When Outsourcing Is Outsourced...

Nick Gillespie | September 25, 2007

Only outsourced workers are outsourced?...

The NY Times reports that the heavily vilified repository of much U.S. outsourcing, India, is now itself outsourcing jobs:

India is outsourcing outsourcing.

One of the constants of the global economy has been companies moving their tasks - and jobs - to India. But rising wages and a stronger currency here, demands for workers who speak languages other than English, and competition from countries looking to emulate India's success as a back office - including China, Morocco and Mexico - are challenging that model.

Many executives here acknowledge that outsourcing, having rained most heavily on India, will increasingly sprinkle tasks around the globe. Or, as Ashok Vemuri, an Infosys senior vice president, put it, the future of outsourcing is "to take the work from any part of the world and do it in any part of the world."

More here. Hat tip: Film critic extraordinaire Alan Vanneman.

reason looked at how Barbie was outsourced first to Taiwan and then eventually to China (no doubt for the special Toxic-Lead Barbie). And back in July 2004, we told 10 Truths about Trade.

Comments

thoreau|9.25.07 @ 9:51AM|#

Since Mexico was mentioned, I should say that I agree with MikeP.

|9.25.07 @ 9:51AM|#

This whole mess started when people began specializing in one skill and outsourcing everything else to other specialists. obviously if you pay one guy to bake bread and another guy to shoe your horse and yet another to build your furniture, those are things you aren't doing for yourself.

|9.25.07 @ 9:53AM|#

Saying that India has been vilified by people who criticize outsourcing is like saying that news stands have been vilified by people who criticize the New York Times editorial page.

Or like saying that American soldiers have been vilified by people who criticize the Iraq War.

thoreau|9.25.07 @ 9:56AM|#

BTW, it will be interesting to hear which thing people think is worse: Mexicans coming here to do the jobs, or the jobs being done down in Mexico instead of here.

|9.25.07 @ 10:06AM|#

Speaking of outsourcing, has the UAW begun hiring homeless people in Flint to picket GM?

Sandy|9.25.07 @ 10:35AM|#

joe:

You're missing the element of racism in the criticism of outsourcing. Except for some older union types, the same people have said almost nothing when a job goes from California to Minnesota. Nary a peep when Ford started making cars in Canada. But a phone center opens up in India or a car is made in Mexico and whoo, look at 'em rip.

|9.25.07 @ 10:39AM|#

Psst... One word: Bangladesh.

|9.25.07 @ 10:56AM|#

Sandy,

There are Indian people in California, you know.

I realize that it is a nice rhetorical strategy to call those who disagree with you racists, but it is self-serving delusion to pretend that it explains the concern about job loss in America. I might as well accuse the proponents of outsourcing of being racist against the white people whose jobs are outsourced.

|9.25.07 @ 11:09AM|#

I would just note that I can think of few humanitarian events I would celebrate more than big call centers opening up in Congo.

|9.25.07 @ 11:13AM|#

joe, It ain't rocket science its simple economics. There will always be winners and losers... Oh hell, why bother? Some people have too much emotional capital invested in a bankrupt world view to admit or even consider they might be wrong.

VM|9.25.07 @ 11:16AM|#

It ain't rocket science its simple economics.

sniffles - were that the case on this current project! :)

A real american|9.25.07 @ 11:16AM|#

The proponents of outsourcing are racist against white people.

An ersatz american|9.25.07 @ 11:46AM|#

Mea culpa: as a white Fortune 500 CEO, I must admit that I do hate my own race. Shame on me.

|9.25.07 @ 12:12PM|#

I hope that made you feel better, J sub D. It certainly didn't accomplish anything else.

Space Monkey|9.25.07 @ 12:14PM|#

Thr first major software outsourcing destination was Ireland.

There was nary a peep of criticism about this, and Ireland was celebrated as the Celtic Tiger.

When half the country cannot trace their roots towards India or China, suddenly trade seems nefarious and a plot by CEOs to ruin America.

Sandy|9.25.07 @ 12:22PM|#

joe:

I'd be more convinced if the criticism were more evenly leavened. Until then I just call 'em like I see 'em. Lou Dobbs is not concerned about Canadians or Europeans.

|9.25.07 @ 12:27PM|#

...suddenly trade seems nefarious and a plot by CEOs to ruin America.

I have no idea what you're talking about.

ed|9.25.07 @ 12:32PM|#

The funny thing is that eventually the outsourcing will come full circle, and I'll get someone at a help desk in West Virginia who can't speak English just as well as the guy in India.

Lou Dobbs|9.25.07 @ 12:32PM|#

I know I can always count on you joe to set the score straight.

They took our jobs!

thoreau|9.25.07 @ 12:33PM|#

joe-

Certainly racial issues aren't the sole reason why some might be concerned when work is outsourced to foreign countries, but it might help explain the relative attention paid to different types of outsourcing.

|9.25.07 @ 12:45PM|#

Differences between the period when Ireland was the largest recipient of outsourcing and today:

The differential between American's pay and Irish workers' pay was much less.

The number of jobs being outsourced was much smaller.

The economy was better, meaning workers who lose their jobs had an easier time re-entering the workforce.

The types of jobs being outsourced were in industries which already had a high demand for US labor - once again making it easier for those who lose their jobs to find new ones. The outsourcing of manufacturing and other blue collar jobs today is generally happening in industries that already offer few job prospects for those who need work.

As a weaselly man once said, "It's the economy, stupid!"

None of which is relevant to what the appropriate response to outsourcing should be.

|9.25.07 @ 12:57PM|#

As the dollar sinks ever deeper into the toilet, the French will outsource jobs to this country. Citroen plant, anyone?

sv|9.25.07 @ 1:06PM|#

call-center or code-maintenence-monkey (if you're lucky) jobs make up the bulk of those that get outsourced to india. i think BPO (business process outsourcing) consists of many of the labor-intensive, mostly mind-numbingly-dull low-end jobs that are created by a mature economy like the american one. the increased efficiency gained by outsourcing should increase wealth and economic growth and increase domestic job growth, IF there are americans well-qualified enough to do the new jobs that should be created in an economy like that - top-of-the-pyramid jobs that require creativity in addition to technical competence and communications skills. the fair, sensible, and very American thing to do would be to rise to the economic challenge posed by foreign countries like India and learn to do jobs which require those skills. Americans are still at the top of the global economy, not only because of our huge capital and momentum, but because there is so much creativity and independent-mindedness among americans. we can compete! opposing "outsourcing" might not be rooted in racism, but it definitely is fed by irrational fear and short-sightedness.

|9.25.07 @ 1:15PM|#

The new york times has only now picked this up? This has been going on for years.

We have specific clauses in outsourcing contracts that forbid this practice without prior approval firms were doing it without telling anyone.

outsourcing uk jobs |11.5.09 @ 6:12PM|#

the increased efficiency gained by outsourcing should increase wealth and economic growth and increase domestic job growth, IF there are americans well-qualified enough to do the new jobs that should be created in an economy
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