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India bashing on outsourcing 99.4% hollow !!
si Team
Thursday, September 1, 2005
India has 17 percent of the world population, 2.2 percent of the landmass, 1.4 percent of the world’s GDP but only 0.6 percent of the world’s trade! Yes, and it shares the same figure of 0.6 percent which can douse the heat off the raging debate on how India is ‘stealing’ jobs from the U.S. Latest figures released by the U.S. Department of Commerce indicate that India accounts for only 0.6 percent of the total employment of American multinationals by way of outsourcing.

“Tech jobs are fleeing to India faster than ever,” moaned the cover of Wired. ‘Lou Dobbs Tonight’, America’s main business show, said that every factory-closing is a proof of America’s relentless “hollowing-out” at the hands of dark forces in China, India and indeed the White House. Strangely, no mention is made of the fact that such a miniscule portion of all jobs lost actually goes overseas.

In 2003, U.S. multinationals employed 344,000 workers in China, up from 252,000 in 2000. They employed 131,000 in India, up from 71,000 in 2000. However, combined, India and China amount to just 1.6 percent of the total employment of U.S. multinationals.

An interesting contrast is that Canada is home to more than three times as many workers for U.S. multinationals as China. U.K. is home to about nine times as many workers as India. The author of the report, Raymond Mataloni, said “the numbers don’t provide a lot of support for the notion that massive offshoring is going on.”

In the U.S. more jobs are lost through churning than outsourcing. The creation of new jobs always overwhelms the destruction of old jobs by a huge margin. According to the U.S. Bureau of Labor Statistics, between 1980 and 2002 the U.S. population grew by 23.9 percent. The number of employed Americans, on the other hand, grew by 37.4 percent. Today, 138.6 million Americans are employed, a near record, both in absolute terms and as a proportion of the population. Forrester Research estimates that 3.3 million U.S. service-industry jobs will have gone overseas by 2015—barely noticeable when you think about the 7 to 8 million lost every quarter through job-churning. And the bulk of these exports will not be the high-flying jobs of IT consultants, but may be the mundane functions of code writers.

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