Outsourcing: bad for India, good for US

The consensus that outsourcing is bad for America is wrong.

By: Romy Misra

Posted: 10/6/08

I magine the following situation: you are having trouble with your cell phone connection and you have to talk to customer service. You dial the number and a person named Paul answers with an unmistakable Indian accent. He assures you he can solve your troubles promptly before hanging up.

Paul is an Indian named Rahul Sharma. He lives in Bombay, India. His schedule is like this: he goes to work at 8 p.m. and works until 5 a.m., sleeping through most of the day. His job is to answer calls and pacify American customers having trouble with their Cingular phones. He works through the night all week and gets no weekends off. Vacations are out of the question.

The work done by Rahul is the same work being done by thousands of Indians in jobs outsourced by the U.S. Most multinational companies outsource office work to India for a fraction of what they would have to pay a U.S. citizen and offering fewer or no employee perks.

Americans should not be afraid of losing jobs to Indians, and should not want to keep these jobs in the U.S. Most jobs outsourced are not worth doing and if Cingular is spending a fraction of the money to outsource the jobs, Cingular connections are much cheaper. At the end of the day, the consumer benefits by getting products at cheaper prices.

The U.S. is doing no favor to third world countries by outsourcing jobs to them. It is a business strategy. Apart from the cost reduction factor, other benefits utilize a company's resources focusing on management efforts and helping to save time. The outsourcing of IT jobs has benefits the U.S. economy.

The effect of outsourcing is not as great as it appears to be. Most of the jobs have little scope for innovation. An employee doing an outsourced job earns more than a doctor interning after medical school in India. Most college students are lured by the money these jobs pay, and more Indians are opting out of graduate school to take one of these jobs, which is not a wise idea. As a result, there is no dearth of people to suffer these incessant night shifts. On a personal level, the jobs stifle creativity and innovation. No innovation can be brought to a job that requires you to listen to customer complaints for hours.

The IT outsourcing done by the multinational companies in the U.S. is not much different. Many of the IT jobs are given to engineering graduates from any discipline, and they are trained for a maximum of three months. After the training period, they are IT engineers, but they probably graduated as mechanical engineers. If you can become an IT engineer in three months, even with a different background, you are not involved in high quality work.

Sabita Acharaya, an industrial engineering graduate student, worked for an IT outsourcing firm in India before coming to Texas A&M.

"The pay is definitely not in proportion to the amount of work they make you do," Acharaya said. "The project I was on had very little growth and the perks were too few."

Outsourcing helps nations mired in poverty by lifting the economy, but whether it does so in the best possible way is questionable. Meanwhile, in the U.S. consumers benefit from low costs, higher standards and timeliness at a developing economy's expense.