13 July 2007

Thank God Pastors Can't Be Outsourced

It means I'll always have a job to look forward to. Though satellite churches suggest that the preaching side could possibly be shipped overseas...

I have finally had a chance to start on Friedman's The World Is Flat, and I'm slightly frightened. While I applaud the ability to take jobs to middle class Asian youth (though I still have my doubts as to whether or not globalization can do anything but harm the Asian poor and under-developed nations, and the moving of jobs to Mexico and other third-world countries is a topic entirely undiscussed in - expect a post on how the flattened world crushed South American and Africa), I cannot find any benefit to working class Americans. Mr. Friedman argues that while outsourcing may cut phone service jobs, it is good for American business because these Indian agencies are using American products - from software to bottled water. Yet on the very next page, he talks about how R&D is being outsourced. And anyone who's ever bought an electronic device in the past ten years knows that production has been moved overseas as well. So if research, production, and service have all been sent to southeast Asia, which Americans are seeing the benefits? Stockholders and the upper class business owners. While prices are theoretically falling (and I cannot stress the "theoretically" enough), what good does that do if the working class has no source of income in the first place?

It seems amazing what is being outsourced these days. The book starts by discussing the use of Indian firms for accounting. Yup, your CPA may very well be sending your taxes to Bangalore. By extension, to all my friends are accounting majors, I suggest you either get really good at what you do or find a job that must be done in person). As it turns out, your CAT scan may also be read by a tech in Bangalore. And most surprisingly, research assistantships, the bread and butter of many college students, are being sent to Bangalore (described as the Silicon Valley of India). For about $2000 a month, you can have all of your research done and summarized for you (sadly, this falls out of the price range of college and grad students).

I don't like to think of things as American v. non-American, but in this case, it's hard not to. Most recipients of these outsourced tele-service jobs are earning $200-$500 a month - a living wage in India. Including insurance and housing pushes the wage up to perhaps $700 a month. And this is to employ a college graduate, a professional. No American, especially one with a family, can compete with that. My friend, a college graduate, was offered a $10/hour full time job in Seattle and still may not be able to afford to live there. My $6.25/hour job on campus* is pushing it for most students, and that's in a college town, land of cheap food (for all who are curious, Ramen is 14 cents a pack now) and $1 movies.
*The most Food Service allows a student to work is 40 hrs/wk, meaning the most a student could could make is $1000 a month, before taxes. That 40 hours is on top of at least a 12 hour schedule.

This outsourcing is, of course, helping India's economy. Eventually, inflation will catch up, and the economy will grow to where $700/month will not be a living wage. The same is true of other outsourcing centers, such as Thailand. So at best, the cheap labor pool is temporary. Unfortunately, "temporary" can be a long time.

Rock on.