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Home > Business > PTI > Report

US divided over outsourcing of jobs

TV Parasuram in Washington | November 14, 2003 12:11 IST

American experts are divided over the issue of outsourcing white collar jobs from the country with some being of the opinion that it may slow down the nation's job growth, while others stating that the phenomenon was healthy for the country as it could create more sophisticated jobs doing away with less productive ones.

A new study published by UC Berkeley researchers has said the jobs remaining in the United States could be subject to pressures to lower wages and that may slow the nation's job growth or generate losses in related activities.

Jobs vulnerable to the new way of outsourcing, they said include medical transcription services, stock-market research for financial firms, customer-service call centres, legal online-database research, and payroll and other 'back office activities'.

They argue that the positions feature vulnerability-producing attributes such as a lack of face-to-face customer service, work processes that enable telecommuting and Internet work, high wage differentials between countries, a high information content, low social-networking requirements, and low set-up costs.

Meanwhile, other economists argue that the movement of jobs to low-cost countries is unstoppable and ultimately healthy for the United States.

"I think overall, long term, the US economy can take it. But there's going to be a huge amount of restructuring pain," said Rafiq Dossani, a senior research scholar at Stanford University and co-author of a study on job movement.

While India and China have long been recognised as centres for US offshore outsourcing, other nations also are hustling to tap into this lucrative market. Ghana, South Africa, Israel, Russia and several Eastern European countries all are vying for jobs and money in the sector.

Also, a coalition of Indian government officials, business groups and influential Indian Americans has quietly launched an extensive lobbying campaign here to counter allegations that the country was taking an unfair number of high-end US jobs.

India is paying several high-priced Washington lobbying and law firms to craft a campaign extolling the benefits to the US of closer economic ties with India.

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