Outsourcing threatens United
BOB HERBERT Syndicated columnist: Jan.27, 2004
YORK - The conference was held discreetly in the Westin New York Hotel in Times
Square last week, and by most accounts it was a great success.
main objections came from a handful of protesters who stood outside in a
brutally cold wind waving signs that said such things as "Stop Sending Jobs
Overseas" and "Put America Back to Work." No one paid them much
The conference was titled "Offshore Outsourcing: Making the
Journey Work for Your Corporation." Its goal was to bring executives up to speed
on the hot new thing in Corporate America, the shipment of higher-paying
white-collar jobs to countries with eager, well-educated and much lower-paid
“We basically help companies figure out how to
offshore I.T. and B.P. functions,” said Atul Vashistha, the chief executive of
NeoIT, a California consulting firm, referring to information technology and
business process. NeoIT was co-host of the conference.
big-name corporations had representatives at the conference, including Procter
& Gamble, Motorola, Cisco Systems and Gateway.
Because the outsourcing of white-collar jobs is so
controversial and politically charged (especially in a presidential election
year), there was a marked reluctance among many of the participants to
speak publicly about it. But Vashistha showed no reluctance. He was quick to
These campanies understand very clearly that this is a
very painful process for their employees and for American jobs in the short
term," he said. "But they also recognize that if they don't do this, they will
lose more jobs in the future and they won't have an ability to grow in the
He said his firm had helped clients ship about a billion
dollars' worth of projects offshore last year.
Noting that he is an
American citizen who was born in India, Vashisdia said he was convinced that
outsourcing would prove to be a long-term boon to the U.S. economy as well as
the economies of the countries acquiring the exported jobs.
becomes a boon to the U.S. economy or not, the trend toward upscale outsourcing
is a fact, and it is accelerating. In an important interview with the San Jose
Mercury News last month, the chief executive of Intel, Craig Barrett, talked
about the integration of India, China and Russia with a combined population
approaching 3 billion - into the world's economic infrastructure.
don't think this has fully understood by the United States,” said Barrett. “If
you look at India, China and Russia, they all have strong education heritages.
Even if you discount 90 percent of the people there as uneducated farmers, you
still end up with about 300 million people who are educated. That's bigger than
the U.S. work force.”
He said: “The big change today from what's
happened over the last 30 years is that it's no longer just low-cost labor that
you are looking at. It's well-educated labor that can do effectively any job
that can be done in the United States.”
In Barretts view, “Unless you are a plumber, or perhaps
a newspaper reporter, or one of these jobs which is geographically situated, you
can be anywhere in the world and do just about any job.”
You want a national security issue? Trust me,
this threat to the long-term U.S. economy is a big one. Why it's not a
thunderous issue in the presidential campaign is beyond me.
Intel has its headquarters in Silicon Valley. A Mercury News interviewer asked
Barrett what the Valley will look like in three years. Barrett said the
prospects for job growth were not good. "Companies can still form in Silicon
Valley and be competitive around the world,” he said. “Its just that they are
not going to create jobs in Silicon Valley.”
He was then asked, “Aren't we talking about an entire generation of
lowered expectations in the United States for what an individual entering the
job market will be facing?”
“It's tough to come to another conclusion
than that,” said Barrett. “If you see this increased competition for jobs, the
immediate response to competition is lower prices, and that's lower wage
We can grapple with this problem now, and try to
develop workable solutions. Or we can ignore this fire in the basement of the
national economy until it rages out of our control.
Bob Herbert is a
columnist with The New York Times. Copyright 2004 New York Times News Service.