Well, we actually do not have presidential election in the US now. We could follow the US presidential battle a few months ago. And I am also not going to make a campaign here. I just want to tell you something (really!) important regarding both of them: Obama and Clinton. And let me tell you something about offshore outsourcing, too
How has it all begun?
We could read such headlines in the newspapers just a few months ago:
Will Obama really take back outsourced jobs? *** Can the US survive globalization? *** Obama Stimulus Tax Cuts Begin April 1st *** India: Worries Grow About Obama Outsourcing Policies
During his speech to Congress on 24 Feb 2009, president Obama said the administration will eliminate “incentives for companies that ship jobs overseas” with the objective to help save or create over 3.5 million jobs.
A few days ago Hillary Clinton visited India. She expressed the opinion that outsourcing
is a concern for many and asserted that the US rejects protectionism.
Where is the truth? – Does (offshore) outsourcing really cost jobs?
These headlines were also common in the press in the past months:
Obama stand on outsourcing is purely politics, comments US expert *** Can the US survive globalization? *** Obama outsourcing 'tax': it's all America's loss
The objective of president Obama’s stimulus package is to help save existing jobs or create new ones. Is it really going to happen?
Som Mittal, president of National Association of Software and Services Companies (Nasscom) has expressed the opinion that US American companies make more than 50 percent of their business outside of the US. To be globally competitive, they also depend on shared services situated world-wide.
According to the study conducted by Capgemini three years ago among top US financial executives, American companies are not only pleased with the benefits delivered by current outsourcing efforts, they plan to do more outsourcing in the future. Outsourcing
enables companies to refocus attention on their core business, improve process speeds, and provide near-term cost savings.
Experts say that offshore outsourcing
brings more positive aspects to national economy using it than the negative ones. For instance, Peter Bofinger, economist, is of the opinion that national economy benefits from globalization. Also Thomas Straubhaar, economist says that international work specialization is not a zero-sum-game but in a longer horizon of time all parties benefit from it.
At a short stage, there are some losers in the offshoring
game: these are mostly low-qualified employees who lose their income as they is no more demand for them in the market. The tendency is as follows: if offshoring
activity increases by 1%, the income of low-qualified employees decreases by 1.8 percent and the income of high-qualified specialists increases by 3 percent according to DIW. According to research provided by DB Research few years ago, only in the IT industry in the US, 571 thousand low-qualified staff have lost the jobs and at the same time 370 new jobs were created for middle and high-qualified staff between 1999 and 2005.
Lessons learned? – Who is your candidate?
Whom exactly is offshore outsourcing
beneficial to? US investors, shareholders and consumers are actually the winners. Remember the price of a personal computer 10-15 years ago? It was a luxury good that time, wasn’t it? And now it is a common one, available to everybody – thanks to offshore outsourcing among others. However, in a short period of time, the benefits we have from offshore outsourcing sometimes happen at the expense of American wage earners.
jobs to other countries helps these countries economically, giving them the ability to pay back their debts to the US. It also helps increase trade for US products.
And what about Hillary Clinton? She said: “We do not want a return to protectionism. So we have to figure out how we are going to work together. Outsourcing is a concern for many communities and businesses in my country, so how we handle that is something that we're very focused on doing in a way that doesn't disrupt the great flow of trade and services that go between our countries.”
Would it be the reason for you to vote for her?