1. Outsourcing is bad.
2. Freedom is great as long as it doesn't harm the "average" citizen.
3. Outsourcing is causing the U.S. middle class to disappear.
4. The "crooked executive officers" are to blame for wanting more money.
5. The government should get involved and stop this outsourcing madness.

What are we saying? I laugh and cry at the same time at the stupidity. I will address these issues from last to first.

5. The government should get involved and stop this outsourcing madness. Right, we should have paid our taxes on that tea they brought to Boston. The government should control and tax everything, even air. Wait, that's not what we said in that document the, um, oh right, the Constitution. Please, people, Social Security, welfare, education, military, IRS, even our roads and national parks, what has the government really done well, I mean excelled at? Why--because they have no competition. More government isn't better government. (Oh, and more on this when we get to the middle class.)

4. The "crooked executive officers" are to blame for wanting more money. OK, quick answer. Who wouldn't give themselves a raise, or a big bonus if they are providing thousands of jobs (no matter where the jobs are) and running, as in directing, as in responsible for, an entity that in part provides for the very economic stability that makes the U.S. great?

If you think being a CEO is easy, try it. Oh wait, most of you don't have what it takes. Then stop whining, and get working on being better at your jobs. If you were indispensable and revolutionary, you would be creating rather than relying on others to create your job for you. America was created; it didn't just happen over hundreds of years of just being populated. We lead in everything. So what if the world is getting better at copying us? We just keep coming up with new and better ideas; that is who we are, why we are the best country in the world.

3. Outsourcing is causing the U.S. middle class to disappear. So the middle class is shrinking, and it's everyone else's fault. Welfare is bleeding the government dry and so is the military and so are the endless agencies that we “need” to ensure we stay free. Who pays for (and elects) most of the government? That's right, the middle class. Why, you ask? Because the poor get paid (yeah, welfare is working great), and the rich get educated and create things like businesses and advances in industry (this is why they don't pay more taxes). So if you're middle class, as in average, as in only a C on the report card, you're going to move into the lower class or the upper class--it's all up to you.

If you aren't the best student, employee, employer, or just not a great citizen (if you're lazy, uneducated, and weak), then someone will take what you won't take yourself. Nature is all about the survival of the most fit. The best in the world want to come here. I welcome them; they make us in the U.S. stronger.

2. Freedom is great as long as is doesn't harm the "average" citizen. If you live in America, you have the freedom to change your life more than most people in the world can dream of. You can allow yourself to be harmed or be a victim. You don't even have to let someone physically harm you. That's why there is the term self-defense, but if you don't learn how to defend yourself, then whose fault is that? Improve yourself, educate yourself, never be satisfied, reach for the stars, and take responsibility for yourself.

1. Outsourcing is bad. Right, just like freedom and advancement and improvement and creation are all bad things. Let's leave out the fact that it's an organization's right to do what may be best for the “bottom line” (that is the point of business, to make a profit), and look at what outsourcing does to the countries (other than the U.S.) it affects.

First the education requirements increase. This happens so that the kids can get these better jobs (outsourced jobs) when they hit the market.

Then the economy starts to boom, creating a middle class that in many of these countries doesn't really exist (this is horrible, I know--how dare we help other people in other countries rise up in station and standard of living?)

Then we see the people from these countries become more creative, and they start businesses and invent advances that then help not only their country but also others (think of this in Africa for a moment, which would make many hearts sing).

These are all great effects of outsourcing, and far outweigh the loss of a lazy, complacent middle class.

Jay Draiman, Energy Consultant

The Greedy Corporations and the Profit-Hungry Shareholders

Honesty and integrity went out the window--anything goes.

Corporate greed and the insatiable thirst to make a profit, to satiate share-holders' profit expectations, have changed American values, where anything is justified in order to derive enormous corporate profits and satisfy the expectations of the shareholders; maintain the image of profitable Corporate America. It is a vicious cycle that feeds itself to ultimate disaster.

These attitudes have brought corporate executives to exercise the drive and mentality that anything goes, No holds barred. Inflating earnings, hiding debts and liabilities, outright fraud and deception. Theft by executives, theft of corporate assets, graft, bribery, illegal contributions to politicians, trips, gifts and favors to politicians, crooked lobbying organizations. Where and when does it all stop? When are Americans going to wake up and realize they are on the path to disaster of a magnitude that will bring our downfall?

We still have honest, ethical, hard-working people in America. Let us all rise and protest these money-hungry actions and methods before it is too late.

Work hard to better America, institute honesty and integrity. It starts at the top--the politicians, the legal system, and corporate America, and progresses to the masses.

The media is not exempt. Honest reporting is a must; the public expects no less.
Exercising sincerity, honesty, and integrity is a good beginning.

If you work hard, perform your duties sincerely and honestly, you will be able to earn a better profit and living. You will not have to worry about covering up for your wrongdoing, and you will be able to sleep better at night, and look at yourself in the mirror.

Corporate America should be required by law to insure pension funds of employees. This will protect employees from losing their pensions to greed and fraud as happened with Enron and others.

We should learn to respect one another. Bring back family values. Am I asking too much?

Jay Draiman, Northridge, Calif., Sept. 25, 2007

Dave

I fully support Mant's response to Rima Gupta. Her comments are really like having a hatred for Americans, those very Americans who brought some prosperity to the life of the Indian people today. She should be grateful for that.

Dave

Hello Jay,
Work Hard, I have no job; my jobs been taken by someone in India. I worked in the IT sector for 25 years, and today I've lost out to cheap labor from overseas. I really don't know how to handle this situation. I still have to pay my mortgage, my health insurance, and my kids' tuition for college. Can anyone tell me how I can do it? Or how I can challenge this cheap labor from overseas.

Lucile

H-1Bs and L1 visas have nothing to do with "free trade." These are "guest worker" programs that are supposed to be needed due to a skilled worker shortage. The problem for their proponents, Bill Gates and the ITAA, is that numerous independent studies have shown there is no shortage of U.S. high-tech workers. These visas are grabbed up on the first day of availability, and the majority of them are used on entry-level positions, not the top-level skill positions that Gates claims they are needed for. The high-tech guest worker programs are total frauds that are nothing but corporate welfare for Gates and his ilk, and results in the destruction of the American middle class: the families of all those highly skilled, unemployment U.S. high-tech workers.

Pedro

I think all those high-skilled workers affected by the mass acceptance of visas from foreigners to secure low-level positions are too much concentrated on IT.

It's time to analyze yourself, your objectives, and future prospects, and devise strategies that will propel your career and lead you to the front command.

As a high-skilled worker, you are, I suppose, not only a master at IT but also innovation, capacity to spot opportunities, entrepreneurship, alliance with other high-skilled professionals, etc.

By standing still you are not going to be better off.

Outsourcing is just a simple way of cutting costs in the name of efficiency and efficacy, but still tied down to operational process--therefore, invariable outputs.

Think out of the box, and offer insights to a world starving for great ideas.

Future third-worlder

Let's look at Korea. North Korea has a bloated military, produces almost nothing but weapons, and has to import everything. South Korea is a manufacturing powerhouse with a vibrant economy and a trade surplus.

Which country are we emulating?

Would someone please show me one major country with a thriving economy that doesn't have a strong manufacturing sector?

Also, we won two world wars, because we just out-built our opponents. Could we do that today? We don't even have a legitimate steel industry any more.

Outsourcing is killing America in more ways than we know.

Beth

The U.S. government cannot do anything about outsourcing taking place in the private sector, because they are highly involved in outsourcing in the government sector. They're outsourcing the military and even decision-making in the Air Force at the highest levels. That type of outsourcing is called defense contractors. Prison management is being tested for outsourcing, commonly known as "privatization." It's all about the bottom line. Outsourcing and privatization costs less and until it does not, it will continue. We are bottom line driven in the U.S.

trasser

I believe the companies that outsource should be obligated to financially support people who are not able to find jobs because of outsourcing. Even if the government taxes them, no matter how big the tax amount, it will not help unemployed people. Government refuses to even extend the unemployment benefits period. "One for one" is a fair rule. For each outsourced job, one unemployed person should be paid by those criminals who outsource, and not for 26 weeks but up until that person finds a job. Maybe this measure would make government care (yeah, right). There should be at least some punishment for stealing from its own people. Thieves.

f

We are blowing the bottom out of our economy. How will the workforce that opts to work for the cheapest salary be able to afford the cost of living? Credit? We all know where that can lead us. This site might tell you how much your boss makes compared to you.

http://www.aflcio.org/corporatewatch/paywatch/

Spain calls this generation baby-losers. On average they have a few more years of education than their parents from the baby-boomer generation, yet they have a lower standard of living. Where is all the money going?

Becky

Those who are stating that Americans are "not losing jobs because of outsourcing" must not work for the same company I did. They continuously denied that our jobs would be lost to overseas employees.

It started with filling 2 QA positions overseas (yes, there were qualified local applicants who applied for the jobs). These people that were hired supposedly had QA experience as well as the system experience we required. Once we began working with them, it was very obvious that they had neither QA experience (couldn't write a test plan) or familiarity with the system. A lot of time went into working with them. When we finally convinced management that it wasn't working, their answer was to bring them to the U.S. for three months for "training."

These two employees came to the U.S. office, stayed at a hotel for three months, got paid an insane hourly wage, took a taxi back and forth to work every day, and "trained" for three months. Still when they went back, they could not do work on their own.

Since this was going so well, they decided to fill 4 DEV positions overseas. They did learn one thing--they had them come straight here for training for three months instead of floundering first. Again--hotel, insane hourly wages, taxi to and from work. They, too, went back, and still there hasn't been a completed project by any of these overseas employees.

I could not watch the floundering, deal with completely incompetent people, or wait for my job, too, to be outsourced so I (very luckily) found another job. I have been gone eight months, but I still keep in touch with many people there.

The same problems exist. Currently any employee who leaves is replaced with someone overseas. They have officially outsourced all of one area (DEV and QA) and actually announced that they will be outsourcing all QA and DEV positions in the next two years.

I don't consider myself well enough educated to say this is a good or bad thing for the world economy. I do, however, believe that there need to be a lot of changes before our unemployment rate gets even higher.

Resistance is futile

All your jobs belong to us.

RG

Pros:
- Corporation (read shareholders) can make more profit, as a result fat bonuses for executives.
- Rich will get richer

Cons:
- Job loss (definitely)
- Wage cut
- Low future employment potential
- Degraded life style of our service people
- Tax loss (decrease government income)
- Effect on other industries (if our people earn here and they spend here for consumer goods)

Now you decide which side you would like to support.

John McGough

It hurts to see outsourcing destroying the West. We have forsaken quality/service ethics and the efficiency of good communication, and downgraded the vital importance of this profession. It has been my experience on many occasions, when these jobs are outsourced to nations where English isn't a first language, but even so the effectiveness of working through process isn't there either, the corporations let these standards/poor training pass, which is dishonest and clearly demonstrates their greed. Ever-decreasing circles, folks. When you get frustrating, rude, or resentful service, it clearly tells they really couldn't give a stuff, but hey, you got sucked. They have become hollowed out and faceless. To engage any discussion with them concerning that just gets you slapped with the same rotten pacifying verbiage or subtle but certain negligence. And it can only get so bad, we reckon. Hello Adobe software, hello, Dell computer.

Donald

My dad was an engineer for HP for more than 30 years. He just got fired recently, because some guy in India is willing to do what he did for 1/3 of his pay and 1/4 the quality of his work. And I'm trying to put myself through medical school. So one day, corporations can shift all the doctors' and nurses' jobs to India. Can't wait for that to happen.

Maxwell

Donald, not to sound like a jerk, but you know just as well as I do that outsourcing doesn't affect every job on the planet, and it certainly doesn't affect human services like medicine that require the worker to physically provide care to his or her patient. I'm pretty sure there are better things to worry about than losing your job to an Indian, not to say this can't happen, but let's be realistic.

Gail

Second article is definitely not true: Companies do fire U.S. employees and hire employees located in Asia to do exactly the same jobs. So the companies do "move jobs overseas." This whole process is despicable.

American citizens being fired oftentimes have been loyal to the company and worked diligently for many years, for a very modest compensation, and have accumulated extensive knowledge. Their overseas replacements aren't as good. The cost benefit is questionable considering high turnaround in "cheap" labor markets. And this is not talking about the moral impact of such layoffs on other company employees.

Also, outsourcing high-tech jobs, engineering jobs, and defense contracts is very near-sighted and jeopardizes our future. Unless we wish to become a service country, a resort kind of place to be visited by wealthy Chinese, Malaysians, Saudi Arabians, and Hindus.

PS

How many of you guys are buying a GM car and supporting them in times of their need?

sam

Outsourcing is giving away all our jobs for here. With the unemployment rate already going down because of big business failing, this will only make it worse in the long run.

Pat

Making the payroll, whether foreign or not, is a substantial process of successful commerce or philanthropy, and creates the necessity of compromise that directly challenges what is meant today by patriotism or loyalty, and whether it is meaningful or not.

Given the impetus to impeach Bush for the number of extreme positions taken during his two terms makes us question what loyalty and patriotism Senator Hyde displayed in calling for the impeachment of Clinton back in the 1990s.

How well does America understand its own notion of loyalty or patriotism, given the diversity of its population?

What is often taken for granted without question is at the heart of efforts to create and strengthen Homeland Security after 9/11, encircling that question as significantly as if it was created for that purpose by the most exquisite scholar America has ever produced.

The question of what is patriotism or loyalty has not been revisited since the McCarthy hearings, and before that, perhaps not since the Revolution. What is loyalty and patriotism in 2009 with the prominence and power of multinational commerce and philanthropy?

Hilvic

Technically, if we were to lower our minimum wage and get rid of child labor laws, it would make our country seem "good" in the eyes of companies that send jobs overseas. If anything, that could get more Americans employed by companies overseas and end the economic crisis. Maybe, but it's ridiculous. If that were true, China and India would be the richest countries in the world with no poverty.

c-rock

"Economist Paul Samuelson, a Nobel Prize winner, wrote in a 2004 paper that the economic effect of outsourcing is similar to allowing mass immigration of workers willing to compete for service jobs at extremely low wages. They can drive down the income for huge swaths of the middle class, even if they benefit their employers."

Absolutely true, as it's already happening. The government should heavily impose immigration restrictions if anything should be done. It's one thing to compete for jobs overseas, but another if we have to compete with foreigners in our own country!

As far as government intervention to regulate outsourcing goes, I believe they should lower taxes & restrictions on businesses hiring overseas. Perhaps if they weren't taxed to death, they wouldn't feel the need to pay lower wages. I doubt it's all because of "greedy" CEOs. We have to look at both sides here instead of point fingers.

Kaweke Bournry

Although outsourcing is causing people in the US to lose jobs, and unemployment is happening, it also has to do with the green future...people in the US will be forced to concentrate on more economically viable jobs.

J Curve Technologies

One of the main factors I think that should be considered is whether the company that you are outsourcing your technical work to is here in the United States or not. There are ways to get the costs to be as low as overseas without sacrificing the quality of work that can come from overseas suppliers.

Steven P

Outsourcing is un-American, and it is a crime against our patriotic citizens. Let India create its own jobs.

What we are doing is enriching India and China only. They do not play a fair game. It is time that we the people create a revolution.

ML

I keep hearing people say that outsourcing is good in the long run and that we should retrain US workers to cope. Retrain to do what? Unless you work at a service job, every job can be outsourced to slave labor in China, Vietnam, or India. They don't have to pay for the benefits that we have passed into laws to protect US workers from exploitation. Now, big companies are just doing it again with workers that aren't protected by law. You used to be able to tell your kids to study hard in math and science. Now you should tell them to go to vo-tech because those are the only jobs that will be left. Goodbye engineers. Goodbye scientists. The day it will stop is when I can hire a lawyer in India. Maybe that is what we need to do to get the government to stop it.

So disgusted

Perhaps if corporate CEO jobs were outsourced to India we would see some change?

The longer we debate the issue of free markets, the more damage occurs, and the only option the economy has is to create bubbles. America is being raped by corporate interest and we do nothing. We are sheep.

IIY

I work for a very large building control company, and they mandate that we send engineering services and graphic services to a "company owned" business in India. Many times we are working on government buildings including military bases, in which we have to send floor plans and security information. No one says a word about it and it is very disturbing. What is even worse the quality of work is not good. Many times we have to send it to companies in the US to make changes and end up spending more on the total project then we would have if we just would have kept it in the US. The people making the decisions in my company do not care about keeping jobs in the US. I hope our government does something about it. I hate bleeding blue.

USJobs

Somehow LudditeWeek ignores the substantial research that offshoring actually creates U.S. jobs. It may surprise the all-white staff at BusinessWeek, but offshoring has the opposite economic effect of "crowding out."

wizowl

Real simply. Greedy corporate bosses refuse to pay living wage to Americans, outsource jobs, leaving Americans without income to consume. Prices that Americans cannot afford. What the greedy has done is brought down the nation due to shortsightedness and greed, and in a little while everyone will be broke including the greedy. This is crazy entrepreneurship. How will their shareholders feel when there is nothing to share? They hate the poor and use the Reagan trickle-down theory which causes the poor to get poorer, and not be able to afford your ever-increasing prices, The greedy will eventually be down here in the mire with the have-not's that they created at the bottom. We SHALL NOT recover from this DEPRESSION due to the greedy wreckless leaders in this world. You are going to finish what the same kind of businesses created in 1929, which I remember. History does repeat itself!

wizowl

Taxes in this country is on the backs of the poor and the few, and dwindling, middle class. Without jobs, just who is going to pay taxes? Not the people who pimped this nation to get rich. This nation is just about like Haiti. What a joke. The brightest have agreed with and voted with the business class for so long till they helped them to get us into this mess and now those business behemoths have turned on the middleclass because they had already finished-off the poor working class stiff.

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