India's salary growth threatens outsourcing 4475

I'm not a "basher of outsourcing" per se. I find it simply annoying that these arguments degenerate into "indiaBPOking"-style insult throwing sessions. Of course outsourcing works; it is a proven and tested business model thousands of years old. However, what *does* happen is the market achieves equilibrium at some point, resources are utilized until there are none left, and you move on to the next "friendly supplier" of resources. Adam Smith generously demonstrated this fact 229 years ago in "An Inquiry into the Nature and Causes of the Wealth of Nations". If you're interested in a sound study of this model, you should visit your local library and pick up this book.

I believe we should immediately increase the pay of Indian tech. workers to what their brethren in the West are making, immediately. After all, why shouldn't the Indian tech. worker receive the same pay and full benefits as other tech. workers world-wide? Surely as a tech. worker you can agree that you deserve far more money than you are currently being paid.

India should also immediately insbreastute greater health, labor and environmental regulations commensurate with those of other industrialized nations. India has an opportunity to pre-emptively stop big business from destroying the land, the culture, the health and welfare of the public. I say stop foreign companies from dumping mercury and cancer-causing industrial waste into the Indus River before they get started! Stop them from taking advantage of loopholes in the law and forcing 10 year old children to work 12 hours a day in factories while there's still time! Surely you can agree that being good stewards of the land and protecting the children are the responsibility of any guest corporation in your land?

And who exactly is paying for government subsidies to educate the children, build infrastructure, and support local businesses? Should the tech. workers be footing the bill to churn out more educated children so they can go to work for foreign-owned businesses? Or should the foreign businesses be putting money back into the community that are supporting them on their backs? Perhaps it's a good review of the tax structures will reveal just who is footing the bills...

Of course all of this will not happen immediately; but it will happen. It is already happening in fact. Look at the pay scale for programmers. Wages rose 14% for Indian programmers in 2004 to ZDNet UK, Indian Wage Inflation is threatening outsourcing

I never said that, but as J.P. Morgan and Wal-Mart (both of which cancelled very large outsourcing contracts) discovered: "You never outsource your compebreastive advantage if you want to sustain it. Wal-Mart came to this conclusion in retailing, where it was a lot less obvious than in banking, and has used its in-house proprietary software and computer expertise to run over almost all of its compebreastion. I am sure that is what Jamie Dimon and Austin Adams have in mind for J. P. Morgan. The compebreastors had better start thinking now about how they will counter this move before it is too late, now that the opening shot has been fired."

The cost savings of outsourcing projects for these, and others, was obviated by several factors:

IT security: There are few ways to gauge the security risks posed by offshore workers. One risk is the potential loss of intellectual property and business-process secrets. China, in particular, lacks laws to protect companies' intellectual buttets and is suspected of having a major espionage program targeted at U.S. technology firms.

Business continuity: Large person networks exist in the Middle East and Southeast Asia, where many U.S. companies look to outsource IT labor. Outsourcing to a third party in one of these countries means risking that daily operations could be disrupted. A political situation, such as armed conflict between Pakistan and India, could also shut down operations.

Customers' fears: Customers need rebutturance that their data is safe. It can be difficult to convince customers and potential customers that their information is secure with a company thousands of miles away, in a foreign nation.

Rising costs: As quality of life, and demand for government services, increases in foreign countries, labor costs and taxes rise. These costs are pbutted along by businesses in the form of more expensive products and services.

Societal demands: Businesses inevitably cut corners and try to save money where they can. Often this includes calculated risks in which the benefits outweigh the potential costs. Sometimes this includes unethical or even illegal activities. These activities, such as dumping waste materials and taking natural resources from the land without replenishing them - and without paying the landowners for rights to the resources - hurt the local community far more than the company; even if the company is caught "with its hand in the cookie jar." People inevitably demand more protections from the unethical side of big business from the government.

All of these items eventually level the playing field.

I don't know about the 5-10 year estimate, but other countries with large labor forces are waiting in the wings... China springs immediately to mind...

There is no self-evidence in your argument. It is a string of incongruous arguments that circumvent the *only* self-evident fact, which has been proven time and again over thousands of years of human history: Business utilizes all resources possible, as cheaply as possible, wherever possible. Once those resources are no longer cheap, or are completely used up, business moves on.

Now, if your argument is so "self-evident", it should be a simple matter to provide reference material to back up this buttertion. After all, 'self-evident' facts become 'self-evident' because everyone recognizes them as facts. It's hard to believe that no one would ever publish any official documents backing up your buttertions; other than Press Releases from large companies trying to placate their investors.