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Thursday, August 7, 2003
As jobs flow overseas, the controversy deepens
Outsourcing: The jobs may be going away, but the debate sure isn't.
For example, earlier this year JP Morgan Chase said it plans to move some of the work of preparing stock market research reports to India. A JP Morgan Chase spokesman quoted in The Boston Globe says the company won't lay off stock analysts in the United States; instead "the Indian workers will do the heavy-duty number-crunching, freeing up the Americans to focus on higher-level financial analysis, and letting them spend more time with customers."
Here is a wonderful bit of irony. Perot Systems recently bought an Indian company that handles billing and claims processing for health care companies in the United States. Nothing like making a self-fulfilling prophecy out of that "giant sucking sound" warning.
Get used to more such announcements. Management consulting firm A.T. Kearney says its survey shows banks, brokerages, insurance companies, mutual funds and other financial service firms plan to move more than 500,000 jobs offshore in the next five years.
And it won't just be call-center and back-office jobs. The jobs will include financial analysis, research, regulatory reporting, accounting, human resources and graphic design.
And technology consultant Gartner Inc. says one out of every 10 jobs within information technology vendors and service providers will move offshore by the end of 2004.
"It is collusion between corporations that pour big money into politics and Congress that passes legislation enabling the corporations to replace American workers with substitutes, thereby keeping all wages artificially low to enhance corporate profits."
Sounds like it came from a labor leader or someone in the Howard Dean wing of the Democratic Party.
But it didn't. The speaker in question: Phyllis Schlafly.
And that illustrates an interesting potential phenomenon of the outsourcing and jobs exportation issue: splitting apart traditional alliances and rearranging the parts into new coalitions.
Labor, not surprisingly, has been outspoken in the past on trade issues. Who else in the political spectrum has been closest to labor's views on that subject? Not that either side would care to admit it, but the Schlafly-Pat Buchanan segment of the Republican Party. The issue has the potential of netting those who saw themselves as Ross Perot independents in past elections.
The issue of outsourcing is already causing some splits in the ranks of business. A fascinating Wall Street Journal report recently detailed the debate among manufacturers over the trend of moving production work to China. Those moves tend most often to be made by large manufacturers, at the expense, The Journal says, of smaller companies that were the suppliers and subcontractors to those bigger outfits.
Says one lobbyist on the issue, as quoted by The Journal, "The big companies are following a new business model: Pay Chinese wages, but charge U.S. prices."
One common thread I see among the dozens of messages I've received on this issue is the contempt with which the Republican and Democratic parties are held on this issue, as both contributors to this situation and impediments to any solution.
The various groups who are in agreement on outsourcing/jobs exportation may be too fractious to pull together in one bloc with any real clout; given what might unite them (knee-jerk, poorly thought-out responses), maybe that's just as well. But watch out if someone figures out how to do it.
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