but a backlash is brewing.
Indiana's state government canceled a $15 million contract with an Indian consulting
firm in November. And eight states voted on bills last year that would ban the use
of taxpayer money on contracts with foreign workers. Though none of those measures
passed, the states and several others are expected to consider similar bills this
year.
Democratic presidential candidate John Kerry says he would require overseas call
centers to disclose their location -- the New Economy version of the "made in
America" label.
The Massachusetts senator said he wouldn't ban outsourcing, but would provide tax
credits to companies that maintain U.S. factories and "close every single loophole
that gives companies incentives to move jobs abroad."
Outsourcing critics say Americans have been complacent about the loss of technology
jobs to overseas workers since the trend began in the late 1990s. But with elections
in both the United States and India, they believe 2004 could be a turning point.
"Politicians can't outsource the vote," said Scott Kirwin, founder of the
Wilmington, Del.-based lobbying group Information Technology Professionals
Association of America, which compiles data from nearly 100 anti-outsourcing Web
sites. Kirwin, who launched ITPAA after a large investment bank asked him to train
the Indian worker who then replaced him, says said only broad consumer revolt will
reverse the trend.
"In the 1980s, many people boycotted companies that did business with the apartheid
regime in South Africa," Kirwin said. "Many of those same people have more money
today and don't like doing business with companies from countries that work against
us politically, like France, or economically, like India and China. Consumer
activism is an important part of putting the brakes on the outsourcing movement."
After his software development job was terminated in 2002, Florida's Mike Emmons
decided to run for Congress on an anti-outsourcing agenda. His meager campaign funds
come mostly from unemployed programmers who visit his Web site,
OutsourceCongress.org. He is trying to get on the ballot for the Democratic primary
this summer.
"This is hitting medical transcribers, financial analysts, radiologists, everyone,"
said Emmons, 41. "If you work at a desk, beware -- the foreigners are coming after
your job."
Fear of a backlash was a major issue at a technology summit this month in Hyderabad,
India. Indiana's failed contract with Tata Consultancy Services, and customer
complaints that prompted Dell Inc. to reroute some help desk calls from India to
Idaho in November, worry Indians, who have received billions of dollars in
outsourcing contracts.
"This is a matter of concern for all of us," India's info tech minister, Arun
Shourie, told officials from 30 Asian countries at the summit. "We must come
together to find a consensus approach to fight this backlash."
Business experts say India needn't worry; Indiana and Dell are high-profile
exceptions to what has become the rule of outsourcing.
In a research report in mid-2003, Gartner Inc. predicted that at least one out of 10
technology jobs in the United States would move overseas by the end of 2004.
Forrester Research predicts at least 3.3 million white-collar jobs and $136 billion
in wages will shift from the United States to low-cost countries by 2015.
"The idea of a backlash makes for great press, and it makes for great rhetoric in an
election year," said John C. McCarthy, vice president of research at Forrester. "But
the reality is that every day there's a new customer with new cost savings from
this. The economics are hugely compelling, and it's not going away."
The cost savings are tough to ignore -- particularly for cash-strapped states.
Connecticut, Florida, Indiana, Maryland, Michigan, New Jersey, New York and North
Carolina all saw anti-outsourcing bills introduced in 2003, but none passed,
according to the National Conference of State Legislatures.
"This is the classic policy dilemma for legislators," said NCSL research analyst
Justin Marks. "You've got a $200 billion deficit for states, and they can save a lot
of money by outsourcing. But the economy has lost a ton of jobs, and legislators are
saying, `I don't want to see more jobs in my district go away.'"
Indiana Gov. Joe Kernan said he'd like to see "preference" for companies from his
state in government contracts. In an interview, Kernan said the contract that Tata
won shouldn't have been such an omnibus. No single Indiana firm could have met all
its requirements, which included everything from speedier unemployment claims
processing to 24-hour accessibility to government records.
Tata's bid was about $8 million lower than bids from two U.S. firms. Indiana
officials subsequently restructured the contract, which is still open, to let
Indiana companies partner with universities or other consulting firms and compete
against multinationals.
Hopefully some Indiana companies will be able to participate, but there are no
guarantees," Kernan said. "We're not closing the door to companies from Bombay to
Los Angeles."
Earlier this month, executives from Dell, Intel Corp., IBM Corp., Hewlett-Packard
Co. and other companies urged the Bush administration to maintain its hands-off
approach and not regulate outsourcing.
"There is no job that is America's God-given right anymore," HP chief Carly Fiorina
said. "We have to compete for jobs."
Executives say transferring highly paid, highly skilled jobs to foreigners allows
companies to engineer products inexpensively and lets Americans focus on emerging
fields such as nanotechnology. The average American programmer commands $60 an hour;
in India the rate is roughly one-sixth of that.
( $60/hr?! Executives will lie big time to get what they
want! )
Proponents also say outsourcing develops work forces -- and in turn, consumers with
buying power -- in fast-growing markets such as China, India and Russia.
Despite that daunting economic logic, outsourcing opponents say they hope to educate
the public about the true cost of globalization.
"People are tired of everything being based upon the bottom line, where companies
are getting richer and everyone else is losing out," said Marcus Courtney, organizer
of the Seattle-based Washington Alliance of Technology Workers, which has 370
dues-paying members and 16,000 people on a free electronic mailing list.
"Indiana can save some money if they go with the Indian firm, but there's a cost to
that savings -- it could put state residents out of work. Free trade is not free."
washtech.org
http://itpaa.org
