BPO gives US more jobs than India

BPO gives US more jobs than India

EconomicTimes.com[ WEDNESDAY, APRIL 14, 2004 11:06:32 PM ]
Is outsourcing creating more jobs than it is destroying in the US ? It is difficult to know for sure.


Wall Street Journal's Jon E Hilsenrath has explained just such a scenario. Last year, when executives at Infineon Technologies AG had decided to eliminate 40 high-paying engineering jobs at its San Jose research facility and transfer the work to India , there was chaos. After all, people had lost their jobs.


But, interestingly at the same time, the company had hired 150 engineers in the US for different departments.


Here, one may say that not all people face the pinch of outsourcing. While some of the Infineon workers in San Jose are directly affected, some of them have also gained from the employment created by foreign investment in the US .


But, Infineon's global job dance certainly raises a fundamental question about the shift of US jobs abroad . How does one count the number of jobs that are gained or lost as companies shift their operations around the world? The answer to this question is, however, not very clear.


As one gets down to think on these lines, there are certain other queries that cross the mind. Is the US government actually keeping a track of the jobs that are outsourced to cheaper destinations? Or is it that the statistics available on outsourcing are sketchy?


And finally the most important point: Is outsourcing creating more jobs in the US than it is destroying?


Many economists estimate that roughly 100,000 high profile jobs migrate overseas each year. And the figure is likely to increase to 600,000 by the end of this decade.


Ravi Aron, a Wharton School professor, calculated the impact of offshore outsourcing and noted that about 440,000 high profile US jobs were lost as a result of outsourcing between the year 2000 and 2004.


Now the question arises as to whether the multinational companies have been able to churn out the same number of jobs that they have outsourced to cheaper destinations?


Let’s imagine for once, that the companies have been able to balance all the lost jobs by the creation of new jobs. Even then, for which posts have they signed up candidates? Are the firms hiring more number of entry-level candidates in order to cut down on costs? What about those employees who have lost the hi-tech jobs during the backlash?