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Outsourcing hits US techies hard
Times of India ^ | MAY 26, 2003 | CHIDANAND RAJGHATTA

Posted on 05/26/2003 3:51:30 PM PDT by 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.


TOPICS: Front Page News
KEYWORDS: catholiclist; michaeldobbs
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Comment #501 Removed by Moderator

To: RaceBannon
I havent had a steady engineering job in 2 years now, unemployed for 13 weeks so far this time, longest time in 6 years or so, been turned down for 3 manual labor jobs or so, they wont even take an application for some because I have a degree.

I've noticed the same thing. Last week I was at one of the local temp agencys here in CT, they told me that they had nothing I was qualified for. I said that I'll do anything, mow lawns, light industrial, mop floors ... long story short, the answer I got was that none of these employers would look at me because of my experience and education. They were afraid I'd leave the first chance I got. It's tough, I'm now reworking my resume and leaving off a lot of my past qualifications, also stressing more of the entry level temp work I've been doing. I NEVER in my life thought I'd have to water down my resume.

502 posted on 05/27/2003 6:12:20 AM PDT by YankeeReb
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To: TaxRelief
I am aware that Aristotle refered to the middle class as being the economic and moral strength of a nation, but the disappearing middle class?

Can you give a more specific reference in his writing?
503 posted on 05/27/2003 6:12:33 AM PDT by TradicalRC (Fides quaerens intellectum.)
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To: Beck_isright
Nice Rant!!!
It's our fault or at least our problem. Labor is cheap outside the US (and EU) and it will stay that way till they catch up. Do you really think pure free trade is going to help you out of this one? The billions of people in Asia can quickly learn to be nearly as productive in these out sourced jobs as we are. We'll be waiting decades until they catch up to us and it will only happen if they successfully beat thier corrupt systems into shape.

The only solution I can see is isolationism; of coarse that isn't free trade, but you could have free trade inside an isolated America. Of coarse it wouldn't be as good as global free market.

How do put a tariff on a call center, assuming you wanted to? Uncle Sam cann't ask for income tax from India or?

Do you think if they remove all taxes and goverment spending and somehow defaulted on the nation debt, that free trade would keep us rich while they caught up?
504 posted on 05/27/2003 6:13:43 AM PDT by Lefty-NiceGuy
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To: YankeeReb
Once upon a time in the 70s Japan Inc was going to rule the world.

Now it's the year 2000s and India Inc is going to rule the world.

Yawn ...
505 posted on 05/27/2003 6:21:22 AM PDT by snooker
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To: USMMA_83; Beck_isright
The only thing this thread proves, is that we (Freepers) do not have an effective means for determining when it is time to dump a poster who has socialist leanings.

There are lots of great capitalists on FR (keep in mind out-of-work IT workers have a lot of time on their hands, and colleges have just released a lot of bored idealogues for the summer).

And don't let this moping group represent the rest of America in your mind. Remember the hard-workers are too occupied to spend a lot of time in forums.

{Present company excluded...}
506 posted on 05/27/2003 6:23:13 AM PDT by TaxRelief
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Comment #507 Removed by Moderator

To: narses
Leo XIII wrote the definitive encyclical on the topic of labor relations--Rerum Novarum.

There are no real "dogmas" on the issue, outside of the moral requirements: work for your pay, and pay for the work of others.

But there are a few rather solid 'hints' about the social contract; that economics alone cannot govern the labor marketplace.

This is what JPII (who wrote another encyclical on the topic,) meant when he said "Work is for man, not man for work." In other words, men are not chess pieces.
508 posted on 05/27/2003 6:37:41 AM PDT by ninenot (Joe McCarthy was RIGHT, but Drank Too Much)
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To: lonestar
Bingo. What should they be majoring in?

Oh, and by the way, what will those grads be paying for the same skills that Indians will obtain in India. What will Indian's pay to obtain those skills in India?

The IT manager probably paid top dollar for his degree, if he got a master's, throw another $30K to $50K on top. His job is being outsourced to someone who's paying, what?

If you didn't go to a military academy, you are already coming out of school with a boatload of debt. The poster commenting on living paycheck to paycheck ought to be ashamed. Today's grads will likely have beyond %50K in debt and might go a year before landing a job. "Where's your reserves, son?"

Worth asking, because one option the IT guy would have is 'going back to school'. What new skill could he possibly learn that some Indian in Bombay can't also learn 10 to 20 times more economically?

Maybe it's time to get my kids ready for college in Eastern Europe. Maybe they could get tech degrees there for less than $8K to $30K per year over four years. In WA state, the universities here NO LONGER ACCEPT 2 yr. degrees from Community Colleges - the major alternative to keep down the unbelievable cost of an undergrad degree here in the States.

I guess its time for everybody to suck it up, right? We can't afford $70K IT guys anymore, so we also can't afford the colleges that train them either?

Also, you better bring down the cost of everything we buy in the US market, or decide to start selling your stuff in India, because the wage base that drives demand is going bye bye.

"Walk it off, son" is not the right advice here. The market is going to react to this - the very thing that companies believe will increase their profits will actually drive down sales over time. Indian IT people are generally not part of most US tech company's value chain.

Oh, while you are at it, I hope your second mortgage is paid off, because the housing market in most coastal states is about to come down around your ears. 850 square foot (1/2 of a duplex condominium) in Sacramento - SACRAMENTO - was $350K.

God bless the Indian's for finding a market. Let's see how long their opportunity actually lasts.
509 posted on 05/27/2003 6:39:17 AM PDT by RinaseaofDs
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To: FoxPro
That's so. The gov't _used_ to cover the costs of getting a clearance; now the hiring company covers the cost. Typical costs I'd heard were around 25K$ for the background check for a DOD Secret.

I don't know when that change occurred. I'd imagine over time the price companies charge the Feds would increase to cover that additional overhead. I'd also guess that the number of people needed with clearances is getting larger, what with Homeland Security issues and such.

The Feds could cover the costs for unemployed engineers; that would likely make those engineers more hireable.
510 posted on 05/27/2003 6:46:43 AM PDT by I_dont_know
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To: TradicalRC
In Book V of Politics, Aristotle goes into great detail about the dangers of an any increase in either the upper or lower classes that will result in an overwhelming of the middle class. There is no exact use of the words "disappearing middle class", but he has definitely stated it over and over with the references to an increasing upper or lower class.

If you are going to read it through, start with Book IV to make sure you are on board with his terminology and premises.

511 posted on 05/27/2003 7:04:36 AM PDT by TaxRelief
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To: DAnconia55
But if folks here have their way, it will be a democracy (not a republic), and you WILL be entitled to a job.

.. and they will pretend to pay you and you will pretend to work.

512 posted on 05/27/2003 7:06:23 AM PDT by El Gato
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To: TaxRelief
Thank you, I can't tell you how much I appreciate this.
513 posted on 05/27/2003 7:09:29 AM PDT by TradicalRC (Fides quaerens intellectum.)
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To: Texaggie79
The less work you have in an economy, the poorer that economy will be while the more work you have in an economy, the richer it will be

Ok, Einstein, now tell me how outsourcing leads us to "more work".

514 posted on 05/27/2003 7:09:43 AM PDT by BrooklynGOP
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To: Texaggie79
Now, the amount of work in our economy remaining a constant, that frees up funds, derived from work, to be spent elsewhere.

Yea. Elsewhere. Like India.

515 posted on 05/27/2003 7:11:01 AM PDT by BrooklynGOP
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To: Roscoe
http://www.h1b.info/

Please check the links at this website.

There are 1.2 million H-1B workers in the U.S. today and an unknown # of jobs are being outsourced. H-1B visas started in the early '90's to address a shortage that no longer exists, so these foreign guest workers should now all be sent back home. Otherwise, they will continue to renew their visas or go from H-1B to Green Card to Citizenship.

A Republican congressman from Colorado, Tom Tancredo, is trying to at least cut-down on the # of new H-1B and now L-1 visas (a sneaky way around any cutbacks in H-1B).

Lou Dobbs' program discussed this problem last night. At least the level of awareness is being raised. According to people interviewed on his program, H-1B workers will work for half the amount of money as their American equivalents. Plus, the foreign worker is desperate to stay in the U.S. and will work far more than 40 hrs/wk.

Outsourcing will not be so simple to fight. Four states are passing laws ensuring that at least government contract jobs cannot be outsourced. Other countries discourage outsourcing from their countries by imposing tariffs.
I'm not an economist and I'm not sure the best way to fight outsourcing except by boycotting the goods from these companies and letting them know why. But, these corporations are saving billions of dollars a year by outsourcing so boycotting will not be enough.
516 posted on 05/27/2003 7:23:01 AM PDT by LibertyAndJusticeForAll
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To: TaxRelief
I see from your page that you have read Bastiat - The Law.

No wonder your comments are the most informed and knowledgeble of all in this conversation. A short little bitty book that sums it all up.

Good to know that there are those who can think on these matters, and not let everything boil down into jingoistic jargon and emotional relativism. I'll not be joining the fray this morning, but I stopped in to he how it was moving along. I'm afraid that folks like you, Lurker, D'Anconia and others are a minority of logic in a sea of rhetorical reactionaries.

I am dismayed that half of what I read in this discussion can be found on any Liberal-supported forum.

Cheers.
517 posted on 05/27/2003 7:24:16 AM PDT by Pukin Dog (Sans Reproache)
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Comment #518 Removed by Moderator

To: LibertyAndJusticeForAll
This subject of this thread is *offshoring*. The issuance of H1B visas is another cause of a loss of IT jobs. My posts have all specifically referred to offshoring, not immigration.

Your post is inadvertently linking the two actions together, although they are very different situations.

Outsourcing refers to a business practice of contracting for services outside of a company. In a free market, the government has no say in this type of business practice. (Offshoring refers to conducting business in an other country.)

Issuing visas to aliens who will be working in this country falls under the realm of immigration control. We must carefully weigh the merits of public policy versus business practices. There has been a tremendous amount written, since the days of the Greek philosophers, on this very lengthy topic.

For now, though, I am discussing *offshoring*.
519 posted on 05/27/2003 7:27:34 AM PDT by TaxRelief (Common sense?)
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To: Lurker
Here's a frigging clue for you Mr. Spotted Owl. Adapt or die. I didn't make the rules, I just recognize them for what they are. You don't have to like them, you just have to live by them.

Here's a clue for you sweetheart, I'm a lady :)

Lol, I've eaten enough crap in my life to "get" what you're saying. I'm going back to school to get a real job, after being a homemaker, telemarketer, and Avon lady. I've also temped doing office work and proofreading. Unfortunately I live in Kalifornistan, and the decent jobs (150k-rotf in my dreams)are drying up fast. I was being sarcastic about him "going postal" at his workplace. I'm happy to know that you're tougher than that poor guy.

520 posted on 05/27/2003 7:37:40 AM PDT by TheSpottedOwl (America...love it or leave it. Canada is due north-Mexico is directly south...start walking.)
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