Outsourcing: Not Just Call Centers. Shocking.
Back in 2005, Esquire editor A.J. Jacobs wrote in "My Outsourced Life".
"Call centers do it. IT firms do it. Manufacturers are doing the hell out of it. Even the CIA does it. So why can't I?"
That 2005 piece was followed by articles and books by others who raved about personal outsourcing. "The 4-Hour Workweek", forwarded the idea that outsourcing would open up free time in our calendars and allow us to frolic as we wished -- drink lattes, go kite-surfing, or create like Rembrandt.
When he wrote his article, Jacobs was reading the first of Thomas Friedman's Flat series1; "The World is Flat", and he wanted to test the outsourcing theory for himself. He ended up outsourcing not only the usual research and writing duties but calls to his parents, apologies to his wife, bedtime reading for his kid.
But Jacobs got a little nervous when "Honey", his Bangalore personal assistant, started sending him feature ideas for Esquire. India wasn't just a place to hand-off tedious chores to free him up for creative leisure, it dawned on Jacobs:
"the Indian workforce can be just as innovative and aggressive as the American, so the "benefits" might not be so beneficial. Us high-end types will be as vulnerable as assembly-line workers.
Friedman predicted that outsourcing would be more prevalent in the future. Companies outsource because it's cheaper and that's "what shareholders want". Americans workers go along more reluctantly than businesses, but corporations convince them they'll all get better jobs when all the 'low level' jobs go offshore. The secret to success is education Americans are told, over and over again.
The Tin Cup Corps
Americans protest outsourcing in fits and spurts, but resistance seems futile. Outsourcing is facilely explained as a natural phenomenon, 'the nature of economics'. So Boeing moved many operations overseas when it moved from Seattle to Chicago, and of course automakers outsource as much as possible. But while US manufacturing capability moved offshore and hungry off-shore workers always look for more work, American workers sink, over their heads in debt and unemployed.
Today, at a time when the US population is faced with a caving economy, people are furious at corporate automakers' malfeasance and insouciance and have come out vigorously against bailing out the auto industries. People seem too befuddled to protest en masse about the banks, the obtuse details of the Fed's bank bailouts are confusing and frustrating. So they seem to seek revenge for the whole mess by throwing the auto industry into the dumpster. 2
Of course the auto CEOs, like the banks on bended knee before them, are not too proud to grovel, as they do now with "concessions". They're relentless like the Salvation Army Kettle Drive man at Christmas, except the "cause" is less appealing. Whatever comes of the stand-down Americans won't want for cars. Imported cars back up in dry dock, just in case, if not just in time.
But what about jobs? What about manufacturing? If everything is cheaper overseas why bother? American cars guzzle oil and our air suffers for it. Last April Acronym Required wrote "The EPA: Mulish Days, Staring Out to Pasture", about the clout the auto industry used to try to keep emissions standards status quo. Our post discussed the industry assertion that any emissions standards must (as in 1970), preserve the "health of the industry", and we wrote:
"...We need to evolve policy to preserve the auto industry. In 1975, the Chevy Chevette got 40mpg highway, 28mpg city. Surely we can do better with mileage and emissions? Otherwise, if the health of the American auto industry is truly still a goal, maybe the government's kindest move would be to shoot it, or drown it in the bathtub, or whatever libertarian types do these days with ponderous, surly sectors they want to put out of their misery."
We wrote our acid response after the auto and oil industries successfully lobbied for another anemic CAFE standard. But we didn't really mean get rid of manufacturing. We didn't want to throw the baby out with the bathwater, just the bums. Last spring, congress didn't stand up to the auto industries to force them to change. Now the executives fly hither and yon on private jets seeking recompense for their habit of fiscal abandon. They've learned lucrative lessons in the past 30 years.
The question now is, would the US really consider letting the auto manufactures sink? Or is this the usual charade before they write the check? But no solution on the table today bodes well for America's manufacturing tomorrow.
Where Once a Country Stood, Now it Sits
If those jobs were lost would they morph into more creative consulting positions like Friedman suggested they would? We're skeptical. America was founded by craftsmen. I grew up with the lore of Paul Revere the silversmith, of clockmakers and furniture makers, pewterers and braziers and potters and glass blowers and iron casters, professions so antiquated my spell check tells me all these words aren't in the English language.
We need none of these materials now. (We have plastic.) And anyway, why make these products anymore, we're all hip economists who can outsource anything because of how "efficient" it is? But who will Americans be then? Folks of some gentle arts movement who construct Martha Stewart inspired husk pillows to stand in for manufacturing? Still, we're told, this is the way it's meant to be. (Economists announced today they found a recession as if they were biologists announcing a new species after an arduous jungle trek.)
Friedmans "Untouchables" (Pun Probably Intended)
According to Friedman, those who survive the flattening world with their livelihoods intact will be "synthesizers, explainers, leveragers, and versatilists". Friedman recommends that schools build right-brain skills that can't be computerized. A few years ago Friedman assured one audience of the the American advantage while trying to ease fears about China's quick economic rise: "I think this right-brain stuff is very culture-bound and hard to teach", he said.
A Harris poll in 2005 found that 71% of polled people agreed that "the long term success of the U.S. economy requires that we have a highly educated workforce who do highly skilled jobs here which cannot easily be done abroad." Only 13% disagreed with the statement.
If these jobs require sophisticated special-culture-delineated educational techniques, is that why schools tried and failed to outsource some teaching tasks to India? Or was that just parental outrage? Is that why Americans are moving overseas to go to school? Education is not so sacred, as it turns out, in the US. To believe that American has some cultural superiority that makes it more capable of the superior "right-sided thinking" is not only arrogantly condescending, its riskily short-sided.
This "flat" world is not only a world of opportunity but also of disparity, with gaps and canyons, and mountains of inequality. The world is not "flat" when some countries have no education, no health care, and 50% unemployment. The world is not flat when some people make .20 cents an hour and live in a dirt hut, and their counterpart in the West makes $80,000K/year.
This enables companies to arbitrage and profit mightily from the unflatness. If the world was truly flat then there wouldn't be an endless pool of cheap labor to exploit. If you're a business, don't worry, the change won't happen soon. India and China have not only outsourcing prowess but business chops to flourish even more. But how will the American autoworker, journalist, lawyer and doctor fare?
And what about other untouchable skills? Lawyers outsource legal tasks. Doctors are outsourcing test interpretation. A company called Wellpoint started a trial sending patients to India for treatment.
Maureen Dowd wrote about a company in Pasadena that outsources news reporting to India. The writers glean information about the story on the internet. One of Jason Blair's crimes as a reporter for the NYT was that he lied about places he claimed to visit and cover with live reports. Now we're paying people to do this type of reporting. The company's owner James Macpherson told Dowd: "'I pay per piece, just the way it was in the garment business,' 'a thousand words pays $7.50.'" Said Macpherson: "the newspaper industry is coming to a General Motors moment -- except there's no one to bail them out."
Maybe Maureen can walk over to Tom's desk and ask, who are these "synthesizers, explainers, leveragers, and versatilists"?
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1 Thomas Friedman ("The Lexus and the Olive Tree), wrote "The World is Flat" (2005), "The World is Flat: Expanded Edition" (2006), "The World Is Flat, 3.0" (2007), and "Hot, Flat, and Crowded" (2008). We look forward to a sequel in 2009, something along the lines of, "The World is Hot, Flat, Crowded, in Recession, with Rising Disparities on all Planes -- but Flat Damn It!"
2 Photo by Craig ONeal, or Florida, who risked his life to take it. Used with permission under the Creative Commons Licence 2.0 Attribution, Share Share-Alike.
