Wednesday, May 12, 2004
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Those damn Indians
Oh dear -- Indian companies are messing with the dominant narrative that U.S. jobs are being outsourced to the subcontinent at an increasing rate. According to Contractor UK:
Damn Infosys and Bharti!! Next thing you know, Americans might actually realize that trade is a win-win game!!posted by Dan on 05.12.04 at 12:18 PM
How much do those Indian consultants pay you for your cheerleading? The only insourcing that works is between America and Europe-two continents with roughly the same labor standards and costs. "Free trade" is like Christianity-it has never been tried.posted by: Lynne on 05.12.04 at 12:18 PM [permalink]
What makes you think that "IBM" means "IBM in the US"?posted by: Jon H on 05.12.04 at 12:18 PM [permalink]
Drezner cites some trade paper:
"Bharti Tele-Ventures, India's largest private telecommunications company, has awarded an IT services contract to US computer giant IBM, worth up to $750m (£424m) in a 10-year deal."
An Indian company contracts its IT department to an Indian operation of an international company. Related increase in American employment of the international company closely approximates zero.
Drezner pockets his monthly PR retainer from Indian Outsourcing lobby group and celebrates contract as a great news. I'm still astonished why anyone would pay any attention to this establishment hack.posted by: Homer Pile on 05.12.04 at 12:18 PM [permalink]
“Drezner pockets his monthly PR retainer from Indian Outsourcing lobby group and celebrates contract as a great news. I'm still astonished why anyone would pay any attention to this establishment hack.”
Dan Drezner is suppose to get a million dollars a week. I’m a minor leaguer so my soul was sold for merely half of that. But where’s my check? I’m still waiting. They were also going to give me a brand new Mercedes Benz, a sex mobile. Alas, my 1994 Ford Taurus remains outside the doorway. Perhaps Dan can find out why this is taking so long?posted by: David Thomson on 05.12.04 at 12:18 PM [permalink]
Folks, those jobs are going to IBM India. The only thing coming back to the US is skimming some profit for management bonuses.posted by: jmcnamera on 05.12.04 at 12:18 PM [permalink]
Come now, come now, let us not resort to cheap shots! First of all, as far as I can tell Dan has struggled to maintain his intellectual independence - with no doubt potentially rewarding temptations to do otherwise. Dan has hardly conducted himself as a sell-out!
Second of all I think there are valid and strong arguments that can be made using reason and widely substantiated evidence as to why the rhetoric of 'free trade' is in fact erroneous. Stooping to cheap shots may cause a moment of visceral satisfaction, but it will only reassure free trade proponents that critics of globalization have nothing better to offer.
For all these reasons, and as well a publicly visible struggle to preserve his integrity, Proffesor Daniel Drezner simply deserves better than that.
If he's going to get brought down, I hope to see him brought down with a strong case based on real evidence and substantiated claims! Away with these ad hominems! A person can sincerely believe in free trade - indeed I do - it's just that I don't see it happening ...
Dan thinks he does. Whose views shall prevail? Well Dan has the weight of numerous authorities siding with him already, so we shall have to work all the harder to present a valid counter-claim and rebuttal!
Keep up the good work Dan. I hope to win you over to the other side, yet.posted by: Oldman on 05.12.04 at 12:18 PM [permalink]
So where do IBM's shareholders come from?
Nitin writes: "So where do IBM's shareholders come from?"
Who cares about the shareholders? You'd have to hold a hell of a lot of IBM shares to get enough dividend income to live off of.
To get $50k a year in dividend income from IBM, you'd need to own about 70,000 shares, which would imply a net worth of over six million dollars, and that's if the person's only assets were IBM stock.
Not many people in that category, are there?
For most investors, IBM dividends provide beer money, not income to live on. You need a job for that.
"Who cares about the shareholders? You'd have to hold a hell of a lot of IBM shares to get enough dividend income to live off of."
With all do respect, this is an irrelevant data item. Probably more relevant data is
(Additional retained IBM profit due to this contract) * (Percent of investment in US) / (Dollar equivalent of one US job)
(Additional distributed profit) * (Percent of US stockholders) / (Dollar equivalent of one US job)
Lets do a semi-informed calculation, assuming that profit margin is 20%, all profits are paid out as dividends, 2/3 of dividends stay in the USA and it takes $100,000 to create 1 job:
No of Jobs created =
$75M * 20% * 2/3 / 100,000 =
One can decide for oneself if 100 new jobs is an event worth writing about.
Any one of you "this ain't outsourcing" people want to discuss the last part of the article, where it says Infosys is creating jobs *in America*?posted by: Adrianne Truett on 05.12.04 at 12:18 PM [permalink]
realize that trade is a win-win game!!
Mmm. I can see how the scenario will play out for a lot of displaced tech workers:
$40,000/yr for a couple years.
Ah, sweet victory...posted by: Keith Tyler on 05.12.04 at 12:18 PM [permalink]
Will the outsourcing of work from Indian firms to American firms actually translate into middle class jobs for Americans? This is the critical question. Anyone familiar with outsourcing would recognise that American companies often receive contracts (\"outsourcing\") from non-U.S. companies but in the current movement of knowledge jobs offshore, the \"American companies\" are employing non-U.S. workers to actually perform the work. So, Indian companies can certainly \"outsource\" to IBM and the work could well be performed by Indians in India. As for the 500 consulting jobs which Infosys says it will create in the U.S., is there any certainty that all or most of these jobs will be filled by Americans at a middle class rate of pay? One must understand that Indian firms operating in the U.S. are able to import large numbers of non-American workers to work in the U.S. under the H-1b and L-1 visa programs. (Details may be found at http://www.outsourcecongress.org and http://www.itpaa.org)posted by: Info Tech Guy on 05.12.04 at 12:18 PM [permalink]
The article is right. Infosys has created 75 jobs in the US with hopes of expanding that to 500. What Drezner conveniently "forgets" to mention is their job responsibility. These consultants job is to spread the benefits of outsourcing to US companies. Let's see -- 500 new jobs in the US in exchange for countless of IT jobs outsourced to India. People welding the power of the pen need to address both sides of the issue.posted by: IT worker - A dying breed on 05.12.04 at 12:18 PM [permalink]
guys the computer business is dead...it has been for awhile now...i'm going to harvard law school in sept of 2005. Its just like anything else, if you have some indian chump who wants to work for 5k a year and not complain about working extra hours let the loser have the job. As much as i hate to say it, the computer business, especially on the tech side but even on the managerial end, is for losers.posted by: IT is dead on 05.12.04 at 12:18 PM [permalink]
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