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More Jobless Words

June 22, 2011

The US unemployment situation continues to remain bleak. People still do not have sufficient jobs and those who have, are worried about losing it.

And President Obama has been trying to bring back ‘lost’ jobs to the country.

The question most experts have been asking though is if it is possible to plug this leak of jobs that has been happening over decades. Much of the US industry was built on outsourcing and immigration. President Obama might have grand aims but achieving that is a distant dream.

The best to do that though seems to be targeting those countries to whom jobs have been outsourced and trying to bring those back.

Infosys is one of the biggest countries to whom jobs were outsourced. They are Indian and have one of the cleanest slates in a country that is known for corruption.

But according to the latest news, that is no longer the case. They are being pulled up on allegations about visa fraud (if it could be called that).

While I get the point that the US wants to protect its jobs and its citizens, was not there a reason why these jobs went abroad in the first place?

No matter which way you see it, hiring a worker in India generally costs the company one-fourth the price of the same level worker in the US. I’m not debating which worker is better. I’m just talking about money – which is what all companies are about. Not delivering the best service and all that stuff. It all comes down to the bottomline.

If you pay an Indian $40,000 annually, that equals roughly to about 20 lakhs in Indian rupees. That is a lot of zeros in this economy, while in the US economy it might just be the average salary.

So an average worker here is paid about $600 to $800 a month for the same skills that a worker in the US is paid about $2000 for. Plus, things like overtime and stuff can be easily overlooked in a culture where working itself is expected to be the reward.

There are also things like health insurance and other benefits that were not often provided by an Indian company till recently.

How does Mr.Obama plan to compete with such basic economics?

India boosted itself up based on these basic currency differences. We had the language in place, thanks to our British obsession. And we are experts at putting up anything overnight, or delaying it for decades.

Now, there are cheaper countries like Phillipines who offer the same service for ever cheaper. For companies that are already in a cash crunch, how would they even think of refusing these places?

Denying visas would definitely work but it would take a decade or more to bring up America’s skill sets back to the levels of doing this work. Some jobs have been left by the roadside, or outsourced, simply because it was cheaper.

Maybe I am slightly biased in this case, being Indian and all that. But when I look at the basics of the whole thing, I wonder how these jobs would go back to the US and how those companies will have the infrastructure built there – cheaply – to have it all in place.

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