Question: "Offshoring" American Jobs to India
Job Exodus: Customer service positions are not the only jobs headed for India. Work moving offshore also includes processing mortgages, overseeing payrolls, balancing business accounts, and handling insurance claims. When you surf the Internet, you're using search terms and archives keyed in or scanned mostly by Indian technicians. India is attractive for several reasons. The country provides a large pool of educated people who speak English. In addition, India's day begins when ours ends, which means that U.S. com panies can work all day and increase productivity by offshoring overnight work to India. With fiber-optic cables wrapped around the world, it is cheap to transmit data from North America to South Asia. Perhaps the most important reason for looking overseas is cheap labor. A software programmer in India earns about $10,000 compared to an American programmer's salary of roughly $60,000.
White-Collar Workers Feel the Pinch: Previously reserved for low-wage jobs such as those in textile manufacturing, offshoring today impacts white-collar workers. Some studies estimate that offshoring cost U.S. workers 400,000 jobs in 2004 and predict that it will cost more than 3 million jobs by 2015. Others foresee as many as 4 million jobs lost in the services sector alone. The ranks of high-profile American companies moving parts of their operations to India include Charles Schwab, AOL, American Express, GE, and Microsoft. And the list continues to grow. More than half of Fortune 500 companies have shipped jobs overseas, including Oracle, Dell, Delta Air Lines, J.P. Morgan Chase, British Airways, and Hewlett-Packard.
What Does It Mean For You?
The good news is that cheaper labor for goods and services means lower prices for you and other consumers. You also benefit from services that are available to you any time of day. For example, if you have a medical emergency that requires x-rays, the digital images can be interpreted by an Indian radiologist overnight, with results reported back to your doctor by the next morning. The bad news is that many Americans may lose their jobs. Offshoring can even change your likelihood of future success. A college degree-even an M.D. or Ph.D.-may not be enough to compete with India's growing employment pool of cheap, educated labor.
Analyzing the Issue Question
1. Identifying How can using workers in India increase an American company's productivity?
2. Determining Cause and Effect What are the main reasons why American jobs are sent overseas?
3. Applying Check your local newspaper or Internet news sources for recent reports about companies in your community or state that have sent jobs overseas. On a separate piece of paper, summarize the issues discussed in these articles and describe how they affect you and your community.