Posted on 05/11/2003 2:42:44 PM PDT by Archangelsk
May 11, 2003
More 'Can I Help You?' Jobs Migrate From U.S. to India
By AMY WALDMAN
BOMBAY — In the early morning hours of May 1, American welfare recipients reached for their phones, dialing toll-free to check on their next infusion of funds.
On a steamy Indian late afternoon in her air-conditioned cubicle here, Manisha Martin was waiting for them.
Without a break, the display panel on her phone lit up. Kansas calling. Arizona. Alabama. Tennessee.
"Hi, this is Megan," she said to each caller. "How can I help you?"
In mostly southern drawls she had once struggled to understand, they asked about the balances on their electronic benefit cards, which work much like those used at A.T.M.'s. "Your food stamp balance is 48 cents," she told one caller.
She activated new cards, or told callers to speak to their caseworker. If they unleashed angry tirades, she tried to understand. When young single mothers cried, she listened.
Her accent, pleasant and neutral, was hard to place. When callers asked her location, she demurred. If they knew where she was, said Ms. Martin, 27, "they would drop off their seat."
Some New Jersey officials say they just about did that when they learned that a contractor had arranged for Bombay operators to handle calls from the state's welfare recipients. County welfare directors complained. A state legislator, Shirley Turner, proposed a bill requiring that workers hired under state contracts be American citizens or legal aliens, or fill a specialty niche Americans could not, prompting at least four other states to consider similar bills.
Much as the exodus of manufacturing jobs abroad did in decades past, sending service or knowledge-intensive jobs to countries like India is causing fears of displacement in the United States and elsewhere.
A study by Forrester Research of Cambridge, Mass., estimated that this type of labor migration, generally referred to as outsourcing if contracted to another company, or offshoring if run by a company itself, could send 3.3 million American jobs overseas by 2015. India, with its large pool of English-speakers and more than two million college graduates every year, is expected to get 70 percent of them.
American companies say a weak economy is pushing them to find new ways to cut costs. American workers say the same economy is the reason they need the jobs to stay home.
"There is a feeling of unease," said Kiran Karnik, the president of India's National Association of Software and Service Companies. "Unless the U.S. economy picks up there's going to be a continuing issue about job loss, and also migration."
Ultimately, Ms. Martin's company, the eFunds Corporation, based in Scottsdale, Ariz., reached an agreement with New Jersey's Department of Human Services to move the work to the state. It created 12 jobs in New Jersey — at an additional cost to the state of $1.2 million until the contract ends in August 2004.
"For us it was about the consistency of the message," said Andy Williams, a department spokesman. The department is telling welfare recipients that they have to work or try to, he noted, "so to have a contract where you're exporting service-sector jobs — it just seemed we were working against our clients' interests."
But few corporations will make similar accommodations. "Even though the government of New Jersey doesn't want to manage costs, companies do," observed Pradeep Saxena, the president of eFunds International.
American companies are using Indian labor — often working around the clock — to do research and development, prepare tax returns, evaluate health insurance claims, transcribe doctors' medical notes, analyze financial data, dun for overdue bills, read CAT scans, create presentations for Manhattan investment banks and much more.
Seeking both to increase senior analysts' productivity and to lower costs, J. P. Morgan Chase & Company is planning to hire 40 junior analysts and support staff in Bombay to set up an equity research department there. It also plans to increase the several hundred employees doing back-office work at its Technopolis office park in Bombay to 1,100 by the end of the year.
Delta Air Lines has contracted two Indian companies to handle some of its customer reservations, the first airline to make such an arrangement. "The main reason is to save us money," $12 million over the next two years, said Catherine Stengel, a spokeswoman for the airline, although she added that allowing Indians to handle simpler reservations would also free American agents for more complex calls.
The move had not prompted any layoffs, she added, although a company news release announcing the arrangement said it would not affect domestic employment "at this time."
The Bombay operations of eFunds include selling thousands of products to American infomercial viewers, back-office work for a British telecom company, and providing customers' bounced-check records to American retailers. It provides customer service help to welfare and food-stamp recipients in 19 American states, using agents who — said Dinesh Bhatia, the head of eFunds sales in India — "are trained in empathy."
Ms. Martin and others like her earn just over $200 a month, less than the American welfare recipients receive but well over the $500 per capita annual income in India. For more challenging jobs, the savings to the American companies are even greater.
Despite the New Jersey bill, the threat is less legal than political. "You can't really outlaw outsourcing," said Jagdish N. Bhagwati, a professor of economics and political science at Columbia University. "Outsourcing is just trade."
But American unions, particularly the Communications Workers of America, have begun a campaign against the practice. When high-tech offshoring began, said Marcus Courtney, the president of the Washington Alliance of Technology Workers, he and others thought it would be confined to technical support. "People never imagined you would literally be able to export the entire production process overseas," he said.
Similar protests have come from the Communication Workers Union in Britain against the British Telecom Group's deal with an Indian software technology company.
At the same time, in the face of rising unemployment in the West, resistance has also grown to importing high-tech professionals from India. In the short term, that may actually prompt moving more work to India to reduce public resentment.
But over time, Professor Bhagwati predicts, visa restrictions may actually loosen as countries decide it is preferable to have foreigners come in to work rather than see jobs migrate abroad. Either way, the movement of work and labor in both directions is likely to continue.
"We don't see the competitive pressures declining, so the notion of being able to cut costs and get quality is only going to grow," said Vivek Paul, the chief executive of the software company Wipro Technologies.
Executives in India, which was long fearful of opening its economy, are now lecturing Americans about the virtues of free trade and contending that visa restrictions effectively constitute trade barriers. "If it takes six months to process a visa, it's like making a fruit shipment sit for six months," said Mr. Karnik of the National Association of Software and Service Companies.
But in the end, the most effective pressure will come from the companies that benefit.
Doing a tax return in India brings savings as high as 50 percent, said Kishore H. Mirchandani, president of Outsource Partners International, which has its headquarters in New York but had about 10,000 American tax returns prepared in Bangalore, India, this year.
To ease security concerns, he said, the Indian accountants have no e-mail, Internet or printer access, or even pens and papers at their work stations to prevent copying data.
More American companies, like American Express, are setting up their own processing centers in India. Some are finding that with lower labor costs they can afford to chase smaller outstanding payments.
The presence of these American operations here is driving salaries up. Still, attrition remains far lower in India than in the United States, where the jobs, aspirational here, are often seen as dead-end.
EFunds' call centers are in a new suburban development called Mind Space that houses only "knowledge intensive" companies. It is already home to eight call centers, with more on the way. Chattering young people are everywhere.
In an eFunds classroom, eager new employees learn to pronounce both R's in Mastercard, what a frat party is, what a Wal-Mart looks like — preparation for interacting with far-flung customers. On the board, the instructor has written, with the second syllable underlined: A-me-ri-ca.
Wow. Instead of getting a surly American help desk worker who usually can't speak English properly, I get a much more cheerful Indian help desk worker, who MIGHT speak English properly, but I won't hold my breath.
If the option is paying $25/hr all up for crappy work, or paying $10/hr all up for equally crappy work, pay the $10/hr.
I recently had a very pleasant experience with an MS tech (it was a registry issue that I didn't want to fool around with and it did take three hours to straighten out). During our conversation he told me that he was in a call center in Bombay, was a recent grad of IIT, and was headed to Toronto to get his Masters as an EE. All in all a very pleasant experience (his English was excellent), but I also wondered which American IT worker he displaced.
Also, you're right, the surly geeks of the world are probably fuming in the unemployment lines of the nation as they wonder "wha' the eff?" after their 70K position disappeared.
Man, this reporter is getting way way too detailed about this.
What I got out of that sentence is it is a modern, air-conditioned facility not unlike one you would fine in Sunnyvale, California or Omaha, Nebraska. We're not talking calcutta slum here. These are college educated young people who speak english and live in a modern society.
Second, just about any job you can imagine taking place in such a setting in America, can take place in India just as well, and a whole lot cheaper too. That would include about any insurance function except for claims adjustment, or any "high-tech" programming job. My company hires engineers from India on H1-B visas for programming jobs all the time. It just makes sense to hire them for even less and let them do the work in their own country.
A 41 year old programmer at the high end of the salary scale, like me, is not in a very secure position right now.
If there a way to outsource bureaucrats? India has them in scads, thanks to British Civil Service.
Seriesly, my biggest concern is identity theft. If it is easy to do it in the US, what happens when my personal data ends up in India, Pakistan or Russia?
I watched the movie "Network" a couple of times this weekend. Towards the end of the film, Ned Beatty's character gives a great monologue. I've copied part of that monolgue below - there is a grain of truth in it!
You are an old man who thinks in terms of nations and peoples. There are no nations! There are no peoples! There are no Russians. There are no Arabs! There are no third worlds! There is no West! There is only one holistic system of systems, one vast and immane, interwoven, interacting, multi-variate, multi-national dominion of dollars! petro-dollars, electro-dollars, multi-dollars!, Reichmarks, rubles, rin, pounds and shekels! It is the international system of currency that determines the totality of life on this planet! That is the natural order of things today! That is the atomic, subatomic and galactic structure of things today! [..snip..] There is only IBM and ITT and AT&T and Dupont, Dow, Union Carbide and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state -- Karl Marx? They pull out their linear programming charts, statistical decision theories and minimax solutions and compute the price-cost probabilities of their transactions and investments just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable by-laws of business. The world is a business, Mr. Beale! It has been since man crawled out of the slime, and our children, Mr.Beale, will live to see that perfect world in which there is no war and famine, oppression and brutality --one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused. It is ebb and flow, tidal gravity, it is ecological balance!
I've never planned on making money currying (pun intended) to welfare recipients.
unions
Can't say seeing either group mauled (a bit) would break my heart.
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