Outsourcing viewed from the outside
By Lauren Iacocca
April 8, 2004 9:00 p.m.
Correction Appended
For UCLA students born and raised in now-booming information
technology economies such as India and China, debates concerning
outsourcing ““ the process of shipping jobs out of the country
““ strike close to the heart.
Many of these students experience mixed emotions as they witness
their homelands benefitting from a growing number of white-collar
jobs while some middle-class Americans are suffering from job
depletion and unemployment.
For those Indian- and Chinese-born students who study computer
science or engineering, outsourcing has additional implications, as
it affects their future job prospects.
Second-year computer science doctoral student Payan Adharapurapu
came to UCLA from India to enhance his academic and cultural
education.
He is both pleased and disheartened by the effects of
outsourcing.
“I would be lying if I said I was not happy to see my
country progress (as a result of the influx of new jobs),”
Adharapurapu said.
He also mentioned that his sister recently got a job with one of
India’s top outsourcing companies, Wipro.
“At the same time, I would be equally lying if I said I am
not saddened to see hardworking middle-class Americans lose their
jobs for reasons not at all related to their performance,” he
said.
“Many people here work harder than I have ever seen
before, and I completely empathize with them,” he added.
While Adharapurapu said he is a firm believer in free trade and
therefore the free flow of labor, he also thinks the majority of
jobs with American companies should remain here.
“I only hope Gregory Mankiw is right,” Adharapurapu
said, referring to President Bush’s chief economic
adviser’s statement that outsourcing will ultimately be good
for the domestic economy.
Mankiw reasoned that there is a positive net effect from the
free trade of goods or services for importers and exporters
alike.
An example of domestic benefit might be lower prices for
consumers who purchase products from IT firms that employ cheaper
labor abroad.
Victor Liu, a fifth-year computer science doctoral student from
China, has faith in Mankiw’s prediction.
“I think outsourcing can be mutually beneficial,” he
said. “In America, (with outsourcing), there can be more
start-up businesses taking advantage of cheap labor in other
countries.”
If start-up businesses restrict themselves to development in the
United States, they will face higher operational costs and smaller
chances of success as a result, he added.
Liu said he thinks Americans can be assured that certain aspects
of a business, such as the management and accounting departments,
can never entirely leave the States.
But if U.S. employees are to make transitions to new job
sectors, the process will take time and training.
With regard to their own post-doctorate employment, neither
Adharapurapu nor Liu seem to fear a lack of job prospects.
“I personally believe I could get a job wherever I
wanted,” Adharapurapu said, adding that while computer
scientists are now in demand in India, the majority of research
positions remain in the United States.
Liu said he plans to eventually return to China to live and
work.
“When I move back, my life will be easier (because of
outsourcing),” he said.
Outsourcing makes people like Liu, who are educated in the
United States, a “hot commodity” because they can
transfer their knowledge and skills to others.
China will require more rigorous training in fields outsourced
by the United States, and Liu anticipates that his advanced degree
will allow him to become part of the training system.
Fourth-year mechanical and aerospace engineering doctoral
students Krishna Kalyanam and Srinivasan Dattarajan, both from
India, share Adharapurapu and Liu’s confidence in their
American educations.
They came to UCLA primarily to earn their Ph.D.s.
“I wanted to check out the U.S. for all the hype it had in
India,” Dattarajan said.
Neither Kalyanam nor Dattarajan see outsourcing as a threat to
the engineering jobs available to them here, and they do not think
outsourcing will play a great role in their decisions to return to
India after earning their degrees.
“The jobs that are moving from the U.S. are mostly in the
computer industry, call centers and so forth,” said
Kalyanam.
“Also, a lot of Ph.D. students here are looking to be
faculty members, so there is no competition unless they start a UC
in India somewhere,” he said jokingly.
But Kalyanam said that outsourcing is changing the engineering
landscape to some extent.
His friend, a native of India but educated and living in the
United States, was recently offered an engineering job with Sun
Microsystems, but he was asked to work in Bangalore, India.
“You see, in India they could pay him $20,000 a year and
that would be plenty,” Kalyanam said.
Dattarajan expressed his opinion that if outsourcing means lower
pay for American engineers, so be it.
“If America makes claims that its an open economy, then
they have to accept the fact that salaries are going to be
global,” he said.
Correction: April 12, 2004, Monday
Pavan Adharapurapu’s name was misspelled.
