John Kerry gives BPO companies the jitters

Democratic Presidential candidate for the US elections John F. Kerry upset the offshoring applecart on Thursday, promising America will expo...

Democratic Presidential candidate for the US elections John F. Kerry upset the offshoring applecart on Thursday, promising America will export 8216;8216;products, not jobs8217;8217; if he gets the top post. In his speech to the Democrat convention, Kerry turned arguments that favoured outsourcing on their head.

8216;8216;We are told outsourcing jobs is good for America. We are told that new jobs that pay 9,000 less than the jobs that have been lost is the best we can do. They say that this is the best economy we have ever had,8217;8217; Kerry vented.

Kerry promised to close the tax loopholes that reward companies for shipping job overseas. He said he would reward companies that keep good, paying jobs in the country, but if the man who once compared CEOs sending jobs abroad with Benedict Arnold 8212; America8217;s most hated traitor 8212; does live up to election-time rhetoric, India Inc will not be happy.

8216;8216;This is an internal matter for America: It can choose to cut costs and improve productivity through offshoring, or not,8217;8217; said a concerned industry source on Friday. Nasscom, the industry association representing software and service firms in India, said it would not comment on Kerry8217;s remarks.

Nasscom has reasoned in the past that America8217;s projected labour shortfall of around 5.6 mn by 2010 can either be filled through offshoring jobs, or by allowing foreign workers in. This, according to research firm Evalueserve, will result in addition of 3.2 mn workers by 2010 in the US, leaving 2.6 mn jobs to be offshored. This is the trend that John F Kerry, who is engaged in a neck-and-neck race with US President George W. Bush for the top post in the US, will try to reverse as a champion of the middle classes.

In his Thursday address, he said, 8216;8216;..Wages are falling, health care costs are rising, and our great middle class is shrinking. People are working weekends; they are working two jobs, three jobs, and they are still not getting ahead,8217;8217; Kerry complained, while assuring his audience, 8216;8216;We can do better and we will 8212; We8217;re the optimists.8217;8217;

An AP poll in May found 69 pc Americans believe outsourcing hurts the US economy. Another poll by the Employment law Alliance in May said 58 pc Americans supported a penalty for companies sending work abroad. An overall 3,74,000 jobs were offshored from the US in 2003. India got a lion8217;s share of these: 383,000 jobs in 2003, expected to touch 1.93 million by 2010 if all goes well. Nearly 58,000 Indian IT professionals with H1-B and L1 visas live in the US, UK and other countries.

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An immediate fallout of offshoring, however, is the loss of jobs in the US, even though taxpayer8217;s money is saved. Already, 36 states are considering laws that ban state contracts to companies that send work abroad, though only Tennessee has passed such a Bill. Around 80 pc of India8217;s offshore projects come from America.