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June 04, 2004
In defense of outsourcing
The outsourcing of IT and call-center jobs from the United States to India is not merely an economic convenience. It is a moral necessity. It is a phenomenon that governments should do their best to promote, not discourage.
I won't do a Thomas Friedman and claim that outsourcing is good for American workers. It isn't, at least not in the short term. What cannot be denied is that it is good for Indian workers. For me, that is what must count the most.
A progressive believes in policies that favor the poor over the rich; that wealth distribution matters as much as wealth creation; that those who are well-off are morally bound to help those who are not. Who is the rich and who is the poor here? Look at the facts: India's per capita income is $400 a year; the US' is $30,000. India's total GDP is $300 billion; the US has a defence budget larger than that.
India has grinding, truly miserable poverty on a scale that most Americans can't even imagine. More than 300 million people live on less than a dollar a day. Fully half of Indian children aged 4 and under are malnourished. Two hundred million people don't have access to safe water. One third of infants are born underweight.
I am not without sympathy for laid-off IT workers, especially since I was recently one of them myself. But I am in America, where unemployment insurance covers me for months. Job or no job, I have paved roads, electricity, running water, and free education for my children. I can still look forward (for now) to Social Security and Medicare in my old age. If worse comes to worse, food stamps, Medicaid, and housing subsidies are still there, albeit less generous than before.
In India, deprivation and horrific suffering are parts of daily life. You can see huge crowds of beggars thronging in big cities. You can see hundreds of thousands of squatters huddled in sprawling shantytowns. You can visit desperately poor villages where farm workers toil 16+ hours a day in burning heat for pennies. You can experience the sight of children spending their entire day scrounging through garbage dumps in search of food.
Some American critics charge that outsourcing helps only the Indian upper class, not the poor. This is true, but it is besides the point. IT workers are not prospering at the expense of the poor, they are prospering due to an influx of new money into the country from abroad. They will spend that money, they will pay taxes, and India as a whole will grow ever-so-slightly less poor.
It is also true that American executives doing the outsourcing are doing it for their own profit, not to help India. That too is besides the point; whatever their motivations, it is the effect that counts. And it can be said that executive jobs should be outsourced as well as professional ones; that too is a good idea, if one less likely to happen.
The bottom line is that, to a progressive, any measure that helps a poorer person should be worth supporting, even if it harms richer people. There is no realistic way to help poor countries that doesn't involve some form of sacrifice by the rich, whether in terms of forgiven debt, aid given, or jobs exported.
Indeed, if jobs are to be exported to poor countries, outsourcing IT to India is the model way to do it. Unlike auto plants in Mexico's maquiladora or shoe factories in Vietnam and Indonesia, Indian IT workers are paid, not just a living wage, but among the highest wages in their country. They are not beaten, not sexually harassed, not forced to work in unsafe conditions. Rather than lower working conditions in America, they raise them in India.
The only real argument against outsourcing is the nationalist one - that an American deserves a job more than an Indian does. At its heart, this is a fundamentally right-wing argument, based on the principle that people of other nations are less important than Americans. That is both wrong and offensive.
The fact remains that India stands to gain far more from outsourcing than the United States stands to lose, and that America can afford this loss much more than India can.
Posted by Tyrone at June 4, 2004 02:31 PM