Reassuring India
March 17, 2004

US Secretary of State Colin L Powell, encountering the other side of a tempestuous debate in the US, sought to assure Indians that the Bush administration would not try to halt the outsourcing of high-technology jobs to their country. In discussions with Indian leaders and college students, Powell said, "Outsourcing is a natural effect of the global economic system, the rise of the Internet and broadband communications. You’re not going to eliminate outsourcing. But, when you outsource jobs it becomes a political issue in anybody’s country." An appropriate US response to outsourcing was to press India to open up to imports of US investments, goods and services, he said.

The New York Times, USA

The Blame Game
March 26, 2004

Is your job going to Guangdong or Bangalore—and is George W. Bush to blame? While corporate outsourcing and offshoring of jobs has already become a central question in the 2004 presidential elections, the debate has so far only scratched the surface of the real reasons for the worst job growth since the Great Depression of the 1930s.

An estimated 2.8 million factory jobs have been lost since Bush took office in 2001. While the unemployment rate is officially 5.6%, that’s only because long-term joblessness—the worst in 20 years—is so bad that people have either dropped out of the labor market or have never even entered it. Count those people, and the real jobless rate is 7.4%.

That’s why outsourcing—factory jobs moved to China or call center operations sent to India, for example—has emerged as such a hot issue. The Bush administration’s response has shown only contempt for working people. "Outsourcing is just a new way of doing international trade," Gregory Mankiw, chair of the Council of Economic Advisers had said. "...More things are tradable than were tradable in the past, and that’s a good thing."

But try telling that to the workers at the Maytag plant in Galesburg, Illinois. Their factory is set to shut down while production moves to Reynosa, Mexico, where workers will be paid just $2 per hour, compared to an average hourly wage of $14.15 for the workers in Illinois.

Socialist Worker, USA

Outsourcing Fears Overblown
March 24, 2004

Concern that American jobs are being sent abroad represents "hysteria", the largest US technology trade group said on Tuesday, as it called for new education and immigration policies to boost employment.

"In today’s hysteria over offshore outsourcing, productivity has become a four-letter word," said the Washington, DC-based American Electronics Association (AeA), whose member companies, numbering more than 3,000, employ 1.8 million people.

"We believe that offshore outsourcing is the least important variable in the decline of high-tech jobs," the group wrote in a report on the subject.

The trade group said data on foreign outsourcing was based either on anecdotes or questionable projections, and it took specific issue with a report by Forrester Research that said an estimated 3.3 million US service industry jobs will be moved offshore by 2015.

The Forrester forecast was based on faulty labor force projections made at the height of the technology bubble, the trade group said.

The trade group said the US could stem technology job loss by mandating improvements in math and science education in elementary and secondary schools. The group also said the country should give permanent residency to all foreigners who graduate with advanced university degrees.

The Washington Post, USA

Protests Swell
March 24, 2004

Natasha Humphries, a former employee of Palm who trained her replacement in India before losing her job, will represent California in an anti-outsourcing bus tour next week protesting job loss in America, labor advocates said.

Humphries will depart from the front of an IBM facility in San Jose and join representatives from all 50 states in St. Louis for an eight-day tour. The AFL-CIO is sponsoring public events on unemployment and overseas job flight for the delegates, who will visit 18 cities in eight states before arriving in Washington at the end of the month.

Jose Tengco, campaign media director for the California Labor Federation, said the IBM facility at 5,600 Cottle Road was chosen as a launch point because workers there allegedly were losing jobs that would be replaced in India. But IBM representative Clay Helm said that claim was "absolutely false". "There are no pending layoffs at the Cottle Road facility," she said, adding that IBM expects to increase the number of jobs in the US this year and is investing $200,000 for job training of its domestic workforce.

Humphries has become a symbol of the most extreme form of offshore outsourcing, which has caught on as a presidential campaign issue as many Americans worry about their job security.

"Offshoring has created a devastating economic climate, not just among Silicon Valley technical workers, but nationwide," Humphries testified March 9 before a state Senate hearing in Sacramento.

"Free trade is not free. The middle class is paying the price," Tengco said.

The Miami Herald, USA

Hirings Continue Unabated
The hiring frenzy by Indian call centers continue, as India remains the undisputed leader of emerging markets to which developed economies are outsourcing high-technology jobs, IT consultancy firm Gartner said in a report. (Inset) Union workers hold signs during a rally against outsourcing of jobs on Capitol Hill, in Washington recently. Outsourcing of US jobs to Asia is expected to slow down, as the Bush administration comes under heavy fire from opposition Democrats who charge the policy is creating widespread unemployment, analysts say.

Making Hay
March 24, 2004

Rather than sweating over US jobs migrating to India and China, some investors are trying to profit from the flight instead. Shares of "offshoring" companies have been getting noticed on Wall Street. US firms are hiring these companies to perform back-office tasks such as software design and call centers for incredibly low costs. Some investors see this as a way to get a piece of what could be the next revolution to sweep business, much as re-engineering did in the ’80s and the Internet did in the ’90s.

Investors who missed the initial run-up have gotten another chance. Worries over the jobless recovery have turned offshoring into a political pinata and have knocked the stocks down sharply. Despite concerns in the stock market about the political risks, the industry has powerful trends working in its favor. The offshoring industry could potentially turn into a powerhouse.

USA Today, USA

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