Sunday, March 9, 2008

Third-World American Workers

Jobs returning to the United States from overseas is a good thing, right? Except when the companies come back because certain states like Idaho and Georgia are "less advanced" than foreign countries like India. Translation: some Americans are so desperate for any work at any wage, they're more attractive than workers in developing nations. This trend reveals just how bad the employment prospects are for many Americans.'s Andrew Leonard looks at the pattern:

In 2006, AAA executive vice president David Hughes told NPR that roadside assistance was too sensitive to outsource to India. Does that include the ├╝ber-operators who connect you to the local operators? I don't know. But it doesn't really matter, because according to an article in Time Magazine this week, the era of the India-accented call center operator may be coming to a close. India's economy is growing so fast that those who once might have seen a call center job as desirable now have other options available to them.

The industry is... facing "intense competition" for workers from the retail and airline and hospitality sectors, where wages are now closer to what call centers pay, said Kiran Karnik, president of NASSCOM. As India expands its share of more sophisticated outsourcing like financial analysis and product research and development, Karnik said competition for choice employees is also growing. "As recently as four years back, the choice was pretty clear," Karnik said. "Either you got a high-paying, good job at a call center or no job at all. Today, not only are there other options, but they are pretty close to the call centers [in terms of salaries]."

The Time article dovetails nicely with a related piece published in the Guardian over the weekend, "India Outsources Outsourcing," which documents a growing trend in which the big Indian infotech companies are moving portions of their outsourcing operations overseas, often to nations that are conventionally considered more economically "advanced" than India. Again, the drivers are rising wages and competition for skilled employees. (Thanks to the New Economist for the link.)

Wipro, another hi-tech titan, has been on a spending spree, buying up companies in America, Finland, Portugal and Europe for hundreds of millions of dollars. Azim Premji, Wipro's chairman, raised eyebrows on Wall Street when he talked this year of setting up divisions in Idaho, Virginia and Georgia -- U.S. states he said were attractive because they were "less developed."

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