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Home > Business > Business Headline > Report

Hillary Clinton changes tune on outsourcing

Aziz Haniffa in Washington, DC | July 09, 2007 15:16 IST

Senator Hillary Clinton, front-runner for the Democratic presidential nomination, has apparently become a trifle defensive on the controversial issue of outsourcing, hardly a month after her rival Senator Barack Obama's campaign mocked her for condoning outsourcing. In the campaign document she was described as 'the Democrat from Punjab'.

Clinton speaking to over 3,000 alumni of the Indian Institute of Technology, gathered in Santa Clara for their annual convention, via satellite from New Orleans, called on these IT specialists to help allay fears of American workers losing their jobs to overseas counterparts. Many of US' IT majors outsource work to India. Hillary said if the concerns of the American workers were not alleviated, then it (outsourcing) could cause both a political and economic backlash.

She said that "workers in the US are concerned about outsourcing. I think they have a right to be - but so should all of us who value the bilateral relationship between the United States and India."

And, she added, "If the standard of living and the quality of life falls in reality and in perception and in any way decreases in the United States, our bilateral cooperation and partnerships could very well suffer in the long run."

Referring specifically to the outsourcing of jobs to India, Clinton issued a dire warning that "if the United States continue to outsource jobs to India in increasingly large numbers, people will begin to feel insecure and may very well seek more protection against what they view as unfair competition."

"America is not just a marketplace to get a foothold in," she argued. "It's a place to make lasting investments that will create jobs and economic growth for everyone."

For months, Pan-IIT, USA, which is the umbrella organisation of the IIT alumni had been advertising Clinton as the keynote speaker at the convention. As per schedule she was to be present at the Santa Clara Convention Center to open the parley.

But on July 6, a day before she was to deliver the keynote address, her office announced that she would not be present personally, but would deliver her remarks via satellite.

Clinton's office said that she was constrained by a tight schedule that made it "not logistically possible" to be in California. Her Senate spokesman, Philippe Reines told the San Jose Mercury News that the decision was not influenced by the growing controversy over outsourcing.

As the election fervour catches on, the outsourcing issue has once again been resurrected to a hot campaign issue - although not to the same level as the war in Iraq or health insurance - an issue that more than 40 million Americans don't have access to.

Democrats like Clinton who have to aggressively court special interests like labour unions - that vehemently oppose outsourcing - have to tread carefully and try to balance their support for free trade and globalisation.  They have to show American workers that they are concerned about the loss of jobs to overseas workers in countries like India.

Political observers note that even though the Clinton camp has denied that the Obama campaign document had not influenced her decision to skip the IIT event for fear that it would be perceived as cozying with Indian American entrepreneurs who are major fundraisers for her campaign and whose companies outsource the bulk of their jobs to India, it necessarily seems to have some impact in so far as making her somewhat defensive on this issue.

In her remarks, she said, "I am concerned that trade is becoming a zero-sum game, instead of being a means to lift up all who participate."

Clinton declared that it is imperative that America continues to be viewed as a "land of consumers and innovators, as a marketplace and a talent pool," and said that the United States "can promote shared prosperity that allows us to lead the global economy in our race to the top, not to the bottom."

She said "the global economy is an upside down pyramid with economic growth resting on the shoulders of the American consumer," and argued that it was the American consumers who were "literally fueling growth throughout the world."

Thus, Clinton reiterating some of the negative effects of outsourcing that is a by-product of globalisation, said, "If globalisation pushes down US wages, other countries will be affected."