Outsourcing hits US techies hard

Times of India ^ | MAY 26, 2003 | CHIDANAND RAJGHATTA

[Lessismore]

WASHINGTON: On a recent April afternoon in Silicon Valley, moments after he was told he had been laid off from his computer programming job at a Bank of America training centre, Kevin Flanagan stepped into the parking lot and shot himself dead.

Some of America's technology workers, who like Flanagan have also had to collect pink slips over the last several months, think they know why Flanagan took his life: Bank of America not only outsourced his job to India, but forced him to train Indian workers to do the job he had to give up.

In the weeks since his death, the techies have used the incident as fuel to fire a campaign against outsourcing to India, an issue that now seems poised to become a major sticking point between the two countries. Several US states are already considering legislation to ban or limit outsourcing.

Bank of America is one of several major US corporations – General Electric, Microsoft, Intel are among others - under scrutiny for outsourcing jobs to India. The Bank created what is called a "Global Delivery centre" in 2000 to identify projects that could be sent offshore.

Since then it has signed agreements with Infosys and Tata Consulting Services (TCS) to provide solutions and services.

In an e-mail exchange with this correspondent, Kevin's father Tom Flanagan said "a significant reason for which my son took his life was indeed as a result of his job being outsourced."

"Did he blame India for his job loss? No. He blamed the "system." He couldn't understand why Americans are losing jobs. Rather I should say he understood it economically, but not emotionally," Flanagan said.

Bank officials, who did not return calls relating to Flanagan's death, have said in the past that the deal with Indian companies would effect no more than 5 per cent of the bank's 21,000 employees, or about 1,100 jobs, in its technology and operations division.

According to some surveys, the US has lost at least 800,000 jobs in the past year and some 3.3 million jobs will move overseas over the next few years because of outsourcing, mostly to India.

The Bank has also acknowledged that it had asked local workers to train foreigners because such knowledge transfer was essential. According to Tom Flanagan, his son was "totally disgusted" with the fact that he and his fellow-workers had to train foreigners to do his job so they could take over. "That sir is a travesty," he said in one e-mail.

US tech workers are challenging the corporate world's claim that it is outsourcing work to improve bottomlines and efficiency. Some analysts have also pointed out that US corporations were being forced to tighten up by the same people who are moaning about outsourcing, and who, heavily invested in the stock market, demand better performance.

But on one website that discussed the Flanagan case, a tech worker pointed out that data processing consumed only a small per cent of revenues and was hardly a drain on the Bank's profit.

"(It is) a prosperous bank which has let greed trump any sense of patriotism or social responsibility," he fumed.

[Pukin Dog]

Sooner or later, you are going to have to choose which reality you believe. At the same time you accuse me of not having a clue, you admit that what I describe is exactly what is happening. Which is it?

If I am correct about what is happening, it might stand to reason that I know more than you would like to accept. Just because you dont like my answer, does not make it flawed.

A casual observance of my circumstance versus your own, might suggest to many that I understand economics a lot better than you do. The only defense you have is that of the victim, and that your current circumstance were more the doing of others, then of your own.

Again and again, you contradict yourself. Either I am wrong about what is happening (I'm not) or I am wrong about what should happen (I'm not) or maybe, just MAYBE, you might be coming at this from the wrong perspective. Your's is that things are being done to you that are wrong. Mine is that things are being done to you that have been done to others; and that your predictions of doom have been made before. They were wrong then, and they are wrong now.

Using your personal circumstances to describe the overall state of the economy, and this nations manufacturing engine, is what I called myopic. No matter how you slice it, you apparently are not going to be able to come up with a single supporting argument that doesnt first involve some form of personal attack on me; which only points to the weakness of your position. We can go back and forth as long as you wish. I will state my position, you will continue with your vitriol, while not providing a single fact in support of your position of IT being more than just the next domino of employment type to fall.

At some point, you might wish to protect your credibility; but that is for you to determine. Maybe you are trying to drag me down into a personal war, but I wont play that game. Be angry if you wish. My point does not rely on the agreement of others. But if you really wish things were different; then why dont you ask yourself why it is YOU suffering and not ME?

I know; you would like to think that my pension allows me a freedom that others dont have. Frankly, I make three times my pension per month in stocks; but I imagine that is beside the point? You IT types are funny in that regard. Folks with money are called villains of the worst kind, without a clue about life in general; while all the knowledge and brains and common sense resides in those of you suffering under us robber-barons.

You never stop to ask yourself, that if we actually know so little, why is it that we (according to you) are so easily able to profit from your misfortune? One argument or the other, just does not fly. I would REALLY like an answer to that question.

[Texaggie79]

I submit if one were willing to pay a person $50,000/year to pick strawberries 8 hours/day one would have people waiting in line for the job.

Sad thing is, some poor saps out there actually think that is a reasonable salary for someone who does what a 5 year old can do.

The free market means that at some wage level certain jobs will not be filled. That is an indication that the wages should increase.

Or that our standard of living has surpassed that which those certain jobs are worth getting paid.

The funniest line I hear is that every job should pay a "livable wage". Who the hell says? A job should pay whatever it's worth to do it. Whether it is enough to live how you wish has nothing to do with it.

[Texaggie79]

How the regular Joe fares is what demonstrates the value of a system.

Correct. What you need to do, is to step back and see that the average Joe, in America is doing pretty dam good. That I even have to point that out is strange.

[oceanview]

Take all workers, not retirees, people on pensions, government payments, etc. Just people who actually work.

- remove government employees (teachers, the california prison guards, etc)

- remove compensation for those in the corporate suites that is increasing significantly to skew the statistics

Take the workers who are left, and you'll find real wage growth in the US amongst those workers is falling consistently.

[Pukin Dog]

Sad thing is, some poor saps out there actually think that is a reasonable salary for someone who does what a 5 year old can do.

Funny you should mention that. I was reading last week about an 9 year old child in India, who had just recieved some sort of Microsoft Certification, and was now working on an advanced certification on Cisco routers.

Does that not suggest that IT become a commodity at worst, and at least no longer deserving of such a lofty status in the minds of those performing that work? I dont mean to denegrate the profession, as it is certainly a profession requiring advanced skill and training, but does this not point to the fact that over time, it is somewhat inevitable that these positions will have their elan diminish in the face of foreign competition?

I know of no job, industry or market immune from competition both fair and unfair. The suggestion that everything would be different, if we only had politicians protecting us from all this, flies in the face of American history.

[oceanview]

wow, are you naive. what your story about the 9 year old "suggests" is that India is cranking out these "certifications" like toilet paper, because having the piece of paper that says you are "certified" is required before one of the US based offshoring houses can shovel a job over there at 20% of the US workers wage, for a US worker that truly earned that certification legitimately.

[RaceBannon]

You arent reading what I am saying, for I never agreed with you once.

[Tokhtamish]

As ever you talk nonsense.

The non-college educated sector of the labor force is clearly worse off than they were 40 years ago. Are you intellectually capable of understanding that 40 years ago a non college educated worker in a manufacturing job could buy a house, send a kid to college, go away on vacation, have health insurance and retire on a pension all on one paycheck ? What non college educated worker could do that now ? How many college educated workers can do that now ?

[Pukin Dog]

Tell ya what, Race. We are not getting anywhere with this; so there is no reason for you and I to continue the back and forth. Enjoy yourself.

[oceanview]

absolutely.

and you are right, the college educated are now also under assault, especially in IT (related to this thread), but very soon at other jobs in HR, health care, business services, any job that can be done in front of a terminal is headed out. MRIs and CAT scans are being read in India now. More and more young people want to be lawyers and teachers, how many lawyers and teachers can our system support? How many more government employees?

[hedgetrimmer]

Sad thing is, some poor saps out there actually think that is a reasonable salary for someone who does what a 5 year old can do

Actually children make great strawberry pickers because they are closer to the ground than adults.

[Pukin Dog]

What it suggests, is that whatever the rules; India appears to be beating American IT folks at their own game. You have no basis to suggest that this was illegitimate. Do you? You dont. Par for the course.

[Pukin Dog]

What non college educated worker could do that now ?

LeBron James.(just answerin')

Am I correct in assuming that you think progress and competition have resulted in America being worse off?

Today's College grads know less than 10th graders did in the 1950's, so I makes sense to me that it would require more education to create the same standard of living on a single income.

[oceanview]

I know that a 9 year old cannot possibly understand the concepts behind managing a cisco router network, so if they have the certification, its phony. Most likely they just got the kid to memorize the IOS commands and gave him the certificate based on that.

Here's a challenge to you, buy a Dell PC and call tech support with even a modestly complicated problem. Then tell me the Indian on the other end of the line is "certified" to do anything other then read the help screens to you, the same ones you could read to yourself on their website.

The story you cited is not "beating us at our own game", unless our "game" is fraud.

[oceanview]

not the ones with engineering degrees, maybe the liberal arts majors.

[Pukin Dog]

I know that a 9 year old cannot possibly understand the concepts behind managing a cisco router network,

Really?

How do you know that? The question is how do YOU know THAT? You can speculate, you can conjecture, you can hope, wish, and prey it aint so, but how do you KNOW.

Answer; YOU DONT.

[oceanview]

How do I know that? I've been working with that gear since it was invented.

[Tokhtamish]

What nonsense you talk. All your babble about "create instead of manufacturing" ignoring all the obvious facts that racebannon, harpseal and other patriotic Americans on this board so clearly point out. Patriotic Americans who do not view their country as expendable to the transnational corporation as you do.

If protecting American industry, America's standard of living, America's future, America's very military security doesn't come under "promoting the general welfare", then what pray tell does ? Historically, free trade has been the mantra of the dominant exporting power because it served its interests. There is nothing the least bit sacred about it. If it does not serve your interests, there is no reason to cling to it like it was gospel. The end to be served is national prosperity a point you are incapable of comprehending. Free trade vs tariffs has always been debated in terms of how it served that end. So it has always been throughout American history because We the People have always insisted that that we make the rules, not selfish, narrow capital interests.

Beneath your "adapt" nonsense, behind the pretense of heroic individualism, is a real cringing servility to the transnational corporation. A certainty that resistance is futile and we must therefore resign ourselves to a future of child labor, sweatshops, and company towns until the Chinese standard of living equals ours. Your kind of helplessness, your refusal to question the rightness of your destruction, is the thinking of a slave, not an American.

[oceanview]

Folks who poo-poo this issue will be the first to shriek when Hillary is elected president in 2008, with the assertion "I can't imagine why anyone would vote for her". All these displaced workers will be first in line at the polling places if the current trends continue.

[Bush2000]

He walked out the door. Ahh reality hits hard against the crybaby union mentality of something for nothing...

Agreed. Everything -- every job, product, and service -- is subject to supply and demand. Trying to counter those market forces is like trying to legislate against gravity. It's a bad idea both in the short- and long-term because it doesn't make you any more competitive. Eventually, like water flooding over a dam, market forces will overwhelm the markets that the protectionists want to protect -- whether they like it or not. Nobody owes anybody anything. And nothing lasts forever. If people would only accept those basic facts of reality, we could eliminate a lot of hand-wringing and whining...