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Congressman Jay Inslee (D-Wash.): "U.S. won't stop outsourcing to India"
siliconindia ^ | Wednesday, May 28, 2003 | IANS

Posted on 06/04/2003 10:38:59 AM PDT by Willie Green

For education and discussion only. Not for commercial use.

U.S. companies will continue to outsource jobs to India to cut costs despite a move by some American states to curb flight of government contracts, said Congressman Jay Inslee.

NEW DELHI: "People are worried about job security in the U.S. and therefore it is not terribly surprising to find a few people who will oppose outsourcing to other countries," said Inslee, a member of the Democratic Advisory Group on hi-tech issues.

"Some people may support the promulgation of legislation to ban outsourcing but the majority of U.S. industry and policymakers are not in support of creation of new trade barriers," Inslee, who is on a visit to India, told IANS in an interview.

"I don't think it (a ban on outsourcing) is going to happen. We want to keep our doors open. I believe any effort to restrict market access will adversely impact the U.S. economy. The policy of protectionism will not take us anywhere.

"For any economic growth to occur, a country needs to add more value to its products without increasing the cost and outsourcing to India helps U.S. companies do exactly that," added the Congressman.

The Indian government has reacted sharply against four American states -- New Jersey, Maryland, Connecticut and Washington -- reportedly proposing to ban outsourcing of government contracts to companies outside the U.S.

Commerce Minister Arun Jaitley said the move was against the principle of market access and India was placed on "high moral ground" to take it up at the World Trade Organisation (WTO) negotiations.

The New Jersey Senate had unanimously cleared a bill on December 16 preventing public enterprises in the state from outsourcing work, specifically to India. State Senator Shirley Turner had proposed the bill.

The bill prohibited public enterprises from shifting their call centres abroad for "cheap labour" with a view to creating more jobs for Americans as the unemployment rate in the U.S. had soared.

The bill was taken up for discussion by the Senate Committee in February this year but couldn't be passed and has now been put on hold. It is now likely to be discussed in the Senate next month.

Close on New Jersey's heels, other states like Washington and Connecticut are also reportedly mulling a ban on outsourcing contracts to India.

Inslee, a representative from the First Congressional district of Washington, however said there was no move in his state to introduce a bill that would make outsourcing difficult.

"Ours is a trade-oriented state and we will not take any step that goes against the principle of market access. Our ability to access other markets will diminish if we ourselves block access to the U.S. market. Trade is a two-way street."

India's vast pool of English-speaking and cheaper manpower, educational system and training programmes have helped transform the country into a global outsourcing superpower over the last few years.

India's software exports grew by 29 percent to $7.5 billion in the year to March 31, 2002, with some 60 percent going to the U.S.

The country's rapidly growing business process outsourcing (BPO) industry has virtually turned it into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants.

More than a quarter of Fortune 500 companies like General Electric, American Express, British Airways, HSBC and Citibank are shifting their back office operations to India.

Inslee, who is a part of the Congressional Caucus on India and Indian Americans, said Indian technology companies and professionals in the U.S. have played a very important role in the American economy.

"Indians in the U.S. have created tremendous intellectual capital and helped in the growth of the knowledge economy."


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; Government; US: Washington
KEYWORDS: globalism; thebusheconomy
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To: sinkspur
"These 200,000 jobs, from the companies you list, were worldwide losses"

Wanna bet?

From March 27, 2003


Even the Information Technology Association of America (ITAA), a D.C.-based employer lobbying organization, acknowledges that more than 500,000 U.S. tech workers lost their jobs in the past year. While the ITAA attributes most of the job losses to economic stagnation and the dot.com implosion rather than offshoring, as U.S. tech employment has slumped, the Indian tech industry has been booming.
http://www.washtech.org/wt/news/industry/display.php?ID_Content=452
81 posted on 06/04/2003 9:41:35 PM PDT by philetus (Keep doing what you always do and you'll keep getting what you always get)
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To: Willie Green
Don't worry all those smart people will become mortgage brokers and they will sell you on a 95% cash out so you can buy "stuff."
82 posted on 06/04/2003 9:46:59 PM PDT by junta
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To: dark_lord
What you have identified are risk factors, not costs. Read up on risk-return space and project portfolio selection: it's in any book on corporate finance.

The ability to effectively produce and then protect useful systems for corporations goes far, far beyond simple programming skills. The fact that you are ignorant of that may be because you are not that knowledgable about IT.

True, ignorance may be one of the reasons. Another may be that I omitted the factors because they were, whether true or not, irrelevant to the point being discussed.

To see relevance, one applies logic, which should be sharply developed in a programmer. It has certainly failed you on this occasion.

83 posted on 06/05/2003 6:25:19 AM PDT by TopQuark
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To: philetus
A few million is going to turn into tens of millions.

Aaah, another one who knows the future.

84 posted on 06/05/2003 6:26:32 AM PDT by TopQuark
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To: philetus
The whole thing boils down to the fact that the modern day "free traders" are actually shills for the WTO and the UN, and their plans to 'haromonize' wages around the world. Go read the Doha agenda, and the GATT Uruguay Round. Of course, wages in the developing countries mustn't go up, ours must go down.

The issue you raise is important. This is not however what we were discussing: the outsourcing occurs in sectors of an economy. It well may be that our workers are on average overpaid, and we as consumers pay them extra. The level of basic education has declined, and it is that which permits employess to adjust to a changing envonment rapidly.

All of us perform multiple roles in the economy: We are workers, consumersa, and investors. Your post, as well as many of those who simply chose to b----h about the issue does not reflect that fact. And without it, no opinion is balanced.

85 posted on 06/05/2003 6:32:10 AM PDT by TopQuark
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To: Willie Green
Let's get our act together here in the U.S. before complaining about other countries. For example, if the state, local and federal governments weren't so tax happy and heavy-handed in their control-freakish regulations, this would unlikely be an issue.
86 posted on 06/05/2003 6:37:14 AM PDT by Frumious Bandersnatch
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To: Black Agnes
You are correct, but I wonder what he will do when the poor hungry people are knocking on his door wanting food.
87 posted on 06/05/2003 8:13:20 AM PDT by samuel_adams_us
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To: TopQuark
Yes, they are risk factors. But the probability of occurance is high. And historically these areas do incur costs. Therefore costs can be estimated. To say they are risk factors but not costs is silly. Maybe in some Arthur Andersen financial text they are only risk factors, but in the real world they are also costs. And you are overlooking the point...which is that those costs are lowered when using American IT workers. You were trying to make a straight labor comparison between US IT workers and Indian IT workers, and I am merely pointing out in the real world that you are comparing apples to oranges. Therefore the straight labor comparison is not useful.
88 posted on 06/05/2003 8:16:48 AM PDT by dark_lord (The Statue of Liberty now holds a baseball bat and she's yelling 'You want a piece of me?')
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To: dark_lord
I am merely pointing out in the real world that you are comparing apples to oranges.

No, I think you are. I referred to losses and you refer to expected losses. I tried to suggest that to you earlier in a different way.

Anyone can see "the real world." It is making sense of it that is not trivial.

In sum: you alleged I made a mistake while, in fact, you misconstrued the notion I was referring to. I stand behind my previous remarks.

89 posted on 06/05/2003 8:49:11 AM PDT by TopQuark
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To: Frumious Bandersnatch
Let's get our act together here in the U.S. before complaining about other countries. For example, if the state, local and federal governments weren't so tax happy and heavy-handed in their control-freakish regulations, this would unlikely be an issue.

Who's blaming India?
Don't you think this buttwipe congresscritter is also responsible for the oppression you've cited?

90 posted on 06/05/2003 9:19:26 AM PDT by Willie Green (Go Pat Go!!!)
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To: Willie Green
Say I was a fortune 500 company and I outsourced my IT to india. My company makes financial software and it is installed in a majority of the fortune 500 companies. My new release has a ton of bugs in it, my Indian programmers didn't do a good job this time, and my customers are going to sue me for the their costs associated with down time. What legal recourse would I have against the Indian software companies?


Next scenario. I have hired a software outsourcing firm in India to do my software development. Not knowing that this software company was owned by a terrorist organization, I hire them to write my next version of software and I deliver that software to all of my fortune 500 financial customers. The software has a defect in it to exit and not run upon reaching the date of 01/01/2005. On Jan 01, 2005 what happens?
91 posted on 06/05/2003 9:20:56 AM PDT by samuel_adams_us
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To: Willie Green
Oh I agree. To paraphrase Mark Twain: "No man's liberty or property is safe as long as the legislature is in session." I'm a little peeved with congress critters who tax and regulate us to death (it has been estimated that 45% of the cost of the average car goes to taxes alone), thus forcing many companies to relocate offshore in order to compete.
92 posted on 06/05/2003 9:24:39 AM PDT by Frumious Bandersnatch
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To: Willie Green
Inslee is a joke.
I remember when this pathetic twerp was going door to door in the tri cities trying to get elected in this district (Tri-Cities).
93 posted on 06/07/2003 4:43:30 AM PDT by tomakaze
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