NEW YORK (Reuters) - U.S. corporations are picking up the pace in shifting well-paid technology jobs to India, China and other low-cost centers, but they are keeping quiet for fear of a backlash, industry professionals said.

Morgan Stanley estimates the number of U.S. jobs outsourced to India will double to about 150,000 in the next three years. Analysts predict as many as two million U.S. white-collar jobs such as programmers, software engineers and applications designers will shift to low cost centers by 2014.

But the biggest companies looking to "offshoring" to cut costs, such as Microsoft Corp., International Business Machines Corp. and AT&T Wireless, are reluctant to attract attention for political reasons, observers said this week.

"The problem is that companies aren't sure if it's politically correct to talk about it," said Jack Trout, a principal of Trout & Partners, a marketing and strategy firm. "Nobody has come up with a way to spin it in a positive way."

This causes a problem for publicly traded companies, which would ordinarily brag about cost savings to investors. Instead, they send vague signals that they are opening up operations in India and China, but often decline to elaborate.

Moreover, on the threshold of a U.S. presidential election year, job losses are a hot button issue. A company that highlighted a major job transfer could wind up in the campaign debate.

Multinationals find that when they trumpet expansion overseas, they cause problems at home. When Accenture Ltd. executives in India this month announced plans to double their staff to 10,000 next year, they triggered a flood of calls to the company's U.S. offices about U.S. job losses.

Offshoring companies "are paying Chinese wages and selling at U.S. prices," said Alan Tonelson, of the U.S. Business and Industrial Council, a trade group for small business. "They're not creating better living standards for America."

The U.S. sales director for one of India's top computer services providers said his company has won business from customers such as Walt Disney Co., Time Warner Inc.'s CNN and the Fox division of News Corp. -- none of which want public disclosure.

In India, some technology companies have recently adopted lower profiles. Microsoft Corp. has been removing its name from minibuses used to ferry engineers on overnight shifts. Major Indian beneficiaries of U.S. business such as Infosys Technologies Ltd., Wipro Ltd. and Satyam Computer Services Ltd. have stopped identifying new customers.

While there have been reports that IBM intends to ship 4,700 high-end jobs to India and China next year, they mark a rare instance when figures "have been reported in black and white," said Linda Guyer, president of Alliance@IBM, a union that has tried to organize IBM employees.

Those numbers were not released by IBM, but rather disclosed by the Wall Street Journal, which had obtained an internal memo. The company has declined to comment.

Guyer believes as many as 40,000 of IBM's 160,000 U.S. jobs will be transferred overseas by 2005, a figure she says was gathered from phone calls by IBM employees.

Previously, IBM has pointed to a report by the McKinsey Global Institute that concludes the U.S. economy ultimately will benefit. The report was commissioned by Nasscom, a group made up of Indian tech companies as well as IBM's Indian services unit -- showing an effort by those invested in offshoring to sway public opinion.

Recently, AT&T Wireless told the U.S. Securities & Exchange Commission that it would lay off 1,900 employees this year. Communications Workers of America members obtained an internal memo prepared by Tata Consultancy Services of India that discussed how it would assume those U.S. jobs.

Subsequently, AT&T Wireless officials acknowledged it was exploring the job shifts but didn't offer details.

While some companies, such as Electronic Data Systems Corp., CAP Gemini Ernst & Young and Sapient Corp., acknowledge they shift jobs abroad to exploit cost advantages and around-the-clock work, IBM asserts that it is not moving jobs but creating new ones.

"It's a business strategy, period. You cut costs. You revamp. You look at what your mission statement says and try to turn a profit," said Sylvia Thomas, who was laid off by chipmaker Agere Systems Inc. after declining offers to relocate to headquarters in Allentown, Pennsylvania -- or to Singapore.

This is a VERY important story, Pepper, and I am amazed you've had no immediate reaction from others in this forum as yet...

America is dying from within! The disease? Corporate greed!

I'm glad you see what's happening...

Keep sendin' quality posts like this our way, ya hear?

;)

Jobs have been moving off-shore to China et al since the 50's

Protectionism of US jobs would just be another form of taxation.

In addition - jobs are often moving off-shore to western employers based in developing nations.

Development of nations like China and improved jobs in their economy leads to increased consumerism and huge new markets for US goods & services. Currently only 10% of the worlds population are consumers of modern day goods & services.

If it's cheaper to do the same thing in China - then the jobs should be in China.

"Were we to yield to such selective nostalgia and shut out a large part, or all, of imports of manufactured goods and produce them ourselves, our overall standards of living would fall," Greenspan warned. "The consequences of moving in that direction in today's far more globalized financial world could be unexpectedly destabilizing," he added.

"If it's cheaper to do the same thing in China - then the jobs should be in China."

Drew, you just gave a justification for the use of sweatshops and free prison labor. India uses the first. China uses both. Their people work hard and smart. They don't work rich. The money they earn goes mostly into the pockets of Coporate higher ups...

Meanwhile the mantra in America is to continue re-training (while amassing enormous debt for the schooling). Training for what? Jobs (by the millions!) which have gone and will continue to go to poor but highly educated Third World countries. So debt-laden students here in the states become shocked to learn they've obtained worthless degrees as far as employability goes, and they can't even get a job at McDonald's... because their higher education has made them... overqualified!!!

But, hey, the top 2 or 3 per cent of America's wealthiest ain't complainin', so what's the beef? Oops, that's the OTHER subject we were talkin' about... Bon apetit, Drew!

Just because jobs pay lower in other countries does not mean that they're sweatshop jobs. My company pays me less to do my job in Ohio than it does someone doing the same job in New York because my cost of living is lower. What's wrong with that?

My company is "outsourcing" a lot of engineering jobs to India, and we also utilize a lot of Chinese and Indian companies to do what is essentially very low level secretarial work. If you suggested that Americans have lost jobs because of this, you'd be correct. If you suggested that for every job held by a Chinese or Indian one American lost their job, you'd be way off, because there's no way the company could employ that many Americans and still make a profit. All of the "nice to have" but non-essential projects we have would be cut because they would be too expensive. We'd also have to massively cut back on the product we offer or dramatically raise prices. Either way, that would reduce customer spending and shrink the company as a whole, which would of course result in layoffs. So you do have a point, but the raw numbers lie.

And keep in mind that every time you gainfully employ people in other countries, you create more opportunities to sell American goods.

Originally posted by In Odder Words

Drew, you just gave a justification for the use of sweatshops and free prison labor. India uses the first. China uses both. Their people work hard and smart. They don't work rich. The money they earn goes mostly into the pockets of Coporate higher ups...


You are so far off the mark - who said anything about sweatshops?

You obviously don't know too much about China & the type of jobs that are moving to China.

My job for the past 5 years is managing a chemical manufacturing facility - it's closing down in April'04 and the sister plant in China will be expanded to produce the volume. The plant in China is as capable & as high quality as the product produced here in the US - the employee's are qualified - hourly workers and engineers / managers. It's a high quality operation that can produce a commodity at a fraction of the cost of the plant in the US. The manufacturing belongs in China - it's a fact of life & crying about it or dreaming up ways to put walls around our economy is miss-informed.

Your "degree's so one can work in MacDonalds analysis" is based on nothing except a simpletons view :rolleyes:

I don't completely understand the liberal (and, as always, I use the term liberal as a descriptor and not a derogatory term) point of view on international trade. On one hand you hear the complaints about angering the international community and on the other hand you get the calls for protectionism, tariffs, and other such things that also piss off other countries. On one hand you hear calls for improving the standard of living in other countries and then the other hand argues that companies shouldn't employ people in other countries.

Originally posted by DrewM
You are so far off the mark - who said anything about sweatshops?
I believe Odder was saying that your statement COULD be used to justify sweatshops. If you think about it...
If it's cheaper to do the same thing in China - then the jobs should be in China.
...it could. Obviously, we don't think you endorse sweatshops, Drew. ;)

Hey Drew, have you ever thought of taking Borg's and ES' moderator duties and sending them offshore for KateYHuang to do?

Where's the benefit in that?

Seems like a lotta folks don't think I know what I'm talkin' about...

yet they never seem to know how to disprove what I say with a convincing argument...The odd thing is, they so often unknowingly corroborate my originial viewpoint though... with comments much like what you, Drew, and you, lionel, have made...

Both of you focus on the COMPANY'S bottomline, and not on what happens to the workers that get laid off... HINT: People who can't find jobs, can't buy products... sometimes, not even the cheapest ones...

I know more than a few ex-workers who don't buy ANY products except for bare essentials like food and clothing... ever since they were cut from payrolls two, three, or more years ago... and unable to bounce back (not even into MacDonald's "careers")...

I remember being SCORNED years ago when I suggested that continually going back to school for endless education might only result in massive debt which can't be paid back, because there still won't be anywhere NEAR enough jobs to go around... Was I correct? Try reading some of the job boards out there these days on the internet and read the anguished messages of those who did indeed fall into the trap I warned about...

I saw the clear possibility of these situations happening some TWENTY years ago, after I read "The Electronic Sweatshop" and actually LOOKED at what was gradually occuring... These job losses to automation and, yes, sweatshops in many cases, is happening a lot faster that gradually NOW, though...

The dirty little secret is out! Any company which doesn't use the CHEAPEST-yet-still-"good enough"-labor may be considered to have progressed to the "extinction mode." (Who says so? Bill Gates of Microsoft, for one!) As the layoffs mount up, don't expect anything more than a continually shrinking market of buyers who can AFFORD to purchase all those wonderful bargains being produced. Why is it that Henry Ford so clearly understood that, yet so many big biz types nowadays don't?

Binbo himanashi! (Work hard!)

You have in interesting & not uncommon view of economics.

A few personal examples of people you know who are endless students and/or get laid off is certainly something close to home, but it doesn't say anything about the big picture of 280 million people. It's an understandable emotive response.

So, what would your solution be to save these jobs? You can't just have a view if you don't have a solution. So, how do you prevent companies from managing their costs? That's what it would amounts to - a tax on companies to maintain US workers, so we become uncompetitive and less productive than other countries and instead of some jobs migrating, whole industries collapse and x10 workers get laid off.

It's a narrow view to believe that ultimately market forces are wrong. Markets are efficient and it's a market economy that has got the US to where it is today and it's market forces that will ensure the success of US companies tommorrow.

Sure, people will be displaced, re-trained, some people will get laid off & turn to drink & beat the kids - this has always happened, it's nothing new - it's the nature of a labor market constantly undergoing change from internal & external forces. There is no secret "out of the bag" - it's common knowledge.

A "continually skrinking market of buyers" is based on what?? I guess you just made that up because somebody you know got laid off?

I'd love to hear what you base your ideas on (beyond observing the lives of a few people you know) and I'd also love to hear your proposal on what the US should do.

Drew, your mind-reading skills are rather... Well, let's just say your wavelengths are a bit inaccurate when it comes to your knowledge about me and my information sources...

I provided a sampling of cases (no, not 280 million people! Are you saying YOU have personally contacted that many? Wowzers!) that I personally know about and recommended that you go out in cyberspace to check various job boards (as I have...) That should provide you with some corroboration that what I am telling you is not inaccurate...

In additon, check news stories, economic data, and use some common sense! People REALIZE that admitting to being unemployed can spell the kiss of death on a job application or interview... So, yeah, many of them PROBABLY lie and say they've been SELF-EMPLOYED (often as "consultants") when actually they've had NO job at all for some time! Now, might we agree that THAT just MIGHT skew the employment data figures?

Even this "jobless recovery," as it's called, may not last all that long... because, in MY view anyway, America is FAR weaker economically than many realize... which may lead to a halt in the "recovery." (Folks have stretched their credit card debt pretty much to the limit, so expect some problems...)

You said "You can't just have a view if you don't have a solution." Well, I have a view about quacks who prey on unwitting cancer victims... yet I don't have a solution myself... (Do you see a flaw, then, in your statement?) I believe the answers to sweatshops and automation will have to be political, seeing as too many business folks just can't look beyond their own narrow short-term interests (even though that WILL eventually hurt THEM, too.) I am not by any means the only one who sees that "blue smoke and mirror solutions" aren't gonna cut it for long in this global economy... Maybe that's why China is starting to make "modifications" to their business relationships with the Western World... (Look VERY carefully at what they do... it's going to have an impact which is more than a little bit noticable before too long...)

I realize that my message is not a happy one and maybe I should just be quiet and go away... I've probably said all I'm going to say on this subject for at least a while...

If some "miracle" happens and reverses in the future these economic woes I am concerned about, I'll be delighted... But I'm not at present overly optomistic about that happening, because over the years, I have had a fairly good track record with regard to my "predictions"... :(

Thanks to you and all others in this thread who have offered your comments about this very important issue...

I must go now...

Odder, can you explain why the U.S. economy and standard of living has grown by leaps and bounds since WWII even though in that time frame the movement of manufacturing jobs to other countries has been taking place? If you went back to 1945 and told them that many of the cars we purchase in 2003 were made in Mexico, Korea, and Japan they'd have predicted that the US economy would be in shambles, yet that's not the case. Why do you suppose that is?

"...they'd have predicted that the US economy would be in shambles, yet that's not the case."

Oh?

"The age of diminished expectations..."

"The shrinking middle class..."

"After the hare is caught, the hunting dog goes into the cooking pot..."

You are probably familiar with the first two phrases (and just dismissed them as "unsubstantiated myths" because, after all, such notions deliver such a... discordant note to the ear. But the LAST quote? It's an old Chinese saying uttered from time to time... It will probably be heard again within the next decade as China is about to-- Ah, but THAT would be guessing!

Now, go back to yer Fox News... and have a happy-shiny day!

:)

Originally posted by DrewM

It's a narrow view to believe that ultimately market forces are wrong. Markets are efficient and it's a market economy that has got the US to where it is today and it's market forces that will ensure the success of US companies tommorrow.


This kind of statement is as irrational and based on faith than a marxist statement about the "way of history" would be.

Market forces are not intrisically good or wrong. To trust them as the "invisiible hand" that directs the economy and the society in the best possible direction is just an easy way of justifying the endless quest for profit of capitalism.

And - the US economy has not been benefiting from a real "free market" at all. Another ideologic fiction. The USA have always kept big taxes on imported goods and many subsidies to various sectors (such as agriculture, defense, etc…).

It's hardly irrational to look at the past hundred years of history and use it to come to a conclusion about the effectiveness of a market driven economy. True, nobody knows what tommorrow will hold, but the statement of mine that you quoted is entirely correct.

Your "ideological fiction" comment - you are confusing global free markets with a free market economy. Yes, you are correct that a global free market does not exist and globally markets have only opened in recent times and still have a long way to go. This is something completely different to a free market economy within the US (or western european countries to different degrees)

What I consider to be irrational is the belief that there is a "market force" which would necessarily be good. The "invisible hand" from Adam Smith's theory.
I agree that western economy have proven to be successful during the last centuries. But to reduce them to "free market" is wrong. Really free market has not been experienced anywhere, not more in the USA than in Europe.

Astropol - the quote you presented was in the context of a discussion on jobs moving to China.

I do not think it is wrong to look at western economies and say that free market approach is a key stone of economic success. Sure, there are other factors - but mainly these back up and support the integrity of a market system - ie strong legal system to support contract law, open competition and personal property rights etc.

Adam Smith's "invisible hand" was related to the concept that self interest promotes a more efficient use of resources within an economy. This has been already proven to be true.

It's a natural path for some to jump to the conclusion that self interest driving markets is inherently a bad thing - the phrase 'self interest' sounds bad - but that's just a cynics view. Human nature has the potential for greed and bad things but also has a huge potential for the good. Human nature itself is unaffected by an economic system., the economic system only imapcts how human nature can be expressed. The pusuit of individual success is not mutually exclusive to a caring & compassionate approach. Wealth creates only more opportunities to do good things. Wealth creates opportunity and the best way to drive the innovation that creates wealth is a free market driven by self interest.

You will find the US to be the closest example of a truly free market on earth.

I think some people would have us living in the stone age if their cynical views were taken to their natural conclusion, yet they enjoy western riches and would be up in arms if anybody tried to take any of it away.

I am not particularly an opponent of the free market. I agree that in most cases it is a good way of managing the economy. I just think that it is an error to have a blind faith about its positive effects. "Free market" is not an insurance for a good society.

It must be balanced by a proper political system, by counter-powers, and it cannot solve all the problems on earth.

Greenhouse effect is a very good example. The idea of selling "rights to pollute" in order to decrease the global amount of pollution is a typical nonsense produced by the "free market ideology". There are some situations that cannot be solved by "free market". And there are some situations - such as globalization - where free market can do more harm than good if not balanced by social and environmental laws.

I agree with you. I don't remember ever saying that free markets could solve all the problems on earth :)

Nothing is perfect anyway & regardless - it is people that solve problems, not economic systems. An economic system is only a framework to provide opportunity for good and yes you are right - there always has to be checks and balances because not everything is a profit center and subject to market forces moving them in the right direction.

Nice to see we can agree on this !

Yes, I knew we would agree on somethings :)

I always have a good respect for your views - I see you as a very intelligent well intended and reasonable minded radical :)

Read in USA Today that the negative in our overseas trade is mainly caused by American companies shipping products into the United States made by workers in other countries.

Not from foreign owned companies in China, for example.

I'm pleased to see American companies usin' cheap Chinese labor

haven't been able to pull the Great Wool over yer eyes, Dan!

;)

All I know is that if every company in the world only employed people in their home market I'd be out of a job since I work for a "foreign" company.