Monday, September 20, 2010

Ohio's Anti-Offshoring Royal Silver Bullet

( Credits Patrick Thibodeau/Computerworld)
Outsourcing doesn't reflect Ohio's values”
-Ohio Governor Ted Strickland

Anti-Offshoring Ohio Lures Indian Offshoring Giant on U.S. Taxpayer Dime

Patrick Thibodeau's headline today at Computerworld entitled Ohio takes the lead in offshoring fight revisits LWOH's probe into the rising “backshoring” trend where incumbent Democratic Ohio Governor Ted Strickland woos TCS, presses India for jobs and is now campaigning on the “anti-outsourcing” brand. If Strickland says outsourcing doesn't reflect Ohio values, what about insourcing?

As we reported in this article entitled NCR, GE and Dow "Backshoring" as Boeing Profits, Plans 10,000 Layoffs, the growing trend of “backshoring” as we reported in Corporate Welfare Roulette  for U.S. corporations to move their operations back home to states that lure foreign outsourcing companies on the U.S. taxpayer dime raises the question: Why are American taxpayers subsidizing foreign outsourcing corporations whose businesses are in the cheap labor/labor arbitrage racket in the first place when millions of unemployed Americans (and businesses) can do those jobs?

Thibodeau's article prompted an interesting discussion in the comments section, as one Ohio citizen notes below:

...practically from the beginning, Ohio had among the best law schools, excellent medical schools, and soon developed the best K-12 text books. We've got plenty of bright, knowledgeable, industrious and creative people in Ohio. We don't need to be importing guest-workers for work Buckeyes can do quite well, while making and leaving our capable people unemployed and under-employed. Off-shore out-sourcing should be rare. Guest-workers should be geniuses at the very least (since we have many gifted people who are unemployed).”

The article also notes that Strickland has "blasted" offshore firms, saying their use has "unacceptable business consequences," most important being data security and privacy risks. Hear, hear, Governor Strickland! But Thibodeau points out that despite his tough stance on outsourcing, Strickland has curiously “given about $19 million in tax breaks in 2007 to Indian giant Tata Consultancy Services to build a development center in the state. Tata has already established 400 jobs at the center and is supposed to have 1,000 there by the end of 2011.” So will American citizens get those jobs with good wages? With India's concern over Ohio's anti-offshoring efforts, President Obama will visit India in November “to take our relationship to the next level," as SOS Hillary Clinton put it in a speech earlier this month. What “next level” might that be? Thibodeau's article may suggest that the whole H-1b visa program that provided U.S. corporations massive flows of cheap labor from India might be abolished. After all, the state of Ohio is home to Dennis Kucinich who wants to scrap the whole H-1b visa program. What would it be replaced with? Some unlimited, global open borders/green card program and massive L-1 student visas? Thibodeau slips in news about a massive Ohio “Supercomputer Center Blue Collar Computing program”:

The decline of manufacturing in Ohio and elsewhere affects more than jobs; it affects IT as well. "Manufacturing is extremely important because that is where the bulk of the research and development is," said Harold 'Hal' Williams, an economics professor emeritus at Kent State. Manufacturers are increasingly relying on high-performance computing systems to develop products. These systems can simulate how products might perform as conditions change, and they eliminate the need for continuous prototype-building, thus speeding time to market and product development. The Ohio Supercomputer Center's Blue Collar Computing program in Columbus has been on the leading edge in the U.S. to provide high-performance computing resources to manufacturers. "If we are going to maintain a strong competitive position internationally, we've got to have firms that are doing a lot of research and development," said Williams.”

Would this mean an unlimited number of L-1 visas? Hmm...that way, wouldn't TCS (and other foreign outsourcers in other states) have all the unlimited, cheap imported student labor they could get their hands on to further drive down wages for educated American citizens (young and old) who need jobs? Slick. They could just skip the whole outmoded adult H-1b slave labor visa entirely and go down to the L-1 slave youth labor model? We don't know!

Will Strickland's anti-outsourcing brand (sans anti-insourcing) seduce Ohio's voters? Never mind  that third-party groups are targeting Ohio Democrats with ads or that FiveThirtyEight's prediction about the gubernatorial race has John Kasich bagging it:

Silver gives The Wizard of Westerville a 90.1 percent chance of beating Ted Strickland, the incumbent governor from southeast Ohio, whose campaign strategy has been to paint Kasich green, colored by the greed and money that go hand in hand with working on Wall Street.”

We applaud Governor Strickland's executive order prohibiting use of public funds for outsourcing, as the use of U.S. taxpayer dollars to ship American customer support and technical design projects offshore harms American workers. But why turn around and then “lure” Indian outsourcing companies to states where millions of educated Americans and businesses can take those jobs? Does one hand know not what the other is doing? 

"Outsourcing jobs does not reflect Ohio values," Strickland said. "Ohioans have been among the hardest hit by more than a decade of unfair trade agreements and the trickle-down economic policies that promoted offshoring jobs at the expense of Ohioans who work for a living. We must do everything within our power to prevent outsourcing jobs because it undermines our economic development objectives, slows our recovery and deprives Ohioans and other Americans of employment opportunities."
"Ohio's policy has been--and must continue to be--that public funds should not be spent on services provided offshore," Strickland says in the order. "Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services. Despite these requirements, federal stimulus funds were recently used to purchase services from a domestic company which ultimately provided some of those services offshore. This incident was unacceptable and has caused me to redouble my commitment to ensure that public funds are not expended for offshore services."

Governor Strickland may be “redoubling” his commitments, alright – by luring Indian outsourcing giants to Ohio with public funds that were once expended for offshore services? This would be fine, if foreign outsourcing companies  like TCS hired only Americans at high compensation levels. How likely is that?

Of course, if Governor Strickland really wanted to turn Silver's predictions upside down, he would include a sign that reads WELCOME TO OHIO, THE ANTI-INSHORING STATE.

Party on, plebes!


1 comment:

saturdaygooglesnoop said...

if Congress would outlaw the h-1b and student visa process and offer tax incentives for us corps to stay in country, there would be plenty of jobs for us graduates.