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Techies Asked To Train Foreign Replacements
Makarand writes "David Lazarus of the San Francisco Chronicle is reporting that Bank of America (BofA) is moving thousands of tech jobs to India and has asked its techies to train their Indian replacements or risk losing severance pay. Although there is nothing in writing that says precisely this, the employees have been made clear about this responsibility in their meetings. BofA is outsourcing tech work to Indian companies whose employees do the work at half the cost of what a U.S. worker gets paid. According to an estimate, outsourcing has allowed the bank to save about $100 million over the past five years."
I've been with B of A since the mid 1980's. The past couple of years they have begun making this loud sucking sound. They suck fees out of my account that lowers it below a threshold and then suck more fees out. On one single day after I screamed, they credited back over 200 dollars in fees into my account. They've been putting 5 business day holds on Govt. checks that used to go in as cash. They obviously have the fees dept. going full tilt, along with the bean counters. I'm moving soon and as soon as I'm settled, they're history. I've had it with them!
"And which bank would you change to?"
Why not join a Credit Union? They offer the same services, tend to be local and regional (which helps the local/regional economies) and in my experience their customer service is far better than that of commercial banks.
Best of all, they are non-profit, which eliminates the greed factor that drives outsourcing.
What you say (global wages will even out eventually) makes sense to a degree but I don't see why socialist/capitalist is a binary choice, some things just don't lend themselves well to "the market", health care being a prime example.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
labour would get a whole lot more competetive (maybe even maintain the current standard of living at half the pay!)
You hit the nail right on the head. The problem is not that Indians (and Mexicans, for that matter) are "stealing" our jobs, it's that they are willing to do it for a lot less money. Honestly, you can't blame the companies for going with cheaper labor that can do the job just as well, or close to it (though forcing the American workers to train their replacement is a different story). If Americans were willing to work for lower wages, then labor wouldn't NEED to be outsourced. Of course, the problem isn't only that Americans aren't willing to work for lower wages, it's that we often aren't able to, so what you're saying, or something similar to it, would be the way to go. If Americans started to work for less, basic (and slightly simplistic, but still mostly valid for an approximation) economics says we would pretty much maintain the current standard of living, but only in the long term. In the short term, it just wouldn't work, because it only works if EVERYONE is working for the lower wages. The "early adopters" would be screwed until everyone else's wages went down by the same amount, at which point prices would also come down to meet demand. So the way to do it, as you say, is to start out by lowering prices a bit (revamping copyright/patent/monopoly law would be a reasonable start, though some would argue monopolies would help with this transition) and let that naturally be followed up with a lowering of wages, then rinse and repeat until we're competetive on a global scale.
Another way to ease the trasition would, of course, be to cut taxes like whoah. Americans pay, on average, a net of about 40% of their income to the government (not only income tax obviously, but including basic economic principles such as "corporate taxes raise prices," etc.). If we were to cut down on pork-barrel spending alone, that could probably be reduced to 35%, maybe even as low as 30%. That means the average American can take a pay cut of 5-10% without changing his net income at all. Then if you're willing to cut government programs that don't quite count as pork-barreling but still provide less benefit than what they cost, you could potentially bring total taxes down to 20%. That means we could bring wages down even lower (20% lower) without hurting the average American household's standard of living, with the exception of those who rely on whatever social programs are cut. Even still, losing a program is preferable to losing your job to someone overseas.
I have an apt analogy.
Yesrs ago, I sold auto parts at car dealerships, mainly to body shops. A good-sized local body shop chain was buying parts from us for 5% over cost, delivered. They came to us and said that they were going to switch to someone who would sell them parts at 3% over cost, delivered, unless we could match it. We let them go.
About 18 months later, they came back: "We want to come back to you." Why? Because my company could provide better service. The 3% over company would deliver parts once a day, that's it. If something was missing or wrong or broken, they wouldn't try to find it someplace else and do a second trip that day, they'd just order another one and deliver it when it came in.
So when this body shop chain came back to us, we said, "Okay, but it's 10% over cost now." They agreed.
The moral of this story? Maybe in five or ten years, when US industry figures out that the front-end savings they're getting on offshored labor translates to a higher "total cost of operation," they'll come back to the US labor market. And when that happens, salaries for US tech jobs will rise.
I'm prepared to ride it out.
Web 2.0 == Giant Blogspam Circle Jerk
It amazes me that this is your perspective. Perhaps you are trolling but I'll take you at face value.
The US welfare system which is woefully inadequate, in combination with its lack of social mobility result in a more or less permanent underclass of hopeless individuals. For you to say that the US system is a social "hammock" tells me than you have little knowledge of the world outside your borders. Most of the rest of us in the "West" have much more redistribution of wealth than you folks do and yet, people still go to work, there are still thriving and successful global businesses which come out of the various countries in Europe plus Canada, all of whom have a sane and humane social model which stands as a stark accusation of the great waste of human potential in the US. The fact that the richest country in the world, with the highest health care spending per-capita, still can't find its way to provide basic health insurance for every citizen is repugnant. For the sake of ideology it seems, folks in the US are willing to stand by and watch people die for lack of decent health care, and live without a hope of a better future for themselves or their children.
I'm afraid that you have been listening to the words of others without giving them much thought or investigating for yourself.