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Offshore Outsourcing Threatens Offshore Outsourcing

Posted by ryuzaki0 on from the giant-sucking-noise dept.

theodp writes "India offshore tech support companies may soon face job losses as U.S. companies such as IBM, Intel, Hewlett-Packard, Oracle and PeopleSoft explore countries with even cheaper sources of technical labor, including Romania, Russia, Hungary, the Czech Republic, the Philippines, Singapore, Thailand and Vietnam. Concerned that outsourcing might be outsourced from India in the near future, a Bangalore call center owner said 'It's hard to know where it will all end. Is there a country where people will work for free?'" There's a Newsforge story about the same subject.

4 of 859 comments (clear)

  1. Re:Cycle of Poverty by Anonymous Coward · · Score: 1, Informative
    The auto industry is not really a good example here. Overseas development was cheaper/US wages higher due to the huge negotiating power of the auto unions. When the Japanese automakers started expanding into the US, they did it in areas that weren't heavily populated by existing autoworkers (Kentucky, Tennessee, and further south to Alabama), paid the same or higher wages, but set up non-union shops. This eliminated huge costs in negotiating and retiree benefits.


    Software development/tech support has never been unionized, and never will.

  2. History *is* on the side of business by thefinite · · Score: 2, Informative

    I am having a hard time understanding what is bad about this cycle. The jobs move away? In America, they were replaced with higher-paying, higher-skilled jobs. The distribution of wealth became less even? Even if that is the case (and there is a lot of information disputing that), the *overall* standard of living became significantly higher. Just because a textile worker wasn't making as much as his boss doesn't mean he wasn't making more than before he got the job.

    The example from America's history is proof that India did the *right* thing. Look where we are now in average standard of living compared to the rest of the world.

    --
    Boom Shanka
  3. Re:Cycle of Poverty by davesag · · Score: 2, Informative
    Eventually you run out of people who will work for rice and you have to step up to paying a slightly higher amount, and the big cycle begins again.

    An alternative is to artificially inflate your prison population and force people to work for their daily bread. The USA is the world leader in that game. I note with interest the 13th Amendment to the United States Constitution reads:

    "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."

    So the solution is simple: Crack down on the sorts of crimes techies revel in such as pot smoking, copyright infringement, terrorism; and bingo you have a well educated pool of slaves all primed to go. Of course that will lead to other techies comitting property crimes to buy food as they can't compete with free slave labour - thus adding to the stock of the 21st centuary slave pens you call prisons. It's happening now, you just need to look.

    --
    I used to have a better sig than this, but I got tired of it
  4. I was in Romania last year... by hirschma · · Score: 2, Informative

    A few facts:

    * If you lose your job in Romania, the goverment pays you around $150/month in unemployment, effectively setting a minimum wage.

    * The average salary is about $200/month - but that is the average, skilled and non-skilled.

    * The average skilled salary is about $50-$100 higher, depending on discipline. Example: an insurance actuary, a person who computes premiums, gets about $300/month. That same job in the US would get about $60k, minimum, and requires advanced mathematics degrees.

    * Many Romanians have gone into business themselves to increase their earnings.

    * As of last year, any kind of bandwidth aside from modem access was horribly expensive, with T1s costing over $10k/month, payable in US currency or Euros.

    * Romanian women are just amazingly attractive as a group. Not totally on topic, but I can certainly understand why Western businessmen would want to prospect there :)

    The bottom line: it isn't cheaper to hire a Romanian over an Indian, and their English is less likely to be acceptable.

    So... it is likely that the corps are doing this as a way to avoid a spike in salary inflation in India - a negotiating tactic.

    jonathan