Outsourcing, the practice of having workers overseas perform key tasks for companies located in America, was once thought to be a concern only for technology workers. But then it spread to various service jobs and other sectors--and now a newspaper is planning to outsource some of its editorial functions. From Business Week:
An Indian company will take over copy editing duties for some stories published in The Orange County Register and will handle page layout for a community newspaper at the company that owns the Pulitzer Prize-winning daily, the newspaper confirmed Tuesday.Orange County Register Communications Inc. will begin a one-month trial with Mindworks Global Media at the end of June, said John Fabris, a deputy editor at the Register.
Mindworks' Web site says the company is based outside New Delhi and provides "high-quality editorial and design services to global media firms ... using top-end journalistic and design talent in India." [...]
"This is a small-scale test, which will not touch our local reporting or decision-making. Our own editors will oversee this work," Fabris said in an e-mail to The Associated Press. "In a time of rapid change at newspapers, we are exploring many ways to work efficiently while maintaining quality and improving local coverage."
Tech workers are probably shuddering in sympathy at the talk of a "small-scale test;" that's how the practice got started in many of their areas of expertise. Any bets on how well this test will go, or whether other newspapers will follow suit? Or, perhaps most importantly of all, how long it will be before newspapers decide to outsource a significant percentage of their layout and editorial functions?
To be fair, the OC Register is not the first, or only, newspaper to try this. From the article:
Other newspapers also have outsourced some work to India. Mindworks began copyediting and design of a weekly community news section and other special advertising sections at The Miami Herald in January. A month earlier, the Sacramento Bee, also owned by the McClatchy Co., said it would outsource some of its advertising production work to India.
So the Register is simply staying competitive, by jumping aboard a new trend that's designed to decrease the paper's bottom line. For now, the Register is saying that staffing won't be affected.
But workers in the technology sector, and others, have heard those words before. They may make pleasing copy, but they seldom tell an unabridged version of the story.
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Other Jim, get your head out of Bastiat and look at reality. In the 90's, the talk was all about how losing a lot of low-end manufacturing didn't matter because knowledge and high-end manufacturing were going to be the future. What's the result a decade later? Our manufacturing base has been hollowed out. High-end manufacturing gets shipped overseas and IT professionals have either been outsourced or undercut by imported labor. And now the same thing is beginning in other professions. Free trade should be used to keep domestic companies and labor honest. Right now it's being used as a bludgeon in pursuit of greed.
A friend of mine was an optical engineer designing optics for high end consumer equipment. He was laid off three years with a nice severance package. The catch: He had to train his Chinese replacement and she had to successfully complete her first project before he could get his severance check. He made 70K/year, she made 7K/year and shared a dorm room with three other engineers.
Before he was laid off he would go regularly to China to start up production. There was no consideration of employee safety or environmental concerns. The visibility in the town where the factory located was routinely below 1/4 mile due to air pollution. Injured employees were let go with no concern for their medical care and immediately replaced.
Is this what we have to do in our nation to compete and keep jobs? In this country there is legally mandated floor for compensation, workplace safety, and environmental safety. How does one compete against a country where there is no such floor?
Another question is how much of outsourcing is driven by U.S. tax law and monetary policy?
If it's just about cheap labor, should Massachusetts have made it illegal to outsource to South Carolina?...
You do realize this is the United States and there are some basic standards everyone has to play by? You're assuming that moving a plant to China or to South Carolina are equivalent. They aren't.
You're right, GM does have higher labor costs. A lot of those labor costs are tied up in things like pensions (until recently) and health care that companies in other countries don't care about or the government assumes the cost. Should we let private companies go under because we, as a country, believe that health care and pensions are better handled by private organizations and individuals, or do we give a bit more of our freedom away in an attempt to get "cheaper" goods?
The person in Malaysia has no job and will work as a prostitute...or they can get a job in a factory for $1 a day, which is 3 times the local daily salary. You're assuming the person in Malaysia is suffering. In the vast majority of cases, the people want and need those jobs. They are happy to have them. If someone offered me three times my current salary to make things that people in foreign countries bought that I could never afford, I'd accept it in a heartbeat.
We also used to have factories like that in America because we were poor and hadn't built up a capital base. As America became wealthier, safety and standards improved. If we trade with these countries, they will become wealthier too and improve their standards more quickly, because American firms treat the workers better (in China, American firms are considered the best, next are European and Japanese. Other Asian and Chinese firms treat the workers worse.)
Chris,
GM's pension system is similar to the pension system at airlines and steelmakers, both of which went bankrupt because of their pensions. It's also the same system used by the Federal government and European and Japanese governments. So, no, I don't want the government to expand a system that has repeatedly failed, to bankrupt an entire nation instead of a few poorly managed corporations.
In this country there is legally mandated floor for compensation, workplace safety, and environmental safety. How does one compete against a country where there is no such floor?
We've been doing it. We even competed with countries that used slave labor, and we won.
"So which is the bottom line cheapest country for outsourcing? Does it go around in an endless circle of relativity?"
Yes. One economist I know calls it "rotating the crops."
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