Europe, US set to fall to cheap Indian labour

Express India ^ | Thursday, April 14, 2005 | Harish Dugh

[jb6]

New Delhi, April 14: If world businessmen go by laissez faire economics alone, a country like India offers the best deal anywhere, anytime. Even if parochial interests are keeping most EU and US companies country-bound today, then losses in the near future are definitely going to drive them eastward, to India.

In fact, Newsweek’s Fareed Zakaria said that American car companies like General Motors, Ford and Daimler-Chrysler, one-time icons of motoring, are being driven to rack and ruin due to the huge benefits they offer their employees. On healthcare alone the American worker in these companies gets more than $6,500 per year. He goes on to add, “GM in fact, will pay a whopping $5.2 billion (2005) in medical and insurance bills for its active and retired workers.”

He raises a scenario of a rout for America’s Big Three as and when India’s and China’s carmakers start manufacturing for the US market.

Also, India has come out tops in a study by Mercer Human Resource Consulting as reported by DW-World De, a German website. The stats indicated that, as far as labour costs are concerned the desi worker has no real challenger, anywhere in the world.

As a corollary, said the world's largest employee benefits consultancy, employers looking for able and willing workers on the cheap, can find the best deals here.

While Belgium, Germany and Sweden have the most expensive labour, costing more than 50,000 euros a year, going to India makes far better sense at a mere fraction of the cost, 2,024 euros!

However, countries that have thrown off the Soviet Union’s yoke in the recent past are also relatively cheap, but they too look awesomely expensive at double that of India.

For instance, Latvia at 4,752 euros, Lithuania at 5,649 euros and Poland at 8,257 euros lose their competitive battle against India even though, when pitted against their European brothers, they win hands down. However, the language barrier that these countries pose is also working against them. India, where English is largely predominant, offers the best brains, dedicated workers and comprehensive infrastructure for even the most technically challenging jobs. That Indians are willing to work extended shifts adds to their appeal.

Japan and USA, where capitalism and managerial excellence rule, also do not emerge as better prospects to take your business to. While in the Land of the Rising Sun labour costs are in the region of 45,839 euros, Uncle Sam’s stands at 33,195 euros.

Putting all of these figures in perspective, one wonders why more European countries are not outsourcing. As it is, the European Union is fighting a virtually stagnant economy. And, if no alternatives are explored, at this rate, the labor costs are going to drive European Union into the ground. Ditto for US. However, even though their businessmen are quite gung ho about outsourcing, politicians are pandering to the nationalist sentiments there to put a spanner in the works of outsourcing.

However, it must be remembered that the EU countries offer very generous social security, annuity benefits, medical assistance besides a host of other incentives. In India these benefits will lead to an expenditure of just $100 at the highest. A people starting from virtual scratch, as India did after hundreds of years of foreign rule, will work for less.

By Y2K the die has been cast. With European and US workers unwilling to accept pay cuts, nor are they willing to outsource, there is no way Germany, France, Spain, US and the rest can keep their rich countries’ financial future safe. Unless they look to countries like India.

[jb6]

By Y2K the die has been cast. With European and US workers unwilling to accept pay cuts, nor are they willing to outsource, there is no way Germany, France, Spain, US and the rest can keep their rich countries’ financial future safe. Unless they look to countries like India.

[OpusatFR]

"With European and US workers unwilling to accept pay cuts..."

I'm perfectly willing to accept a pay cut to keep the country competitive.

Where can I rent a hovel for $5 a week?

[Vn_survivor_67-68]

Can India also provide a market for these cars after the final "victory"?

[LauraleeBraswell]

Better India than Red China

[ClaireSolt]

In Holland workers are exhorted to keep their wage demands low to keep a positive balance of trade.

[jb6]

How does it feel to be a commodity? I'm still waiting until we serfs can be sold on the auction block along with our families.

Seriously though, with stagnant wages, rising interest rates, who is going to buy the Chinese/Indian junk that our former tech leaders and now nothing but empty brand names are selling? Or is that to many quarters ahead to plan for?

[Fast1]

Thats funny who will buy that crap here hell we invented the mass production and it is about time to rebuild our manufacturing base.

[KC_for_Freedom]

There is no doubt that India will get some offers, but US firms are a long way from rolling over and puting feet up. Although the management and union staff at GM had better look this over carefully. Now is not a good time to be stubborn. But it looks like GM workers will dictate that the company drop the dividend.

Watch for renewed efforts to find tort reform to drop these huge health care costs, (ant look at solutions involving immigration as well). The global world is going to have to develop a "global" solution.

[American Vet Repairman]

"In fact, Newsweek’s Fareed Zakaria said that American car companies like General Motors, Ford and Daimler-Chrysler, one-time icons of motoring, are being driven to rack and ruin due to the huge benefits they offer their employees."


Will bankruptcy allow them a way out?

[Sam the Sham]

Putting all of these figures in perspective, one wonders why more European countries are not outsourcing.

Because European countries have powerful unions that will not stand for it. Because countries with double digit or near double digit unemployement and strong levels of government intervention will not allow jobs to be shipped to India.

[grey_whiskers]

Not to mention
a) the unspeakable corruption in India
b) the caste system in India which makes the Jim Crow laws in the States look like a picnic--very anti-PC; compare the reaction to South Africa's apartheid...
c) low quality of materials and work produced
d) other Southeast Asian countries competing as Indian wages rise
e) the fading of Jack Welch and Carly Fiorina into insignificance, and with them, the idea that short term quality profits, and producing junk while screwing your workers are all that matter...

[desidude_in_us]

Just another Troll who intentionally defames India out of spite.. Jim Crow has only parallel viz Apartheid regime of SA.. Caste system, even in its worst form, never had families split up and little kids sold in the streets like cattle.

[CarrotAndStick]

Exactly. Caste problem is one that's in the minds of people. India's Constitution doesnot discriminate based on caste. And many easily forget the affirmative action that India has implemented since 1947, that almost seems like reverse-discrimination.

Besides, most of India's lawmakers and politicians are from the 'lower' castes. Miracle of democracy, the wise ones say, and the fool fails to see it. Typical 'useful idiot'.

[RogueIsland]

Exactly. Caste problem is one that's in the minds of people.

Uh huh.

http://www.pal-item.com/apps/pbcs.dll/article?AID=/20050330/NEWS01/503300307/1008

Aftershocks among India's 'untouchables' Local native who witnessed tsunami's aftermath alarmed by this week's news

By Rachel E. Sheeley

Staff writer

The International Medical Corps, with whom Union City, Ohio, resident Mary Rodeheffer volunteered her services in Indonesia, reports that the team that Rodeheffer was with survived the earthquake unharmed. Trudi Behr, a communications representative for the corps, reported in an e-mail to the Palladium-Item, "We just heard everyone on the International Medical Corps team is fine, thank goodness."

Richmond native Nanci Ricks welcomed news that no second tsunami hit the coast of India on Monday and Tuesday.

After hearing reports of an earthquake in Indonesia and a tsunami warning, Ricks, executive director of the Colorado-based Dalit Freedom Network, was concerned for the safety of the medical team from the organization working in the Tamil Nadu region of India.

Ricks, the daughter of Tom Reddington of Richmond and the late Norma "Taffy" Reddington, took a team to India in January to help people affected by the Dec. 26 tsunami. The efforts by the Castle Rock, Colo., woman and her team were documented by a reporter and photographer from the Rocky Mountain News.

As was reported in the Rocky Mountain News stories and by Ricks, the post-tsunami grief and fears of the people are greater than any physical injury.

Monday's earthquake, which killed about 1,000 people, and subsequent warnings, Ricks said, will combine with other post-tsunami phenomena -- inexplicable flooding of 2 to 4 feet in villages where the water rises and recedes without reason -- to increase the post-traumatic stress.

"We kept saying, 'No tsunami,'" she said. "It just reinforces that it could happen. That's just going to keep them in fear for months to come now."

Ricks, a physical therapist, generally makes an annual trip to inland India with a medical team to offer aid to Indian Dalits, who are at the bottom of the practiced caste system and who are sometimes known as untouchables. In the wake of the tsunami, many Dalits were refused relief such as food, medical treatment and shelter. Those reports made Ricks and her crew change their destination to the coast, where they visited several Dalit villages.

"I'm so used to bandaging up wounds and taking care of sores," she said, "This was a shocker. They were completely emotionally paralyzed."

She said many of the people are uneducated and believe that the sea god attacked them because they did something wrong.

"It kills you," Ricks said. "... That just adds to all the grief and psychological paralysis. They feel as though it's their fault."

Ricks' visit to Singarathoppu, India, was a prime example of the fear that the tsunami has bred.

They had been treating the villagers there for two days when a high tide brought a tsunami scare.

"The whole village just panics, just screaming and running," she said.

That night, the team slept in a hotel in another community. The terrified villagers slept on the bridge.

Along with the emotional problems, the tsunami has created economic problems, Ricks said.

The problem is exemplified by a Dalit village where pigs were raised to be sold to the fishermen at the rate of about one per month.

"They were not underneath the wave itself, but they were more affected by the tsunami because the fisherman aren't buying pigs," Ricks said. "These people are literally starving to death ... because the tsunami hit the fishermen and the fishermen are being fed by relief efforts. They're not getting any relief because they weren't actually hit by water."

The Dalits' plight touched Ricks five years ago when she joined a medical mission trip to India to help the people following a cyclone that killed 700,000. There, she saw the Dalits -- who make up 25 percent of India's population -- treated poorly.

"I decided the world needs to know about this," Ricks said.

She founded the Dalit Freedom Network, which collaborated with Operation Mobilization India to help in tsunami-ravaged areas. The network also is helping the Dalits cultivate schools, medical resources, economic development and human rights.

Ricks said relief teams from the network will continue to visit the coast. She returns to the northern region of Orissa with a team in October.

"There's going to be a need for quite some time," Ricks said.

Reach reporter Rachel E. Sheeley at (765) 973-4458 or rsheeley@pal-item.com.

Originally published March 30, 2005

[CarrotAndStick]

Substitute 'Dalit' with 'poor', and a more accurate description emerges. Are you trying to say that the Dalits in India are officially discriminated against? If you do, you need to learn more about India's affirmative action programme, the largest of its kind on the planet. Casteism is a social problem, not a problem due to governance.

About thirty or so years ago, African Americans didn't have as many freedoms as they do now. As the economy grows, things change.

[CarrotAndStick]

Take a look at India's political setup now. Most people in power are these very Dalits and other minorities. Democracy does wonders, you see.

[CarrotAndStick]

Ever heard of these people known as Kashmiri Pandits?

These are Hindu refugees from Kashmir, and their plight isn't any better than the plight of the Dalits, if not worse.

The Invisible Refugees

Nearly 400,000 homeless Kashmiri Pandits

http://www.kashmir-information.com/Refugees/

In the 1989-1991 time period, nearly 400,000 Kashmiri Pandits were expelled from their native Kashmir valley after a combination of violence and explicit threats by Islamic terrorists aided and inspired by Pakistan. In the last decade, India-Pakistan tensions have continued and spiralled, especially over the state of Jammu and Kashmir. The tensions recently culminated in the Kargil invasion by thousands of Pakistani troops and supporting Islamic mercenaries. However, through a decade of continuing violence initiated by Pakistani elements, most of the hundreds of thousands of Kashmiri Pandits who have been expelled from their homeland continue to be ignored at the state, national and international level.

Most of the Pandit refugees, mislabeled as "migrants", live in squalid camps with spiralling health and economic problems. That the Muslim-led state government of Jammu and Kashmir has ignored their plight comes as no surprise since the oppression of Kashmiri Pandits did not start in 1989, but much earlier. Between 1947 and 1989, hundreds of thousands of Kashmiri Pandits had left the valley to escape oppression by the Muslim majority.

It is clear that the return of the nearly half a million Kashmiri Pandits to their native land will not be facilitated simply by the end of Pakistani-inspired terrorism in the state. While a cessation of the targeting of Pandits by Islamic terrorists in the state is the essential first step, an end to the oppression by majority Muslims would be the next essential step to enable the Pandits to return as equal citizens.

-------------------------------------------------------------------------------- The following charts depict the Kashmiri Pandit refugee situation and provide some glimpses into the extent of the targeting of Hindus carried out by Pakistan-inspired and -aided terrorists in the state: A comparison of the Kosovo and Kashmir refugee situations in 1999

http://www.kashmir-information.com/Refugees/kos-compare.html

Numbers of Kashmiri Pandit refugees living in different Indian cities

http://www.kashmir-information.com/Refugees/ref-data.html

Numbers of buildings destroyed by Islamic terrorists in Jammu and Kashmir

http://www.kashmir-information.com/Refugees/bldg-data.html

Numbers of religious places destroyed by Islamic terrorists in Jammu and Kashmir

http://www.kashmir-information.com/Refugees/rel-bldg-data.html

-------------------------------------------------------------------------------- Images of Kashmiri Pandit refugees living in "migrant" camps

Isn't it sad when human plight is exploited to further one's agenda?

I mean, a lot of talk goes on about Hindus oppressing Christians and Muslims, but the plight of many Hindus is simply forgotten since they are a majority. The fact is, in India, all groups have suffered severely one time or the other.

[Red6]

I think India will be China's demise in growth.

I believe that India being also a democracy, no threat, respecting patent and copyright laws, with an open and free society that largely speaks English and is educated (In a British style system) will over take China economically in the end.

China will slow in growth as issues such as support for N. Korea, threats to Japan and Taiwan, sweat shops, crushing dissident movements, censorship, espionage, possible state nationalization catch up with them and deters foreign investment. I believe that despite all the hype about the massive growth in China in our media (The projections showing them to be this huge economic super power in 25 years) you will see it slow down in the next decade, while India will accelerate. The writer of the article only mentions the cost of labor. However, many other factors play into the equation as well.

Already today US firms are moving to India. If you look at what is moving to India it’s high tech jobs in part. Why? They have the labor force capable of doing complex tasks (IT and even Chip manufacturers). They have many who can be used in outsourced jobs answering phones in English. Can you EVER imagine the US sharing defense technology with China in its current state? But with India it’s possible in the future. As an investor in China I must seriously consider the Chinese government at some point taking away my property. Ask Hollywood how good the Chinese enforce copyright laws. I see India as growing a lot in the near future. The framework in this nation has more potential than China. China is cheap, but that’s about it. China as Russia will slow in their growth because of self-imposed constraints while India will grow for a long time.

Red6

[grey_whiskers]

It would be better to engage in substantive discourse, rather than using personal attacks.

The point about the caste system was that it is still deeply entrenched in many areas--e.g. National Geographic magazine had an article on it within the past couple of years; and yet in the P.C. "West" it does not cause as much outrage as apartheid did in South Africa.

The reason this is significant is that many companies were pressured into avoiding trade with South Africa, just as many investment funds were pressured into removing their investments in South Africa--"Divest NOW!" was the rallying cry at many "progressive" student meetings on college campuses across the U.S.

If those same investment standards were put in place against India, there would not be nearly so much money flowing there.

In the meantime, the other points I made remain unrefuted. (There was an article within the last week or two in Business Week Online or Yahoo! Business News, in which an Indian Executive at an Indian company was quoted excitedly about improvements in India's companies. To paraphrase: "We could always compete on price, now we can begin to compete on quality as well."

Public statements like this do tend to beg the question somewhat...

Cheers!

[grey_whiskers]

Oh, yes, speaking of Trolls...

The title of the article you posted was somewhat inflammatory, n'est-ce pas?