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Obama Says Offshoring Fears Are Unwarranted
alphadogg writes "The perception that Indian call centers and back office operations cost US jobs is an old stereotype that ignores today's reality that two-way trade between the US and India is helping create jobs and raise the standard of living in both countries, US President Barack Obama told a gathering of business executives in Mumbai on Saturday. President Obama's remarks come after some moves in the US that had Indian outsourcers worried that the US may get protectionist in the wake of job losses in the country. The state of Ohio, for example, banned earlier this year the expenditure of public funds for offshore purposes. US exports to India have quadrupled in recent years, and currently support tens of thousands of manufacturing jobs in the US, he said in a speech that was also streamed live. In addition, there are jobs supported by exports to India of agriculture products, travel and education services. President Obama, who is in India on a three-day visit, said that more than 20 deals worth about $10 billion were announced on the first day of his visit."
The state of Ohio, for example, banned earlier this year the expenditure of public funds for offshore purposes.
One of the many things that was possible with Governor Strickland, and not Head Banker-elect Kasich.
The only shame is that Kasich got elected as Head Banker, instead of the state retaining Governor Strickland. Now we get a Wall Street banker that compares himself to an East Coast thug. By how he's talking to the media, he's not going to step aside; the Head Banker's simply going to exact revenge.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
because no matter what anyone says, india is still rife with corruption and incompetence on a scale completely unheard of in the US. When you're there, immersed in it, you develop certain strategies to deal with it, but for a western company that is used to saying 'built to this spec/design, and at this time' and actually getting something close to it, either from china or other western companies, doing business in india is very frustrating. It's usually preferable to pay more, but actually get what you want, when you want it, and have some way to resolve contract disputes in a reasonable fashion.
I have a friend who just flew to India for a month to clean up an outsourcing mess for his company. Months behind schedule, 1/2 million over budget... from what he told me folks there had been promoted way above their ability level resulting in really substandard management and unsurprising results.
they deserve jobs India can do for a cheaper price?
The H-1Bs seem to me to be more of a distraction. However, I'm biased: I'm a Canadian in the US on an H-1B. But, as an H-1B holder, I know something of the process involved.
There are annual limits on the number of H-1Bs that the US hands out. That number is 65k plus an additional 20k for people with masters degrees. I know in 2008, they got more than double the cap on the first day and instituted a lotter, but in 2009, there were very few applications because of the failing economy. I'm pretty sure that most years, the 20k masters cap is never reached, and I think the 65k in 2009 wasn't reached, either.
Anyway, H-1Bs are good for 3 years, extendable up to an additional 2. This means that the theoretical maximum number of legal H-1Bs in the US at any one time is 5 * 85k = 425k. That's less than 0.2% of the population and seems unlikely to me to significantly affect the unemployment rate.
Another point is that H-1B workers are required, by law, to be paid at least the "prevailing wage" based on their work and geographical location. While this is by no means perfect, it does provide some protection against wage depression.
Am I saying the H-1B program is perfect? God, no. There is a lot of abuse. People apply for H-1Bs on false pretenses, the green card application process is dubious to say the least, and the spouses of H-1B holders cannot work unless they acquire their own visas.
The number I quote can be inflated a little because H-1B holders who are applying for green cards can basically keep their H-1Bs indefinitely until the green card application is fully processed. This process can take years. One simple way to reduce the number of H-1B holders is just to process these applications faster.
Of course, there are lots of green card holders in general who are immigrants and you could argue that people with permanent residence status are taking US jobs. I think that's actually a more defensible position, since there are simply more of them. And there are more undocumented workers than H-1B holders, too. Lots more. Therefore, my point is that while the H-1B program is not perfect and is certainly abused, I am dubious of kneejerk claims that it is this fraud that in any way hurts "most Americans". With millions of jobs being lost every year due to the economy, there simply aren't enough H-1B workers to account for very much of it.
If I were IBM top brass, I'd do the same thing exactly.
Why hire and keep people in USA rather than anywhere in Asia, now in India, later in China, the in Mongolia, I don't care?
The USA has stupid income taxes, it has stupid payroll taxes, it has regulations that would force me to overpay the employees. The stupid regulations that would make me responsible for employees' healthcare! All the unions, etc.etc.
Of-course I'd get rid of as many people as possible in the shortest time frame and hire people all over the world where I wouldn't be faced with the same regulations and rules.
That's just pure common sense and pure liquidity.
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Now, of-course everybody is aware that large corporations have always enjoyed disproportionate access to gov't officials by buying politicians through campaign donations, fundraisers, lobbying, etc. IBM has gained plenty through all of this, so IBM is in a cushy place compared to any new start up that would aim at any part of IBM's business.
But now realize, that while IBM is a massive company, like most companies that are backed by gov't, protected by gov't from any new competition, and at the same time the same rules apply to small start ups, where they are in disproportionate disadvantage to the existing company because to an existing large compnay/monopoly, the rules and regulations are trivial cost of business, since they are established and have solid cash flow.
A start up does not have a cash flow. A start up would have to comply with rules and regulations that would make it impossible for a startup really to take off.
IBM is not even an interesting example of this, if you want to start your own hedge fund, you are screwed. You have to be a millionaire already to be able to pay all the compliance costs for all the new regulations that are constantly coming out.
Bills that force you to collect data about the customers, effectively turning you int an IRS and a CIA agent, an unpaid agent, an agent that has to pay out of his own pocket to set up all the system necessary to keep track of all transactions and report them to IRS and the rest of the gov't.
The Patriot act alone probably made start ups in hedge funding impossible.
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So honestly, USA is not a country that is conducive to new business and that's exactly what it needs - new business. But it's overloaded with bills and rules and laws and regulations and various expectations and lawsuits, it's just too much red tape.
Obviously it makes much more sense to start a business in Asia.
Today, ironically, China is a much more free place to start your own business and succeed than USA. People used to come to US to be more Free and to try and achieve something because the system was created to allow people to achieve success, now it's nowhere near anything like that. China now is more Free in an economic sense than the US.
Oh oh, and all this inflation, all this money printing, it's not helping at all. Inflation and eventual destruction of USD and US consumer, why start a business in US unless you are masochistic?
You can't handle the truth.
That was not clear. Here's a description. It's pretty despicable how corporations bend-over backwards to disqualify Americans, just so they hire cheaper imported workers:
"Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers. Microsoft, Oracle, Hewlett-Packard, and thousands of other companies are running fake ads in Sunday newspapers across the country each week."
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Hear Hear! I frankly don't care about the numbers, I care about what I'm seeing with my own two eyes. About half the people in my apt building aren't the same ones from a year ago NOT because the old tenants found a better place to live, but because they lost everything. Some may be lucky enough to sleep on someone else's couch, the rest are probably living in their cars.
Between the illegals and H1-Bs we've seen flooding the area there are pretty much NO jobs for Americans except McJobs, and unless you are living in your mom's basement you can't even feed yourself on one of those. When I was young a man with a good work ethic that couldn't afford to go to school or didn't have the aptitude for it could go into construction and feed his family. Now the local teens play a game called "Deer run" where you walk by a construction site and yell "Immigra!" and watch as the ENTIRE SITE turns into a ghosttown, with illegals running everywhere.
I personally had hoped to get my bachelors followed by my masters in either Comp Sci or maybe Information Security, but after going to job interviews in the state capital where it is obvious they've rigged the game for H1-Bs (requirements like 10 years experience, program in 2 languages, 4 certs required, for a $19k a year job? Obvious much?) convinced me there simply isn't a future long term in IT and the amount of debt I would have had to add at 40 simply would bury me. Basically the only "computer jobs" open to Americans I've seen are likewise Geek Squad McJobs. My friends in IT are going to interviews where there are 400+ guys applying for a single job, and most are so far in debt they will most likely die broke. Year before last the guy down the hall committed suicide simply because there was no way out of his student debt with the pathetic jobs being offered to Americans.
And THIS is the chilling effect seen by Americans from illegals and H1-Bs. My oldest is going to pre-med and at his school the IT dept is nearly 100% foreign, simply because no kid with eyes would want to pile on 60k+ worth of debt for a 20k a year job. Looking out my apt window at the tons of empty businesses and homes that have lain empty with for sale signs for over a year I personally think we are getting ripe for a revolution. You have HUGE teeming masses of unemployed Americans, growing ever larger by the day, and for most of them the American dream is long dead. I could very easily see a radical protectionist hardcore Joe Stalin type easily gaining power, because the people are fed up, they're frustrated, and they have NO future if they aren't in the top 3%. The few guys I know still in IT are looking for ways out as fast as they can, because more and more they are surrounded by Indians with degrees they paid a hell of a lot less than we did. This shit just can't keep up, something has got to change.
ACs don't waste your time replying, your posts are never seen by me.
Solution: Why not raise our import tariff rates to match that of our so-called trading partners?
Because the politicians (and make no mistake, I'm talking both major parties in the U.S.) are bought and paid for by the multinational corporations.
That's a great idea, if you want to start another Great Deprerssion. Protectionist laws like the Smoot–Hawley Tariff Act virtually shutdown international trade causing the world's economy to collapse. US exports themselves declined by 61%, falling from "US$5.4 billion to US$2.1 billion". Before Pres Herbert Hoover signed it more than a 1000 economists warned him not to, but of course he did. In retaliation other national governments passed their own protectionist laws.
Falcon
Should there be a Law?
Yawn degrees, 4 years of school is about as useful as 2 years at a real job, at least that's what my state says in it's hiring practices. I've hired plenty of people what degree you have is important for maybe your first or second job after that it's a check box at best. The big issue I've seen with h1b visa labor is the majority are study for the test types they have no passion for the work it's just a means to have a better life. It's the same thing as the kid in school that crams before a test to get a grade and has forgotten most of it a week later forget several years. I don't care to know what large corps are looking for besides replaceable cogs. When I'm hiring I'm looking for one of two things a star that can solve the hard problems so they don't happen again or the guy with an attentive eye that will take the time to get the grunt work done right every time. I've never interviewed a h1b that fit either category, I've worked with them but they were hired by an Indian owned start-up and they has as much trouble finding good people as I did.
No sir I dont like it.
This is not quite true either. I have been in the Green Card process for almost 11 years now and have been steadily renewing my H1 every time it comes around. This is because they realized (to some extent) that they completely jumped the shark on the immigration process and allow us to keep renewing our H1 visa's while we are still in the Green Card process. For the first 9 years of that process I was stuck with a pig of an employer that made sure he abused me as much as he could because I was unable to switch jobs. So once I hit the Employment Authorization phase I was out of there like a shot.