Outsourcing hysteria only election-year rhetoric
Mahaveer Jain
Issue date: 4/16/04 Section: Ed-Op
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Elections are a month away in India and six months away in the United States, and in this election year in the two greatest democracies of the world, two issues have attracted my attention. The first one is "India Shining," a slogan to which I subscribe, and the other one is "U.S. Whining," with which I do not agree.
There is a cause for celebration in India and a cause for worry in the U.S. India has shown all around development, quite notably in the spheres of communications, information technology, transportation, agriculture and of course education. It has come a long way since the colonial British left it impoverished and bifurcated, and much can be said about its development in glowing terms because India was never a strategic ally of the U.S. until recently when the bonhomie started between the Clinton administration and the Vajpayee government. Also this was the period of the technological boom. A bulk of the student visas to the U.S. were granted to students majoring in computer science and information technology and a chunk of the job visas were cornered by the Indian software professionals. For many Indians, the great American dream started coming true, and a large number of them are in fact well established in the U.S.
There would be no words to describe the mammoth development the U.S. has made in the past century in all the spheres - economic, social and cultural; what is amazing is the fact that this great nation is a whirlpool of cultures, everyone is absorbed here and there is an infinite degree of tolerance here. It has given a chance for everyone who wanted to excel, without any bias or fear; of late it has been surprising that a dent has been made in this "equal opportunity for all" principle. I would like to deal on this in the later part of my commentary.
After World War II, the U.S. witnessed a phenomenal growth in the manufacturing sector and from the early 1970s, a steep rise in the services sector. Around 70 percent of the Fortune 500 companies have been U.S. based and some of the companies' annual earnings are more than the gross domestic products of many countries, but this change from manufacturing to services pattern in employment was not out of choice but due to sheer necessity. The reason was the ever-increasing wage bills of such companies, and in order to save themselves from the ignominy of cutting jobs, many companies started exporting these manufacturing jobs to developing and third world countries under the garb of expansion. The reason was pure economics - very low labor rates in these countries. Their labor rates can baffle many Americans; in some countries they are as low as 15 to 20 cents an hour, after the conversion to the local currency rates. So when labor is available at such rates, why would these companies pay a lot more added with all the so-called benefits to get the same amount of work done? That is the reason why one does not find many products with the "Made in USA" tag. Many of the business giants have manufacturing facilities in China, Taiwan, Mexico, Indonesia and other such developing countries. The best example that I can quote to prove my point is any department store.
There is a cause for celebration in India and a cause for worry in the U.S. India has shown all around development, quite notably in the spheres of communications, information technology, transportation, agriculture and of course education. It has come a long way since the colonial British left it impoverished and bifurcated, and much can be said about its development in glowing terms because India was never a strategic ally of the U.S. until recently when the bonhomie started between the Clinton administration and the Vajpayee government. Also this was the period of the technological boom. A bulk of the student visas to the U.S. were granted to students majoring in computer science and information technology and a chunk of the job visas were cornered by the Indian software professionals. For many Indians, the great American dream started coming true, and a large number of them are in fact well established in the U.S.
There would be no words to describe the mammoth development the U.S. has made in the past century in all the spheres - economic, social and cultural; what is amazing is the fact that this great nation is a whirlpool of cultures, everyone is absorbed here and there is an infinite degree of tolerance here. It has given a chance for everyone who wanted to excel, without any bias or fear; of late it has been surprising that a dent has been made in this "equal opportunity for all" principle. I would like to deal on this in the later part of my commentary.
After World War II, the U.S. witnessed a phenomenal growth in the manufacturing sector and from the early 1970s, a steep rise in the services sector. Around 70 percent of the Fortune 500 companies have been U.S. based and some of the companies' annual earnings are more than the gross domestic products of many countries, but this change from manufacturing to services pattern in employment was not out of choice but due to sheer necessity. The reason was the ever-increasing wage bills of such companies, and in order to save themselves from the ignominy of cutting jobs, many companies started exporting these manufacturing jobs to developing and third world countries under the garb of expansion. The reason was pure economics - very low labor rates in these countries. Their labor rates can baffle many Americans; in some countries they are as low as 15 to 20 cents an hour, after the conversion to the local currency rates. So when labor is available at such rates, why would these companies pay a lot more added with all the so-called benefits to get the same amount of work done? That is the reason why one does not find many products with the "Made in USA" tag. Many of the business giants have manufacturing facilities in China, Taiwan, Mexico, Indonesia and other such developing countries. The best example that I can quote to prove my point is any department store.
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