Stop Offshoring
Wednesday, December 03, 2003
Here's another article submitted by a reader of this blog.
The Rise of India - BW Online
http://yahoo.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
"No wonder India is at the center of a brewing storm in America, where politicians are starting to view offshore outsourcing as the root of the jobless recovery in tech and services. An outcry in Indiana recently prompted the state to cancel a $15 million IT contract with India's Tata Consulting. The telecom workers' union is up in arms, and Congress is probing whether the security of financial and medical records is at risk. As hiring explodes in India, the jobless rate among U.S. software engineers has more than doubled, to 4.6%, in three years. The rate is 6.7% for electrical engineers and 7.7% for network administrators. In all, the Bureau of Labor Statistics reports that 234,000 IT professionals are unemployed.
"The biggest cause of job losses, of course, has been the U.S. economic downturn. Still, there's little denying that the offshore shift is a factor. By some estimates, there are more IT engineers in Bangalore (150,000) than in Silicon Valley (120,000). Meta figures at least one-third of new IT development work for big U.S. companies is done overseas, with India the biggest site. And India could start grabbing jobs from other sectors. A.T. Kearney Inc. predicts that 500,000 financial-services jobs will go offshore by 2008. Indiana notwithstanding, U.S. governments are increasingly using India to manage everything from accounting to their food-stamp programs. Even the U.S. Postal Service is taking work there. Auto engineering and drug research could be next."
What is alarming about this article is that the offshoring phenomenon is just the tip of the iceberg where India is concerned. IT service exports employ less than 1% of the Indian workforce, and Indians have less than 3% of the American IT-services industry. Unless something is done about it, those numbers are sure to go up -- at the expense of American workers.
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