Long-time reader, first time poster so please be gentle.
(N.B. I do appreciate that the below posting rambles on a bit, but stay with it, it'll make sense in the end, I promise).

Here in the UK there appears to be more and more media coverage of businesses outsourcing their Call and Contact Centre work abroad. India seems to be the favourite destination though there are also sections of the press who highlight the broader international potential such as Eastern Europe, South Africa and South-East Asia.

All of this seems to be covered with a great sense of trepidation and dread, with the main motivation appearing to be the fear of losing jobs here in the UK especially right in the middle of the 'Global down-turn'.

Now I appreciate that like most 'hot topics' covered by the UK press, (i.e. immigration, SARS, potential terrorist threats, BSE, the Beckhams etc.), there will probably be more hype\hysteria than fact\substance published. The UK call centre industry will NOT be killed off by call centre work going abroad. However, equally I am not so naive as to think that this work migration will fail to have any impact on domestic employment.

This then got me thinking. The UK actually manufactures very little these days when compared to 50 years ago for all manner of social and economic reasons. Our biggest area of employment over recent decades has been the Tertiary or Service sector.

Our Primary, (mining, farming, foresting, fishing, etc.), work can almost always be carried out cheaper abroad in countries where the cost of production and cost of living are lower. A prime example of this is a local company I know of who sell processed poultry to supermarkets. They actually import their ready slaughtered birds from Brazil to the UK, rather than buying birds raised and slaughtered domestically, because it is so much cheaper.

Likewise the Secondary sector, (production of food, goods, clothes, etc.), has similarly decreased since almost invariably things can be made abroad cheaper and then imported. An example that springs to mind is of a UK entrepreneur who designed, patented and manufactured a revolutionary domestic appliance. Economically, he can no longer 'afford' to keep manufacturing his goods domestically so the UK factory is closing and production is being transferred to the Far East.

Now I am not wishing to start an international storm or upset anyone with my comments but generally speaking if I actually purchase a good that has been built\grown\produced in the UK, I will have to pay a premium for the privilege. This is because the good will usually have cost more to produce but it will often then be sold\marketed as more exclusive and superior to their cheaper counter-parts.
Examples of this might be;
* Organic, free-range, West Country chicken versus the Brazilian grown poultry;
* English 'farm-house' cheddar versus imported Canadian cheddar;
* a Burberry or Aquascutum suit versus a high-street chain's off-the-peg equivalent.

(Incidentally, almost irrespective of whether the good IS actually superior or not, (which is often entirely subjective anyway), there has always been and will continue to be a perceived superiority of the more expensive good. "It is more expensive therefore it must be better". Take a look at bottled mineral water. Why do I drink bottled mineral water when the water that comes from my tap is just as good and often of a superior quality? If I invited a group of important, affluent guests to a dinner party, would I serve tap water or bottled mineral water with our meal?)

This then got me thinking. With the news that this same sector erosion may now be spreading to the Tertiary\Service Sector through the call centre industry, what are the odds that soon, those companies who chose not to outsource abroad will actually use this fact as a major marketing point for their company and product(s)? It will operate as a key product differentiator.

I believe that shortly we will see these UK based companies and their products marketed as 'superior' to their cheaper, overseas counterparts and sold at a premium to a customer base that are prepared to pay for the perceived exclusivity\superiority of the 'home-grown' product.

There may even be a two-tier call centre structure within the same company. The example I'm thinking of here is a Bank or Credit Card company.
Perhaps the membership\access to the domestic call centre services will be reserved for those customers who deposit or spend over £x,000 or who have multiple relationships with the company. Whereas Joe Public who costs more to service than he generates in profit will be sent to an overseas centre where he can still be serviced economically. The company can then sell the domestic service as a product in it self and encourage border-line customers on the 'lower' tier to increase their spend\deposits so that they too can enjoy the 'superior' product.

I hope no one finds any of this too contentious and controversial. Would anyone else like to follow on or comment?

That's an excellent post considering its your first Willow.

I can certainly see your point, it would be an excellent excuse to raise prices for patriotic customers who believe that the best service is the one provided in there own country. However I think it will be a long time before we start to see the outsourcing of Call Centres to foreign climates start to really hurt our industry/economy and even longer before anyone could implement such a plan.

I would be very interested to see what happened with that Building Society (no names) that outsourced there call centre to a/another country. I would like to know if they experienced a downturn in business following there announcement that everyone would lose there jobs, has anyone got any info on that?

Jason

http://news.bbc.co.uk/1/hi/business/2957094.stm

Thanks, saw that one myself on Monday.

It is quite interesting that this issue appears to be dogging this company in particular when there are many other UK based firms that have employed the practice for some time already. I imagine that a large part of it is down to a heavy unionised work force.

However, I did think that there was something quite ironic in this development and would like to share it with you if that's ok?

(Administrator - I hope that this is not too contentious a point but if you fell that it is then please feel free to remove this posting).

The company in question's CEO was last year proudly making a number of announcements, explaining that independent research had shown the number 1 priority for UK call\contact centres was improving customer service and NOT reducing costs. He then went on to out line how his company could help their customers to achieve this.

Yet earlier this year, the same person has staunchly defended the company's actions of out-sourcing certain services to overseas operations, as an entirely valid, cost cutting measure!?!?

I did view these seemingly contrary announcements as both amusing and confusing.

The BBC article is a good one, thanks I had not seen it.

I worked for BT for a number of years and notice the statement,

BT said no permanent employees would lose their jobs as a result of work being transferred to India.

BT recruitmented Temporary staff through recruitment agencies when I worked for them. I worked in a comms centre with 1200 agents, only the management and team leaders actually had the privileged of a permanent contract. That's about 5-10% of the staff.

If the agents were to go one strike all the savings from the outsourcing project would be lost in hours or days.

It would be interesting to see what would happen if the did walk out.

Jason

http://www.thisislondon.com/news/articles/5186123?source=Evening%20Standard

Willow...you'll love this angle

Thanks for the URL, I'd not actually read this article. It does once again bring into question the moral validity that surrounds the whole issue of implementing 'cost cutting' measures in order to increase 'share holder value'.

Recently there has been a similarly, eye-brow-raising package bestowed upon the CEO and COO of another telco, where at the same time, half of their staff at the head office have been told they will lose their jobs, along with numerous other staff across the business.

Take a look at http://www.cw.com/template_05.jsp?ID=mc_600apr0203 and scroll down to 'Remuneration' in order to see exactly what payments and perks they receive in their package. It is frankly staggering.

The really sickening part of all this is that the people who fill these roles are usually employed on very short-term, rolling contracts, (i.e. 1 to 2 year deals). Yet despite the fact that may only be employed by a company for a relatively short period of time, they are still bought at least one property in order to live closer to their company's head-office. This property is usually located in Central London or in a leafy suburb in the Home Counties, where traditionally house prices are likely to increase rather than decrease. So at the end of their term, despite the fact they may very well have under performed and been released early from their contract, they are paid a settlement payment of at least the full value of their remaining contract plus they have a property to sell, which cost them nothing but has appreciated in value!

To add to this the failing company then has to recruit ANOTHER CEO in order to reverse its ailing fortunes. This no doubt then leads to the new CEO hand picking an executive management team to replace the incumbent one, which then generates another round of financially-softened redundancies for the exiting management team.

All this no doubt adds so much 'share holder value' that the aforementioned share holders can barely contain their excitement waiting for their next dividend payment, (if in fact the company manages to pay one at all).

I've always believed that the 'fat cats' should only be paid relative to performance - so if a company doesn't perform they don't get paid. By all means pay them handsomely if they offer an exceptional service - increased profits, etc., but ensure that underhand steps aren't taken in order to realise those profits (e.g. layoffs).

Perhaps somewhat idealistic, but sometimes I think it'd be a better option than what currently happens...

John

Mark has no doubt seen my comments on CEO pay in another thread.

Again, this is only my opinion, but this problem is a result of wedding very "individualistic" social cultures to less-than-adequate standards of corporate governance.

Outrageous "golden parachute" retirement entitlements happen because prevailing standards permit executives to abuse their positions, to the detriment of shareholders (and ultimately, employees).

I think that part of the problem is that our (meaning Anglo-American) business culture does not adequately recognize the contributions of others to the "successes" attained by CEO's. The CEO is only the head of a team-- Generals don't win wars...squad leaders win wars.

To throw further fuel on the fire, part of the reason *why* such individuals get these huge bonuses has to do with **FIRING** people. Just look at the careers of people like "Chainsaw" Al Dunlap.

Bluntly, you can produce a big short-term upward surge in the return-on-investment in an enterprise by *firing* a bunch of staff, precisely because employee salaries are generally the lion's share of business expenses (certainly in the CC industry). So they get a bonus **for** taking away others' paycheques. You could say they are *taking* their paycheques (in economic terms).

Such upward surges are generally temporary, because it's the staff that enable the company to make money. The effect is something like cutting off the engine in a freight train, rolling at top speed-- it will keep going without using fuel, but eventually stop.

I do feel compelled to take issue with a couple of the comments made in this thread, however.

Mr. Clark-- layoffs are not "underhanded". Labour laws permit them; they are simply a risk every employee must face in the labour market. No business has a legal obligation to provide income security for employees. If you or anyone else has an issue with that, Parliament should be the target of invective, not employers. It is the UK's lawmakers that set the terms upon which people can be hired and fired in the UK; those lawmakers elected to delegate most of that power to employers. As an aside, Japan tried to informally implement a lifetime-employment economy, and the result is currently a mess.

Willow-- You should consider that the **tax treatment** of high salaries is part of the problem. Once you are above a given threshold of nominal income, tax laws will have a larger impact on your actual pay than the decisions of your company's Board of Directors. In the top brackets, you have to pay someone 100 for them to get 50. An executive's tax accountant and solicitor are more important to his income than his 'boss'. So the company is *indirectly* paying them, too.

The real estate issue is a red herring, however. The people that invest **their** money in real estate run the risks themselves, and are entitled to the rewards. If the company is buying them property, this is a taxable benefit, *no different than salary*. It does not cost them "nothing"-- they forego receiving that amount in cash, options, etc.

If you took your salary and bought a car, then resold it for more, should the guy working next to you be able to say that his pay should be increased to compensate him for your gains?? Real estate is no different. Execs risk being fired, becoming unable to make mortgage payments, and having to sell off their property at lower-than-market prices.

Moreover, nothing prevents even the lowest income employees from pooling their funds and taking advantage of the same predictable increases in real estate values.

WP,

I like the salient points that you make surrounding the perceived increase in profitability or reduction of cost initially generated through redundancies. However, I do find some of the other points you make impossible to agree with.

Bare in mind that our original line of discussion was surrounding the paradox of companies closing domestically based call centres in order to outsource these operations overseas, thus cutting cost and creating 'shareholder value' whilst at the same time paying vast sums of money to their new CEOs, (including parachute payments for failure), and sweetening the deal with perks and benefits to entice them further still.

I appreciate that payments in kind are taxed at the highest tax band you are in or would be in if you received the cash equivalent. Here in the UK this is 40%. Therefore if I receive a home in central London as part of my package, which is worth £1 million, then I will have a tax bill for £400,000. However I have already made £600,000 at current market values and given the relatively buoyant UK housing market this is likely to increase over time. Even if I sell whilst there is a slump in the market, it is incredibly unlikely that its value will drop by £600,000 so I am almost guaranteed to be in profit. Don't forget, chances are that I already own a seperate home elsewhere and only require this London property in order to be nearer the City or our head office. If I lose this house I will not be out on the streets.

Your car selling analogy is flawed in so far as these executives are using company money to purchase these properties, they are not speculating with their own cash. Therefore as a fellow employee and colleague my desire to see some of the profit they have made on that sale becomes a whole lot more legitimate. If they profited through investments made with their own money then your argument is quite valid. Whilst they are profiting from a zero risk investment of someone else's money I have issue.

Finally there are plenty of things stopping the lowest income employees from profiting from the same kind of investment. I think there needs to be a bit if a reality check here, WP. The average house price here in the UK is presently around the £120,000 mark. In London and the South East £120,000 would not buy you a single-bedroomed studio flat. Most properties in the these areas will sell for over £250,000, which would mean repayments in excess of £2,000 per month for a 25 year mortgage, (that's without payment protection\insurance). With the lowest income employees already paying rent or a mortgage on their own home how on earth can they expect to afford to invest in the property market? You mention pooling resources which makes things even more complex with regards issues of taxation, ownership and owner disputes, (what happens if one owner wants to sell whilst the others do not and vice-versa?)

Getting back to the main issue that this thread was originally dealing with; though I agree that there are few businesses\organisations that do offer the 'job for life' or even display a genuine philanthropic view on employment, treating employees with respect, with compassion and most of all fairly should not be viewed as a perk it should come as standard.

When big organisations treat the front-line staff as an expendable cost, whilst at the same time throwing money at individuals and headhunters in an attempt to fill the CEO position, it leaves a bad taste in the mouth. We all know that the person at the top will get more than everyone else, that is a given. However shouldn't all employees expect to be treated fairly and with the same degree of respect, wherever they are in the food chain? This was the point I originally tried to make; how I felt that it exposed the company and said a great deal about them and their 'strategies' when they were saying on the one-hand that cost-cutting was not the main business driver for call centres moving forward, whilst on the other they were advocating outsourcing overseas as a great way for them to cut cost and create share holder value.

I've rambled on for far too long but I hope that I've made some sense. Feel free to add comments in complete disagreement!

Willow-- I understand the original line of discussion.

What I am saying is that "...closing domestically based call centres in order to outsource these operations overseas, thus cutting cost and creating 'shareholder value'" is simply part of the process of increasing 'productivity'-- making more money, faster, at less cost.

This practice is hardly unique to the Call Center industry. It is simply what trans-national corporations have been doing for decades (or, arguably, for centuries, if the Industrial Revolution is considered to count), in almost any industry you can name. 'Overseas' outsourcing to lower cost economies is one of the reasons why trans-national corporations are *almost* invariably dramatically more productive (read profitable) than their purely domestic counterparts.

There is nothing "paradoxical" about it. The *only* reason to pay anyone money (apart from philanthropy or consumption) is that the payee makes the payor more money than he or she costs. The overpaid CEO's are being overpaid **because** they enable the company to pay less to the employees, be they in Birmingham or Bangalore, while making the same amount of money for the shareholders. This is not quasi-Marxist rhetoric, but simple logic.

People want to buy products and services for less money. The only way that can be made possible is by producing them for less money. There is a limit to the amount of productivity gains that can be acheived using existing technology and human resources. If I am cost-engineering (which is social engineering) I will not use an expensive worker to perform a task a cheaper worker can do just as well. I will put expensive workers on the tasks only *they* can handle.

If that means fewer expensive workers are needed, that means that the expensive workers have to figure out how to do something *else* that other people want and will pay for. That's just part of the price tag of high pay-- you assume the risk of unemployment. (Please keep in mind-- I'm one of the *expensive* workers under discussion here).

This may sound *amoral* or mechanistic, but it is not. People in high-wage economies bear the burden of innovating; people in low-wage economies have the luxury of imitating (without implying anything negative to those readers who may be in low-wage economies).

I do not want to come off as all 'American' or irritatingly chipper and enthusiastic about it, but it is not nearly as difficult as many people seem to think. Identify a social problem, figure out who will pay you to solve it, figure out who you can convince to fund your initial efforts, get funded, solve it, then sell the solution. Keep trying this until you have enough money for your taste. It might be difficult, but it is not complicated. (Anyone telling you that it *is* complicated is probably trying to sell you business consulting services).

And (sorry to harp on the real estate) but it's *not* "the company's money"-- it's the executive's money, because it's *part* of their compensation. Unless what you are saying is that the company has contractually bound itself to make up the loss in value to the employee if the value of the real estate collapses. Then the exec is not being paid in real estate-- they are being paid in real estate *and* insurance.

Someone can be paid in money, stock options, real estate, deep fryers, professional services or what have you. It is still compensation. Your exec has 'already made' £600,000 because that is what the company has *paid* him or her. If you are objecting that the salary is too high, fine, but why should it matter whether it is too much money or too much real estate equity?

I'm sure this will sound harsh or brutalist, but your *entitlement* as an employee is whatever your local labour laws give you, plus what the company is contractually bound to give you as a result of what you negotiate. Nothing more-- no fair treatment, no respect, no two-cheek kisses, no sweetness-and-light.

It would be **smart** of the company to give workers fair treatment and respect, but not because they are entitled to it. Employers that have done their homework will figure out that employees that perceive themselves as respected and fairly treated cost less and produce more. That is the only reason managers should give employees respect and fair treatment-- but it is a **very** good reason. I'm hoping it never becomes 'standard', because then our organization will no longer be able to poach good, productive employees from companies with short sighted, pennywise/pound-foolish management. (Oh, wait, it costs me nothing, but it makes me money...nah, I won't bother with that...;)).

A CEO that tells you that cost-cutting is not important either (1) *is* stupid, or (2) thinks *you* are. Companies' PR people (or CEOs) should avoid making two-faced speeches in public because workers and the general public are not stupid enough to buy such nonsense, and they get insulted by it.

And in response to your comment: "Finally there are plenty of things stopping the lowest income employees from profiting from the same kind of investment."

Sorry, have to disagree with you on this point. Solving these sort of collective action problems is what corporation law was created for. Microsoft has a market cap larger than the total assets of most *countries*, and you can own a piece of it. Same point applies to real estate, and employee real estate investment pools. Your £250,000/£2,000 per month for 25 years house can be held through a corporation, and the shares in it distributed to employees. They don't want their shares any more, they can sell them. They want more, they can buy more. It's called asset securitization, if you haven't heard of it. (Generally, you don't actually use corporations, but rather corporations holding SPVs or trusts, depending on local laws, tax considerations etc., but the basic point is the same).

And if poetic justice is amusing to you, the house can be leased to the company's CEO ;).

Yes, of course, employees that make less than CEOs have to put a bigger value on their last dollar, and forego a lot more to invest smaller sums. So what-- you simply have to include more employees. If it takes two companies' worth to buy one house, no problem-- the cost of adding one more holder of the securities to the existing group is near-zero. Take the money you'd spend on coffee, and invest that.

And since we're digressing:

To expand on the point I made about Japan: after WWII, Japanese decision-makers tried to set up a system where all the working men would have lifetime jobs. (No one says it was not *sexist*, but the aim was social equity). One of the results was an outlandishly high cost-of-living. Bluntly, most people had a standard of living that was shabby, not because they had no job, but because their buying power was weak-- everthing was expensive (sound familiar?). The Soviets tried something like the same idea-- a job for everyone. Instead of everything being ridiculously overpriced, quality standards for everything were **crap**. Result: quality-of-life = crap, again.

I call it the 80/20 problem. No matter the society, no matter the era, 20% of the population produces 80% of the value. The problem is how to distribute the value in such a way that the productive 20% won't sabotage the system from the inside, and the unproductive 80% retain enough human dignity not to revolt and wreck it for everyone. Humanity as a whole has yet to solve it, and we've killed a lot of one another over 'solutions' that did not work (name your "-ism", it's probably an attempted solution that didn't work). Extensive ad hoc regulation of an economy based on freedom of contract is about as close as we have yet come to solving it, in my humble opinion.

Looking back at Willow's original posting, do I detect an anti-globalisation undertone? Perhaps, perhaps not, although this wouldn't be entirely out of line with a growing realisation worldwide of the effects of globalisation both. Many concerned individuals are taking action on this front both demonstrative and (I have to disagree with you Wiggle) ethically shopping. Whilst it may or may not follow that they want lowest price/best quality they are certainly examining the big picture with regards to production of goods, pollution, ethics etc etc and the ways and methods by which producers in developing countries are being remunerated - its not just a cost issue - it may have been in the past but Western consumers are becoming ever more sophisticated. These movements and concerns are growing and internationally too.
I disagree that the Soviets produced crap quality standards for everything, take the arts and sports, both have a significant bearing on quality of life, but I suppose it depends on your measuring stick and how far you wish to extend it and its easy to look hard and globally to find examples to prove your point. (I'm an avid arts supporter).
I also believe that Wiggle's last paragraph concerning value depends entirely on your interpretation of the multi-definitive word "value" - if you take the definition to be ; An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return. - it seems to render the sentences meaningless.

As regards solving this eternal conundrum, have a look at the work of George Monbiot and his new book "The Age of Innocence", he has some 'revolutionary' (not another one!) and fascinating thinking on the subject - world order, MNC's, global trade, etc.
http://www.amazon.co.uk/exec/obidos/ASIN/0007150423/ref=sr_aps_books_1_1/202-7746957-8019827 (currently only available on UK Amazon but deliverable worldwide).

Watching this from the outside, I would point out that Willow seems to be arguing concern for the future and Wiggle seems to be justifying and explaining the status quo. Perhaps I am wrong.
Frequently in many aspects of life we are aware of the present situation yet are unhappy with its outcome, perhaps we don't even need to understand why these issues come about in order to feel the need to want to change them. These implied needs of righteousness, compassion and altruism are in my optimistic view some of humankind's best values.

As for moi, I try to be neither a half empty or a half full man, although recently I've been swayed by friends to see the empty glass and ask who'll get the next round in !

Fun thread, yall. You're right, Wig, there's not much we'll disagree on, at least philosophically. It's nice not to be perceived as the only capitalist bad guy around here anymore ;)

Are CEOs paid "too much"? That's very likely.

Whose fault is that? The company that's paying them.

Then why do they do it? Ostensibly, to increase shareholder value.

How do we measure shareholder value? Stock prices.

Who drives stock prices? WE DO!

Hm. If we, as stockholders (the people), were to quit allowing the headlines and quarterly earnings reports drive our perception of value in a company, and instead valued a company based on it's long-term business plan among other things, wouldn't that change the way companies behave?

Brent

Mark,

Pretty much you've hit the nail on the head. I couldn't agree more with the view that you have on people approaching consumer spending from a more ethical angle. Equally your assessment of my anti-globalisation is not a million miles away either.

Just to add fuel to the fire, and continuing with the idea of a social conscience and capitalism NOT being mutually exclusive, what about the countries who offer overseas outsourcing?

Let's bare in mind that the main requirement when recruiting agents overseas is good conversational English coupled with IT\keyboard skills. To pick these up from a standing start, would probably take a year or two at the most and the earning potential at the end of this period is vastly superior to many other occupations in these countries.

In order to become a qualified doctor there is a training period of 5 years followed by further years as a junior doctor, 'learning the ropes' as it were. Now if we compare the two occupations, it doesn't necessarily take a genius to see what is likely to occur with regards your employee resource pool.

Do we not run the risk of tearing apart the very social fabric of these countries? In X number of years time there is the risk that the number of intelligent and skilled people moving into essential services roles within these countries will be seriously diminished. Is there not a social responsibility for all concerned to address this kind of issue now, before it starts having a tangible, detrimental and visible effect on the infrastructure of these countries?

Or Wiggle Puss, am I just being a rose-tinted spectacle wearing, mis-guided, idealistic hippy?

Again.


Peace.

Willow -

Well put. I agree entirely with "the idea of a social conscience and capitalism NOT being mutually exclusive". Too often, people and their ideas are pigeon-holed by others into one polarized extreme or another. The fact is, I believe, that most of us are only a few degrees apart in our views and hopes for ourselves and the world.

Concern for the infrastructure of developing nations is a noble cause. I think it might be a stretch, however, to assume that the growing call center industry in India would eventually lead to a lack of essential professions there such as doctors. In fact, I think it would pull from a different direction.

In the US, the 'boom' in the economy created more high-paying jobs than we had ever seen before. Dot-coms, call centers, technical support - it was great. People under the age of 28 had no idea what it was like to look really, really hard for a job. They popped out of college or technical school, showed up for an interview wearing jeans and a baseball cap, smirked, and took jobs with the highest bidder (ah, frailty, thy name is capitalism).

The perceived need for 'technical' people during the boom forced companies to hire people they didn't really like for way too much money. This caused a competition among companies for qualified people, and being capitalists, these companies kept increasing their wages and benefits packages to attract the best people. OK, fine.

But these people were not doctor-types. Or lawyer-types. These were people who, 10 years ago, would have spent the first five or six years of their careers upselling matching handbags to go with the pumps they just sold. This backdraft filtered to call centers, restaurants, fast-food, you name it. What we ended up with was a case of mass Peter Principle.

24-year-old 'executives' who knew nothing about business. The same people who 10 years ago would have been taking your order at the drive thru, were now taking your credit card number in a call center. Don't get me wrong - all work is honorable as are the people who choose to work. On paper, this seemed like a boon to everyone. However, the glut of jobs created a natural apathy among workers - "hey, I can always go somewhere else".

Turnover was atrocious, service was never so poor and even worse, companies were driving each other into bankruptcy with their corporate version of 'wages chicken'. Winners? Employees, at least on the surface. But then the boom goes away. Now what?

Now we have 30-year-old former executives who learned absolutely nothing during their early career, as no one had the cojones to push them for fear of losing them. Now they are either unemployed, or working for half of the money they were making. The really hard-headed ones STILL think they're worth a ton of money, and prove it by not taking any job that is beneath them (Hmm). Many are in debt up to their eyeballs, and some will likely spend the next 10 years trying to get back to even.

The real threat, Willow, I think, is to the most basic of services in a developing country. Streetcleanrs, window washers, fruit vendors, whatever. The quality of services in the basic jobs will suffer most, I think.

Globalization? Still collecting data on that one. Each country is a microcosm of a neighborhood in any city. Some are already wealthy, some are poor, some are in the middle. Not everyone can earn 'above-average' wages - the math doesn't work. I don't like it that a few thousand call center jobs here in Austin, Texas, have found their way to India - not good for me personally, nor for my community. But that can't be the only reason to fight it.

Another topic, that. Enjoying your posts, Willow.

Brent

PS - loved your last title - I'm a devotee to the words and philosophies of MLK.

Don't know if anyone saw this news article from earlier this month, (sorry but it is UK-centric).

http://news.bbc.co.uk/1/hi/wales/south_west/2980994.stm

To me at least it represents a stark warning to anyone who is accumulating the infrastructure and the staff based on business that is yet to be won. Whether this is in the UK, India, the Philippines, South Africa, or wherever, this kind of business practice exposes you to a broadly similar risk.

I think that what has recently started occurring here in the UK will shortly occur in countries overseas, where companies are undertaking large scale growth, based on potential business or an over exaggerated 'pipeline'.

No, Willow, I do not think you are just being a rose-tinted spectacle wearing, mis-guided, idealistic hippy. Nor, actually, would I agree with being characterized as "justifying and explaining the status quo."

I think the status quo has plenty of defects. These defects cannot get fixed unless there are people with vision.

But nor are they going to get fixed by those who want to wish away the short-sightedness and self-delusion that is a chronic part of the human condition. Everyone I know (myself included; present company excluded) has an amazing capacity to convince themselves that ideas that serve their personal interests also serve the general good. To adopt something as a solution, we should at least have evidence that it is no worse than the existing alternative.

I, for one, have observed first-hand the phenomenon Willow is talking about. It is already here. Examples abound: (1) an astrophysicist, driving a cab, because it pays in hard currency, (2) street hustlers that speak 4 languages fluently, (3) hotel receptionists with multiple degrees. Not that I'm running down driving cabs, checking in guests, or (even) hustling tourists, but...

I have also observed something like the converse phenomenon, also. People that would be marginally employable in their home country, enjoy an excellent standard of living overseas. Their asset? Basic conversational ability in the local language, and a willingness to be the front-man for a company, selling to nationals of their country-of-origin.

But you could impose a global ban on Call Center outsourcing and not change the situation one iota.

Net emigration rates from developing countries the world over increase almost in lockstep with education levels-- the more educated they are, the more likely they are to emigrate. Whether Dr. so-and-so has left Mumbai to work as a Dr. in the U.S., or is now working in a call center in Mumbai, the result for health care in Mumbai is pretty much the same.

Mumbai's economy is probably somewhat better off if he stays, depending on how Dr. so-and-so decides to spend.

Are human skills mis-allocated by market economies? All the time. People do what others can and will pay for. Need does not create ability to pay. That's why most industrialized countries impose state control on health care. I'm being cited as the capitalist, but I'm all for it.

Arguably, the richest countries feature the most apalling mis-allocation. Just think about the words "Tobacco Company Marketing Executive". Rich countries can better afford mis-allocation.

Each generation will undergo this serious effect worldwide. Attributed to the costs & growth which is being borne widely. This has become possible undoubtedly due to the creation of efficient connectivity with Internet & then the online systems.

The Business world effort will continue to pursue good administration of the best outputs including manpower.

Global citizenhood could provide us to be the best.