CALIFORNIA JOBS MOVE TO OTHER COUNTRIES
In America, there is a major problem these days in the technology industry. It is called “offshoring.” This refers to American companies shipping jobs to other countries, especially India and China.
American companies have always been very active about manufacturing in other countries. However, for the first time, technical high level jobs such as computer programming are being sent to other countries. Why is this happening? Because India has a high number of computer programmers who are paid low wages, as well as having many very good English speakers. And with modern telecommunications equipment and the Internet, workers can be around the world and still work on the same project.
Offshoring, which sometimes is also called “outsourcing”, is increasing every day. And California stands to lose the most from this new trend.
According to a recent study, jobs are more likely to be shipped overseas from Silicon Valley than any other region in the U.S. 1 in 6 jobs in Silicon Valley are at risk of being sent abroad, compared with only 1 in 10 positions nationwide, according to researchers at UC Berkeley. The economists who did the study estimate that 1 in 7 San Francisco jobs could be exported.
Silicon Valley and San Francisco is well known for high-paid service jobs such as computer programming and accounting. Any job that can be done over the internet or on the phone could be exported to other countries.
Besides computer programming, service jobs such as call centers are being sent overseas. Dell Computer (I just bought one of their computers) has their technical service center in India. I wonder if it is in New Delhi? (That's a joke.)
This has become a big political issue, and will become a big part of the upcoming presidential elections. Some politicians are trying to prevent it, and others see offshoring as a normal part of the globalization of business.
Economists estimate that as many as 290,000 service jobs nationwide -- including software development and office jobs such as customer service -- had gone offshore by the end of 2003 and that 3.3 million will head overseas by 2015.
Why do jobs go overseas? Because there is a huge gap between U.S. salaries and those around the world. The average programmer in San Jose earns $77,690 a year plus benefits. In India, the same job pays $10, 900. Here are some examples of companies who have offshored: Oracle Corp. has 4,200 workers in India;
PeopleSoft will hire 1,000 more workers in India, increasing its total to 3,000.
Hewlett-Packard has increased its staff in India to 8,000. Cisco Systems Inc. of San Jose employs 600 workers in India.
Personally, I don’t see how offshoring can be prevented. It will be interesting to see how workers in California and the rest of the United States react to this new challenge.
