Tuesday, July 03, 2007


The Effects Of Outsourcing Are Truly A Global Affair

The United States is not the only nation affected by outsourcing. According to the article at the link below, high wage-earning countries like Singapore, Australia and Japan are being forced to outsource to remain competitive in the global market, and their white collar labor forces have suffered as a result. Singapore, once "a showcase example of a rapidly growing newly industrialized country," has recently had to farm out electronics manufacturing to countries like China, Thailand, Vietnam and the Phillipines. "Now the global outsourcing trend is putting pressure on white-collar jobs, including [those] in the crucial finance and engineering industries," the article says. "While the Singaporean economy is still growing outwardly at a healthy rate, the office employment figures mask a mounting loss of white-collar jobs. That includes scores of highly trained engineers, many of whom now drive taxicabs to make ends meet while they look for new employment." Sound familiar? It certainly does.

If outsourcing is an innovation, America leads the pack. It is pushing forward the frontiers of middle-class disenfranchisement. The average American worker has a "one-in-six chance of seeing his or her income drop by 50% or more from one year to the next" and 90 percent saw their real wages decline in 2005. With figures so progressive, we certainly are a shining example of something or other, don't you agree?

Outsourcing has spread to Australia, too. The Australian parliament nonetheless supports outsourcing, claiming it is instrumental to the nation's global competitiveness. "We have to be careful we're not protecting current Australian jobs to the detriment of future Australian jobs," harrumphs alpha banker David Murray. "Everyone knows the value of free and open trade!" he declaims - and you can almost hear the cries of "Hear! Hear!" echoing through the Anglophone boardrooms of the world. In the meantime, Australian unions are organizing a desperate campaign to save white-collar IT jobs from offshoring, using as their rationale "the bogey that outsourcing frequently compromises data security."

Although Japan has traditionally kept the design of its products secret through a tactic known as "technology blackboxing", other Asian nations - particularly China - have been able to reverse engineer those products and replicate them far more cheaply in their own lands, thus destroying any advantages Japanese manufacturers might have enjoyed. It is only a matter of time before the notoriously insular Japanese must resort to outsourcing as well, ultimately adding to the woes of their already overworked and insanely repressed white-collar classes.

One wonders where it will all end. It is one thing, as an American, to gloat with schadenfreude at the rise and fall of Asian techies. It is quite another to know what will happen next - and to whom. What happens when Indian and Chinese workers become too prosperous, forcing their production costs to rise, and causing even those nations to outsource labor to somewhere else? Maybe by that time the children and grandchildren of laid-off American white-collar workers will have sunk low enough to represent an affordable labor option once again, and the rest of the world will start outsourcing to us!

"White-collar Asia feels outsourcing pinch" from Asia Times

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