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January 25, 2004 - A comment from Canada...

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Outsourcing Notes:


A Canadian Asks a Question.   Do corporations having social responsibilities?  



My friend from London, Ontario sent a news item along last week. 

See IBM memos detail overseas jobs savings - report
Reuters, 01.19.04, 10:50 AM ET


NEW YORK, Jan 19 (Reuters) - IBM expects to save $168 million annually starting in 2006 by moving several thousand high-paying programming jobs abroad, according to internal company documents obtained by The Wall Street Journal. 

International Business Machines Corp.  has said it plans to move up to 3,000 jobs from the United States to developing countries this year.  The Journal story did not say how many jobs the company expected to shift overseas starting in 2006. 

The Journal said the documents indicate that for internal IBM accounting purposes, a programmer in China with three to five years of experience would cost about $12.50 an hour, including salary and benefits. 

That's compared with $56 an hour for a comparable U.S.  employee, the Journal said, citing an unidentified person familiar with the company's internal billing rates. 

Separately, Armonk, New York-based IBM said on Saturday that it plans to hire 15,000 new employees this year - 50 percent more than originally planned - in areas like software and services because of a rebound in the economy.  The company said about 4,500 net jobs will be added in the United States.


And he made this observation:


I saw a bit on CNN this morning about IBM adding 15,000 jobs this year, 5,000 in the US.  Typically, this got no mention whatsoever though....


Well, my reply was this:


Yeah, I saw this on the wires.  From what I see, this is being spun both ways, depending on who reports it. 

More jobs - the Bush plan is working - things are getting better.  Saw that.  Fox News and the rest.  The long nightmare of massive unemployment is obviously ending. 
The other spin is out there too. 

The Bush recovery plan that is making corporate profits jump and the markets rise, is, in fact creating twice the number of jobs in Singapore and places like that than it is creating here.  Do the damned math.  Two thirds of these jobs are overseas. 

Well, duh.  When you look at the dollar costs - 12.50 an hour and then at 56.00 an hour, for the same work, and actually quality work - well, IBM and the rest are not dumb.  They exist to make money.  They are not patriotic charities, after all.  As these corporations come out of their slumps, well, they are NOT going to throw money away.  Why would they? 

In short, as the business climate improves the Bush method of boosting the economy turns out to be great for the whole world.  Really.  It does.  It just has very little to do with the situation down here, south of your border.  And that is why I can live off my investments, and not work.  Work is for others.  I'm a capitalist owner, not a worker.  Better for me, of course.  But quite ironic for a lefty like me.


But in these pages, here, and elsewhere, this has been discussed.  And of course the real irony is my friend from London, Ontario used to work for me.  I hired him when I was running that systems shop up there for two years.  And he's still working away. 

This came later, 20 January, from Canada:


Like you said, corporations exist to make a profit... period. 


I have to disagree though with folks who say that a corporation owes nothing to the country or community where it prospered and grew to be the behemoth it is now (one thinks of Moore's "Roger and Me"). 


The only way they got that big and fat was through bazillions of dollars of tax-breaks, R&D investment incentives and breaks, etc.  In other words, they fed at the fed/state/municipal trough for free and don't expect to have to return anything to the folks who fill it - you and me. 

Up here, the "national airline" Air Canada gets bailed out by the feds every few years.  Do the taxpayers get anything back when they're flying high again?  Nope.  (Pun fully intended.)

As for the offshore thing, not all of this offshored work is being done as well as we are being led to believe though.  You may have seen a couple weeks back, that Dell (or was it Gateway?) canned their 15,000-person support operation in India.  Way too many customer complaints.  Rather ironic, because it was a customer support center. 

Now if I can just get those telemarketing calls from credit card company centers in Bangladesh to stop phoning me at suppertime....


Corporations owe the community that made their business possible?  Curious. 

I don't think that will fly with the business folks.  It's easy enough for them to characterize that idea as anti-business at best - something that could force them to lose money and thus hurt the community: layoffs and closures would be possible if you really believe such "Canadian" things. 


At worst they'd call it socialism, or communism. 

But "communism" and "community" have they same root.  How odd.