Slashdot Mirror
India Outsourcers Find Back Door in Canada
securitas writes "Metro International newspapers Toronto edition reports that more Indian companies are opening back doors into the United States by setting up shop in Canada. The issue of outsourcing, offshoring and nearshoring has become a hot issue, with the 2004 presidential election less than a week away. Candidate John Kerry has said he will close the tax loophole that makes it advantageous to outsource call centers."
I guess that makes me an evildoer, eh? Ah well, at least Guantanamo Bay will be warmer than Winnipeg this winter.
Trolling is a art,
Blame Canada?
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
I think near-shore or off-shore makes no difference as they're still outsourcing, ie taking away jobs which could have been given to locals.
Bush said druing a debate that he will let Mexicans to come to US to work legally, and gradually obtain residency. If this happens, the Canadian-Indian issue is small in comparison.
Maybe the ideal "screening" is based on the percentage of employees' residency status, so if over 50% of a Canadian company is from developing countries, it's no deal.
Rock that crushes, Paper & Scissors that don't matter.
He could of introduced plenty of bills supporting his current election platform as a senator, why didn't he? What makes you think he'll do it now if elected president? Just asking.
I think it's because there was a fad for awhile for directors of TV and movies to film in Canada, because it was cheaper, and for a little while a lot of places in Southern California were feeling it. But then prices started going up in the areas in Canada where filming was being done because there was awareness that there were lots of rich people there all of a sudden, and the locals acted accordingly. It'll balance itself out. At least, in my youthful optimism, I'm going to hope it will.
Why doesn't anyone ever talk about all the jobs being insourced? The real "Benedict Arnold" companies are those that move their headquarters overseas -- in the form of a rented office in Bermuda -- to avoid paying US taxes, not US-based companies with manufacturing centers in other countries. Those are the real tax cheats.
Bungo!
What tax loophole is this exactly? I know that the companies avoid certain expenses just due to lower wages offshore, but taxes too?
If there is a loophole, closing it would mean more revenues for the government (plus for them) and/or less outsources (plus for us)
I knew from the post that someone would immediately whine that it mentioned Kerry's stance.. and immediately wanted to post something about it...
Slashdot is not a TV or radio network. There is no reason for it to give "equal time" or avoid showing bias. It's "news for nerds" - it doesn't claim to be nonpartisan (or partisan).
The internet is not the same as other "media outlets", and Slashdot has no "responsibility" to be any certain way.
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Also please remember that the US has spent the last twenty five years literally ramming free trade down the world's collective throat (admittedly, an effort made on behalf of the financial elite, not workers).
Be sure you show George where we are on the map. It could be embarassing seeing him saying how great Canada's burritos and Corona are after he conquers Mexico.
Trolling is a art,
not necessarily...
...
User: it's a Latitude CPi-A.
Tech: Got it, a CPi.
User: no, it's a CPi-A.
Tech: I heard you the first time, eh? A CPi.
User: No, a CPi with the letter A.
Tech: With what letter, eh?
...
User: I think it's a boot virus.
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User: No, it's a boot virus.
Tech: What does "it's about virus" mean? What virus, eh?
First off I'm voting for Kerry, but the idea that new legislation is going curb the tax advantages of outsourcing is ludicrous. So lets say Kerry does pass such a bill, what will happen? Large companies will simple open up offshore subsiaries to skirt the law, similiar to what Haliburton did under the leadership of Dick Cheney, by having a Caymen islands phantom corporation in order to business with nations like Iran.
from an old episode of This Hour Has 22 Minutes
An Apology to Americans
By Reporter 'Anthony St. George' (Performed by Colin Mochrie)
Hello. I'm Anthony St. George on location here in Washington.
On behalf of Canadians everywhere I'd like to offer an apology to the United States of America. We haven't been getting along very well recently and for that, I am truly sorry. I'm sorry we called George Bush a moron. He is a moron, but it wasn't nice of us to point it out. If it's any consolation, the fact that he's a moron shouldn't reflect poorly on the people of America. After all, it's not like you actually elected him.
I'm sorry about our softwood lumber. Just because we have more trees than you, doesn't give us the right to sell you lumber that's cheaper and better than your own. It would be like if, well, say you had ten times the television audeince we did and you flood our market with great shows, cheaper than we could produce. I know you'd never do that.
I'm sorry we beat you in Olympic hockey. In our defence I guess our excuse would be that our team was much, much, much, much better than yours. As word of apology, please accept all of our NHL teams which, one by one, are going out of business and moving to your fine country.
I'm sorry about our waffling on Iraq. I mean, when you're going up against a crazed dictator, you want to have your friends by your side. I realize it took more than two years before you guys pitched in against Hitler, but that was different. Everyone knew he had weapons.
I'm sorry we burnt down your White House during the War of 1812. I see you've rebuilt it! It's very nice.
I'm sorry for Alan Thicke, Shania Twain, Celine Dion, Loverboy, that song from Seriff that ends with a really high-pitched long note. Your beer. I know we had nothing to do with your beer, but we feel your pain.
And finally on behalf of all Canadians, I'm sorry that we're constantly apologizing for things in a passive-aggressive way which is really a thinly veiled criticism. I sincerely hope that you're not upset over this. Because we've seen what you do to countries you get upset with.
For 22 minutes, I'm Anthony St. George, and I'm sorry.
If I hadn't been through all of this election I probably wouldn't have believed my eyes. This report from last February from people in Wisconson finding Caller ID signatures from Canada for the Kerry Election Call Center? Makes you wonder if there will be political loopholes in any laws similar to those for the National No Call list.
Today is a gift. Save the receipt.
If?
I guess thats one reason, but let me maybe present another one. The company I work for recently did some outsourcing to India, even though we mostly went through Chicago when the RFP negotiations were going on when it came to the nitty gritty (i.e. the "real" work) communication was a huuuuge problem. Even after we worked that out the quality of the code we got back was, let us say lacking (this might have just been this one company, but I'm just saying...). Anyway, by the time the project was done it cost us more and took us longer than if we had just hired local contractors to do it. Edmonton is kind of a weird place, there are at least four post-secondary institutions pumping out IT grads three times a year, putting it bluntly we have a lot of skilled IT people flipping burgers around town. Getting those people who are still keen on the IT industry (but don't want to move away) into low paying but IT-related jobs isn't exactly hard to do.
Edmonton has always been an IT hub because of the Provincial Government (and the IT jobs it attracts), but in the last decade big IT firms have moved in and paled that aspect of Edmonton's IT community, firms like IBM, Microsoft, Fujitsu, BioWare, Intuit (etc, etc...).
P.S. It's good to see NAFTA finally doing what it was designed to do, form an even stronger economic partnership between the Americas.
P.P.S. If these Indian companies have indeed found a back door to profit in the good ole USA, you can be sure that the Canadian Revenue Agency will be sucking the life-blood from them if they are profitable. If there's one thing our Government knows how to do, it's tax the bejesus out of any pocketbook...
crazy dynamite monkey
Everything you've said so far is good except for the
Maybe in 3rd world nations were slave labour is fine
comment. Software Developers in India (including me) are paid 350 times the prevailing minimum wage in India. They aren't slaving away at all. That's the REAL reason outsourcing is working. Because the people in the 3rd-world companies are NOT being exploited. They're paid astronomical sums by their country's standard, but dirt cheap by American standards, so it works out just fine. This article may help. Eventually our salaries will rise (they've been rising about 6% every year for the past 5 years) and eventually the work will move elsewhere - or it might even move back to USA after y'all make a painful adjustment and decide to work for $30,000 instead of $40,000 At some point, it will no longer be worth the communication, distance and time lag problems to hire 50 Indian workers to do the work of 12 American developers. Yes the work might then be outsourced to the Philipines or China or some place but this is unlikely and I'll tell you why: The reason India is a chosen destination is population. There is just such a LARGE pool of english-speaking univeristy graduates relative to other developing nations. So philipines might take some of the work, but never as much as was shipped to India. China is unlikely, because its standard of living is already higher than India's. This means that Chinese workers are already more expensive than Indian ones (plus in terms of english-speaking people and IT China has some ways to go - by the time China catches up with India in this particular demographic its standard of living also be higher thus meaning that the price differentials between Chinese and American workers ain't too big so no outsourcing). In order for this to truly be a race to the bottom as all of you Slashdot panickers assume you would need another country of India/China's size in terms of population, with a standard of living lower than them and with a large percentage of young, university graduates that can speak the language of the western world. There is no other country. So this is what the future holds - American wages fall a little, Indian wages rise a LOT. It becomes financially unviable to outsource to India so some work comes BACK to the US, some work gets shipped to Sudan or the Philipines or Croatia or whatever and some other work stays in India. And now that India has higher wages, they start buying more developed world products, trade increases, your economy picks up again blah blah. But yes, if you're a software engineer, it'll be hard to find a job for the next 5 years or so - this all hinges on how fast Indian wages rise, and how fast American wages fall. If Americans are willing to work for less, then less jobs will be outsourced. I'm not saying you SHOULD be willing to work for less, I'm just stating the facts.
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I'd like to point out that the story as posted edited out the attribution.
Editors: Please don't remove quotation marks where they are necessary because that effectively results in plagiarism. The words in quotes are not mine. They belong to the reporter.
Also, the reference to the interview with the Chairman of Satyam - an Indian outsourcer that has set up shop in Toronto - was removed. Knowing that Slashdotters often don't read the source articles, I included that detail as an incentive for people to read what the leader of a large outsourcing company has to say about this politicized business practice.
Original post follows:
..what you say is correct, but there are other aspects to consider. A US company competes in a global marketplace, they're competing against products made all over the world. If for example an Indian company makes a piece of software similar to your entirely "made in the USA" product, their costs will have been much lower, they'll be able to sell it for less and nobody will buy your software - you're completely screwed. Outsourcing allows you to lower your costs, which isn't just trying managements evil attempt to fire you. Outsourcing also allows other advantages, you can exist as a small startup company in the US with a core R&D team and a great idea. When you've designed the product you can suddenly have a team of 100 in Bangalore coding like banshees for 6 months to make it a reality - and when you've got your product you can wave them goodbye. Without outsourcing you'd either be trapped as a small company, have taken years to code the same yourself - and miss your window of opportunity, have been bankrupted taking on US contractors or have taken on employees and either kept them on afterwards (bankruptcy) or laid them off. Because of outsourcing you're now a small company, with a great product you're selling around the world, making a tonne of money and paying a lot of tax into the US system. Point I was trying to make is that outsourcing isn't right or wrong, good or bad, it's another tool and if you refuse to accept it exists or use it if available you'll be screwed.
It is a sink or swim situation. However, when the ship suddenly plunges, it's difficult to avoid being sucked in. Your wages, your job, are dependant not just on your abilities and efforts, bu the state of the entire (in this case) American economy. Being a good mechanical engineer on the Titanic probably didn't help so much when the ship hit the iceberg.
As many people have said on Slashdot, and on more academic boards, the entire point of outsourcing is to lower labor costs. That's it. Nothing else. Nothing more. A capitalist system exists primarily to generate a return to those who own the capital. Cutting labor costs increases the capitalists returns. No, I'm not speaking from any Marxist point of view here. Read Adam Smith.
India's policies work do to the low pay of their workers. Nothing more. Not a policy choice, but a cheap labor force due to a massive and desparate population. So, do you really think American workers can compete against about two billion Indian and Chinese workers? The only way we can do that is to have our own wages plunge to a level that would be difficult for most American's to imagine.
As wages fall for workers facing international competition, wages fall in other fields. Think of this: if the automobile factory closes the next town over, business probably won't be that good. When we combine outsourcing with a taxation system that encourages the concentration of wealth, we can foresee serious structural problems in the American economy. I've tried to think of a simple way to explain this - maybe the greatest evidence is the fact that American real wages have been flat for thirty years, despite incredible increases in productivity.
Jobs are out there - but job quality, measured in wages and in hours, is falling. If your job is outsourced, its unlikely - and against economic theory - that you'll be able to find an equivalent job in the same field and roughly the same locale for the same wage. And as the Democrat's have been happily pointing out, the new jobs being created pay far lower than the ones lost.
Other employers understand outsourcing, and they'll be happy to give you a lower offer. Of course, your bank doesn't care about outsourcing and your mortgage stays the same. So does your health insurance, children's tuition, etc. So your in serious trouble.
I have a question for all of our fun Libertarian economists on /. If immigration to the US averages about 200,000 per month, and the Administration claims that 1.7 million jobs were created in the last four years, how many new jobs were available for the native population? Guys, unemployment statistics are easily manipulated. I'd recommend you visit the Bureau of Labor Statistics site and, well, read between the lines. Alos, please consider that unemployment statistics only count those who are receiving unemployment benefits. Once you've exhausted your six months, you're no longer unemployed, you become a "discouraged worker." Off the roles, out of thought. Same thing occurs if you take a low wage job - say go from being a chip designer to a chif fryer. Still counts as a job.
I have to say this: The government of the United States exists to protect the welfare of the American people, not to protect the welfare of the wealthiest American's bank accounts. And the two are not one and the same.
/* Dang, I can't type that well. */