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March 2004   ted lang
Outsourcing, Loyalty To The Worker A Thing Of The Past By Ted Lang


By: Ted Lang

Along with the growing, disquieting economic uncertainty of lost high level technical jobs in favor of lower labor costs overseas, a deliberately induced self-deprecating assessment of workers reflecting upon their own efficiency is yet another hollow dimension of job outsourcing to foreign lands that is being advanced by both American businesses as well as our own government. The message intended: American workers aren’t as good and as efficient as those in other nations.

And while this message is being implanted to further intimidate our populace as we lose our technical jobs, our high labor costs and worker complacency must be replaced by "real workers" in the form of illegal aliens for low-paying farm crop-picking work, and low paying unskilled factory work. After all, what’s more important, protecting the rights and the jobs of Americans, or enriching the few hundred trillionaires who chose George W. Bush to be our president? When it comes to rights versus exporting highly technical jobs while importing illegal illiterates to cut labor costs, money will always win out in this nation run by the wealthy.

Outsourcing is the latest insult Americans are being saddled with. Along with "deficits don’t matter," and "staying on focus," downsizing and rightsizing are just economically correct prose offered to ease the pain of workers losing their jobs. The economic downturn of the late 1980s required new terminology to replace the bitter pill of "layoffs."

Nothing like having one or two college degrees and a couple or three kids in college and having a young snoot three years out of college replace you. The corporation saves on pension, medical and life insurance payments. Oh, you don’t want to quit – don’t think another great American corporation will hire you at your age? Not to worry – we’ve got a position for you as a switchboard operator in Addis Ababa, Ethiopia, and we’ll pay all your moving costs too!

The analogy of high tech jobs being taken away from Americans while the nation’s laws are being subverted and circumvented by the Bush administration isn’t completely accurate. High-level scientist and engineering positions are being filled by emigrating foreigners from the very same nations to where our technical positions are being exported; namely, India and China. These "Third World" nations are utilizing that which is a most vital asset in a rapidly, radically technologically changing world; namely, education.

Even scientist and engineering positions in our nation’s Department of Defense and its numerous research and development facilities throughout the country, are finding their staffs increasingly replaced by professionals from these nations. Our educational systems are seemingly unable to keep up with the volume of graduates offered by these Third World nations in the fields of science, engineering and mathematics. Even in the field of medicine, emigrants from these nations are populating positions at virtually all levels.

Our own government champions another false savings approach that costs Americans jobs. To cut defense costs, members of the privileged Ivy League set whose wealthy families take advantage of political patronage payoffs by arranging to have their recently graduated offspring assume positions of high responsibility within government, do US a disservice by "experimenting" with cost-cutting schemes and scams in order to make a name for themselves and advance through the executive ranks quickly. This goes a long way to explaining how real workers in the FBI and CIA are summarily ignored when in possession of life-saving intelligence. They are ignored by our perfumed princes of bureaucracy who are too busy playing at administration and executive government management.

It is these arrogant and pompous administrators who cook up cost-cutting exercises, and whether or not they work, their effectiveness never becomes an issue after the fact. One such type of cost reduction scheme is a concept designated as "commercial activities," or "A-76" competitions. The designation A-76 refers to the Office of Management and Budget [OMB] circular that establishes the rules and procedures for creating a cost study that weighs whether or not to keep government workers or to replace them with "more efficient" workers in the private sector. The idea is to force an efficiency restructuring of the public sector employees to continue performing the same functions, but to do so at a greater cost savings.

The first error in this procedure is the fact that the cost of the work performed by the government team involved in determining the existent structure, hiring an outside consulting firm, as well as the extensive time lost interviewing members of the workforce and management, and conducting "town hall meetings" to prepare the workers for the possible loss of their jobs, is not factored into the equation. A recently conducted A-76 Study performed at a northeast facility cost $3 million, and was not included due to OMB rules. Additionally, the government’s restructured work force lost the competition in the Information Technology area, which is comprised of computer support and IT information management services. Employees concluded that the only way the private sector competitor beat the government employees by a margin of $30 million was to farm the work out to India.

As "T-Day" rapidly approaches, the infamous April 15th tax day of reckoning on the part of the beleaguered American workforce with their central rulers inside the Beltway, even this 100 percent totally traditional American ritual is finding its way to India. In an article carried on by Chidanand Rajghatta writing for the Times of India a year ago on April 17, 2003, Rajghatta offers, "Millions of Americans sweated it out on Tuesday, struggling to meet the deadline – April 15 – for filing their annual tax returns as accountants and post offices stayed open late to accommodate the laggards. Many will be hoping the Indians have lived up to their reputation for sound number-crunching."

In his article, "US Tax Returns To India Causing A Stir," Rajghatta continues: "In keeping with the great outsourcing trend that has swept across American businesses, thousands of US tax returns are now being processed in India, a development that has led to quite a stir in the accounting community. Numbers are hard to pin down, but according to Kishore Mirchandani, president of Outsource Partners International, the firm that claims to have triggered the development, more than 10,000 returns went to India for scrutiny this year. The accounting firm Ernst and Young alone is believed to have forwarded 7500 American tax returns to its subsidiary in India after transferring a tax partner familiar with US tax laws there. Scores of other smaller accounting firms have also sent returns numbering in the hundreds to India after a pilot study last year showed encouraging results."

The article quotes Mirchandani, "‘The business is still in its infancy, but we are looking at over 100,000 returns going to India this coming year,’ says Mirchandani, whose firm has a 300-person operation in Bangalore and is looking to expand because of the growing demand. Several additional American firms are also lining up to send returns to India, after pilot projects showed significant reductions in costs and turnaround times. ‘More and more firms are jumping on the bandwagon after seeing the results. They seem very satisfied with the quality, not to speak of the speed and cost factor,’ says Bill Carlino, Editor-in-Chief of the journal Accounting Today, which has tracked the trend over the past year."

In a March 14th article in the "Job Market" section of the Sunday New York Times, entitled "Corporate America Sending More Legal Work to Bombay" by Ellen Rosen, Rosen begins her piece, "When Laurene Horiszny, the general counsel of Borg Warner, needed to research an employment law question in several states, she left her firm’s lawyers alone. She did not contact the outside firms she retains either. Instead, Ms. Horiszny turned to Mindcrest, a fledgling consulting firm with Indian-trained lawyers in Bombay ready to do the work."

Rosen goes on, relating that, "The research, Ms. Horiszny said, was ‘much less expensive than going to our outside firms.’ And she was satisfied enough with the results to engage Mindcrest for a second project, an initial legal review of the purchase order terms used by Borg Warner, an automotive parts manufacturer."

The article continues, "While computer programmers, radiologists and tax preparers have watched some of their business move off shore, lawyers, bound by intricate ethical rules and licensed by states, have been largely protected from foreign competition. But as companies from Borg Warner to General Electric start to experiment with using foreign lawyers for discrete legal projects, that is starting to change."

A trend is now easily discernible – no job in America is safe! The debate between anarcho-capitalist economists and traditional conservative economist leaning more to a regulated, protectionist economy will shortly start heating up. A job drain as a result of the latest corporate employment fad and buzz program, namely "outsourcing," will indeed cut costs for corporations. But how will this affect our society? Can the American people weather this stampede towards a new global economy? Clearly, global economics will indeed diminish national sovereignties. Does that mean that perhaps our entire government can be outsourced to India? Perhaps we can export our tax code there as well, and import their Constitution since we no longer have one.

"Published originally at : republication allowed with this notice and hyperlink intact."

Ted Lang is a columnist for the The Patriotist and the Sierra Times He is a regular columnist for Ether Zone.

Ted Lang can be reached at:

Published in the March 17, 2004 issue of Ether Zone. Copyright © 1997 - 2004 Ether Zone.