Outsource Force

I have always wondered what fired up the debate on United States unemployment rate increasing because of offshore outsourcing. When or how such hideous discussions started is still a mystery. However, I came across this article which dates back to 2003 and was written by three authors from Bloomberg Businessweek. The article is believed to be the possible impetus for this debate. It created a tension between offshore outsourcing and internal unemployment rates in the US. Eight years ago, Pete Engardio, Aaron Bernstein, and Manjeet Kripalani, with Frederik Balfour, put forward the argument that though it was reasonable enough to outsource manufacturing to developing countries like China and India, it would be quite an insult to the United States to outsource even the white collar jobs. Having only partially recovered from the economic setbacks of 2008, however, the country is faced with little choice but to take part in outsourcing at a pace much faster than a few years before.

Late in 2010, there were forecasts that around “1.3 million additional Western jobs will vanish by 2014.” The provided statistics is alarming. How many people would have become vagabonds, wondering from place to place and begging the government for support? But that is beside the point. Is it really because of outsourcing that millions of jobs will eventually jump ship to other countries rather than remain on Western shores? There are speculations on for how long this should go on. Early in 2010, it was reported that AMR Research Inc.’s mid-2009 report conjectured that an estimated 80% of enterprises plan to increase their IT outsourcing investments or retain its status quo. This does not bode well for the West who has suffered a great blow from this global job shift. And so the authors pose one of the hardest questions to date: “What happens if all those displaced white-collar workers can’t find greener pastures?”

The above question may shake the naïve into convulsions of guilt. There will be a tug-of-war between the need to outsource and the fear of betraying one’s country. Outsourcing, an offshoot of globalization and the free trade revolution, has now become more of a moral issue, rather than just a complicated business dispute. This is no longer about outsourcing jobs or what benefits they might bring. The debate has reached a point where those who care about it argue which side of the world should have the right to have more jobs. In the past, when export labor from Third world countries had infiltrated Western shores, the West was all mum about it and they silently and surely took advantage of the cheap, hardworking workforce before them. Developing countries, on one hand, assumed a similar but opposite kind of silence. They were silent about their society’s ‘brain drain’ and endured the pain of losing countrymen who were abused by their foreign employers, or wrongfully convicted for crimes they did not even do. These immigrants came to North America and Europe in the hopes of finding pastures green enough to spew a stable source of income, through which they can feed a brood left somewhere in Asia, Africa or Latin America. But now that the fortunes have been tweaked a bit, with outsourcing doing most of the tweaking, the West bursts out into a litany of complaints.

“You are stealing our jobs!” cries the West, pointing an accusing finger at the Orient.

“Oh, but we only did what you told us to do.” The Asian countries replied, utterly confused.

“Well we want those jobs back,” says the West.

“Very well –”

“Wait! Let us recover from this dreadful economic meltdown first.”

“Fine,” the Asians shrugged, “But we will still be marketing our services whether you decide to continue or not.”

And that is the sheer irony of it all. Outsourcing is not a Third World invention. Even the very idea of offshore outsourcing was first initiated by the West for cost-cutting purposes in the manufacturing industry. In the end, the inventors of outsourcing got a taste of their own medicine. What they initially created to assist their financial problems has now become one of their problems instead. So who is to blame?

In the face of this global job shift, the ideal thing to do is not to bicker and blame. Rather than accuse outsourcing as being the cause of growing unemployment rates and then ban it through protectionist policies, it would be better to use it as a means to an end. So while the economy has not yet fully recovered, outsourcing will provide a breathing space through which the West could rebuild the strength it nearly lost during the 2008 global meltdown and other such financial earthquakes in the years before that. As the advantage is regained through outsourced jobs, the demand for important, indispensable in-house jobs eventually increases. Or if such is not the case, perhaps the government may impose a reasonable amount of tax, which may vary depending on the job nature or the quantity of outsourced jobs. The tax reaped from this undertaking should be used to create more office-based jobs or to invest in projects that would bridge the gap between outsourcing and in-house jobs. Since the tax itself is extracted from the outsourcing industry, it is just fitting to invest it in projects that will help it maintain its reputation as an economic boon for developing countries, while simultaneously helping it become a less detrimental activity for Westerners.  

By: Ex Tin
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