U.S. Taxpayers Fund IT Offshoring in Sri Lanka

August 10, 2010
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When your August 9th issue of the InformationWeek magazine comes in the mail, be sure to turn to page 18 and read the short article on IT Outsourcing. If you do not have a subscription, here is what Paul McDougall wrote:

When your August 9th issue of the InformationWeek magazine comes in the mail, be sure to turn to page 18 and read the short article on IT Outsourcing. If you do not have a subscription, here is what Paul McDougall wrote:

The U.S. Agency for International Development will contribute $10 million to $36 million to train workers, including 3,000 IT specialists, in Sri Lanka.

The federal agency will partner with private outsourcers in that country to teach workers advanced IT skills such as Enterprise Java programming, business process outsourcing, and call center support. USAID will also help the trainees brush up on their English.

Following their training, the workers will be placed with outsourcing vendors in the region that provide offshore IT services to U.S. companies looking to take advantage of the Asian subcontinent’s low labor costs.

The outsourcing program is part of a larger effort to create 10,000 jobs in Sri Lanka in IT, construction, and the garment industry. But it’s the outsourcing program that’s drawing fire from critics. President Obama has pledged to retain more high-tech jobs in the U.S. in IT, biological sciences, and green energy.

I wonder who convinced the U.S. government to chose Sri Lanka as a new source of cheap IT workers (perhaps programmers in Tamil Nadu are getting too pricey)?  Evidently, the $60 billion offshoring industry could always use some assistance from American taxpayers.

A key phrase in the article might be “U.S. companies looking to take advantage of…”

We have come to accept the business fact that U.S. companies do not want to hire American workers because we are too expensive. Instead, highly-paid executives at those firms make a financial case for their wise decision to pay a fraction of U.S. salaries to individuals on the other side of the planet.

Unless things change, American workers will have to wait for the cycle to come full circle. At some point, U.S. companies will no longer pay any American citizens — all wages will go to workers in other countries. Then, we citizens will be unable to buy products from U.S. companies who will then need to sell to their own non-American employees.

To afford U.S. products, those offshore employees will then need higher wages and, at some point, the U.S. executives will make a wise decision to give those demanding workers the boot. Once Americans have experienced a good economic depression, those U.S. executives can hire back U.S. citizens for a mere pittance. It is the American Way!

Perhaps President Obama can introduce some of that Change he talked about. For example, why not send some federal IT training money to low-wage workers in Jonesboro, Arkansas or Van Wert, Ohio?

It’s an idea that many Americans are pushing. If you have not heard of “rural outsourcing,” and how Arkansas might be able to compete with India, see the 2010 July CNNMoney article.