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Outsourcing And Job Losses in USA: The Other Side Of The Story

Recently there is a lot being said and written about outsourcing. The proponants of free markets in the world are advocating it. The people who lost their jobs are cursing it.

Let me start with saying that I sypathize with every person that lost his/her job. That is hard. That sucks and if ever I could do anything about it, I would.

Now let me tell you the other side of story.

There was a soft drink company called Thumbs Up in India. When the economy opened and Cocacola arrived, they tried to buy the company. When the company refused, Coca cola just baught all their products and sent to warehouse, and kept them off market shelves for a while, so people would forget them. Result? Evantually the Indian cold drink company gave in. Coca cola changed the taste of that product. It sucks now. Now it’s all Coca cola.

The same thing happened to many many Indian companies. At many places, American companies did not need to play games. American products were far superior than their Indian counterparts. Obviously people switched to American goods. GM and Ford, losing here, are having time of their life in India. Because old Indian cars sucked compared to GM and Ford offerings.

Many Indian companies were closed, Indians lost jobs as well.

But evantually things stabilized, and bingo, actually turned upwards. Call centers, software outsourcing, people started seeing benefits.

And now people in USA are complaining. Perhaps many of the jobs lost did not belong to USA. They were just borrowed from India. I know I sound like Satan to your ears, but you should see the whole picture.

People in India switched to USA companies because for almost same price, they offered better quality. Now companies in USA are switching to Indian labour, because it costs much less for the same skill level.

Just a list of few Indian companies went bankrupt or got kicked in 1990s- Premier Automobiles, Murphy Television, Thumbs up cold drink. Can’t remember more of the top of my head. But there are a lot.

Military equipment producers, OIL companies and such are having time of their lives in USA. Why not ask them to share their profits before blaming Outsourcing? This is just other side of capitalism. Face it. You can’t just have benefits of something and but not face disadvantages.

I have strong faith in future of USA. This country thrives on innovation. Evantually Americans will figure the way out and in the process bring a whole new era. The same thing happened at times of Japanese auto makers, at times of South Asian electronics manufactures, the same thing will happen about cheap Chinese goods and about Indian call centers.

[P.S.: If you find any similarity between an old slashdot comment and this article, it’s because both are written by me.]


6 Responses

  1. I’m glad you feel so rosy about it…for those of us who have been devastated by the economy…we hold no solace in the happiness of Indians. Sorry. We’ve heard this argument before…it’s not good economic practice to lower tariffs and outsource jobs, while at the same time giving carte blanche to companies hiring illegal immigrants HERE.

  2. The main point is not about holding solace in happiness of Indians. The point is that perhaps the too rosy picture you saw before the economy went belly up was not sustainable for long term any way and that outsourcing is not really to be blamed for the woes and that there is another side to free trade story.

    Lowering tarriffs is two edged sword. It can build healthy competition, at the same time it can also fail to stop unfair protectionism across border and starve the even the local fittest.

    USA trade deficit is not the whole picture. The real export from USA is currency, the biggest exporter – USA treasury. The world is buying all the dollars USA treasury is printing. If outsourcing is a hurricane, then the floating US currency is the global warming.

    If USA government wants, they can stop this outsourcing phenomena tomorrow. They just have to link the US currency back again to the gold standard, which Nixon broke free. It will stop dollar being so precious vis.a.vis other currencies. But the repurcassions will be humoungous. The national US debt will go through the sky, inflation will shoot up and American’s will have to do far more compromises with their life style than they have to do with outsourcing in practice.

    Illegal immigration is a totally different issue and I am with you on that one. I see no valid explanation for breaking the law.

    Yes, and I still feel rosy. One breakthrough in solar energy from one of the national labs and you will see another boom.

  3. HAH !!!! I was a medical coder and just last month they outsourced our jobs to India saying it was just to help with overflow and people on vacations. They had already outsourced one job. Then just the other day, I was pulled in the office and told 2 coders jobs were being terminated because of outsourcing to India and mine was one. Effective the next day, I could take a 2 week severance package or except the position they had chosen for me. So, don’t give me that bull about these companies were probably Indian jobs to begin with…that’s a load of crap and you ain’t selling it here.

  4. I will give you this one. Like you said it’s a double edge sword. Yeah The U.S. could do better internally so this wouldn’t happen. It’s a global market market economy you have to be competitive. Look it’s called global Capitalism you might think it sucks but try a different system and see how much fun it can be.

    Plus if the other counties in the world raised there standards of living it would be a lot less money (the billions) the U.S. would be forking over in charity.

    The immigration thing is because the U.S. refuses to enforce their own laws. Yes I know the average person wants them to but the people they elect do not. So stop voting for them and giving their political parties money. Hell you have the Second Amendment start using it like it was meant to be used.

  5. Thank You, I agree that the world economy is changing, put the real question is what needs to be done to kick start the local and national economics here at home

  6. Found a great site that lets Outsourcing Buyers post their projects for FREE.

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